Justia Contracts Opinion Summaries

Kristina Knight agreed to an endorsement to her Nationwide automobile insurance policy providing the coverage in the policy would not apply to her husband. During the policy period, Danny Knight was tragically killed in a motorcycle accident. Knight, as personal representative of Danny's estate, recovered $25,000 in UIM coverage under Danny's motorcycle insurance policy with Progressive Casualty Insurance Company and $25,000 in UIM coverage under a policy with ACCC Insurance Company insuring a different vehicle Danny owned. Knight made a claim with Nationwide to recover an additional $25,000 in UIM coverage under her insurance policy. Nationwide denied the claim and filed this lawsuit asking the trial court to declare Nationwide did not have to pay the $25,000 because Danny was excluded from all coverages under the policy. On appeal, Knight claimed the endorsement excluding coverage for her husband violated public policy and Nationwide could not enforce it. The South Carolina Supreme Court found the exclusion was clear and unambiguous and was not in violation of any statute. Therefore, the Court held the exclusion was enforceable. View "Nationwide Insurance Company of America v. Knight" on Justia Law

The United States District Court for the District of South Carolina certified a question to the South Carolina Supreme Court on whether a homeowner's insurance policy that did not define the term "actual cash value," an insurer could depreciate the cost of labor in determining the "actual cash value" of a covered loss when the estimated cost to repair or replace the damaged property includes both materials and embedded labor components. This issue arose in two cases in which the homes of Miriam Butler and Joseph Stewart were damaged in separate fires. Butler and Stewart each purchased a homeowner's insurance policy from one of the defendants, both of whom were subsidiaries of The Travelers Companies, Inc. Butler and Stewart elected not to immediately repair or replace their damaged property. Each thus elected not to receive replacement cost but instead to receive a cash payment for the ACV of the damaged property. The certified question addressed whether Travelers properly calculated the ACV payments Travelers offered to Butler and Stewart to settle their property damage claims. The Supreme Court responded affirmatively: “the fact the labor cost is embedded makes it impractical, if not impossible, to include depreciation for materials and not for labor to determine ACV of the damaged property. Rather, the value of the damaged property is reasonably calculated as a unit. Therefore, we answer the certified question "yes," because it makes no sense for an insurer to include depreciation for materials and not for embedded labor.” View "Butler v. The Travelers Home" on Justia Law

In 2012, Bishop Lawrence sought to disaffiliate his South Carolina-based diocese from the Episcopal “Mother Church”. Some parishes followed suit. The Mother Church purported to remove Lawrence and selected a new bishop. The Disassociated Diocese and Parishes sued the Mother Church to clarify their property rights in diocesan. The Mother Church filed counterclaims and separately filed trademark and false-advertising claims. Both cases are ongoing.The Church Insurance Company, wholly owned by the Church Pension Fund, is a freestanding nonprofit affiliated with the Mother Church. Captive insurance companies may only cover the risks of their parent companies and related entities. Before the schism, the Company issued a Diocesan Program Master Policy, listing as “named insured” the Episcopal diocese and listing 56 participant parishes, including the now-Disassociated Parishes, in its declarations. Each parish has a separate, individualized insurance policy and paid premiums directly to the Company. The policies provide liability coverage for injuries arising out of “infringement of copyright, title, slogan, trademark, or trade name” and include a broad duty to defend. The Company has reimbursed the Disassociated Parishes’ defense costs in connection with both lawsuits.The Associated Diocese sued the Company, alleging breach of contract, bad faith, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty. The Fourth Circuit affirmed the dismissal of that suit for lack of standing. The Company has not strayed beyond its limitations as a captive insurer or breached its obligations under the policies, so there is no injury traceable to such conduct. View "Episcopal Church in South Carolina v. Church Insurance Company of Vermont" on Justia Law

The Supreme Court declined to issue mandamus relief to compel Commissioner George P. Bush, head of the General Land Office, to refer the City of Galveston's claim that that the Land Office owed reimbursement to the City, holding that the City was not entitled to mandamus relief.The dispute in this case arose from a block grant contract that required the City to administer federal disaster relief funds. The City hired a private contractor to do some of the work, and the private contractor later sued the City for alleged amounts owed under the parties' contract. After the City settled with the private contractor it filed a claim for reimbursement from the Land Office for the settlement amount paid by the City. Bush refused to refer the City's claim to the State Office of Administrative Hearings for an administrative law judge to hear it. The City brought this action asking that the Supreme Court exercise its original mandamus jurisdiction over state officials to compel Bush to refer the claim. The Supreme Court denied the petition for a writ of mandamus, holding that where, as part of the settlement, the City agreed not to sue Bush in any "related proceeding," mandamus relief was precluded. View "In re City of Galveston, Texas" on Justia Law

In this insurance dispute, the Supreme Court denied a writ of mandamus compelling the trial court to render judgment in favor of Insurer on the jury's verdict, holding that the trial court did not abuse its discretion in declining to render judgment on the verdict.Insured sought underinsured motorist (UIM) benefits from Insurer. Insurer in this case declined to participate in a jury trial to establish the at-fault motorist's liability and demanded a separate trial on its liability under the UIM policy. Before trial on the UIM claim, the court commenced a jury trial on Insured's negligence claim against the at-fault motorist. The parties settled and the claim was dismissed without rendition of judgment on the jury's verdict. Insurer then argued that a separate trial on the UIM claim was no longer necessary because of the jury's findings and the settlement payment. The trial court denied Insurer's motion for judgment based on the jury verdict from the negligence trial. Insurer sought mandamus relief. The Supreme Court denied relief, holding (1) collateral estoppel did not bind Insured to a verdict that was not reduced to judgment; and (2) Insurer's post-dismissal consent to be bound by the negligence suit's outcome did not make the negligence verdict enforceable against Insured in the contract suit. View "In re USAA General Indemnity Co." on Justia Law

In this construction defect case brought by homeowners against several contractors, the Supreme Court affirmed the ruling of the district court that the limitations period against each contractor began to run upon the substantial completion of each contractor's project.The district court granted summary judgment in favor of the contractors in this case, generally agreeing that the limitations period for the homeowners' claims against the contractors began to run on the dates that each contractor substantially completed its work. The Supreme Court affirmed, holding that the district court did not err in finding that Homeowners' claims against the contractors were time barred as matter of law under Neb. Rev. Stat. 25-223 and by denying their oral motion seeking leave to amend their complaint to add a new claim. View "McCaulley v. C L Enterprises, Inc." on Justia Law

In September 2016, defendant Trend Motors, Ltd. (Trend), provided defendant Mary Aquilar with a loaner vehicle for her personal use while her vehicle was being serviced. Aquilar’s negligent operation of the loaner vehicle caused it to strike plaintiff Tyrone Huggins’s car. Huggins sustained serious injuries as a result. GEICO insured Aquilar through an automobile policy. Trend held a garage policy with Federal Insurance Company (Federal) that insured Trend’s vehicles for up to $1,000,000 in liability coverage. The definition of an “insured” in the Federal policy purported to extend liability coverage to Trend’s customers using Trend’s vehicles only if the customer lacked the minimum insurance required by law. Huggins filed a complaint seeking compensation for the injuries and loss of income he suffered as a result of the accident. Federal disclaimed liability, arguing that Aquilar did not fit the policy’s definition of an insured because she held $15,000 in bodily injury coverage through GEICO. The trial court held that the Federal policy’s definition of an insured constituted an illegal escape clause and held Federal to the full policy limit of $1,000,000 in liability coverage. The Appellate Division declined to review the trial court’s ruling. The New Jersey Supreme Court concurred with the trial court’s ruling that the provision in the garage policy at issue constituted an illegal escape clause which could not be used to evade the minimum liability requirements for dealership vehicles set by the Chief Administrator of the Motor Vehicle Commission (MVC). The Court ordered the reformation of Federal’s policy to the $100,000/$250,000 dealer-licensure minimum liability coverage required by N.J.A.C. 13:21-15.2(l). View "Huggins v. Aquilar" on Justia Law

The Supreme Court reversed the judgment of the court of appeals denying Defendants' motion to dismiss under the Texas Citizens Participation Act (TCPA), Tex. Civ. Proc. & Rem. Code 27.001-.011, as untimely, holding that because Plaintiff's amended petition in this case asserted new legal claims, Defendants' motion to dismiss those claims was timely.In his original petition, Plaintiff asserted claims for deceptive trade practice, negligence, and negligent misrepresentation. Plaintiff subsequently filed an amended petition reasserting the same claims, adding new claims for fraud, conspiracy to commit fraud, fraudulent concealment, and breach of contract, and alleging the same essential facts alleged in the original petition and requesting the same relief. The trial court denied Defendants' TCPA dismissal motion, concluding that the motion was untimely. The court of appeals affirmed. The Supreme Court reversed, holding that the court of appeals erred in holding that Defendant's motion to dismiss the new claims was untimely because the amended petition asserted new legal actions and thus triggered new sixty-day period for Defendants to file a motion to dismiss those new claims. View "Monteglongo v. Abrea" on Justia Law

The Supreme Court affirmed the portion of the judgment of the court of appeals reversing the judgment of the trial court granting a motion to reconsider the court's denial of a motion to seal brought under Tex. R. Civ. P. 76a, holding that the Texas Uniform Trade Secrets Act (TUTSA), Tex. Civ. Proc. & Rem. Code 134A.006a, does not provide an independent, self-contained pathway for sealing court records.Plaintiff sued Defendant for breach of contract, and Defendant asserted counterclaims, including misappropriation of trade secrets. The jury found in favor of Defendant. Defendant subsequently filed a Rule 76a motion to seal thirty trial exhibits. The trial court denied the motion to seal but then granted Defendant's motion to reconsider that relied exclusively on section 134A.006a of TUTSA. The Supreme Court remanded this case to the trial court to exercise its discretion under the applicable provisions of both TUTSA and Rule 76a, holding that the trial court erred by failing to apply the non-displaced provisions of Rule 76a in ruling on the motion to reconsider. View "HouseCanary, Inc. v. Title Source, Inc." on Justia Law

Plaintiff, cross-defendant and appellant Nissan Motor Acceptance Corporation (NMAC) was a subsidiary of nonparty Nissan Motors of North America. NMAC was a specialty lender that loaned money to Nissan automobile dealers. Defendants, cross-complainants and appellants, Michael A. Kahn (Kahn) and his wife Tami L. Kahn, plus a group of now defunct limited liability company auto dealerships they owned, were NMAC borrowers (collectively, “Superior”). This appeal and cross-appeal stemmed from the retrial of Superior’s cross-claims against NMAC. The jury awarded Superior $256.45 million in compensatory and punitive damages based on two promissory fraud theories: negligent misrepresentation and fraudulent concealment. The trial court granted NMAC’s motion for new trial based on juror misconduct, but denied NMAC’s motion for judgment notwithstanding the verdict (JNOV). Superior contended NMAC forfeited its right to complain about juror misconduct. It also challenged the sufficiency of the evidence to support the trial court’s discretionary decision to grant NMAC’s new trial motion. After review, the Court of Appeal concluded NMAC did not forfeit the basis for its new trial motion and substantial evidence supported the court’s juror misconduct findings. And contrary to Superior’s claim, the Court found nothing arbitrary or capricious in its prejudice ruling. Accordingly, the Court affirmed the new trial order. View "Nissan Motor Acceptance Cases" on Justia Law