Justia Contracts Opinion Summaries

This matter arose from the suicide of a sixteen-year-old girl, who was residing at the Spring Creek Lodge Academy at the time of her death. Following the girl's death, her mother, Plaintiff, brought an action against the owner of the school, its on-site directors, including Teen Help, and various related entities. Claims against Teen Help were settled before trial, and the settlement was later reduced to a judgment. While Newman I proceeded to trial, Newman filed this declaratory judgment and breach of contract action against Teen Help's two insurers to collect on the settlement and judgment, arguing that the insurers breached their obligation to defend and indemnify Teen Help in Newman I. The district court determined the insurers were severally liable for the underlying judgment and awarded attorney's fees and interest on the underlying judgment. The Supreme Court (1) affirmed the district court's judgment as it pertained to the insurers, its award of interest on the underlying judgment, and its application of Montana law; and (2) reversed the court's ruling on attorney's fees. Remanded for recalculation of reasonable attorney's fees. View "Newman v. Scottsdale Ins. Co." on Justia Law

Shane Traylor Cabinetmaker, L.L.C. ("STC"), and Michael Shane Traylor sued American Resources Insurance Company, Inc., alleging breach of contract and bad faith, based on American Resources' refusal to defend or to indemnify STC and Traylor on counterclaims filed against them by Robert Barbee and R.L. Barbee Builders, Inc. in a separate action. The circuit court entered a summary judgment in favor of American Resources, and STC and Traylor appealed. Finding no error, the Supreme Court affirmed. View "Shane Traylor Cabinetmaker, L.L.C. v. American Resources Insurance Company, Inc. " on Justia Law

In 2006, Plaintiffs sustained serious injuries in an automobile accident and incurred medical expenses in excess of $1,000,000. Plaintiffs subsequently learned that they had only $5,000 in medical payments coverage and did not have any underinsured motorist (UIM) coverage after a transfer of their Oregon State Farm policy to Montana by the Mark Olson State Farm Agency. The driver who caused the accident carried the statutory minimum automobile liability insurance limits. Plaintiffs sued State Farm and Mark Olson, requesting declaratory relief and a reformation of the contract and alleging negligence, breach of fiduciary duty, and conduct sufficient to support an award of punitive damages. The district court entered summary judgment in favor of Defendants. The Supreme Court reversed, holding that the district court erred in entered summary judgment in favor of State Farm and Olson on Plaintiffs' negligence claims. Remanded for trial. View "Bailey v. State Farm Auto. Ins. Co." on Justia Law

This case involved the interpretation of two contractual provisions under Minnesota law: an indemnification clause in a contract between PDSI and Miller and an insurance contract between Harleysville and PDSI which extended insurance coverage to PDSI's indemnification of third parties for tort liability caused, in whole or in part, by PDSI or by those acting on its behalf. The court agreed with the district court's finding that a PDSI employee's suit fell squarely within the indemnity provision of the 1989 Agreement between PDSI and Miller. The court also agreed with the district court's interpretation of the insurance agreements as requiring Harleysville to cover Miller's settlement of the employee's claims. Further, the court concluded that the undisputed facts established as a matter of law that PDSI or those acting on its behalf at least partly caused the employee's bodily injury within the terms of the Harleysville policy. Accordingly, the court affirmed the judgment. View "Harleysville Ins. Co. v. Physical Distrib. Serv., et al" on Justia Law

Petitioner homeowners filed suit against Respondent, an entity that had been hired to perform emergency services for damages to Petitioners' home as the result of a sewage backup, asserting claims for personal injury and property damage arising from Respondent's alleged negligence in failing to detect and/or remediate mold in their home following the sewer backup that flooded the home with water and waste. The circuit court held that the contract between the parties, which included a mold/mildew/bacteria waiver, was a complete bar to Petitioners' claims. The Supreme Court affirmed, holding (1) the contract was not substantively unconscionable; and (2) allowing Respondent to disclaim liability for mold damage did not violate public policy. View "Pingley v. Perfection Plus Turbo-Dry, LLC" on Justia Law

Following a car accident with an uninsured motorist, Lori McDonnell filed suit against her insurer State Farm Mutual Automobile Insurance Company on behalf of herself and her minor son, Luke. McDonnell sought a declaratory judgment that: (1) she was entitled to have her personal injury claims settled by appraisal under the mandatory appraisal statute; and (2) a provision in her State Farm insurance policies requiring her to file suit against the insurance company within two years of the accident was void as against public policy. The superior court ruled that the mandatory appraisal statute did not apply to personal injury claims. The court further ruled that the contractual two-year limitations provision was enforceable, but only if State Farm could show that it was prejudiced by an insured's delay in bringing suit, and that the appropriate accrual date for the limitations period was the date State Farm denied an insured’s claim, rather than the date of the accident. McDonnell and State Farm both appealed that decision. Finding no error in the trial court's decision, the Supreme Court affirmed. View "McDonnell v. State Farm Mutual Automobile Ins. Co." on Justia Law

The question before the Supreme Court in this appeal was whether a defendant who pled no contest to disorderly conduct in a criminal action could be collaterally estopped from relitigating the elements of that crime in a related civil declaratory judgment action regarding insurance coverage, thereby precluding coverage. Kent Bearden pled no contest to disorderly conduct for punching Paul Rasmussen. Rasmussen subsequently filed a civil complaint against Bearden, and Bearden tendered the lawsuit to State Farm Insurance Company to defend and indemnify him under his homeowners insurance policy. State Farm sought declaratory relief and moved for summary judgment on the ground that Bearden's conduct could not be considered an "accident" within the meaning of the insurance policy because his no-contest plea collaterally estopped him from relitigating the issues of mens rea and self-defense. The superior court granted the motion. Finding no error with the superior court's decision, the Supreme Court affirmed. View "Bearden v. State Farm Fire & Casualty Co." on Justia Law

Brooks Insurance Agency, Sidney Brooks (its agent), and Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively "Nationwide") petitioned the Supreme Court for a writ of mandamus to direct the Jefferson Circuit Court to vacate its order denying their motion to dismiss an action filed by Guster Law Firm, LLC, and Guster Properties, LLP (collectively "Guster"), against them. Guster made a claim for a fire loss under commercial property policies issued to it by Nationwide. In April 2011, Nationwide filed a declaratory-judgment action requesting that the federal court determine the rights and obligations under the insurance policies it had issued to Guster. Guster answered and asserted compulsory counterclaims against Nationwide, including bad-faith failure to pay an insurance claim and breach of contract, among others. Months later, Guster filed a lawsuit in the Jefferson Circuit Court alleging against the agency, Brooks, and Nationwide: negligent/wanton failure to provide insurance coverage; misrepresentation; suppression and concealment; and negligent/wanton failure to train. The agency, Brooks, and Nationwide moved to dismiss the state court action on the ground that the action violated the state abatement statute and the compulsory-counterclaim rule. The trial court summarily denied the motion to dismiss. The agency, Brooks, and Nationwide then petitioned the Supreme Court for mandamus relief. Upon review, the Supreme Court affirmed in part, reversed in part, and issued the writ. Although the causes of action in the federal court and the state court arose out of the same transaction or occurrence and were thus related, Guster's claims against the agency and Brooks were not compulsory counterclaims in the federal declaratory-judgment action because the agency and Brooks were not "opposing part[ies]" in the federal action. Accordingly, the Alabama abatement statute mandated that the claims against Nationwide in Guster's complaint filed in state court be dismissed. The Court concluded that the agency and Brooks did not show a clear legal right to the dismissal of Guster's claims against them in the state-court action. However, Nationwide did show a clear legal right to the dismissal of Guster's claims against it in the state-court action, therefore the trial court erred in denying the motion to dismiss as to Nationwide. View "Guster Law Firm, LLC v. Brooks Insurance Agency" on Justia Law

A construction company and its principals (collectively, Appellants) hired a plumbing company (Peters), excavation company (Bostic), and marble company (Esquire) as subcontractors for the construction of Appellants' home. After Buyers purchased the home, Buyers filed a complaint against Appellants, alleging negligence and breach of the implied warranties of habitability, sound workmanship, and proper construction. Appellants filed a third-party complaint against Peters, Bostic, and Esquire, alleging several causes of action. Bostic subsequently filed cross-claims against Peters, and Peters filed cross-claims against both Bostic and Esquire. Thereafter, the circuit court (1) granted Peters' motion for summary judgment on the third-party complaint, (2) granted summary judgment for Bostic on Peters' cross-claim, and (3) granted Esquire's motion for summary judgment on the third-party complaint. Appellants appealed. The Supreme Court dismissed the appeal, holding that the Court lacked jurisdiction because a final order had not been entered disposing of all the claims. View "J-McDaniel Constr. Co. v. Dale E. Peters Plumbing Ltd." on Justia Law

Plaintiff and Defendant were brother and sister. Defendant was a longtime resident of Maryland. Plaintiff allegedly lived in Iowa in 2003. After Plaintiff obtained employment in Iraq in 2003, he opened a checking account in Des Moines and provided Defendant with checks that could be used to draw on the account to provide for the needs of his children and to pay the bills. Instead of using the checks as agreed, Plaintiff claimed Defendant used the checks to withdraw funds for her personal use. Plaintiff filed a lawsuit against Defendant in Iowa district court for breach of contract, conversion, bad faith, fraud, and breach of fiduciary duty. The district court dismissed the complaint for lack of personal jurisdiction over Defendant, finding that sufficient minimum contacts were lacking. The Supreme Court reversed, holding that Defendant was subject to personal jurisdiction in Iowa under the Calder v. Jones foreseeable effects test based on the claim of an intentional tort in Iowa. Remanded. View "Shams v. Hassan" on Justia Law