Justia Contracts Opinion Summaries

Petitioner's decedent, Freda Bradley, purchased a named perils homeowners insurance policy from Farmers and Mechanics Mutual Insurance Company of West Virginia (Farmers). Bradley filed a claim under the policy for damage to her kitchen and bathroom floor. Farmers denied the claim citing a policy exclusion for water damage below the surface of the ground, fungi, wet or dry rot, or bacteria. Bradley filed a complaint against Farmers alleging several causes of action stemming from Farmers' denial of coverage under an insurance policy Bradley had purchased from Farmers. The circuit court granted summary judgment in favor of Farmers, concluding (1) damage done to Bradley's kitchen floor did not constitute a "collapse" as required by the policy; and (2) the alleged collapse was not caused by "hidden decay." Petitioner appealed. The Supreme Court reversed, holding (1) the circuit court erred in finding that the term "collapse" in the insurance policy was not ambiguous and that Bradley's kitchen floor did not collapse; and (2) whether Bradley should have known that decay was causing her kitchen floor to sink was a genuine issue of material fact to be decided by a jury. Remanded. View "Chafin v. Farmers & Mechanics Mut. Ins. Co. of W. Va." on Justia Law

The issue before the Supreme Court in this case arose from an alleged breach of contract and bad-faith denial of Dr. Jack and Margaret Hoover’s homeowner’s insurance claim against United Services Automobile Association (USAA) following Hurricane Katrina. The trial judge granted USAA’s motion for directed verdict as to the Hoovers’ claims for: (1) the unpaid portion of losses; (2) mental anguish and emotional distress; and (3) punitive damages. The trial court further determined that there were issues of fact for the jury as to whether the Hoovers’ roof structure was damaged, and as to the Hoovers’ claim for additional living expenses. The jury found for the Hoovers and granted compensatory damages. The Hoovers appealed and USAA cross-appealed. After its review of the record, the Supreme Court found that trial court applied an incorrect legal standard and improperly shifted a burden of proof to the Hoovers. Therefore the Court reversed the directed verdict as to the unpaid damages, and remanded the case for a jury to determine whether USAA proved by a preponderance of the evidence that the unpaid loss was caused by an excluded storm surge. The trial court did not err, however, in directing a verdict for USAA as to the Hoovers’ claims for mental anguish, emotional distress, and punitive damages. View "Hoover v. United Services Automobile Association" on Justia Law

After Opal Corn was rear-ended by Martha Gafford, she settled with Gafford and Gafford's insurer. Opal and L.B. Corn subsequently filed an underinsured motorist (UIM) claim with their insurer, Farmers Insurance Company, for the remaining damages from the accident. The Corns then filed suit against Farmers and a driver and company also involved in the accident (collectively, Eden). The Corns settled their claims with Eden, but their settlement was for less than the limits of Eden's insurance policy. Farms refused to offer UIM benefits and moved for summary judgment, arguing that because the Corns had failed to exhaust Eden's liability policy, they had not triggered UIM coverage under their policy with Farmers. The circuit court entered summary judgment for Farmers, finding that, based on the exhaustion requirement of UIM coverage and the policy language, the Corns were not entitled to UIM benefits. The Supreme Court affirmed, holding (1) insured persons are required to exhaust all liability insurance policies of all tortfeasors before they are entitled to receive UIM benefits; and (2) under the terms of the policy, UIM coverage was not triggered until all policy limits had been exhausted. View "Corn v. Farmers Ins. Co., Inc." on Justia Law

After discovering that she had lung cancer that had spread to her brain, Killian underwent aggressive treatment on the advice of her doctor. The treatment was unsuccessful and she died. Her husband submitted medical bills for the cost of the treatments to her health insurance company. The company denied coverage on most of the expenses because the provider was not covered by the insurance plan network. The husband filed suit, seeking benefits for incurred medical expenses, relief for breach of fiduciary duty, and statutory damages for failure to produce plan documents. The district court dismissed denial-of-benefits and breach-of-fiduciary-duty claims, but awarded minimal statutory damages against the plan administrator. In 2012, the Seventh Circuit affirmed the dismissals, rejecting an argument that the plan documents were in conflict, but remanded for recalculation of the statutory damages award. On rehearing, en banc, the Seventh Circuit affirmed the denial of benefits and statutory penalties holdings, but reversed on the breach of fiduciary duty claim. The instructions given in plan documents were deficient and a reasonable trier of fact could rule in favor of Killian, based on telephone conversations in which Killian attempt to determine whether the physicians who were about to perform surgery were within the network. View "Killian v. Concert Health Plan" on Justia Law

The issue before the Supreme Court in this case centered on whether Delaware’s personal injury protection (PIP) statute requires insurers to reserve PIP benefits for lost wages when requested. The plaintiff suffered severe injuries as a passenger in a car accident. While he was in a coma, his mother signed an assignment of insurance benefits in favor of the hospital. Plaintiff did not challenge the validity of the assignment. The hospital was promptly paid by the insurance company. When plaintiff later requested the insurers to reserve his PIP benefits for his past and future lost wages, he was informed that the benefits had been exhausted by the payment to the hospital. The Superior Court held sua sponte that the unchallenged assignment to the healthcare provider was invalid. Upon review of the facts of this case, the Supreme Court concluded the Superior Court erred as a matter of law in deciding that uncontested issue. Because the assignment on behalf of the plaintiff resulted in the exhaustion of his PIP benefits before the plaintiff requested the reservation of PIP benefits for his lost wages, the legal issue of whether the insurer was required to reserve PIP benefits for lost wages is moot. View "State Farm Mutual Automobile Insurance Co. v. Davis" on Justia Law

Sweet Valley Missionary Baptist Church filed a complaint against its insurance carrier, Alfa Insurance Corporation. Based on Sweet Valley’s failure to cooperate in discovery, the trial court entered an order of dismissal. Sweet Valley then filed a motion to set aside judgment, or, in the alternative, a motion for new trial. The trial court denied the motion, and, in response, Sweet Valley filed a second complaint against Alfa the same day. The trial court dismissed the second claim based on the expiration of the statute of limitations. Sweet Valley appealed. On rehearing, the Court of Appeals reversed the trial court’s judgment and remanded for further proceedings. Alfa filed a petition for writ of certiorari, and the Supreme Court granted it. Upon review, the Supreme Court held that a motion filed pursuant to Mississippi Rule of Civil Procedure 59(e) tolls the applicable statute of limitations, and it reversed the decision of the trial court. View "Sweet Valley Missionary Baptist Church v. Alfa Insurance Corporation" on Justia Law

This case involved an uninsured motorist benefits claim filed in connection with injuries allegedly sustained by the appellant in a 2001 motor vehicle accident. Appellant was driving a truck insured by Harleysville Insurance Company when he rear-ended another vehicle. The police report contained no mention of a phantom vehicle being involved in the accident. Appellant later reported the accident to his employer, explaining he momentarily took his eyes off the road, and when he looked again, a vehicle was stopped in front of him; he was unable to stop and rear-ended the vehicle. Twenty days later, appellant completed a written Workers’ Compensation Employee’s Statement in which he reported the accident occurred due to the other vehicle stopping suddenly in front of him. But again, no phantom vehicle was reported. Over eight months later, appellant filed a claim for uninsured motorist benefits, alleging the accident was caused by a phantom vehicle pulling out in front of the other vehicle, causing appellant to stop suddenly. Harleysville denied appellant’s claim and sought a declaratory judgment that he was not entitled to uninsured motorist benefits. The Superior Court reversed the order of the Court of Common Pleas of Luzerne County, which held appellee Harleysville Insurance Company did not suffer prejudice as a result of appellant’s failure to report the phantom vehicle within a 30-day time requirement established by the Motor Vehicle Financial Responsibility Law (MVFRL). Upon review, the Supreme Court affirmed the Superior Court decision. View "Vanderhoff v. Harleysville Ins. Co." on Justia Law

Thomas Warner filed a complaint against Robert and Rebecca Hanke for conversion and negligence after Robert Hanke asserted ownership over some personal property Warner was storing on the Hanke's property. At the time the action was filed, Robert and Rebecca Hankes maintained home insurance coverage from a subsidiary of Horace Mann Insurance Company. The Hankes filed a claim with Horace Mann to request a defense against Warner's suit. Horace Mann filed a declaratory judgment action requesting a determination whether the insurance policy required Horace Mann to defend the Hankes. The district court concluded that Horace Mann did not owe coverage to the Hankes for the Warner dispute. The Supreme Court affirmed in part, reversed in part, and remanded, holding that the district court (1) properly determined that the Hankes' insurance policy failed to cover the Warner dispute; (2) correctly determined that Horace Mann's decisions to provide a defense and to pay the settlement of Warner's claims nevertheless allowed Horace Mann to pursue reimbursement for the Hankes' share of the settlement; and (3) abused its discretion in awarding attorney's fees to Horace Mann. View "Horace Mann Ins. Co. v. Hanke" on Justia Law

Plaintiff, a school, was sued by two of the school's donors who sought a return of a monetary gift to the school, claiming that the gift had been induced by misrepresentations. The case settled, and Plaintiff sought defense costs and indemnity under a directors and officers liability insurance policy issued by Defendant. The district court granted summary judgment for Defendant based on a provision in the policy excluding from coverage any losses involving any matter disclosed in connection with "Note 8" of the school's financial statement. Note 8 set forth a description of the gift. Plaintiff appealed. The First Circuit Court of Appeals affirmed, holding that because the language of the policy clearly excluded coverage "in any way involving" the disputed gift, Plaintiff had no reasonable expectation of coverage. View "Clark Sch. for Creative Learning, Inc. v. Philadelphia Indem. Ins. Co." on Justia Law

In 2000, the Schuchmans purchased homeowner’s insurance from State Auto to insure a residence in Junction City, Illinois. About 10 years later, a fire severely damaged the insured house and the Schuchmans made a claim against the homeowner’s policy. After a lengthy investigation, State Auto denied the claim on the basis that the Schuchmans were not residing on the “residence premises,” as that term is defined by the policy, and were maintaining a residence other than at the “residence premises,” in violation of the policy’s Special Provisions. The district court entered summary judgment in favor of State Auto. The Seventh Circuit reversed, agreeing that the term “residence premises” is ambiguous and should be liberally construed in favor of coverage. View "Schuchman v. State Auto Prop. & Cas.Ins. Co." on Justia Law