Justia Contracts Opinion Summaries

The Knowles owned rental property in Clinton, Massachusetts that was mortgaged with Fidelity Co-operative Bank (Fidelity) and insured by Nova Casualty Company (Nova). In 2008, a tropical storm brought heavy rain that caused substantial damage to the interior of the Knowles' building. The Town of Clinton ordered the building to be closed. Because the Knowles could not afford to make repairs to the building, it remained vacant. The Knowles submitted a claim for reimbursement for the water damage with Nova, which denied the claim. The building was later vandalized, causing further damage. Nova also refused coverage on this damage. The Knowles subsequently defaulted on their mortgage. In 2010, Fidelity, individually and as assignee of the Knowles, filed a complaint against Nova seeking a declaration that the physical losses suffered by the property and the loss of business income to the Knowles was covered by their all-risk insurance policy. The district court granted summary judgment for Nova. The First Circuit Court of Appeals reversed, holding that the water damage was covered under the policy because the policy's coverage extended to both damage "caused by" or "resulting from" rain as well as damage resulting from the entry of "surface water." Remanded. View "Fidelity Coop. Bank v. Nova Cas. Co." on Justia Law

Whitney Schwan died in an automobile accident after Travis Turner, the driver, lost control of the vehicle. Whitney's parents sued Travis's estate and his parents (the Turners). The Turners had a homeowners policy with State Farm Fire and Casualty Company (State Farm). State Farm filed an action seeking a declaration that it owed no duty to defend or indemnify the Turners under the homeowners policy. Meanwhile, a mediation concluded with a settlement that included assignment of all of the Turners' rights and claims under the homeowners' policy to the Schwans, and the Schwans replaced the Turners in the declaratory action. The district court granted summary judgment to the Schwans on its counterclaim that State Farm had breached its duty to defend the Turners by not retaining separate counsel for the Turners in the underlying action. The Supreme Court reversed, holding that the district court erred by concluding that State Farm had breached its duty to defend under the policy, as State Farm did ensure a full defense was provided to the Turners even though its decisions regarding counsel did not include hiring additional counsel. View "State Farm Fire & Cas. Co. v. Schwan" on Justia Law

Plaintiff, who carried health insurance through New West Health Services (New West), was injured in an automobile accident resulting in medical expenses totaling approximately $120,000. The tortfeasor's insurer paid approximately $100,000 of Plaintiff's medical bills. Plaintiff later filed a complaint against New West alleging individual and class claims, asserting that New West failed to pay approximately $100,000 of her medical expenses because the third party liability carrier had paid the majority of the bills. The district court certified the class complaint. The Supreme Court affirmed, holding that the district court did not abuse its discretion by adopting the class definition proposed by Plaintiff and denying New West's motion to modify the class definition. View "Rolan v. New West Health Servs." on Justia Law

Leonard Landa was the sole managing member of a Montana limited liability corporation. Landa carried commercial general liability insurance through Assurance. After a former employee of Landa's filed a complaint alleging that Landa had committed various torts by inducing him to work for Landa under allegedly false pretenses, Landa tendered defense of the former employee's claim to Assurance. Assurance refused to defend Landa, stating that the complaint's allegations were not covered under Landa's policy. Landa filed a complaint seeking declaratory relief establishing that Assurance had a duty to defend and indemnify Landa and alleging violations of Montana's Unfair Trade Practices Act (UTPA), negligence, and other causes of action. The district court granted summary judgment for Assurance, finding that the complaint's allegations were not covered under Landa's policy and that Assurance was not liable under the UTPA because the denial of coverage was grounded on a legal conclusion. The Supreme Court affirmed, holding that Assurance correctly declined to provide a defense where the former employee's complaint did not allege an "occurrence" and, as a result, did not trigger a duty to defend under the policy. View "Landa v. Assurance Co. of Am." on Justia Law

Allen suffered a fatal heart attack in 2009, leaving a wife of three years, Arlene, and three adult children from a previous marriage. At the time of Allen’s death, his daughter and her children lived with Allen and Arlene. Allen had a will bequeathing $100,000, but his assets passed outside of probate, leaving his estate with insufficient funds for the bequest. Allen had designated his children as beneficiaries of assets, including a home, life insurance policies, retirement accounts, and other savings accounts. Allen had one life insurance policy as part of his compensation package as a pharmacist, which provided $74,000 in basic coverage and $341,000 in supplemental coverage. If the policyholder failed to designate a beneficiary by his date of death, the proceeds would pass to the policyholder’s spouse by default. The insurer never received any indication that Allen wished to designate a beneficiary. In the days following Allen’s death, however, the children found a change-of-beneficiary form, allegedly completed by their father more than a year before his death, but never submitted. The district court ruled in Arlene’s favor, finding that even if Allen had filled out a change-of-beneficiary form he had not substantially complied with policy requirements for changing beneficiaries. The Seventh Circuit affirmed. View "Kagan v. Kagan" on Justia Law

Wife sustained injuries as a result of Husband's negligent driving. Wife and Husband (Plaintiffs) sought coverage from Insurer, which denied coverage due to a family member exclusion in the umbrella police Husband held with Insurer. The district court concluded that the exclusion was unconscionable and entered summary judgment for Plaintiffs. The Supreme Court reversed and remanded for entry of summary judgment in favor of Insurer, holding (1) Plaintiffs failed to establish that the family member exclusion unconscionably favored State Farm, and the district court erred in so concluding; (2) the exclusion did not contravene and express statute, undermine the made-whole doctrine, or violate public policy in any other way; and (3) the policy unambiguously excluded Wife's claim from coverage, and the family member exclusion did not violate Plaintiffs' reasonable expectations. View "Fisher v. State Farm Mut. Auto. Ins. Co." on Justia Law

Grange Insurance Company of Michigan sought a declaratory judgment regarding its responsibility under a no-fault insurance policy issued to Edward Lawrence to reimburse Farm Bureau General Insurance Company of Michigan for personal protection insurance (PIP) benefits it paid after the death of his daughter Josalyn Lawrence following an automobile accident. The accident occurred while Josalyn's mother, Laura Rosinski, was driving a vehicle insured by Farm Bureau. Lawrence and Rosinski were divorced at the time of the accident but shared joint legal custody of the child. Rosinski had primary physical custody. Farm Bureau sought partial reimbursement of the PIP benefits it paid, arguing that Grange was in the same order of priority because Josalyn was domiciled in both parents' homes under MCL 500.3114(1). Farm Bureau counterclaimed. The circuit court granted Farm Bureau's motion for summary judgment; Grange appealed. The Court of Appeals affirmed. Automobile Club Insurance Association (ACIA) also sought a declaratory judgment to recover PIP benefits from State Farm Mutual Automobile Insurance Company under similar circumstances as in "Lawrence." Sarah Campanelli, the daughter of Francis Campaneli and Tina Taylor, died following an automobile accident. At the time of the accident, Sarah's parents, Francis Campanelli and Tina Taylor, were divorced and shared joint legal custody of Sarah; Campanelli had physical custody. Soon after the divorce, the family court modified the divorce judgment, allowing Campanelli to move and to change Sarah's domicile to Tennessee. When the accident occurred eleven years later, Sarah was staying in Michigan to attend school after a summer visit with her mother. ACIA claimed that State Farm was the responsible insurer and that that Sarah was not domiciled in Michigan, therefore it was not responsible for Sarah's PIP benefits. The circuit court granted summary judgment in favor of State Farm; the Court of Appeals reversed, concluding that there was a question of fact as to the child's domicile. Upon review, the Supreme Court reversed and remanded the "Grange" case for entry of summary judgment in favor of Grange; the Court reversed and remanded the "ACIA" case for entry of summary judgment in favor of ACIA. View "Grange Insurance Company of Michigan v. Lawrence" on Justia Law

Brent Harris sued Auto Club Insurance Association (ACIA), seeking to recover a duplicate payment for medical expenses incurred as the result of a motorcycle-motor vehicle accident, which had been paid directly to providers by his health insurer, Blue Cross Blue Shield of Michigan (BCBSM). Harris claimed ACIA was required to pay him directly the same amounts paid by BCBSM to any healthcare provider for the medical expenses. ACIA filed a third-party complaint against BCBSM and Harris filed an amended complaint naming BCBSM as a defendant. The circuit court granted summary judgment to BCBSM and ACIA, concluding that because ACIA's policy was uncoordinated, ACIA was the primary insurer, and that the BCBSM certificate coordinated benefits with the no-fault policy. The Court of Appeals reversed the circuit court, concluding that the BCBSM certificate did not coordinate with ACIA's no-fault policy. Upon review, the Supreme Court reversed in part and reinstated the trial court's judgment: In this case, the Court of Appeals erred in concluding that Harris was entitled to double recovery; Harris was not obligated to pay his medical expenses because, as a matter of law, ACIA was liable for Harris's PIP benefits. ACIA was liable regardless of when the expenses were incurred and BCBSM's certificate that stated it would not cover those services for which Harris legally did not have to pay precluded Harris from receiving double recovery for those medical expenses. View "Harris v. Auto Club Insurance Association" on Justia Law

A plaintiff who was injured in an accident sought PIP benefits from an insurance carrier. The Superior Court applied Delaware's current three-part test and analyzed: (1) "whether the vehicle was an 'active accessory' in causing the injury," (2) "whether there was an act of independent significance that broke the causal link between use of the vehicle and the injuries inflicted," and (3) "whether the vehicle was used for transportation purposes." After concluding that the insured vehicle was not used for transportation purposes, the court granted the insurance carrier's motion for summary judgment. Upon reexamination of the statutory framework for PIP coverage, the Supreme Court concluded that the test's "transportation purposes" element should have been rejected. Therefore, the Court reversed the Superior Court judgment and remanded the case for further proceedings. View "Kelty v. State Farm Mutual Automobile Insurance Co." on Justia Law

Plaintiffs Dorothy Harris and Tedeen Holbert were injured in separate automobile accidents caused by third-party tortfeasors. Plaintiffs were treated at Billings Clinic and St. Vincent Healthcare (Providers) for their injuries. Both Harris and Holbert were members of health plans administered by Blue Cross Blue Shield (BCBS), which entered into a preferred provider agreement (PPA) with the Providers pursuant to which Providers accepted payment from BCBS at a discounted reimbursement rate for certain medical services for BCBS insureds. Plaintiffs subsequently filed a complaint against Billings Clinic, asserting breach of contract and constructive fraud claims and requesting compensatory damages equal to the difference between the amount the third-party insurers paid to the Providers and the reduced reimbursement rates under the PPA with BCBS. Harris also filed similar claims against St. Vincent Healthcare. The district courts dismissed the claims for failure to state a claim upon which relief can be granted. The Supreme Court affirmed, holding that the district court did not err in determining that the Providers were entitled to collect from third-party insurers payment for the full amount of the billed charges for the medical treatment provided to Plaintiffs. View "Harris v. St Vincent Healthcare" on Justia Law