Justia Contracts Opinion Summaries

Ryan Price-Williams sued Admiral Insurance Company and Gabriel Dean and Charles Baber in Circuit Court pursuant to Alabama's direct-action statute. Both Dean and Baber were alleged by Price-Williams to be covered under a commercial general-liability insurance policy Admiral had issued the national Kappa Sigma fraternity to which Dean and Baber belonged. Price-Williams alleged that Admiral was obligated to pay a judgment that had been entered in favor of Price-Williams and against Dean and Baber in a previous action. Following a bench trial, the trial court entered a judgment in favor of Price-Williams and against Admiral, holding that the Admiral policy provided coverage to Dean and Baber for the negligent and/or wanton acts that formed the basis of the underlying action. Price-Williams sued Admiral after obtaining a judgment against Dean and Baber, who he alleged were insured by Admiral under a policy Admiral had issued to Kappa Sigma, by virtue of their positions as officers of the local chapter of Kappa Sigma. Following another bench trial, the trial court entered a judgment in favor of Price-Williams, obligating Admiral to fulfill the judgment entered against Dean and Baber in the underlying action. Because the evidence presented at trial supported the trial court's conclusion that Admiral's policy with Kappa Sigma provided liability coverage to Dean and Baber with regard to the negligence and wantonness claims tried in the underlying action, the Supreme Court affirmed that judgment. View "Admiral Insurance Company v. Price-Williams " on Justia Law

Forrest Construction was the named insured on a commercial general liability policy with Cincinnati Insurance. In 2004, Forrest was hired toconstruct a home for the Laughlins. A dispute arose over the amount owed and Forrest filed suit. The Laughlins counter-sued based on alleged defects in the workmanship of the construction, particularly the foundation. Forrest notified Cincinnati Insurance of the counter-complaint and requested defense. Cincinnati Insurance based its denial on an exclusion in the policy for work done by the insured its position that the underlying complaint did not allege damage caused by a subcontractor, thereby rendering the subcontractor exception to the “your work” exclusion inapplicable. Forrest sued, alleging breach of contract, bad-faith denial, and violation of the Tennessee Consumer Protection Act. The district court found that Cincinnati Insurance had breached its contract. The Sixth Circuit affirmed, holding that Cincinnati Insurance was given sufficient notice of the facts giving rise to its obligation to defend and that, under Tennessee law, “property damage” occurs when one component (here, the faulty foundation) of a finished product (the house) damages another component. View "Forrest Constr., Inc. v. Cincinnati Ins. Co." on Justia Law

Defendants-Appellants National Grange Mutual Insurance Company and The Main Street Insurance Group (collectively "NGM") appealed a Superior Court's grant of summary judgment in favor of Plaintiff-Appellee Elegant Slumming, Inc. in this property insurance coverage dispute. NGM raised two claims on appeal: (1) NGM contended the trial court erred in finding that the property insurance policy at issue requires only "some evidence," rather than "physical evidence," to show what happened to lost property; (2) and that the trial court erred in finding the amount of Elegant Slumming’s attorney’s fees reasonable. Upon review, the Supreme Court found that the trial court erred in concluding that testimonial evidence, by itself, fulfills the "physical evidence" requirement of the policy, and that Elegant Slumming did present physical evidence in addition to testimonial evidence to show what happened to the lost property and therefore coverage was not barred by the policy exclusion. Furthermore, the Court found no abuse of discretion in the award of attorney’s fees pursuant to statute in this case. Accordingly, the Court affirmed. View "National Grange Mutual Insurance Co. v. Elegant Slumming, Inc." on Justia Law

A railroad employee sued his employer, DM&E, after he was injured while working as the employee-in-charge of a construction site. DM&E then brought a third-party complaint against Corman, contending that Corman was required to indemnify and defend it against the employee's Federal Employers' Liability Act (FELA), 45 U.S.C. 51-60, claim pursuant to a contract between the parties. Nothing in the Contract Work Agreement (CWA) indicated that it extended to claims which were unrelated to Corman's common-law negligence. The indemnity clause in the CWA did not mention the FELA. Therefore, the court held that DM&E had not shown any issues of material fact existed and therefore no negligence could be attributed to Corman. The court also held that the indemnification provision in the CWA did not trigger the insured contract exception to the general exclusion provision contained in the Lexington Insurance policy, and, as a result, no obligation existed based on the terms of the policy. View "Dakota, MN & Eastern R. R. v. R. J. Corman R. R. Construction" on Justia Law

Plaintiff filed this action, asserting claims for, inter alia, breach of contract and violation of the Maryland Credit Grantor Closed End Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq. The district court was persuaded that the National Bank Act (NBA), 12 U.S.C. 24, 484(A), and federal regulations preempted the CLEC, and that plaintiff failed to state a claim for breach of contract. The court held that the district court erred in deeming plaintiff's CLEC claim against Capital One preempted by federal law and regulations where Capital One was subject to the terms of the CLEC in loans it acquired through assignment. The court also held that a breach of contract claim had been adequately pleaded and therefore, the district court erred in dismissing the claim. Accordingly, the court vacated and remanded for further proceedings. View "Decohen v. Capital One N.A." on Justia Law

The issue before the Supreme Court in this case stemmed from the grant of summary judgment in favor of an insurance company. The insureds contended that the liability coverage provision in their homeowner's policy required the insurer to defend a lawsuit brought by a contractor they hired to repair fire damage to their home and to remodel the home, and that the insurer was required to indemnify against any recovery by the contractor. Upon review of the policy underlying this case, the Supreme Court found no such duties as the insureds contended and affirmed the district court's judgment. View "Linford v. State Farm Fire & Casualty" on Justia Law

Ila and Gary Fedderson owned a business called Whisky Flow Dining and Minor Alley. Whisky Flow was destroyed by fire, after which Ila and Gary submitted a sworn proof of loss statement to the business's insurer, Columbia Insurance Group. Gary, however, made misrepresentations and committed fraud in submitting the statement. Columbia declined to pay Ila benefits, relying on a condition that voided the policy for fraud or misrepresentation by any insured. Ila filed suit, claiming that she was an innocent insured who was entitled to her share of the claim that related to her fifty percent interest in the business. The circuit court granted summary judgment for Columbia. The Supreme Court affirmed, holding that the circuit court correctly granted Columbia's motion for summary judgment, as Gary's misrepresentation and fraud voided the policy. View "Fedderson v. Columbia Ins. Group" on Justia Law

Hospital purchased from Assurance Company of America a "builder's risk" insurance policy and contracted with Wehr Constructors for installation of subsurfaces and floors as part its project. After installation, a portion of the floors and subsurface done by Wehr was damaged. Hospital sought recompense under the builders risk policy. Assurance denied the claim. Meanwhile, Wehr and Hospital settled on Wehr's breach of contract claim. As part of the settlement, Hospital assigned to Wehr any claim Hospital had against Assurance arising out of the policy. Wehr, as Hospital's assignee, then sued Assurance in federal district court. Assurance moved for judgment on the pleadings, invoking the policy's anti-assignment provision and arguing that it had not consented to the assignment. The district court requested certification to answer a question of Kentucky law. The Supreme Court concluded that under Kentucky law, a clause in an insurance policy that requires the insured to obtain the insurer's prior written consent before assigning a claim for an insured loss under the policy is not enforceable or applicable to the assignment of a claim under the policy where the covered loss occurs before the assignment, and that such a clause would, under those circumstances, be void as against public policy. View "Wehr Constructors, Inc. v. Assurance Co. of Am." on Justia Law

Olin brought suit against its insurers, including American Home, regarding environmental contamination at Olin sites in the United States. On appeal, Olin challenged the district court's grant of summary judgment in favor of American Home. At issue was whether the $30.3 million attachment point for American Home's excess policies for the years 1966-69 and 1969-72 could be reached by the alleged property damage at Olin's Morgan Hill, California, manufacturing site. The court held that the plain language of Olin's policies with American Home required American Home to indemnify Olin for that damage. Accordingly, the court vacated and remanded for further proceedings. View "Olin Corp. v. Ins. Co. of North America" on Justia Law

Gallagher provided insurance-related services throughout the country. Its subsidiary, GBSI, handled Gallagher's employee-benefit insurance programs. In November 2003, GBSI purchased Babcock Consulting, a business owned by Clayton L. Babcock. In this diversity suit, Gallagher and GBSI (collectively, "plaintiffs") sought money damages for breach of restrictive employment agreements under Louisiana law. The court affirmed the district court's directed verdict on the breach of competition agreement, but set aside the damages. The court concluded that the district court abused its discretion in admitting certain evidence on the issue of damages. The court vacated the award of attorneys' fees, leaving the ultimate award to be decided on remand. View "Arthur J. Gallagher & Co., et al v. Babcock, et al" on Justia Law