Justia Contracts Opinion Summaries

Plaintiffs brought a declaratory action seeking a ruling that their insurance policies issued to defendants did not cover class claims brought in state court by Percic Enterprises. The state court complaint alleged that defendants violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C), by sending unsolicited fax advertisements. After a settlement was reached in the state action, the federal district court concluded that damages sustained by sending unsolicited fax advertisements in violation of the TCPA were covered under the advertising provision of the policies. The court affirmed, applying standard Minnesota principles of insurance contract interpretation where unambiguous words were given their plain, ordinary, and popular meaning, and ambiguous language was construed in favor of the insured. View "Owners Ins. Co., et al v. European Auto Works, Inc., et al" on Justia Law

In a 2009 opinion, the Sixth Circuit held that, in a 1998 collective bargaining agreement, CNH agreed to provide health-care benefits to retirees and their spouses for life, but rejected the suggestion that the scope of this commitment in the context of healthcare benefits, as opposed to pension benefits, meant that CNH could make no changes to the healthcare benefits provided to retirees. The court remanded for a determination of reasonableness with respect to CNH’s proposed changes to its retiree healthcare benefits, under which retirees, previously able to choose any doctor without suffering a financial penalty, would be put into a managed-care plan. The court listed three considerations: Does the modified plan provide benefits “reasonably commensurate” with the old plan? Are the proposed changes “reasonable in light of changes in health care”? And are the benefits “roughly consistent with the kinds of benefits provided to current employees”? On remand, the district court granted CNH summary judgment without reaching the reasonableness question or creating a factual record from which the determination could be made on appeal. The Sixth Circuit again remanded.View "Reese v. CNH America LLC" on Justia Law

TMTA obtained a policy, known as the CrimeShield Policy to transfer the risk of employee theft from the TMTA to Hartford. Almost immediately after the parties signed the Policy a TMTA employee began diverting funds into his own accounts from the TMTA Insurance Agency, a limited liability corporation controlled by the TMTA and from which the TMTA receives a significant portion of its income. The Agency is not a named insured under the policy. Hartford took the position that the Agency, not the TMTA, suffered the loss. The Sixth Circuit affirmed the district court, holding that the Agency a party is not directly covered by the policy, and that the policy does not otherwise provide for the TMTA to recover funds that were diverted from the Agency.View "Tooling, Mfg.& Tech. Ass'n v. Hartford Fire Ins. Co." on Justia Law

Judith Koenig rented a car from a car rental company and was involved in an accident. PurCo sued Koenig to collect damages related to the incident, including damages for loss of the vehicle's use during the time it was being repaired. PurCo sought to measure loss of use damages by using the reasonable rental value of a substitute vehicle. Koenig filed a motion for summary judgment which the trial court granted, holding that PurCo could prevail on its loss of use damages claim only if it suffered actual lost profits. The court of appeals reversed the trial court's summary judgment ruling and remanded the case. It agreed with the trial court's conclusion that, in general, the appropriate measure of loss of use damages in a commercial setting is actual lost profits, but concluded the rental agreement in this case altered the measure of loss of use damages and held that PurCo was required to show certain loss prerequisites. Upon review, the Supreme Court affirmed the court of appeals judgment on different grounds, holding that loss of use damages in a commercial setting may be measured either by actual lost profits or by reasonable rental value. PurCo was entitled to recover loss of use damages irrespective of its actual lost profits. Accordingly, this case was remanded for calculation of the reasonable rental value of a substitute vehicle. View "Koenig v. PurCo Fleet Services, Inc." on Justia Law

This case arose from claims asserted by multiple persons against Blue Cross and Blue Shield of Montana (BCBSMT) and Montana Comprehensive Health Association (MCHA). Claimants asserted that while they were fully insured by BCBSMT or MCHA, they submitted claims that the insurers denied based upon exclusions contained in their insurance policies. These exclusions were subsequently disapproved by the Montana Commissioner of Insurance (Commissioner) and the insureds sought the previously-denied benefits. The matter evolved into a class action and three of the claimants, Krista Lucas, Brittany Smith, and Alice Speare, were named class representatives. Subsequently, a settlement was negotiated. Three other claimants, Tyson Pallister, Kevin Budd and Jessica Normandeau, objected to the settlement and sought review by the Second Judicial District Court. The District Court approved the settlement. Pallister, Budd and Normandeau appealed asserting numerous errors by the District Court including but not limited to the court’s error in denying Pallister’s motion to conduct discovery. Upon review, the Supreme Court reversed and remanded on a discrete issue of discovery and vacated the District Court’s approval of the Settlement Agreement. View "Pallister et al v. Blue Cross & Blue Shield of Montana" on Justia Law

Plaintiff James Bannister was injured in a motorcycle accident on the freeway near Oklahoma City in 2009. According to Bannister, he was forced to lay down and slide his motorcycle at a high speed when a car in front of him braked suddenly, that car having been cut off by another car. Bannister slammed into the wall of the freeway and suffered substantial injuries. He did not collide with any other vehicle; neither of the aforementioned cars remained at the scene of the accident; and no witnesses besides Bannister ever gave an account of the crash. Bannister filed an insurance claim with his insurer, defendant State Farm Automobile Insurance Company (State Farm). State Farm denied Bannister’s claim, finding him to be majority at fault in the accident. Bannister subsequently filed suit in Oklahoma state court, and State Farm removed the case to the Western District of Oklahoma. By the time the case went to trial, Bannister sought relief solely on a tort theory: that State Farm violated its duty of good faith and fair dealing in denying his claim. The jury found in favor of Bannister, but the district court granted State Farm’s renewed motion for judgment as a matter of law (“JMOL”), ruling essentially that the evidence showed that State Farm’s denial of Bannister’s claim was based on a reasonable dispute regarding whether Bannister was majority at fault, and that no evidence suggested that further investigation would have undermined the reasonableness of that dispute. Bannister failed to “make a showing that material facts were overlooked or that a more thorough investigation would have produced relevant information” that would have delegitimized the insurer’s dispute of the claim. As such, the Tenth Circuit concluded his inadequate-investigation theory of bad faith was without merit, and JMOL in favor of State Farm was appropriate. View "Bannister v. State Farm Mutual Auto Ins Co" on Justia Law

In this subrogation action, appellant Insurer sought to recover payments it made to its Insured for the repair of water damage allegedly caused by the negligence of respondent, the commercial tenant of Insured. The district court dismissed Insurer's subrogation claim as a matter of law, relying on the court of appeals decision in United Fire & Casualty Co. v. Bruggeman. The court of appeals affirmed. The Supreme Court reversed after rejecting the rule from Bruggeman, holding that the question of whether an insurer may pursue a subrogation action against the tenant of an insured, when the tenant's negligence caused damage to the insured's property, must be answered by examining the unique facts and circumstances of each case. Remanded. View "RAM Mut. Ins. Co. v. Rusty Rohde" on Justia Law

At issue in this case was whether the workers' compensation courts had the authority to hear a petition filed by Insured to determine whether Insurer had a duty to defend and indemnify Insured under a policy for workers' compensation insurance. Insurer moved to dismiss Insured's petition, arguing that the compensation judge did not have subject matter jurisdiction to hear the petition because it asserted a breach of contract claim rather than one arising under the workers' compensation laws. The compensation judge disagreed and denied Insurer's motion to dismiss. The workers' compensation court of appeals (WCCA) affirmed, concluding that Insured was seeking a declaration that its insurance coverage with Insurer was still "in effect," a question within the compensation judge's authority to decide. The Supreme Court affirmed, holding that the workers' compensation courts had jurisdiction to decide the issues presented in Insured's petition for declaration of insurance coverage, as the real nature of the claim was whether Insured's insurance coverage was in effect, a question that was within the authority of the compensation judge to answer. View "Giersdorf v. A & M Constr., Inc." on Justia Law

Plaintiffs purchased a flood insurance policy from Appellee, American Bankers Insurance Company of Florida. Their policy was issued pursuant to a federal program under which private insurers issue and administer standardized flood insurance policies (WYO companies), and all claims are paid by the government. After a flood damaged their home in Rhode Island, including the contents of their basement, Plaintiffs sought compensation. American Bankers disallowed much of the amount claimed, asserting that the contents of Plaintiffs' basement were not covered by their policy. Plaintiffs subsequently brought suit in federal court, arguing that the Declarations Page of their policy created an ambiguity as to the scope of coverage and that, under federal common law and general insurance law principles, this ambiguity should be resolved in their favor. The district court entered summary judgment in favor of American Bankers. The First Circuit Court of Appeals affirmed, holding that Plaintiffs' claim was not remotely a claim on which a WYO company may be required to pay damages. View "McGair v. Am. Bankers Ins. Co. of Fla." on Justia Law

This case arose out of a motor vehicle accident caused by an underinsured motorist in which Plaintiff, an employee of defendant City (Defendant), sustained injuries while operating a private passenger motor vehicle owned by Defendant and acting within the scope of his employment. Plaintiff sought coverage for his remaining damages from Defendant pursuant to its obligation to provide underinsured motorist coverage pursuant to Conn. Gen. Stat. 38a-336(a)(2). Defendant denied Plaintiff's claim because Plaintiff's $50,000 recovery exceeded the purported $20,000 coverage limit of Defendant's plan. The trial court rendered in favor of Defendant, determining the limits of Defendant's underinsured motorist coverage in its capacity as a self-insurer to be the statutory minimum of $20,000 per person and $40,000 per occurrence. The Supreme Court affirmed, albeit under different reasoning, holding that pursuant to the statutory insurance scheme, a self-insurer is deemed to provide the minimum statutory underinsured motorist coverage of $20,000 per accident and $40,00 per occurrence for the benefit of occupants of its private passenger motor vehicles. View "Garcia v. Bridgeport" on Justia Law