Justia Contracts Opinion Summaries

Strata Corporation and Liberty Mutual Fire Insurance Company appealed a partial summary judgment dismissing Liberty Mutual's subrogation claim against United Crane & Excavation, Inc., after the district court certified the partial summary judgment as final under N.D.R.Civ.P. 54(b). Because this case did not represent the "infrequent harsh case for immediate appeal and subsequent proceedings in the district court may moot the issue raised on appeal," the district court improvidently certified the partial summary judgment as final and the Supreme Court dismissed the appeal. View "City of Mandan v. Strata Corp." on Justia Law

Lexington Insurance Company and Chartis, Inc. appealed a circuit court order that appointed a third arbitrator to the arbitration panel established to settle a dispute between Lexington and Southern Energy Homes, Inc. ("SEH"). From January 1, 2002, through October 31, 2004, SEH purchased from Lexington three commercial general-liability ("CGL") policies. An endorsement to a CGL policy insuring SEH from January 1, 2002, through December 31, 2002, provided that SEH is responsible for a $100,000 self-insurance retention ("SIR") "per occurrence." Endorsements to two successive CGL policies that together provided coverage to SEH through October 31, 2004, provide that SEH is responsible for a $250,000 SIR per occurrence. The SIR applied both to costs of defense incurred by SEH and to amounts SEH pays in settlement or pursuant to a judgment. From January 1, 2002, through October 31, 2004, SEH was named as a defendant in 46 lawsuits alleging property damage and personal injury resulting from SEH's using a vinyl-on-gypsum product in the homes it manufactured. SEH gave notice of these lawsuits to Lexington, and that it had exhausted its SIR amounts in the litigation and was entitled to reimbursement from Lexington. More than 120 days passed without SEH receiving a decision from Lexington as to whether it agreed with SEH's claim for this amount. SEH made an arbitration demand pursuant to the arbitration clauses of the CGL policies, including the SIR endorsement to the 2002 policy. Upon review of the policies in question, the Supreme Court concluded that the circuit court erred in appointing the third arbitrator. The order was reversed and the case was remanded for further proceedings. View "Lexington Insurance Co. v. Southern Energy Homes, Inc. " on Justia Law

This was an interlocutory appeal from the district court's grant of class certification in a case involving allegations that the defendant title insurance company charged premiums for title policies that exceeded the refinance rates set by the Texas Department of Insurance in Tex. Ins. Code Rate Rule R-8. The Fifth Circuit Court of Appeals reversed the district court's grant of class certification and remanded for further proceedings, holding that the district court abused its discretion in finding that the requirements of Fed. R. Civ. P. 23(a)(2) were satisfied, as none of the four questions identified by the district court was actually common to the class and common questions would not predominate at trial. View "Ahmad v. Old Republic Nat'l Title Ins. Co." on Justia Law

The original opinion in this case was filed on June 15, 2012. Because this Texas diversity law case involved important and determinative questions of Texas law as to which there is not controlling Texas Supreme Court precedent, the panel withdrew the previous opinion and substituted the following certified questions to the Texas Supreme Court: (1) Does a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, assume liability for damages arising out of the contractor's defective work so as to trigger a contractual liability exclusion in a CGL insurance policy; and (2) if the exclusion is triggered, do the allegations in the underlying lawsuit alleging that the contractor violated its common law duty to perform the contract in a careful, workmanlike, and non-negligent manner fall within the exception to the contractual liability exclusion for "liability that would exist in the absence of contract." View "Ewing Constr. Co. v. Amerisure Ins. Co." on Justia Law

After its property sustained wind damage during Hurricane Katrina, a real-estate developer sued its insurance provider for coverage, and, in the alternative, its insurance agent for professional negligence. The district court decided that the insurance policy covered wind damage, and a jury decided that there had been no "mutual mistake" between the agent and the provider concerning wind coverage. As a consequence, the district court dismissed with prejudice the developer's negligence claim against its agent. The insurance provider appealed, and the Fifth Circuit Court of Appeals reversed, deciding that the policy did not cover wind damage. On remand, the developer moved under Fed. R. Civ. P. 60(b) to set aside the dismissal of its professional negligence claim against the agent in light of the reversal. The district court granted the motion and resurrected the negligence claim against the agent. The Fifth Circuit affirmed, holding that the district court did not abuse its discretion in granting the developer Rule 60(b) relief. View "Lowry Dev., LLC v. Groves & Assocs. Ins., Inc." on Justia Law

Plaintiff Marnita Goddard was injured while riding on a trolley operated by the city of Deadwood, South Dakota. Invoking diversity jurisdiction, Goddard sued the city for negligence and the South Dakota Public Assurance Alliance (SDPAA) for uninsured motorist coverage. After Goddard settled with the city, the district court granted summary judgment in favor of SDPAA, concluding that Goddard was not covered under the uninsured motorist provision in the city's agreement with SDPAA. The Eighth Circuit Court of Appeals affirmed, holding that Goddard had not shown she was entitled to coverage under the uninsured motorist provision of the SDPAA agreement. View "Goddard v. S.D. Pub. Assurance Alliance" on Justia Law

Ronske’s widow sued Heil after a dump truck body it manufactured caused Ronske’s death. Heil held a commercial general liability policy. Evanston insured the first $1 million loss in excess of $500,000 self-insured retention. Heil was required to defend, investigate, and accept any reasonable settlement offer within the SIR; Evanston could choose to assume charge of defense and settlement. Heil retained attorney Pelini. After more than two years, Evanston wanted to assume defense and appointed Sutter, with Pelini to remain involved. Pelini’s fees would count toward exhaustion of the SIR, and Evanston would pay Pelini’s fees in excess of the SIR. The parties settled for $5,711,000. Evanston paid $1 million, leaving Heil responsible for $4,711,000 and $63,533.79 in fees and costs in excess of its SIR. Evanston declined to pay fees and costs. A jury found that Evanston breached the contract and refused in bad faith to pay amounts owed under the policy, but did not fail to settle the wrongful death action in bad faith, awarded Heil compensatory damages plus prejudgment interest for breach of contract, $15,883.44 in statutory damages for bad faith refusal to pay, and $2 million punitive damages. The Sixth Circuit vacated the $2 million punitive damages award, but affirmed the finding of liability under state law. View "Heil Co. v. Evanston Ins. Co." on Justia Law

Alpine Glass, Inc. appealed the district court's partial denial of Alpine's motion to consolidate 482 short-pay claims for arbitration against the Country Mutual Insurance Co. and five of its subsidiaries. The Eighth Circuit Court of Appeals dismissed Alpine's appeal for lack of appellate jurisdiction, holding (1) the Court lacked jurisdiction to hear the appeal under 28 U.S.C. 1291 because the district court's order was not a final order; and (2) the denial of a motion to consolidate arbitrations does not imperil a substantial public interest sufficient to warrant jurisdiction under the collateral order doctrine, and therefore, the order was not appealable under the collateral order doctrine. View "Alpine Glass, Inc. v. Country Mut. Ins. Co." on Justia Law

Sweeney owned a transmission shop and referred customers to Tradewell, who owned a nearby car rental business. Sweeney would sometimes simply refer customers to Tradewell or drive them to Tradewell’s business. If employees were available, Tradewell would have them take a car to Sweeney’s shop. Sweeney would sometimes pick up a car from Tradewell and deliver it to the customer and would occasionally use the car for personal errands. This was encouraged by Tradewell, who asked Sweeney to make sure the cars were running properly. In 2004 Sweeney, returning from a personal errand, was injured in an accident while driving a car owned by Tradewell that was intended for delivery to a customer the following morning. Sweeney sought underinsured motorist benefits pursuant to his policy with Liberty. Liberty sought a declaration that Sweeney was not entitled to coverage. On remand, the district court granted Liberty summary judgment, finding that “intended use” and “regular use” provisions did not bar coverage, but Liberty could deny coverage based on the “auto business” provision. The Third Circuit reversed, in favor of Sweeney, noting that Sweeney was on a personal errand, not engaged in “auto business” and did not have unfettered use of the cars. View "Liberty Mut. Ins. Co. v. Sweeney" on Justia Law

The Supreme Court granted leave in two cases to address the question whether a person injured while driving a motor vehicle that the person had taken contrary to the express prohibition of the owner may avail himself or herself of personal protection insurance benefits (PIP benefits) under the no-fault act, notwithstanding the fact that MCL 500.3113(a) bars a person from receiving PIP benefits for injuries suffered while using a vehicle that he or she "had taken unlawfully, unless the person reasonably believed that he or she was entitled to take and use the vehicle." Upon review, the Supreme Court held that any person who takes a vehicle contrary to a provision of the Michigan Penal Code (including MCL 750.413 and MCL 750.414, the "joyriding" statutes) has taken the vehicle unlawfully for purposes of MCL 500.3113(a). Furthermore, the Court held that the use of the phrase "a person" in MCL 500.3113(a) "clearly and plainly" includes a family member who has taken a vehicle unlawfully, thereby precludes that person from receiving PIP benefits. View "Spectrum Health Hospitals v. Farm Bureau Mutual Ins. Co. of Michigan" on Justia Law