Justia Contracts Opinion Summaries

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

This insurance coverage dispute arose from a policy designed to protect financial institutions from losses caused by dishonest employees. Trying to recover nearly one million dollars stolen by an employee from client brokerage accounts, three financial institutions sued the insurance company that issued the policy. The district court held that the policy covered the losses and granted summary judgment to the financial institutions. The Sixth Circuit Court of Appeals affirmed the court's liability judgment and all but one of its damages calculations, holding (1) the stolen money was covered property; (2) the employee's theft caused a direct loss to the bank; (3) the employee committed his dishonest acts with the manifest intent to cause the loss; and (4) the district court's decision to subtract another insurance company's $50,000 pay-out to the banks based on another employee-dishonesty policy from the damages award was error. Remanded. View "First Defiance Fin. Corp. v. Progressive Cas. Ins." on Justia Law

This insurance coverage dispute arose from a policy designed to protect financial institutions from losses caused by dishonest employees. Trying to recover nearly one million dollars stolen by an employee from client brokerage accounts, three financial institutions sued the insurance company that issued the policy. The district court held that the policy covered the losses and granted summary judgment to the financial institutions. The Sixth Circuit Court of Appeals affirmed the court's liability judgment and all but one of its damages calculations, holding (1) the stolen money was covered property; (2) the employee's theft caused a direct loss to the bank; (3) the employee committed his dishonest acts with the manifest intent to cause the loss; and (4) the district court's decision to subtract another insurance company's $50,000 pay-out to the banks based on another employee-dishonesty policy from the damages award was error. Remanded. View "First Defiance Fin. Corp. v. Progressive Cas. Ins." on Justia Law

In 2004-2005, Costa & Son Construction performed site work for the general contractor (Braitt) on such a project in Bridgewater. After Braitt terminated the relationship Costa sued, alleging breach of contract and violations of G.L. c. 93A. Costa sought to recover damages under a payment bond obtained by Brait from Arch Insurance, G.L. c. 149, 29. Brait asserted similar counterclaims against Costa. Arch argued that Costa had relinquished any right to claim against the bond pursuant to a provision of his subcontract with Brait. The trial court granted Brait and Arch directed verdict with respect to claims under the bond. A jury returned a verdict for Costa, against Brait. The Massachusetts Supreme Court vacated the directed verdict. A subcontractor on a public construction project for which a payment bond has been obtained by the general contractor pursuant to G.L. c. 149, 29, may not by private agreement forgo its right to pursue payment under the bond. The court also vacated the portion of the amended judgment granting consequential damages to Costa; consequential damages were precluded by the contract. View "Costa v. Brait Builders Corp." on Justia Law

The issues before the Supreme Court in this case was whether the services provided by plaintiff's wife constituted services "for an injured person's care," whether the Court of Appeals properly remanded this case to the circuit court for findings of fact regarding the extent to which expenses for services for plaintiff's care were actually incurred, and whether the circuit court erred by awarding an hourly rate that corporate agencies charge for rendering services, rather than an hourly rate that individual caregivers receive for those services. Upon review, the Court held that "allowable expenses" must be "for an injured person's care, recovery, or rehabilitation." Because the Michigan no-fault act does not create different standards depending on who provides the services, this requirement applies equally to services that a family member provides and services that an unrelated caregiver provides. For this case, the Supreme Court held that the Court of Appeals correctly determined that plaintiff may recover "allowable expenses" to the extent that they encompass services that are reasonably necessary for plaintiff's care when the care is "related to [plaintiff's] injuries." However, because the circuit court erred by awarding damages for allowable expenses without requiring proof that the underlying charges were actually incurred, the Court agreed with the decision of the Court of Appeals to remand this case to the circuit court for a determination whether charges for allowable expenses were actually incurred. In determining the hourly rate for attendant care services, the circuit court "clearly erred" by ruling that plaintiff was entitled to an hourly rate of $40 for attendant care services because that rate was entirely inconsistent with the evidence of an individual's rate of compensation, including the compensation that plaintiff's wife, actually received as an employee hired to care for plaintiff. The case was remanded to the circuit court for further proceedings. View "Douglas v. Allstate Insurance Co." on Justia Law

Ruth Mendenhall appealed a summary judgment in favor of Property and Casualty Insurance Company of Hartford on her equitable garnishment claim seeking insurance coverage for the death of her husband, Len Mendenhall. The trial court's judgment was premised on the conclusion that Len was an "employee" under the terms of the Hartford policy and, therefore, was excluded from coverage. The Supreme Court reversed the judgment of the trial court, holding that, given the facts of this case and the policy language, Len was not an "employee" but was instead a "temporary worker" subject to coverage under the terms of the Hartford policy. View "Mendenhall v. Prop. & Cas. Ins. Co. of Hartford" on Justia Law

Attorneys Post and Reid were retained to defend a medical malpractice action. At trial, plaintiffs introduced evidence suggesting that Post and Reid had engaged in discovery misconduct. Fearing that the jury believed that there had been a “cover-up” involving its lawyers, and concerned with the “substantial potential of uninsured punitive exposure,” the hospital, represented by new counsel, settled the case for $11 million, which represented the full extent of its medical malpractice policy limits. The settlement did not release Post, Reid, the law firm where they began representation of the hospital, or their new firm from liability. The hospital threatened Post with a malpractice suit and sought sanctions. Post eventually brought claims of bad faith and breach of contract against his legal malpractice insurer. The district court awarded $921,862.38 for breach of contract. The Third Circuit affirmed summary judgment in favor of the insurer on the bad faith claim and remanded for recalculation of the award, holding that, under the policy, the insurer is responsible for all costs incurred by Post in connection with the hospital’s malpractice claim from October 12, 2005 forward and for all costs incurred by Post to defend the sanctions proceedings from February 8, 2006 forward. View "Post v. St. Paul Travelers Ins. Co." on Justia Law