Justia Contracts Opinion Summaries

The United States Court of Appeals for the Eleventh Circuit certified two questions to the Georgia Supreme Court: "(1) Did the Georgia Insurance Commissioner act within his legal authority when he promulgated Ga. Comp. R. & Regs. 120-2-20-.02, such that a multiple-line insurance policy providing first-party insurance coverage for theft-related property damage must be reformed to conform with the two-year limitation period provided for in Georgia's Standard Fire Policy, Ga. Comp. R. & Regs. 120-2-19-.01?; and, (2) is this action barred by the Policy's one-year limitation period?" These questions arose from a dispute over Petitioner Ricardo White's purchase of a homeowner's insurance policy from Respondent State Farm Fire and Casualty Company. The insurance policy was a first-party insurance contract that provided multiple-line coverage, including coverage for loss or damage caused by both fire and theft. The policy contained a limitation provision stating that a lawsuit against State Farm must be brought "within one year of the date of loss or damage." After his home was burglarized in January 2008 (within the period of coverage), Petitioner filed a claim for the loss of more than $135,000 in personal property. State Farm denied the claim based on its determination that Petitioner misrepresented material information in filing his claim. Waiting more than one year after his date of loss, Petitioner filed a June 2009 complaint against State Farm in state court alleging claims for breach of contract, bad faith, and fraud. Upon review of the facts of this case, the Supreme Court found that: (1) the Georgia Insurance Commissioner did not act within his legal authority and (2) this action was barred by the one-year limitation period in his insurance policy.

In this case, the Supreme Court was asked to decide whether the decedent Robert Daniel George, who was struck and killed by an uninsured motorist in 2006, qualified as an insured under an insurance policy provided by Harleysville Worcester Insurance Company, which policy was procured by The Cormack-Routhier Agency, Inc. Plaintiffs Pamela A. Riel and Glenn N. George, as co-administrators of the decedent’s estate, and Pamela A. Riel, on behalf of her and the decedent’s minor daughter, Kara George, brought a complaint against Defendants Harleysville and Cormack for declaratory and other relief, but a Superior Court justice granted summary judgment in favor of the defendants. Plaintiffs appealed, arguing that the trial justice erred in dismissing their claims against Harleysville because a genuine issue of material fact existed with respect to whether the decedent should be considered a named insured under the policy. Plaintiffs further asserted that the trial justice erred in dismissing their claims against Cormack because, even if they failed to establish that the decedent was a named insured, they still were entitled to pursue their claims against Cormack for failing to procure adequate coverage. After considering the parties' written and oral submissions and reviewing the record, the Court affirmed the judgment of the Superior Court.

The issue before the Supreme Court in this case concerned the applicability of an assault and/or battery exclusion in a commercial general liability insurance policy. Great American E&S Insurance Company filed a declaratory-judgment action against its insured, End Zone Pub & Grill of Narragansett, Inc. and Defendant Michael Gondusky. Gondusky previously had filed a civil suit against End Zone alleging that he had been seriously injured by two doormen who were employed by End Zone. The Superior Court entered both an order granting Great American's motion for summary judgment and a declaratory judgment decreeing that Great American "owe[d] no duty to defend or obligation to indemnify relative to the underlying action brought by Michael Gondusky against End Zone * * *." Gondusky appealed the Superior Court’s judgment. This case came before the Supreme Court pursuant to an order directing the parties to show cause why the issues raised in this appeal should not summarily be decided. After considering the parties' written and oral submissions and reviewing the record, the Court concluded that cause had not been shown and that this case could be decided without further briefing or argument. The Court affirmed the judgment of the Superior Court.

This was an appeal after a retrial on remand in a breach of contract claim by Insured against Insurer. At issue on appeal was the optional replacement cost coverage that Insured contracted. The question was whether Insurer's general denial of liability excused Insured from complying with a policy condition requiring that Insured actually repair or replace the damaged property before replacement costs would be paid. The Supreme Court remanded the cause for a new trial on the limited issue of the extent to which Insurer's conduct prevented Insured from complying with the repair / replace condition to replacement cost coverage under the policy. Also to be tried on remand was the amount of the actual cash value of the loss in the event Insured was not excused from the condition precedent to replacement cost coverage.

Plaintiff-Appellee William Mohr was struck in Delaware as a pedestrian by a car insured in Delaware. He recovered the minimum $15,000 coverage limit from the carrier that insured the striking car. Plaintiff also sought to recover from Defendant-Appellant Progressive Northern Insurance Company which sold an automobile insurance policy to Plaintiff's mother. Under the policy, Plaintiff's mother was the named insured, and Plaintiff was a member of her household. The Progressive policy, by its terms, did not cover Plaintiff as a pedestrian. The superior court held nonetheless that Plaintiff was entitled to recover under Progressive's policy because insofar as it denied PIP coverage, the policy conflicted with the Delaware automobile insurance statute which mandated such coverage. Progressive appealed. The court ordered Progressive to pay the difference between the amount Plaintiff recovered from the striking-car's policy and PIP limit of his mother's policy. Finding no error in the superior court's decision, the Supreme Court affirmed.

The issue before the Supreme Court concerned the extent of uninsured motorist coverage provided under an automobile insurance policy issued to a husband and wife who were both injured by an uninsured motorist while riding their motorcycle. The husband, Leo Fontaine, died as a result of his injuries. The motorcycle in question was not expressly identified in the policy at issue. Plaintiff-Insurer New London County Mutual Insurance Company (NLC) filed suit for declaratory relief seeking clarification of the rights and obligations of the parties pursuant to their policy issued to the couple. Arguing that the policy language unambiguously excluded the defendants' claim for uninsured motorist benefits, NLC filed a motion for summary judgment, which was granted by the Superior Court. Defendants Karolyn Fontaine, individually and on behalf of the estate of her husband, Leo appealed the grant of summary judgment and contended that the pertinent policy provision was ambiguous and should have been construed in favor of coverage. Upon review, the Supreme Court held that the policy language explicitly excluded Defendants' claims from coverage. Accordingly, the Court affirmed the superior court's judgment.

As the primary beneficiary under an insurance policy issued by Appellee Penn Mutual Life Insurance Company, Appellant Roger Goff brought a cause of action under the West Virginia Unfair Trade Practices Act, asserting that Penn Mutual had violated the statutory duty of good faith and fair dealing. After deciding that Goff did not meet the accepted definition of either a first- or a third-party bad faith claimant, the trial court dismissed Goff's complaint for failure to state a claim upon which relief could be granted. The Supreme Court reversed, holding that a primary life insurance beneficiary may assert a statutory bad faith action upon the death of the insured. Remanded.

This case presented the question of whether an automobile insurance policy's permissive user step-down provision was valid and enforceable. Specifically, the Supreme Court addressed whether the particular provision at issue was sufficiently conspicuous, plain, and clear to satisfy the doctrine of reasonable expectations. The circuit court entered summary judgment in favor of the insurance company, declaring the permissive user step-down provision enforceable. The court of appeals affirmed. The Supreme Court reversed, holding that the policy's permissive user step-down provision was insufficiently plain and clear to defeat the reasonable expectations of the insureds, and therefore, the provision violated the doctrine of reasonable expectations. Remanded.

In 1990, Pedicini purchased a LICOA supplemental cancer-insurance policy that provided for unlimited cash benefits, payable directly to Pedicini, equal to “usual and customary charges” for radiation or chemotherapy received as treatment. In 2001, Pedicini obtained assistance from an insurance agent, who negotiated a policy with LICOA that capped benefits for treatments at $25,000 per year, lowering the premium. The policy, effective October 2001, tied benefits to “actual charges” made by a person or entity furnishing services treatment or material. Unbeknownst to Pedicini, in February 2001, LICOA changed its practices. It had paid benefits tied to the amount billed by medical providers regardless of the amount accepted in payment, but began paying benefits equal to the amount accepted as full payment by providers. LICOA did not notify policyholders, but did notify its agents. In 2007, Pedicini was diagnosed with cancer. His benefits were only equal to the discounted amount accepted by his provider due to his status as a Medicare recipient. Pedicini won summary judgment on a breach of contract claim, but the court ruled in favor of LICOA on bad faith claims. The Sixth Circuit affirmed on the contract claim, but reversed with respect to bad faith claims.

Defendant appealed the district court's grant of partial summary judgment in favor of CGI in its action seeking "appropriate equitable relief" under section 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. CGI appealed the district court's grant of partial summary judgment in favor of defendant's counsel and codefendant, dismissing the codefendant from the action. CGI also appealed the district court's grant of proportional fees and costs to the codefendant, deducted from CGI's recovery from defendant. The court affirmed the district court's grant of summary judgment in favor of the codefendant, dismissing it from the action. However, because the court saw no indication that in fashioning "appropriate equitable relief" for CGI, the district court did more than interpret the plain terms of the reimbursement provision, and no indication that the district court considered traditional equitable principles in assigning responsibility to CGI for attorneys' fees and costs, the court vacated the judgment in favor of CGI, vacated the judgment that the codefendant deducted fees and costs from CGI's entitlement, and remanded to the district court for further proceedings.