Justia Contracts Opinion Summaries

This action arose from an appeal to the Eleventh Circuit wherein plaintiff appealed the dismissal of insurance coverage claims under section 627.701(4)(a), Florida Statutes, and the denial of a motion to enforce execution of the judgment, and defendant cross-appealed the denial of motions for a new trial and for judgment as a matter of law. In answering five certified questions, the court concluded that, under Florida law: (1) first-party claims were actually statutory bad-faith claims that must be brought under section 624.155; (2) an insured could not bring a claim against an insurer for failure to comply with the language and type-size requirements established by section 627.701(4)(a); (3) an insurer's failure to comply with the language and type-size requirements established in section 627.701(4)(a) did not render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable as the Legislature had not provided for this penalty; and (4) a contractual provision mandating payment of benefits upon "entry of a final judgment" did not waive the insurer's procedural right to post a bond and stay the execution of a money judgment pending resolution of appeal.

This action stemmed from an appeal to the Eleventh Circuit wherein plaintiff appealed the dismissal of claims under section 627.701(4)(a), Florida Statutes, and the denial of a motion to enforce execution of the judgment, and defendant appealed the denial of motions for a new trial and for judgment as a matter of law. Plaintiff had filed a claim with defendant, its property insurer, pursuant to an insurance policy but was dissatisfied with defendant's investigation and processing of its claim. Based on the facts and analysis, the court answered the first, third, fourth, and fifth questions certified by the Eleventh Circuit in the negative. In doing so, the court did not reach the second certified question. The court concluded that under Florida law: (1) first-party claims were actually statutory bad-faith claims that must be brought under section 624.155; (2) an insured could not bring a claim against an insurer for failure to comply with the language and type-size requirements established by section 627.701(4)(a); (3) an insurer's failure to comply with the language and type-size requirements established in section 627.701(4)(a) did not render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable as the Legislature had not provided for this penalty; and (4) a contractual provision mandating payment of benefits upon "entry of a final judgment" did not waive the insurer's procedural right to post a bond and stay the execution of a money judgment pending resolution of appeal.

Sixty-six plaintiffs filed the underlying lawsuit in Tennessee against Morrow Valley Land Company and Ben Cain (Appellees) and others, alleging that Defendants owned and operated a concentrated animal-feeding operation that constituted a nuisance and a continuing trespass. After Appellees' insurer, Scottsdale Insurance Company, refused to provide defense or indemnification coverage under its insurance policy with Appellees, Appellees filed a petition for declaratory judgment in an Arkansas circuit court against Scottsdale and seeking damages for breach-of-contract claims. The circuit court granted partial summary judgment in favor of Appellees, concluding that Scottsdale had a duty to defend Appellees as its insured in the action. The Supreme Court affirmed, holding that the circuit court did not err in finding that the pollution exclusion provision in the insurance policy was ambiguous and that Appellees were entitled to summary judgment on the duty to defend because there was a possibility that the injury or damage may fall within the policy coverage.

In the underlying federal court action, an auto insurer (Insurer) sought a declaratory judgment that it had validly denied Insured's underinsured motorist (UIM) claim. Insured was injured while a passenger on a motorcycle driven by her husband, who had a motorcycle insurance policy with Insurer. Insured counterclaimed for breach of contract and bad faith. The U.S. district court certified several questions to the state Supreme Court. The Court held (1) Ariz. Rev. Stat. 20-259.01(G) required Insurer to provide UIM coverage for Insured under the auto policy, where Insured's total damages exceeded the amount of her tort recovery from her husband under the husband's motorcycle policy; and (2) Ariz. Rev. Stat. 20-259.01(H) did not permit Insurer to refuse to provide Insured with UIM coverage under her auto policy because she was partially indemnified as a claimant under the liability coverage of the separate motorcycle policy issued by Insurer to Insured's husband, whose negligence contributed to Insured's injuries.

Cassadie and Chris Parish were injured in a motor vehicle accident when their vehicle was struck by an uninsured driver. United Financial Casualty Insurance Company (UFC) provided insurance coverage to the Parishes, including uninsured motorist (UM) coverage. The Parishes, who had two vehicles insured on their UFC policy at the time of the accident, argued they should be permitted to stack the UM benefits provided in their policy. UFC refused, stating that the Parishes' policy did not allow stacking. The Parishes sued seeking declaratory judgment. The district court granted summary judgment in favor of UFC. The Supreme Court affirmed, holding that the district court did not err in granting UFC's motion for summary judgment, as, inter alia, the policy was unambiguous and UFC's insurance agreement did not create a reasonable expectation of stacked UM coverage.

The circuit court granted summary judgment to Community Insurance Corporation (CIC) on a claim by the Hartford Union High School Board of Education and the Hartford Union High School District (collectively, the District) that insurance coverage had been created by virtue of CIC's failure to issue a reservation of rights letter during its unsuccessful defense of the District in a contract lawsuit. The court of appeals reversed, holding that CIC was estopped from denying coverage because the District relied on CIC's defense to its detriment and was prejudiced thereby. The Supreme Court reversed, holding that the failure to issue a reservation of rights letter cannot be used to defeat, by waiver or estoppel, a coverage clause in an insurance contract that would otherwise justify the insurer's denial of coverage.

Tammy Pepper suffered injuries in a single-vehicle accident when she was struck by a pickup truck owned by her sister and driven by her stepfather. Pepper subsequently sought insurance benefits under three policies. First, Pepper sought and recovered liability benefits from her sister's insurer. Second, Pepper sought and recovered liability benefits from her stepfather's insurer, State Farm. Third, Pepper sought, but did not recover, underinsured motorist coverage under a separate State Farm policy held by her stepfather. State Farm denied that it owed Pepper underinsured motorist coverage under the stepfather's policy on the ground that the terms of that policy excluded the sister's truck from its definition of vehicles eligible for underinsured motorist coverage. The district court granted summary judgment to State Farm, concluding that the exclusion in the stepfather's policy was valid because the exclusion was designed to prevent coverage conversion. The court of appeals reversed. The Supreme Court reversed, holding that the district court was correct that Pepper was not entitled to UIM benefits in this case.

In these consolidated cases, the primary issue was whether there was liability insurance coverage for Plaintiffs' injuries resulting from an altercation on the premises of Insured's bar and restaurant. Insurer denied coverage and declined to defend Insured based on its determination that there was no coverage under the terms of the policy. The trial court entered an order finding that the altercation was covered under both the commercial general liability and liquor liability provisions of the policy. The court of appeals ruled that the liquor liability coverage agreement provided coverage for the judgments but that the commercial general liability agreement provided no coverage. The Supreme Court reversed, holding (1) based on the clear terms of the policy agreement, there was no liability coverage because the incident arose from an assault and battery, which was an excluded cause, and because there was no nonexcluded concurrent cause to provide coverage; and (2) estoppel by judgment did not apply to collaterally estop Insurer from arguing the lack of coverage.

Appellants appealed from the district court's grant of summary judgment in favor of American Standard. The district court concluded that appellants were not entitled to recover underinsured motorist (UIM) coverage benefits under four American Standard policies because the tortfeasor's vehicle was not an "underinsured motor vehicle" under the policies' plain language. The court held that the district court correctly concluded that appellants were not entitled to recover under the UIM policies because stacking them did not result in an amount exceeding the tortfeasor's liability. Accordingly, the court affirmed the judgment.

The United States Court of appeals asked the court to answer a question that stemmed from a dispute over the proper interpretation under Georgia law of a contract insuring real property. The primary issue presented was whether the court's ruling in State Farm Mut. Auto. Ins. Co. v. Mabry, a case involving an automobile insurance policy wherein the court held that a provision requiring the insurer to pay for loss to the insured's car required the insurer to also pay for any diminution in value of the repaired vehicle, was applicable. The court held that its ruling in Mabry was not limited by the type of property insured, but rather spoke generally to the measure of damages an insurer was obligated to pay.