Justia Contracts Opinion Summaries

This case stemmed from an Excess Disability Income Reinsurance Agreement (Treaty). At issue was whether a reinsurance agreement between plaintiff and defendant contained a follow-the-settlements provision. The court held that there was no ambiguity in the Treaty and that it contained a follow-the-settlements provision. The court also held that the statute of limitations barred plaintiff's challenges to several claims submitted by defendant and defendant's conduct did not give rise to tolling under Connecticut law. The court further held that the district court properly granted summary judgment on defendant's counterclaims for breach of contract and for breach of the implied covenant of good faith and fair dealing.

In this appeal, accounting firm Bryan Brothers sought coverage under a professional liability insurance policy issued by Continental Casualty Company for liability arising from illegal acts of a former Bryan Brother's employee. Under the policy, it was a condition precedent to coverage that no insured had knowledge, prior to the inception of the policy, of an act that was reasonably likely to become the basis for a claim. The court held that because Bryan Brothers had such knowledge, the claims at issue were not covered. Therefore, the court affirmed the district court's grant of summary judgment to Continental Casualty Company.

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees.

This dispute emerged from state and federal litigation over liability for damages and defense costs in certain environmental tort suits. At issue was an action for damages that appellants brought in federal court and a declaratory judgment action that appellee brought in state court, which appellants later removed to federal court. The district court dismissed the former and remanded the latter in light of a related third action that had been pending for several years in state court. The court held that the district court did not abuse its discretion by deciding that the parties' claims should be resolved in a more comprehensive action (Vulcan Action). The court also held that the district court had discretion under Wilton v. Seven Falls Co. and Brillhart v. Excess Ins. Co. of Am. to remand the removed action. The court further held that the district court's concerns about piecemeal litigation and interfering with the progress made in the Vulcan Action supported dismissal under Colorado River Water Conservation Dist. v. United States. Therefore, the court affirmed the judgment of the district court.

Claimant Patrick Williams appealed the Industrial Commission's determination that I.C. 72-802 does not prohibit Respondent Blue cross of Idaho from seeking to exercise its contractual right of subrogation against his lump sum settlement proceeds. Claimant's insurance contract with Blue Cross contained several subrogation and reimbursement provisions. In addition to seeking payment from Blue Cross, Williams filed a complaint with the Industrial Commission seeking workersâ compensation for the medical expenses incurred as a result of two shoulder surgeries, as well as benefits for temporary and permanent disability as a result of such injuries. Claimant entered into a lump sum settlement agreement with the State Insurance Fund. After the agreement was finalized before the Commission, Blue Cross sent a letter to counsel for Williams demanding that, pursuant to Blue Crossâ right of subrogation, he withhold money from the workersâ compensation proceeds for payment to Blue Cross. The Commission ultimately concluded that I.C. 72-802 did not prohibit Blue Cross from seeking to exercise a contractual right of subrogation because Blue Cross is a subrogee, and not a creditor, within the meaning of the statute. However, the Commission found it did not have jurisdiction to consider a breach of contract claim by Blue Cross against Williams and, therefore, determined that Blue Cross must pursue its remedy in district court. Upon review of the applicable legal authority and the Commission's record, the Supreme Court affirmed the Commissionâs determination that Blue Cross was a subrogee under I.C. 72-802.

The South Dakota Public Assurance Alliance (SDPAA), a local government risk pool, negotiated with Aurora County to provide what was essentially insurance coverage. After coverage was finalized, a local dairy farm sued the County over a pre-existing zoning dispute. The County was found liable for damages. SDPAA then sought a declaration that it did not have a duty to defend or indemnify, arguing, inter alia, that the County failed to disclose material facts relating to the claim. In a jury trial, the circuit court excluded as parol evidence the parties' pre-contract communications regarding coverage for zoning issues, including communications that could be interpreted as having disclosed the dairy farm zoning dispute. The jury found for SDPAA. The Supreme Court reversed and remanded for a new trial, holding that because the excluded coverage communications were not offered to alter or contradict any written terms of the agreement, their admission would not have violated the parol evidence rule.

Gregory Latterell, on behalf of his stepson Jared Boom's estate, sued Progressive Northern Insurance and AIG Insurance to recover underinsured motorist (UIM) benefits following Boom's death from a motor vehicle accident. Progressive, the insurer of Boom's vehicle, denied Latterell's claim for UIM benefits because of a business-use exclusion in Boom's insurance policy. AIG, Lattrell's insurer, also denied Latterell's claim. Latterell sued, and the district court granted summary judgment to Progressive and AIG. The court of appeals affirmed, holding (1) the business-use exclusion in the Progressive policy was enforceable under the Minnesota No-Fault Automobile Insurance Act and unambiguously excluded UIM coverage under the specific circumstances of this case, and (2) Latterell could not recover UIM benefits under the AIG policy. The Supreme Court reversed the denial of Latterell's summary judgment as to Progressive, holding that Progressive's business-use exclusion was unenforceable under the No-Fault Act. Remanded with instructions to enter judgment in favor of Latterell against Progressive.

After Homeowners' house burned down, Homeowners' insurer denied coverage, stating that payment was not timely delivered, the money order was not signed, and the damaged house was the secondary house and Insurer's underwriting policies required insurance on the primary house also to be purchased through Insurer in order to have coverage in place for the secondary residence. Homeowners filed suit, asserting that no reasonable basis in fact or law existed for denial of the claim and seeking damages and a declaratory judgment that the loss was covered. The district court granted Insurer's motion for summary judgment and denied Homeowners' motion for partial summary judgment with respect to their declaratory judgment action. The Supreme Court reversed in part and affirmed in part, holding (1) the district court erred in granting summary judgment to Insurer as genuine issues of material fact remained, and (2) the district court did not abuse its discretion in denying Homeowners' motion for partial summary judgment.

Virginia King was injured in an automobile accident and was treated for her injuries at Toledo Hospital. Although King informed the hospital staff that she was covered by a health-insuring corporation, the hospital billed King's automobile insurer for the services rendered. King sued the hospital and ProMedica Health System (Appellants). Each of King's causes of action was based on the claim that Appellants violated Ohio Rev. Code. 1751.60(A) by billing the automobile insurer instead of the health-insuring corporation. Section 1751.60(A) stated that every provider that contracts with a health-insuring corporation to provide health-care services to an insured shall seek payment solely from the corporation. The trial court granted Appellants' motion to dismiss, and the court of appeals reversed. At issue on appeal was whether section 1751.60(A) prohibited a provider from seeking payment for medical treatment rendered to an insured injured in an automobile accident from the insured's automobile insurance medical benefits. The Supreme Court reversed the court of appeals, holding (1) section 1751.60(A) applies only when a health-care provider seeks payment from an insured, and (2) section 1751.60(A) does not conflict with Ohio's law on the coordination of insurance benefits.

Stephen and Dawn Steadele contracted with Montana Component Housing Corporation (MCHC) to construct a home. MCHC did not complete the home by the deadline and eventually abandoned the project without completing the home. The Steadeles filed suit against MCHC. The district court entered a default judgment against MCHC when it failed to respond to the suit. The Steadeles then requested payment from Colony Insurance Company, MCHC's insurer. Colony denied coverage and refused to pay because MCHC never notified it of the Steadeles' claim. The Steadeles then filed this action, arguing that Colony's refusal to issue payment on the underlying judgment was a violation of Mont. Code Ann. 33-18-201, which prohibits unfair claim settlement practices. The district court granted summary judgment to Colony. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment to Colony because MCHC's failure to notify Colony of the Steadeles' claim was a material breach of MCHC's obligations under the policy.