Justia Contracts Opinion Summaries

In this insurance dispute, the Supreme Court held that Ariz. Rev. Stat. 20-259.01 mandates that a single policy insuring multiple vehicles provides different underinsured motorist (UIM) coverages for each vehicle rather than a single UIM coverage that applies to multiple vehicles.Plaintiff's mother died in a car crash caused by a neglectful driver. Plaintiff submitted a UIM to CSAA General Insurance Company, her mother's insurer. At the time of the accident, Plaintiff's mother's CSAA policy covered the mother's two vehicles and provided UIM coverage of $50,000 per person. When CSAA paid only $50,000 Plaintiff sought an additional $50,000 under an "intra-policy stacking" theory. After CSAA rejected the claim, Plaintiff sued for declaratory judgment, alleging breach of contract, bad faith, and a class action. CSAA moved to certify two questions. The Supreme Court answered (1) insurers seeking to prevent insureds from stacking UIM coverages under a single, multi-vehicle policy must employ section 20-259.01(H)'s sole prescribed method for limiting stacking; and (2) section 20-259.01(B) does not bar an insured from receiving UIM coverage from the policy in an amount greater than the bodily injury or death liability limits of the policy. View "Franklin v. CSAA General Insurance" on Justia Law

A healthcare provider contended it was underpaid for substance abuse treatment that it rendered to 29 patients. Seeking to recover the difference directly from the insurance company, the provider filed suit alleging the insurer entered into binding payment agreements during verification of benefits and authorization calls with the provider and otherwise misrepresented or concealed the amounts it would pay for treatment. The trial court entered summary judgment against the provider. After review, the Court of Appeal concluded the court did not err in determining one or more elements of the provider’s causes of action could not be established. View "Aton Center v. United Healthcare Ins. Co." on Justia Law

The Supreme Court held that Arizona law does not permit an insurer to challenge the validity of a life insurance policy based on a lack of insurable interest after the expiration of the two-year contestability period required by Ariz. Rev. Stat. 20-1204.Columbus Life Insurance Policy, which issued a life insurance policy on the lives of Howard and Eunice Peterson, filed a lawsuit following the Petersons' death seeking a declaratory judgment that the policy was unenforceable and seeking to retain the premiums. Wilmington Trust N.A., which was designated as the owner of the policy, filed a motion for judgment on the pleadings, arguing that Columbus could not challenge the policy's validity in light of the incontestability provision in the provision and section 20-1204. The federal district court certified to the Supreme Court the question of whether Columbus could challenge the policy's validity. The Supreme Court answered the question in the negative, holding that section 20-1204 allows challenges to the validity of the policy after the incontestability period only for nonpayment of premiums. View "Columbus Life Insurance Co. v. Wilmington Trust, N.A." on Justia Law

In 2007, Defendant PHL Variable Insurance Company issued two life-insurance policies to Plaintiff Catholic Charities of Southwest Kansas, Inc. on the lives of Elwyn Liebl and John Killeen. Both policies guaranteed Plaintiff, as their named beneficiary, $400,000 upon the insureds’ death. Between 2013 and 2014, Defendant sent Plaintiff grace notices for both policies and demanded premium payments. Plaintiff believed the demanded premium payments were too high and that the grace notices were defective and untimely under the policies. So Plaintiff did not pay the requested premiums. Because Plaintiff did not pay the requested premiums, Defendant sent cancellation notices, informing Plaintiff that both policies had lapsed. In 2016, the insureds died. Plaintiff sought payment of benefits under both policies. Defendant declined, believing that it terminated Plaintiff’s policies for nonpayment of premiums two to three years earlier. In 2020, Plaintiff sued Defendant in the District of Kansas for failure to pay the death benefits under both policies. Defendant moved to dismiss both claims, arguing that Kansas’s five-year statute of limitations for breach of contract actions bars them. According to Defendant, the statute of limitations began to run in 2013 and 2014 when it informed Plaintiff that it was terminating the policies. In response, Plaintiff asserted that Defendant first breached both insurance contracts when it failed to pay the benefits upon the insureds’ death in 2016 because Defendant never successfully terminated the policies. The district court agreed with Defendant and dismissed Plaintiff’s claims as untimely. The appeal this case presented for the Tenth Circuit's review centered on a question of when the statute of limitations for a breach of contract claim alleging the wrongful termination of a life insurance contract began to run under Kansas law: if the limitations period began when Defendant acted to terminate Plaintiff’s policies, the district court correctly dismissed Plaintiff’s complaint; if the limitations period began when Plaintiff’s death benefits became due, the district court erred. Finding the district court did not err in dismissing Plaintiff's claims, the Tenth Circuit affirmed. View "Catholic Charities of Southwest Kansas v. PHL Variable Insurance Company" on Justia Law

Defendant Union Mutual Fire Insurance Company appealed a superior court grant of summary judgment to plaintiff CC 145 Main, LLC, in a declaratory judgment action regarding the interpretation of an insurance policy exclusion. CC 145 Main owned an apartment building and purchased a “Businessowners Coverage” insurance policy that included “all risk” property insurance, which provided that Union Mutual would “pay for direct physical loss of or damage to” the covered property, unless coverage was specifically limited or excluded by the policy. The insured property sustained damage when a tenant poured cat litter down a toilet, clogging an interior pipe and causing water to overflow from a shower and toilet. The property required significant cleaning and repair, and tenants were required to temporarily relocate. CC 145 Main filed a claim with Union Mutual for water damage, which Union Mutual denied pursuant to a provision in the insurance policy excluding coverage for damage caused by “[w]ater that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment.” CC 145 Main filed a complaint seeking a declaration that the water exclusion does not apply to its claim. Union Mutual filed a motion for summary judgment, arguing that the damage at issue was caused by water that overflowed from “drains” within the meaning of the exclusion. The trial court concluded it was unclear whether the word “drain” in the water exclusion applied to shower and toilet drains and, therefore, the water exclusion was ambiguous and had to be construed in favor of CC 145 Main. Defendant challenged the trial court’s ruling that the policy’s water damage exclusion was ambiguous and its decision to construe the policy, therefore, in favor of CC 145 Main. But finding no reversible error, the New Hampshire Supreme Court affirmed the trial court. View "CC 145 Main, LLC v. Union Mutual Fire Insurance Company" on Justia Law

Ramaco Resources suffered a coal silo collapse and submitted a claim for losses to Federal Insurance Company. When Federal denied the claim, Ramaco sued. After a twelve-day trial, a jury awarded Ramaco $7.6 million in contract damages and prejudgment interest. The jury also awarded $25 million under West Virginia’s Hayseeds doctrine, which permits an insured party to claim consequential damages when it prevails after suing to collect on its insurance policy. But post-trial, the district court reduced Ramaco’s contract damages and interest to $1.8 million and entirely rejected the Hayseeds damages as a matter of state law. The district court also conditionally granted a new trial on the Hayseeds award, reasoning that—even if Hayseeds damages were theoretically permissible—the jury’s $25 million award was punitive and thus invalid. Ramaco appealed.   The Fourth Circuit reversed in part and affirmed in part. The court reversed the district court’s reduction of contract damages and prejudgment interest because the insurance policy’s plain language and the trial evidence support the jury’s original $7.6 million award. And the court reversed the district court’s wholesale rejection of Hayseeds damages. But the court affirmed its conditional grant of a new Hayseeds damages trial. The court explained that West Virginia law requires courts to give insurance policies their plain, ordinary meaning whenever possible. Here, the policy’s plain language extended the period of restoration until Ramaco’s operations were restored to the level of generating the net profits that would have existed but for the collapse. To determine that level, a court must consider both throughput and expenses. The district court did not. View "Ramaco Resources, LLC v. Federal Insurance Company" on Justia Law

Boulevard RE Holdings, LLC (Boulevard) sued Mixon Insurance Agency, Inc. (Mixon), alleging breach of contract and negligent procurement of insurance. Mixon moved for summary judgment. The district court granted Mixon’s motion. Boulevard appealed that order. On appeal, Boulevard challenged the district court’s conclusions that Mixon had no duty to know or discover whether Boulevard was a mortgagee under Missouri law and that Mixon’s actions did not cause Boulevard’s alleged damages.   The Eighth Circuit affirmed. The court reasoned that even assuming that the district court erred in concluding that Mixon did not have a duty to know or discover whether Boulevard was a mortgagee, summary judgment in favor of Mixon was proper because Boulevard cannot show Mixon caused its alleged damages. Noncompliance with the policy, not Mixon’s failure to notify, barred recovery. Therefore, Bell is inapplicable. The district court did not err in granting Mixon’s motion for summary judgment. View "Boulevard RE Holdings, LLC v. Mixon Insurance Agency, Inc." on Justia Law

The parents work for the School District. Through the District, they contracted for a self-funded health insurance plan. The District, not an outside insurer, bears sole financial responsibility for the payment of plan benefits. The District is also the plan administrator and named fiduciary but contracted with United HealthCare to serve as the third-party claims administrator, with the authority to deny or approve claims. The plan is a governmental plan, so the Employee Retirement Income Security Act does not apply, 29 U.S.C. 1003(b)(1). In 2017, daughter Megan—covered under her parents’ policy—suffered a mental health emergency. United approved Megan for 24 days of inpatient treatment and informed the family that it would not approve additional days. Her parents and Megan’s doctors disagreed and appealed internally within United. They elected to continue Megan’s inpatient treatment. They received a final denial of coverage notice, leaving most of Megan’s treatment expenses uncovered.The family sued United for breach of contract, bad faith, punitive damages, and interest under Wisconsin’s prompt pay statute but did not join the District as a defendant. The Seventh Circuit affirmed the dismissal of the suit. There was no contractual relationship between the plaintiffs and United. Wisconsin law does not permit them to sue United for tortious bad faith absent contractual privity. Wisconsin’s prompt pay statute applies only to insurers. View "Daniels v. United Healthcare Services, Inc." on Justia Law

Plaintiff-Appellant Weyerhaeuser NR Company (“NR”) entered into a manufacturing agreement with Simsboro Coating Services, LLC (“Simsboro”). That agreement required Simsboro to acquire commercial general liability insurance, which it obtained from Defendants-Appellees Burlington Insurance Company (“BIC”) and Evanston Insurance Company (“EIC”). It further required that “Weyerhaeuser and its Subsidiaries” be named as additional insureds. However, NR’s parent company, Weyerhaeuser Company (“W. Co.”), was never added to the insurance policies that Simsboro obtained from EIC and BIC. This insurance coverage dispute arose after several personal injury lawsuits were filed against Simsboro and W. Co. in state court. After those lawsuits settled, W. Co. and NR sued BIC and EIC, demanding that they defend and indemnify W. Co. and NR. EIC and BIC then filed Rule 12(b)(6) motions, which were granted by the district court.The Fifth Circuit affirmed the district court’s dismissal of Weyerhaeuser’s breach of contract claims. The court concluded that Defendants had no duty to defend or indemnify W. Co. and NR as additional insureds or as third-party beneficiaries to the CGL Policies or Excess Policy. The court explained that it was satisfied that BIC and EIC had no duty to defend W. Co. and NR as thirdparty beneficiaries. The indemnification inquiry, however, is fact intensive and may incorporate extrinsic evidence. The district court explained that because NR is listed on the CGL Policies as an additional insured and the CGL Policies might cover Simsboro’s indemnification obligation arising from the Agreement, NR might be a third-party beneficiary of the policies with respect to indemnification. View "Weyerhaeuser v. Burlington Insurance" on Justia Law

Continental Casualty Company and Valley Forge Insurance Company (collectively, “the insurers”) and Winder Laboratories, LLC and Steven Pressman (collectively, “the insureds”) appeal and cross-appeal from the district court’s judgment in this insurance coverage dispute. In short, the parties’ insurance agreements required the insurers to defend the insureds against certain third party lawsuits. After being sued by non-party Concordia Pharmaceuticals Inc., S.A.R.L. (“Concordia”), the insureds sought coverage under the policies. The insurers agreed to defend the insureds against Concordia, subject to a reservation of rights, including the right to seek reimbursement of defense costs incurred for claims not covered by the policies. The insurance agreements themselves, however, did not provide for reimbursement.   The Eleventh Circuit affirmed. First, the court agreed that the insurers did not have a duty to defend the insureds in the underlying action. To supplement this analysis, the court held that the duty to defend was extinguished when the district court’s ruling was issued. Second, the court agreed that the insurers do not have a right to reimbursement because the reservation of rights letters did not create a new contract, the insurers’ unjust enrichment argument is untenable, and the court wrote that it does not believe the Supreme Court of Georgia would upend the State’s insurance law framework by establishing a right to reimbursement for an insurer who has no contractual right to recoupment. View "Continental Casualty Company, et al v. Winder Laboratories, LLC, et al" on Justia Law