Justia Contracts Opinion Summaries

The Supreme Court answered a certified question from the United States Court of Appeals for the Fourth Circuit concerning the amount of motor vehicle liability insurance coverage, if any, that Insurer must provide to a non-employee permissive user of an insured vehicle who caused personal injuries to an employee of a named insured under a standard commercial automobile insurance policy.The Fourth Circuit determined that an employee indemnification and employer's liability's exclusion in the policy at issue was void and unenforceable under the mandatory omnibus requirements of W. Va. Code 33-6-31(a). The Supreme Court answered (1) the void exclusion may not be invoked to limit the amount of coverage available to a permissive user of a vehicle insured by Insurer's policy; and (2) Insurer must afford the permissive user with liability coverage up to the full limits available under the insurance policy for any proven damages. View "Ball v. United Financial Casualty Co." on Justia Law

The Supreme Court reversed the circuit court's grant of summary judgment in favor of Allstate Vehicle and Property Insurance Company's decision to rescind an insurance policy purchased for a derelict house Homeowner intended to remodel, holding that questions of material fact existed precluding summary judgment.After a fire occurred, damaging the house and some of its contents, Allstate announced that it was rescinding the homeowners' insurance policy issued to Homeowner, asserting that Homeowner digitally signed an application in which he falsely answered a request as to whether he would occupy the house within thirty days. Plaintiffs, including Homeowner, sued Allstate for breach of contract and unfair trade practices. The circuit court granted Allstate's motion to rescind the policy, concluding that there was no factual dispute that Homeowner had made false statements on his insurance application. The Supreme Court reversed and remanded the case for further proceedings, holding that questions of material fact existed regarding whether Plaintiff's answer to Allstate's thirty-day-occupancy question was false and whether the question was material to Allstate's issuance of the policy. View "McDowell v. Allstate Vehicle & Property Insurance Co." on Justia Law

After Defendant’s Arkansas home burned to the ground, her insurer, Hiscox Dedicated Corporate Member Limited (a "capital provider" to an underwriting syndicate doing business within the Lloyd's of London insurance marketplace), declined to pay her for her loss and instead rescinded the insurance policy because she had made material misrepresentations in her insurance application. Hiscox then sued Defendant in federal court, seeking a declaratory judgment that it had properly rescinded the policy and had no obligation to Defendant. The district court agreed with Hiscox and granted it summary judgment.   The relevant question is whether Defendant "had a foreclosure, repossession, bankruptcy or filed for bankruptcy during the past five (5) years." Defendant maintains that the district court erred in concluding that the phrase "had a foreclosure" meant the initiation of foreclosure proceedings.   The Eighth Circuit reversed and remanded. The court agreed with Defendant that the question is ambiguous. Under Arkansas law, the court read the question in its "plain, ordinary, and popular sense," as "the common usage of terms should prevail". Further, the court wrote it sees no indication in any case that the parties meant to adopt Arkansas statutes as the standard to determine the meaning of the words in the application question. View "Hiscox Dedicated Corp Member v. Suzan Taylor" on Justia Law

Plaintiff Keene Auto Body, Inc. appealed a circuit court order that dismissed its complaint against defendant State Farm Mutual Automobile Insurance Company. Keene Auto Body, acting as an assignee of Caleb Meagher, who insured his vehicle through State Farm, sued State Farm for breach of contract for failing to cover the full cost of repairs to the insured’s vehicle. State Farm moved to dismiss the suit on grounds that, because of an anti-assignment clause in the insured’s policy, the insured’s assignment of his breach of contract claim to Keene Auto Body was not valid, and that, even if it was, Keene Auto Body did not sufficiently state a claim for breach of contract. The trial court granted the motion. The New Hampshire Supreme Court found the anti-assignment clause at issue here was ambiguous, and construed it against the insurer. Therefore, the clause did not prohibit the insured from assigning his post-loss claim to Keene Auto Body. Given this holding, the Supreme Court determined Keene Auto Body's factual allegations were sufficient to survive State Farm's motion to dismiss. Judgment was reversed and the matter remanded for further proceedings. View "Keene Auto Body, Inc. v. State Farm Mutual Automobile Insurance Company" on Justia Law

Plaintiff sued Farmers New World Life Insurance Company (Defendant or Farmers) for breach of contract, breach of the covenant of good faith and fair dealing, and punitive damages in connection with a policy insuring the life of her ex-husband. The trial court granted summary judgment for Defendant on those claims, concluding it was undisputed that the ex-husband remained the owner of the policy until he died, and that he had changed the beneficiaries on the policy, reducing his ex-wife’s interest from 100 percent to 25 percent.   The Second Appellate District reversed, finding that the trial court failed to consider the terms of a divorce decree affecting ownership of the policy, and because Defendant’s agent repeatedly assured Plaintiff, up to and after the ex-husband’s death, that Plaintiff remained the sole beneficiary. Therefore, the court concluded disputed issues of material fact prevent summary judgment. View "Randle v. Farmers New World Life Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the circuit court in favor of Liberty Mutual Fire Insurance Company in this insurance dispute, holding that the circuit court improperly dismissed the complaint for failure to state a claim upon which relief can be granted.An agent of Kaiser Trucking was in an automobile accident with Liberty Mutual's insured. The circuit court granted default judgment for Kaiser Trucking and its agent. After the judgments were returned unsatisfied, Kaiser and its agent brought this action against Liberty Mutual seeking indemnification of the judgments against its insured. Liberty Mutual filed a motion to dismiss under S.D. Codified Laws 15-6-12(b)(5), arguing that Plaintiffs failed to plead a condition precedent to coverage under the policy. The circuit court agreed and dismissed the complaint. The Supreme Court reversed, holding that Kaiser Trucking, Inc. was not required to plea satisfaction of conditions precedent in the relevant insurance policy sufficiently to state a claim upon which relief could be granted and avoid a Rule 12(b)(5) dismissal of its complaint. View "Kaiser Trucking, Inc. v. Liberty Mutual Fire Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the district court concluding that Bonner County, an Idaho political subdivision, had failed to demonstrate to Western Insurance Company's Liquidator that Pend Oreille Bonner Development LLC's failure to complete several municipal projects had cost it anything, holding that the court's finding were not against the clear weight of the evidence.Bonner County contracted with Pend Oreille to construct the projects at issue and required Pend Oreille to obtain multiple surety bonds, which Pend Oreille purchased through Western. Pend Oreille defaulted on the projects. Bonner County filed a claim with the Liquidator of Western, which had been placed in liquidation, to recover the surety bonds. The district court entered judgment against Bonner County. The Supreme Court affirmed across the Board, holding that the district court did not err when it (1) admitted extrinsic evidence to determine the parties' intent; (2) read the statute to provide that a liquidator can amend a determination of claims in response to charged circumstances; and (3) made its findings. View "Bonner County v. Western Insurance Co." on Justia Law

The Court of Appeals held that Plaintiffs' original complaint alleging that Defendant breached the parties' written insurance policy and that Plaintiffs had fully complied with the requirements contained in the policy failed to give Defendant the requisite notice of the "transactions, occurrences, or series of transactions or occurrences, to be proved" in support of Plaintiff's reformation claim, as required under N.Y. C.P.L.R. 203(f).Defendant, an insurance company, issued Plaintiffs, two limited liability companies, a multi-million dollar, written insurance policy covering many of Plaintiffs' vacant commercial properties. Plaintiffs later brought this action for breach of contract seeking damages based on Defendant's failure to cover damages incurred after a fire on the premises. A jury returned a verdict in favor of Plaintiffs on the reformation claim, and the appellate division affirmed. The Court of Appeals reversed, holding that Plaintiffs' complaint failed to give notice to Defendant of the transactions or occurrences on which Plaintiffs based their reformation claim. View "34-06 73, LLC v. Seneca Insurance Co." on Justia Law

Southern Farm Bureau Life Insurance Company (“Farm Bureau”) issued a term life insurance policy to S.M. S.M.’s husband, Plaintiff, who was the policy’s primary beneficiary. Farm Bureau received a notification from the Post Office indicating that S.M.’s address had changed. Farm Bureau sent its semiannual bill to S.M. at her South Carolina address, informing her that her payment was due on November 23, 2016. S.M. did not pay the bill. Plaintiff sued Farm Bureau in federal district court, seeking the policy’s coverage amount as well as excess damages for alleged unfair and deceptive trade practices on the part of Farm Bureau. He argued that Farm Bureau had not complied with a statutory notice requirement prior to canceling the insurance policy for nonpayment and he was therefore entitled to the policy’s benefits. The parties filed cross-motions for summary judgment, and the district court granted summary judgment to Farm Bureau.   The Fourth Circuit affirmed finding that Farm Bureau complied with the statute’s notice requirement. The court wrote that a literal interpretation of the statute’s language—referring to a notice being sent to the “last known post-office address in this State”—would not put S.M. on notice at all. Rather it would have Farm Bureau send “notice” to an address where it knows she no longer resides. Additionally, there is substance in Farm Bureau’s argument that a rigidly literal reading of the words “in this State” would require insurers to implement burdensome and nonsensical notice policies. View "Robert Whitmire v. Southern Farm Bureau Life Insurance Company" on Justia Law

The United States Court of Appeals for the Eleventh Circuit certified questions of Georgia law to the Georgia Supreme Court about life-insurance law. The basic question for the Supreme Court was whether a person could legally take out an insurance policy on his own life with the intent to turn around and sell that policy to a third party who had no “insurable interest” in the policyholder’s life. The person seeking to recover on the life-insurance policy in this case said that such a policy was legal if a third party was not involved in causing the policy to be procured. The insurance company says that with or without such third-party involvement, such a policy was an illegal wagering contract and therefore void, relying on some Georgia case law. But as it turned out, that case law was interpreting and applying old statutes. In 1960, the Georgia General Assembly repealed those statutes and replaced them with new statutory language that codified some, but not all, of the old decisional law, and the new language did not even hint at the unilateral-intent-based limitation that the insurance company advanced. So the Supreme Court answered the certified questions: under Georgia law, a life-insurance policy taken out by the insured on his own life with the intent to sell the policy to a third party with no insurable interest, but without a third party’s involvement when the policy was procured, was not void as an illegal wagering contract. View "Crum v. Jackson National Life Ins. Co." on Justia Law