Justia Contracts Opinion Summaries

The Supreme Judicial Court affirmed the summary judgment entered in the business and consumer court in favor of UIG, Inc. on Yankee Pride Transportation and Logistics, Inc.'s claims of negligence, breach of contract, and breach of fiduciary duty, holding that there was no genuine issue of material fact as to causation.On appeal, Yankee Pride argued that it had an implied contract with UIG based on the parties' relationship and that UIG breached that contract by failing to make timely efforts to renew Yankee Pride's policy. The Supreme Judicial Court disagreed, holding that Yankee Pride's failure to offer competent evidence of causation precluded a prima facie showing on any of its claims, whether they sounded in contract, tort, or breach of fiduciary duty. View "Yankee Pride Transportation & Logistics, Inc. v. UIG, Inc." on Justia Law

Plaintiff-Appellant Neil Hall appealed the district court’s grant of summary judgment in favor of Defendant-Appellee Allstate Fire and Casualty Insurance Company (Allstate) on his claim for underinsured motorist benefits. Hall challenged the district court’s determination that Allstate successfully asserted the affirmative defense of failure to cooperate, and that his bad faith claim also failed as a result. Hall was injured in a car accident caused by underinsured motorist Teri Johnson. Johnson only carried $25,000 in liability insurance coverage. Hall carried underinsured motorist coverage through Allstate. Allstate gave Hall permission to settle with Johnson for her $25,000 limit. Hall’s counsel submitted a request for benefits to Allstate asserting that he was entitled to more than the $25,000 he had received. An Allstate claims adjuster reviewed the medical expenses in the letter and determined that the reasonable amount of expenses was $25,011.68. Allstate sent Hall’s counsel a payment of $11.68 along with a letter that stated: “I will be in contact with you to resolve the remaining components of your client’s claim.” Counsel did not respond to any of the five attempts over three months: two voicemails and three letters. Without any prior notice to Allstate, Hall filed suit against Allstate for breach of contract, statutory unreasonable delay or denial of payment of benefits, and common law bad faith. The Tenth Circuit affirmed the district court, finding that because the district court found the insured's failure to cooperate resulted in a material and substantial disadvantage to the insurer, the insurer properly denied coverage on this ground, and summary judgment was proper as to the insured's bad faith claim. View "Hall v. Allstate Fire" on Justia Law

First Baptist retained Skyline to provide emergency remediation services to address wind damage to First Baptist’s real estate. Skyline then received the right to collect any proceeds from First Baptist's insurance policy with Church Mutual. Church Mutual subsequently disputed coverage in part and Skyline filed suit to recover the value of services provided to First Baptist but not paid by Church Mutual.The Fourth Circuit affirmed the district court's dismissal of Skyline's claims because they were barred by the applicable North Carolina statute of limitations. The court found that the applicable statute of limitations is three years from the date of loss, and agreed that Skyline's claims for declaratory judgment and breach of contract are time barred because Skyline brought this action in November 2019, more than three years after the time of loss; October 2016. The court denied as moot Church Mutual's motion to strike part of Skyline's reply brief. View "Skyline Restoration, Inc. v. Church Mutual Insurance Co." on Justia Law

The Supreme Court affirmed the decision of the district court granting summary judgment in favor of State Farm Mutual Automobile Insurance Company and dismissing Plaintiffs' claim alleging that they were entitled to uninsured motor vehicle (UIM) benefits after they were injured in an automobile accident caused by another driver, holding that State Farm was entitled to judgment as a matter of law.After their accident, Plaintiffs filed claims with State Farm for full UIM benefits of $100,000 after settling with the tortfeasor's insurance company. When State Farm did not respond, Plaintiffs brought suit, asserting breach of contract, bad faith in delaying and denying payment for the benefits, and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment for State Farm. The Supreme Court affirmed, holding that under the unambiguous language of the State Farm insurance policy, Plaintiffs were not entitled to UIM benefits and were not entitled to relief on their claims. View "Bergantino v. State Farm Mutual Automobile Insurance Co." on Justia Law

The Georgia Supreme Court granted certiorari review to consider whether the Court of Appeals erred in reversing a trial court’s order confirming an arbitration award against Interstate National Dealer Services, Inc. (“INDS”), in favor of Southern Mountain Adventures, LLC (“Dealer”), and Adventure Motorsports Reinsurance Ltd. (“Reinsurer”). The dispute arose from the parties’ contractual relationship pursuant to which Dealer sold motorsports vehicle service contracts, which were underwritten and administered by INDS, to Dealer’s retail customers, and Reinsurer held funds in reserve to pay covered repair claims. The Supreme Court concluded the Court of Appeals erred in reversing the confirmation of the award because the arbitrator manifestly disregarded the law in rendering the award. In Case No. S21G0015, the Supreme Court reversed the Court of Appeals’ decision reversing the order confirming the arbitration award on that basis, and remanded for resolution of INDS’s argument that the arbitrator overstepped his authority in making the award. In Case No. S21G0008, the Supreme Court vacated the Court of Appeals’ decision dismissing as moot Dealer and Reinsurer’s appeal of the trial court’s failure to enforce a delayed-payment penalty provided in the arbitration award, and remanded for reconsideration of that issue. View "Adventure Motorsports Reinsurance, Ltd., et al. v. Interstate National Dealer Services, Inc." on Justia Law

Hodroj, a passenger, was injured in a single-car collision. The driver was insured by CSAA. Hodroj’s attorney wrote to CSAA offering that Hodroj would settle his claim for bodily injuries in exchange for payment of the driver’s insurance policy limits if CSAA provided a sworn declaration confirming the policy limits and delivered a check within 21 days of acceptance. CSAA could condition its acceptance on Hodroj signing a written release of all bodily injury claims. CSAA responded: “We accept ... [and] are tendering ... $100,000[.]” Enclosed were a sworn declaration attesting to the policy limits, and a written release to be signed by Hodroj. A $100,000 check was sent separately, providing that it should not be presented until the release was signed. Hodroj reneged on the settlement because the release included a release of claims for property damage. Hodroj sued the driver. CSAA sued Hodroj for breach of contract.The court of appeal affirmed judgment in favor of CSAA. An objective observer would conclude that the parties intended to settle Hodroj’s bodily injury claim for the policy limits. That the proposed document contained terms materially different from what had been agreed did not change the binding effect of the agreement. Hodroj was not obliged to sign a release that was inconsistent with what he agreed to but a proposal that does not accurately reflect the agreement does not unwind the entire deal. Hodroj breached the contract by filing suit. View "CSAA Insurance Exchange v. Hodroj" on Justia Law

Plaintiffs filed suit alleging that Allstate breached the terms of their insurance policies by not using either the "Cost Approach" or "Comparable Sales Approach" to determine the "Actual Cash Value" (ACV) of their automobiles. The Fifth Circuit affirmed the district court's grant of Allstate's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), concluding that neither the contract nor Texas state law requires either the Cost or the Comparable Sales Approach. View "Cody v. Allstate Fire and Casualty Insurance Co." on Justia Law

Plaintiff filed a class action complaint against Farm Bureau, alleging breach of contract and seeking a declaratory judgment. Plaintiff's breach of contract claim was based, in part, on an alleged violation of Arkansas Insurance Rule and Regulation 43, which he claimed was incorporated into the policy. The district court granted Farm Bureau's motion to dismiss for failure to state a claim. Plaintiff then filed a motion to clarify whether the order also disposed of the common law breach of contract theory, which the district court dismissed.The Eighth Circuit agreed that the Arkansas regulation that Farm Bureau allegedly violated is not incorporated into plaintiff's policy, and thus he cannot use it as the basis for a breach of contract claim. However, because plaintiff also states a breach of contract claim based on the policy language, the court reversed in part. In this case, plaintiff alleges that "a 9% reduction on a used vehicle is not typical and does not reflect market realities," and that dealers' actual practice is not to inflate prices above market value because of the "intense competition in the context of internet pricing and comparison shopping." The court explained that, if this is true, then Farm Bureau did not consider the truck's fair market value. Rather, it considered an artificially lower value, in breach of its contractual duty and thus plaintiff stated a claim for breach of contract based on the policy language. Finally, the court denied plaintiff's motion to certify questions of law to the Arkansas Supreme Court. View "Smith v. Southern Farm Bureau Casualty Insurance Co." on Justia Law

In 2001, Lavastone Capital LLC (Lavastone) entered into an agreement with Coventry First LLC (Coventry) to purchase “life settlements” – life-insurance policies sold on the secondary market. One was that of Beverly Berland. Lincoln Financial (Lincoln) issued the policy to Berland in 2006. But Berland did not act alone in acquiring it. A few months before, she approached a business called “Simba.” As Simba pitched it, the transaction allowed clients to “create dollars today by using a paper asset, (a life insurance policy not yet issued from a major insurance carrier insuring your life)” by selling it on the secondary market. Clients did not need to put up any money upfront. Instead, they got nonrecourse loans to finance the transactions, which allowed them to make all necessary payments without tapping into personal funds. The only collateral for the loan was the life-insurance policy itself. Berland agreed to participate in several transactions with Simba, profiting greatly. Lavastone kept the policy in force, paying all relevant premiums to Lincoln Financial. Upon Berland’s death more than seven years later, Lincoln paid Lavastone $5,041,032.06 in death benefits under the policy. In December 2018, Berland’s estate filed a complaint against Lavastone in the District Court, seeking to recover the death benefits that Lavastone received under 18 Del C. 2704(b). In 2020, the parties filed cross-motions for summary judgment. In 2021, the District Court certified the three questions of law to the Delaware Supreme Court. The Supreme Court responded: (1) a death-benefit payment made on a policy that is void ab initio under 18 Del. C. 2704(a) and PHL Variable Insurance Co. v. Price Dawe 2006 Insurance Trust was made “under [a] contract” within the meaning of 18 Del. C. 2704(b); (2) so long as the use of nonrecourse funding did not allow the insured or his or her trust to obtain the policy “without actually paying the premiums” and the insured or his or her trust procured or effected the policy in good faith, for a lawful insurance purpose, and not as a cover for a wagering contract; and (3) an estate could profit under 18 Del. C. 2704(b) where the policy was procured in part by fraud on the part of the decedent and the decedent profited from the previous sale of the policy, if the recipient of the policy benefits cannot establish that it was a victim of the fraud. View "Lavastone Capital LLC v. Estate of Beverly E. Berland" on Justia Law

This appeal presented an issue of first impression for the Court of Appeals: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic? After review of the specific insurance policy that California Mutual Insurance Company (California Mutual) issued to The Inns by the Sea (Inns) for its five lodging facilities, the Court determined Inns could not recover from California Mutual for its lost business income resulting from the COVID-19 pandemic. Further, Inns did not identify any manner in which it could amend its complaint to state a claim for coverage. Accordingly, the Court affirmed the trial court’s order sustaining California Mutual’s demurrer without leave to amend. View "The Inns by the Sea v. Cal. Mutual Ins. Co." on Justia Law