Justia Contracts Opinion Summaries

The Supreme Court reversed the trial court's grant of summary judgment in favor of Continental Western Insurance Company and dismissing G&G Oil Company of Indiana's claim for losses from a ransomware attack, holding that neither party demonstrated that it was entitled to summary judgment.G&G Oil purchased an insurance policy from Continental. One provision of the policy - the "Computer Fraud" provision - covered loss "resulting directly from the use of any computer to fraudulently cause a transfer of money." G&G Oil was the target of a ransomware attack and submitted a claim for coverage of its losses under the "Commercial Crime" provision of the policy. Continental denied the claim. G&G Oil then brought this complaint. The trial court granted summary judgment for Continental. The Supreme Court affirmed, holding that, although G&G Oil's losses "resulted directly from the use of a computer," neither party was entitled to summary judgment. View "G&G Oil Co. of Indiana v. Continental Western Insurance Co." on Justia Law

The Supreme Court answered a certified question under Nev. R. App. P. 5 concerning an insurer's right to reimbursement, holding that when a party to a contract performs a challenged obligation under protest and a court subsequently determines that the contract did not require performance, the party may generally recover in restitution, thus giving effect to the terms of the parties' bargain.Insurer filed this declaratory judgment action seeking reimbursement of expenses it had occurred in defending Insured against a suit by a third party. The district court concluded that Insurer was not entitled to reimbursement. The Ninth Circuit Court of Appeals affirmed, concluding that the suit did not trigger a duty to defend. The Supreme Court accepted a certified question from the Ninth Circuit regarding the issue. The Supreme Court then held (1) no contract governed the right to reimbursement in this case; and (2) under the principle of unjust enrichment, a party that performs a disputed obligation under protest and does not in fact have a duty to perform is entitled to reimbursement. View "Nautilus Insurance Co. v. Access Medical, LLC" on Justia Law

Hall filed various contract, statutory, and common-law claims against Old Republic in federal district court for failing to indemnify Hall under its title insurance policies. The district court concluded that, although the unpaid Penta pre-policy-date work is a defect under Covered Risk 2 and an encumbrance under Covered Risk 10, coverage is precluded by Exclusions 3(a) and 3(d), which bar claims for liens and work performed after the policy date. The district court found that Hall had not raised a genuine dispute of material fact that Penta's liens were for unpaid work before the policy date, and granted Old Republic's motion for summary judgment and denied Hall's motion for partial summary judgment.The Fifth Circuit concluded that the insuring clauses do not cover Hall's Penta lien losses. The court explained that any doubt about whether Covered Risks 2 and 10 could possibly be read to cover the Penta lien losses at issue here is removed by the fact that the parties also signed standard ALTA Form 32-06. In so doing, the parties specifically contracted to eliminate one coverage provision of the standard-form insurance policy—Covered Risk 11(a). Even assuming arguendo that the 32-06 endorsements and the Covered Risks conflict or result in an ambiguity about whether the Penta lien losses are covered, the court explained that it is the more general provisions that suggest that there may be coverage (under Hall's theory), while the more specific provisions instruct that there is no such coverage. Under basic principles of contract interpretation, the specific controls the general. Therefore, the court need not review the district court's conclusions regarding Exclusions 3(a) and 3(d) to affirm the judgment.The court also affirmed the district court's grant of Old Republic's motion for summary judgment on Hall's bad-faith and Texas Insurance Code claims. The court explained that, because Hall is not entitled to indemnification for the Penta lien losses, Hall cannot show that Old Republic acted in bad faith in denying its claim. Furthermore, because Hall alleges no other harm apart from the Penta lien losses, Hall cannot demonstrate that Old Republic caused it any harm in violating the Texas Insurance Code—assuming arguendo that the Texas Insurance Code applies, and that Old Republic ran afoul of its provisions. Finally, the court affirmed the district court's grant of Old Republic's motion for summary judgment on Hall's independent-counsel (or duty-to-defend) claim. View "Hall CA-NV, LLC v. Old Republic National Title Insurance Co." on Justia Law

The Supreme Court reversed in part the order of the district court denying Petitioner's petition for judicial review of an order of the Nevada Division of Insurance, holding that remand was required with the instruction that the district court grant judicial review in part.Choice Home Warranty (CHW) marketed and sold Home Warranty Administrator of Nevada, Inc. (HWAN)'s home warranty service contracts, in which HWAN was the obligor. The Department of Business and Industry, Division of Insurance filed a complaint alleging that HWAN, dba CHW, made false entries by answering no to a question in certificate-of-registration renewal applications, conducted business in an unsuitable manner, and failed to make records available to the Division. A hearing officer found that HWAN committed all of the alleged violations. The district court denied HWAN's petition for judicial review. The Supreme Court reversed in part, holding (1) under Nev. Rev. Stat. 690C.150, a provider of home warranty services is not simply an entity that issues, sells, or offers for sale service contracts but the obligor in those contracts; (2) CHW was not an obligor so it was not a provider and need not have held a certificate of registration; and (3) HWAN did not act improperly by selling its contracts through an unregistered entity. View "Home Warranty Administrator of Nevada, Inc. v. State, Department of Business & Industry" on Justia Law

An excess insurer under a directors’ and officers’ liability insurance policy sought a declaration from the superior court that coverage under the policy was not available to fund the settlement of two lawsuits: a breach of fiduciary duty action in the Court of Chancery, and a federal securities action in the United States District Court for the District of Delaware. In a series of decisions, the superior court rejected the insurer’s claims and entered judgment in favor of the insureds. Aggrieved, the insurer contended the superior court committed several errors: whether the insurance policy, which insured a Delaware corporation and its directors and officers but which was negotiated and issued in California, should have been interpreted under Delaware law; whether the policy, to the extent that it appeared to cover losses occasioned by one of the insureds’ fraud, was unenforceable as contrary to the public policy of Delaware; whether a policy provision that excluded coverage for fraudulent actions defeats coverage; and whether the superior court properly applied the policy’s allocation provision. Finding no reversible error, the Delaware Supreme Court affirmed the superior court. View "RSUI Indemnity Co. v. Murdock, et al." on Justia Law

The Supreme Judicial Court vacated the judgment of the superior court dismissing for failure to state a claim Corinth Pellets, LLC's complaint alleging that a fire loss at Corinth's wood pellet mill was covered under a commercial property insurance policy issued by Arch, holding that the superior court erred in its interpretation of Maine's surplus lines insurance law, Me. Rev. Stat. 24-A, 2009-A.On appeal, Corinth argued that the fire loss was covered under the policy, despite having occurred after the policy term had expired, because Arch failed notify Corinth of its intention not to renew the policy as required by section 2009-A, and therefore, the policy was automatically renewed at the end of the term. The Supreme Judicial Court vacated the judgment, holding that section 2009-A(1) requires a surplus lines insurer to give written notice of its intent either to cancel a policy or not to renew a policy at least fourteen days before the effective date of cancellation or nonrenewal. View "Corinth Pellets, LLC v. Arch Specialty Insurance Co." on Justia Law

Reliance Standard Life Insurance (“Reliance”) appealed district court’s orders: (1) concluding that Reliance wrongly denied David Carlile’s claim for long-term disability benefits; (2) refusing to remand the case and instead ordering an award of benefits; (3) awarding attorney fees and costs to Carlile; and (4) denying Reliance’s motion to amend or alter judgment. After reviewing the policy at issue here, the Tenth Circuit determined the relevant policy language was ambiguous and therefore construed it in Carlile’s favor, and in favor of coverage. Furthermore, the Court concluded the district court did not err in refusing to remand the case back to Reliance or in awarding attorney fees and costs to Carlile. View "Carlile v. Reliance Standard Life Ins." on Justia Law

The Supreme Court answered a question certified by the United States Court of Appeals for the Ninth Circuit by holding that, under a policy without a contractual duty to defend, the objective reasonableness of an insurer's decision to withhold consent is assessed from the perspective of the insurer, not the insured.National Union Fire Insurance Company of Pittsburgh, PA, which insured Apollo Education Group, Inc.'s directors and officers for liability up to $15 million under a policy that included no duty to defend the insured if sued. A class action suit against Apollo resulted in an agreement to settle. Apollo refused to consent to the settlement but entered into the agreement. Apollo then sued National Union to recover the settlement amount, alleging breach of contract and bad faith. The district court granted summary judgment to National Union. On appeal, the Ninth Circuit certified the question to this Court. The Supreme Court held that an insurer must, in deciding whether to consent to a settlement, give the matter full and fair consideration, but need not approve a settlement simply because the insured believes it is reasonable. View "Apollo Education Group, Inc. v. National Union Fire Insurance Co." on Justia Law

The Supreme Judicial Court affirmed the summary judgment entered by the superior court in favor of Concord General Mutual Insurance Company on Arthur Bibeau's complaint for alleged breaches and violations of the homeowner's insurance policy issued to him by Concord, holding that the policy did not unambiguously exclude from coverage losses caused by earth movement.Bibeau insured his home through a policy issued to him by Concord. Bibeau submitted a notice of claim to Concord alleging that his home was damaged by a water line leak that pushed sand and other material under the foundation of his home. Concord denied the claim based on the policy's earth movement exclusion and its anti-concurrent-causation clause. Bibeau then brought this action. The superior court granted summary judgment for Concord on all counts. The Supreme Judicial Court affirmed, holding that the superior court did not err in determining that the policy was unambiguous and that Bibeau's losses were excluded from coverage pursuant to the earth movement exclusion. View "Bibeau v. Concord General Mutual Insurance Co." on Justia Law

The Supreme Court answered in the negative a question certified by the Fifth District Court of Appeal, holding that in a first-party breach of insurance contract action brought by an insured against its insurer not involving suit under Fla. Stat. 624.155, Florida law does not allow the insured to recover extra-contractual, consequential damages.The insureds in this case sought to recover from the insurer extra-contractual, consequential damages for lost rental income. The trial court granted the insurer's motion for partial summary judgment regarding the breach of contract claim for lost rental income. The Fifth District reversed the partial summary judgment regarding the consequential damages claim, concluding that the insurer was not statutorily immune from this aspect of the insureds' claim. The Supreme Court quashed the Fifth District's decision and remanded the case, concluding that extra-contractual, consequential damages are not available in a first-party breach of insurance contract action. View "Citizens Property Insurance Corp. v. Manor House, LLC" on Justia Law