Justia Contracts Opinion Summaries

The insured, Brenda Sandoval, submitted a claim to her insurer, Unum Life Insurance Company of America, which initially paid benefits but then terminated them. The termination of benefits led Sandoval to sue Unum for: (1) a common-law tort (bad faith breach of insurance contract); (2) a statutory tort (unreasonable conduct under Colo. Rev. Stat. sec. 10-3-1115 to 1116); and (3) breach of contract. The district court granted Unum’s motion for partial summary judgment on the tort claims. The contract claim went to trial, where the jury rendered a verdict for Sandoval. The district court later denied Unum’s motion for judgment as a matter of law. Sandoval appealed the grant of Unum’s motion for partial summary judgment, and Unum cross-appealed the denial of its motion for judgment as a matter of law. After review, the Tenth Circuit affirmed the award of partial summary judgment on the tort claims because Unum conducted a reasonable investigation. On the contract claim, the Court also affirmed the denial of Unum’s motion for judgment as a matter of law: the policy contained two alternative tests for a disability, and the evidence permitted a reasonable finding that Sandoval had satisfied at least one of these definitions. View "Sandoval v. UNUM Life Insurance" on Justia Law

Flameproof, a distributor of fire retardant and treated lumber (FRT lumber), maintained liability insurance through Lexington, covering liability for "property damage” that is “caused by an occurrence that takes place in the coverage territory.” “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Property damage” is “physical injury to tangible property, including all resulting loss of that property,” or loss of use of property that is not physically injured. Three lawsuits arose from Flameproof’s sale of lumber to Minnesota-based contractors. The contracts called for FRT lumber meeting the requirements of the International Building Code (IBC). The complaints alleged that Flameproof “unilaterally” decided to deliver its in-house FlameTech brand lumber, which purportedly was not IBC-compliant. After the material was installed, the owners discovered that the lumber was not IBC-certified. Flameproof “admitted” that it had shipped FlameTech lumber rather than the FRT lumber advertised on its website and ordered. The FlameTech lumber was removed and replaced, damaging the surrounding materials. The lawsuits alleged negligent misrepresentation, fraudulent misrepresentation, deceptive business practices, false advertising, consumer fraud, breach of warranties, and breach of contract. Lexington sought a ruling that it owed no duty to defend Flameproof. The Seventh Circuit affirmed summary judgment for Lexington. The underlying complaints do not allege an “occurrence”—or accident—as required to trigger Lexington’s duty to defend under the policy. View "Lexington Insurance Co. v. Chicago Flameproof & Wood Specialties Corp." on Justia Law

Guerline Felix’s vehicle collided with Brian Richards’ vehicle in New Jersey. Richards was insured under a New Jersey automobile insurance policy issued by AAA Mid-Atlantic Insurance Company (AAA). The policy provided bodily injury (BI) liability coverage, as well as uninsured and underinsured motorist (UM/UIM) coverage. Felix was insured by the Government Employee Insurance Company (GEICO) under a policy written in Florida. That policy provided up to $10,000 in property liability and personal injury protection (PIP) benefits, but it did not provide any BI liability. Felix sued Richards for personal injuries, and, in a separate action, Richards sued Felix and AAA for personal injuries. AAA then filed a third-party complaint against GEICO, claiming that GEICO’s policy was automatically deemed to include $15,000/$30,000 in BI coverage and that payment would eliminate the claim for UM/UIM coverage by AAA. The motion court determined that the New Jersey "deemer" statute applied to GEICO’s policy, rejecting the argument that the statute created a carve-out for BI coverage based upon the basic policy, as well as GEICO’s constitutional challenge. The Appellate Division affirmed, and the New Jersey Supreme Court granted the petition for certification filed by GEICO. The Supreme Court concluded after review that the deemer statute did not incorporate by reference the basic policy’s BI level for insurers, like GEICO, to which the second sentence of N.J.S.A. 17:28-1.4 applied. From the perspective of the insurers’ obligation, the required compulsory insurance liability limits remained $15,000/$30,000. As to the equal protection claim, New Jersey insureds were the ones who had a choice to purchase less than the presumptive minimum BI amount. The obligation of in-state insurers to offer and provide that minimum was the same as the obligation imposed under the deemer statute’s second sentence on authorized insurers writing an out-of-state policy. "The equal protection claim therefore falls flat," and the Appellate Division's judgment was affirmed. View "Felix v. Richards" on Justia Law

In an earlier appeal, the Tenth Circuit Court of Appeals ruled that Wyoming’s anti-indemnity statute would not defeat possible insurance coverage to an additional insured. In this second appeal and cross-appeal, the issue presented for the Court's review centered on whether the district court correctly ruled that additional-insured coverage existed under the applicable insurance policies; whether the district court entered judgment for the additional insured in an amount greater than the policy limits; and whether the district court correctly ruled that the additional insured was not entitled to prejudgment interest and attorneys’ fees. Ultra Resources, Inc. held a lease for a Wyoming well site. In January 2007, Ultra contracted with Upstream International, LLC under a Master Service Agreement to manage the well site. The Ultra-Upstream contract required Upstream to obtain insurance policies with a stated minimum amount of coverage for Ultra and Ultra’s contractors and subcontractors. To do so, Upstream obtained two policies from Lexington Insurance Company - a General Liability Policy (“General Policy”) and a Commercial Umbrella Policy (“Umbrella Policy”). Lexington issued and delivered the two policies in Texas. Ultra contracted with Precision Drilling (“Precision”) to operate a drilling rig at the well site. Precision maintained a separate insurance policy with Lloyd’s of London (“Lloyd’s”), covering Precision for primary and excess liability. Upstream employed Darrell Jent as a contract management of some Ultra well sites. Jent assumed that Precision employees had already attached and tightened all A-leg bolts on a rig platform. In fact, Precision employees had loosened the A-leg bolts (which attach the A-legs to the derrick) and had not properly secured these bolts. After supervising the pin removal, Jent had just left the rig floor and reached “the top step leading down from the rig floor” when the derrick fell because of the “defectively bolted ‘A- legs’ attaching the derrick to the rig floor.” Jent was seriously injured after being thrown from the steps, and sued Precision for negligence. Precision demanded that Ultra defend and indemnify it as required by the Ultra-Precision drilling contract. Ultra, in turn, demanded that Upstream defend Precision under the insurance policies required by the Ultra-Upstream Contract. The Tenth Circuit concluded the district court ruled correctly on each issue presented, so it affirmed. View "Lexington Insurance Company v. Precision Drilling Company" on Justia Law

This dispute arose from a 2013 oil well blowout on the HERCULES 265 drilling rig in the Gulf of Mexico. After the rig's charterer filed suit raising products liability claims against a refurbisher of the rig's blowout-prevention components, counterclaims and third-party claims ensued. The district court subsequently granted a series of summary judgments, based both on contractual indemnity and also on the merits of the liability claims.The Fifth Circuit affirmed the district court's grant of summary judgment as to Hercules' duty to defend, hold harmless, and indemnify Axon; reversed the district court's grant of summary judgment as to Walter's duty to directly indemnify Axon; reversed the district court's grant of summary judgment as to Walter's duty to indemnify Hercules for Axon's claims; vacated the district court's order excluding Bellemare's testimony; vacated the district court's orders excluding the expert reports of Sones, Bourgoyne, Williams, Rusnak, Bellemare, and Adair, as well as the orders excluding the affidavits of Sones and Bourgoyne; reversed the district court's grant of summary judgment as to the causation and "unreasonably dangerous condition" prongs of the Louisiana Products Liability Act; vacated the district court's final judgment and fee orders; and remanded for further proceedings. View "Certain Underwriters at Lloyd's v. Axon Pressure Products Inc." on Justia Law

At issue in this case before the Vermont Supreme Court was the meaning of “date of loss” for the purpose of an insurance policy’s condition that any action be commenced within one year after the “date of loss.” The trial court concluded that the insurance provision requiring that an action be brought “within one year after the date of loss” was ambiguous and had to be interpreted against insurer to mean that the one-year period began to run when insurer breached its obligations (i.e., at the time homeowner received final, allegedly insufficient, payment from insurer). The court accordingly denied insurer summary judgment and granted partial summary judgment to homeowner. After its review, the Supreme Court concluded the provision was unambiguous in requiring suit to be brought within one year of the date of the occurrence giving rise to coverage and reversed the partial summary judgment for homeowner. View "Brillman v. New England Guaranty Insurance Company, Inc." on Justia Law

In May 2015, the Chickasaw County School District entered into a contract with Sullivan Enterprises, Inc., for window restoration work on the Houlka Attendance Center. In July 2015, during construction, a fire began that completely consumed the attendance center. Liberty Mutual, the school district’s insurer, paid the school district $4.3 million for the damage to the building. Liberty Mutual then filed a subrogation suit against Sullivan Enterprises, Fowlkes Plumbing, LLC, and Quality Heat & Air, Inc. The United States District Court for the Northern District of Mississippi found that the waiver of subrogation did not apply to damages to the “non-Work” property, thus Liberty Mutual could proceed in litigation as to “non-Work” property damages. The United States Court of Appeals for the Fifth Circuit allowed an interlocutory appeal and certified a question to the Mississippi Supreme Court regarding whether the subrogation waiver applied to “non-Work” property. The Supreme Court determined that based on the plain meaning of the contract language, the waiver of subrogation applied to both work and non-work property. View "Liberty Mutual Fire Insurance Co. v. Fowlkes Plumbing, L.L.C." on Justia Law

After Wayne Bourgeois contracted mesothelioma, he filed suit against Chevron and other defendants in state court. Chevron settled with Bourgeois for $550,000, and then sought contractual indemnity from Jacobs Field Services. The district court determined that Chevron was entitled to the full value of the settlement as well as about $256,000 in attorney's fees and costs.The Fifth Circuit affirmed, holding that Chevron easily met its burden to establish potential liability as the governing rule, and the district court did not err in setting potential liability as the operative standard; Chevron established, as a matter of law, that it was potentially liable to Bourgeois; and the district court did not err by finding that the relevant indemnity provision unambiguously entitled Chevron to indemnity in the Bourgeois suit and attorney's fees and "ordinary litigation costs." View "Chevron Oronite Co., LLC v. Jacobs Field Services North America, Inc." on Justia Law

The Supreme Court affirmed the decision of the district court granting summary judgment in favor of an insurer on the grounds that the plaintiff's contractual assignment was unenforceable, holding that a residential contractor acting as an unlicensed public adjuster cannot enforce its post-loss contractual assignment of insurance benefits against the homeowner's insurer.The contractor in this case represented homeowners as an assignee of their insurance claim for storm damage to their home. The district court concluded that the contractor's contractual assignment was invalid because the contractor acted as an unlicensed public adjuster. The Supreme Court affirmed, holding that the district court did not err in ruling that the contractor acted as an unlicensed public adjuster and that the assignment contract was void and unenforceable under Iowa Code 103A.71(5). View "33 Carpenters Construction, Inc. v. IMT Insurance Co." on Justia Law

The Supreme Court affirmed the district court's grant of summary judgment for an insurer on the grounds that the plaintiff's contractual assignment was unenforceable, holding that a residential contractor acting as an unlicensed public adjuster cannot enforce its postloss contractual assignment of insurance benefits against the homeowner's insurer.Iowa Code 103A.71(5) declares void contracts entered into by residential contractors who perform public adjuster services without the license required under Iowa Code 522C.4. The contractor in this case represented homeowners as an assignee of their insurance claim for hail damage to their home. The district court concluded that the contractor's contractual assignment was invalid under section 103A.71(5) because the contractor acted as an unlicensed public adjuster. The Supreme Court affirmed, holding that the district court did not err in ruling that the contractor acted as an unlicensed public adjuster and that the assignment contract was unenforceable and void under Iowa law. View "33 Carpenters Construction, Inc. v. State Farm Fire & Casualty Co." on Justia Law