Justia Contracts Opinion Summaries

Defendant Metropolitan Property and Casualty Insurance Company (Metropolitan), appealed a superior court order partially granting and partially denying its summary judgment motion as well as a cross-motion filed by plaintiff Joseph Santos. Santos held a personal excess liability policy with Metropolitan that included excess underinsured motorist (UIM) coverage. After Metropolitan denied a claim made by Santos for excess UIM benefits after Santos was hurt in a motorcycle accident, he brought this declaratory judgment action. The trial court ruled that Metropolitan was liable to Santos for excess UIM benefits. Metropolitan argued the trial court erred in so holding because Santos’s policy required, as a precondition to receiving excess UIM benefits, that he carry a certain amount of underlying insurance coverage, and Santos did not do so. Santos argued his lack of sufficient underlying coverage allowed Metropolitan to reduce its excess UIM liability but not escape it altogether. Finding no error in the superior court's judgment, the New Hampshire Supreme Court affirmed partial summary judgment. View "Santos v. Metropolitan Property & Casualty Ins. Co." on Justia Law

A Reinsurance Participation Agreement (RPA) executed by AUCRA and Minnieland was an insurance contract under Virginia law. The Fourth Circuit held that the district court did not violate the court's prior mandate by looking at the EquityComp program as a whole; the RPA and insurance policies constituted an integrated transaction and must be read as one contract; and the integrated contract was a contract of insurance under Virginia Code 38.2–312. Finally, the court noted that it was not the first to determine that the program marketed by Applied Underwriters was insurance. View "Minnieland Private Day School v. Applied Underwriters Captive Risk Assurance Co." on Justia Law

Dennis Woolman, former president of The Clemens Coal Company, challenged a district court’s determination that Liberty Mutual Fire Insurance Company didn’t breach a duty to him by failing to procure for Clemens Coal an insurance policy with a black-lung disease endorsement. Clemens Coal operated a surface coal mine until it filed for bankruptcy in 1997. Woolman served as Clemens Coal’s last president before it went bankrupt. Federal law required Clemens Coal to maintain worker’s compensation insurance with a special endorsement covering miners’ black-lung disease benefits. Woolman didn’t personally procure insurance for Clemens Coal but instead delegated that responsibility to an outside consultant. The policy the consultant ultimately purchased for the company did not contain a black-lung-claim endorsement, and it expressly excluded coverage for federal occupational disease claims, such as those arising under the Black Lung Benefits Act (the Act). In 2012, a former Clemens Coal employee, Clayton Spencer, filed a claim with the United States Department of Labor (DOL) against Clemens Coal for benefits under the Act. After some investigation, the DOL advised Woolman that Clemens Coal was uninsured for black-lung-benefits claims as of July 25, 1997 (the last date of Spencer’s employment) and that, without such coverage, Woolman, as Clemens Coal’s president, could be held personally liable. Woolman promptly tendered the claim to Liberty Mutual for a legal defense. Liberty Mutual responded with a reservation-of-rights letter, stating that it hadn’t yet determined coverage for Spencer’s claim but that it would provide a defense during its investigation. Then in a follow-up letter, Liberty Mutual clarified that it would defend Clemens Coal as a company (not Woolman personally) and advised Woolman to retain his own counsel. Liberty Mutual eventually concluded that the insurance policy didn’t cover the black-lung claim, and sued Clemens Coal and Woolman for a declaration to that effect. In his suit, Woolman also challenged the district court’s rejection of his argument that Liberty Mutual should have been estopped from denying black-lung-disease coverage, insisting that he relied on Liberty Mutual to provide such coverage. Having considered the totality of the circumstances, the Tenth Circuit Court of Appeals concluded the district court didn’t err in declining Woolman’s extraordinary request to expand the coverages in the Liberty Mutual policy. “Liberty Mutual never represented it would procure the coverage that Woolman now seeks, and the policy itself clearly excludes such coverage. No other compelling consideration justifies rewriting the agreement— twenty years later—to Woolman’s liking.” View "Liberty Mutual Fire Insurance v. Woolman" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment for Employers in an action brought by Employers, seeking a declaratory judgment to clarify whether Hartford had a duty to pay half of the expenses related to an underlying workers' compensation claim. The court held that Hartford's purported cancellation of an insurance policy, after a workers' compensation claim had arisen, was void under Missouri law. Furthermore, assuming that Hartford properly pleaded the affirmative defense of mutual mistake, the court held that the company failed to identify any mutual mistake during the formation of the contract. View "Employers Preferred Insurance Co. v. Hartford Accident & Indemnity Co." on Justia Law

Appellant Rainforest Chocolate, LLC appealed the grant of summary judgment motion in favor of appellee Sentinel Insurance Company, Ltd. Rainforest was insured under a business-owner policy offered by Sentinel. In May 2016, Rainforest’s employee received an email purporting to be from his manager. The email directed the employee to transfer $19,875 to a specified outside bank account through an electronic-funds transfer. Unbeknownst to the employee, an unknown individual had gained control of the manager’s email account and sent the email. The employee electronically transferred the money. Shortly thereafter when Rainforest learned that the manager had not sent the email, it contacted its bank, which froze its account and limited the loss to $10,261.36. Rainforest reported the loss to Sentinel. In a series of letters exchanged concerning coverage for the loss, Rainforest claimed the loss should be covered under provisions of the policy covering losses due to Forgery, for Forged or Altered Instruments, and for losses resulting from Computer Fraud. Sentinel denied coverage. In a continuing attempt to obtain coverage for the loss, Rainforest also claimed coverage under a provision of the policy for the loss of Money or Securities by theft. Sentinel again denied coverage, primarily relying on an exclusion for physical loss or physical damage caused by or resulting from False Pretense that concerned “voluntary parting” of the property—the False Pretense Exclusion. Finding certain terms in the policy at issue were ambiguous, the Vermont Supreme Court reversed summary judgment and remanded for the trial court to consider in the first instance whether other provisions in the policy could provide coverage for Rainforest's loss. View "Rainforest Chocolate, LLC v. Sentinel Insurance Company, Ltd." on Justia Law

Plaintiff filed suit for breach of an insurance contract and bad faith against State Farm, requesting punitive damages. The Court of Appeal affirmed the trial court's grant of summary adjudication in State Farm's favor, holding that plaintiff forfeited any contention of error regarding the breach of the insurance contract claim because she neither discussed the claim nor suggested that there were unpaid policy benefits. In regard to the bad faith claim, the court held that plaintiff raised no contention that State Farm improperly delayed arbitration under Insurance Code section 11580.2, subdivision (f). The court held that there were no triable issues regarding bad faith where State Farm acted reasonably in delaying payment of uninsured-underinsured motorist benefits. View "Case v. State Farm Mutual Automobile Insurance Co." on Justia Law

Billy Hamilton appealed a district court’s order granting summary judgment in favor of defendant Northfield Insurance Company as to Hamilton’s claim for breach of the implied duty of good faith and fair dealing and his accompanying request for punitive damages. In March 2015, Hamilton purchased a Northfield insurance policy for a commercial building in Council Hill, Oklahoma. Northfield had a third party inspect the property for underwriting purposes; the underwriting survey report concluded the risk was “Satisfactory with Recommendation Compliance” and identified eight recommendations for repairs. A tenant informed him the roof was leaking in December 2015, and Hamilton reported the leak and the resulting interior damage to Northfield. Northfield denied the claim because a claims adjuster saw no evidence of damage. Hamilton had made repairs, but the adjuster did not see evidence of them, and did not ask whether any were made. A week after receiving the denial, Northfield informed Hamilton it would not renew his policy when it expired. Hamilton was unsuccessful in his suit against Northfield, challenging on appeal the outcome with respect to breach of the implied duty of good faith and fair dealing (he won a jury verdict on his breach of contract claim). The Tenth Circuit found no abuse of the trial court’s discretion in its rulings on Hamilton’s claims, and affirmed. View "Hamilton v. Northfield Insurance Company" on Justia Law

In 2002, in Texas, Dr. Phillips performed a laparoscopic hysterectomy on Bramlett, a 36-year-old mother. While hospitalized, Bramlett suffered internal bleeding and died. Her family filed a wrongful death lawsuit against the hospital and Dr. Phillips, who held a $200,000 professional liability insurance policy with MedPro. He notified MedPro of the lawsuit. In 2003, the hospital settled with the Bramletts for approximately $2.3 million. The Bramletts wrote to Dr. Phillips’s attorney, Davidson, with a $200,000 Stowers demand; under Texas law, if an insurer rejects a plaintiff's demand that is within the insured’s policy limit and that a reasonably prudent insurer would accept, the insurer will later be liable for any amount awarded over the policy limit. MedPro twice refused to settle. The family won a $14 million verdict. The Supreme Court of Texas capped Dr. Phillips’s liability. The family sued MedPro, which settled. MedPro was insured by AISLIC, which declined to cover MedPro’s settlement. The district court granted AISLIC summary judgment, concluding that coverage was excluded because MedPro should have foreseen the family’s claim. An exclusion precluded coverage for “any claim arising out of any Wrongful Act” which occurred prior to June 30, 2005, if before that date MedPro “knew or could have reasonably foreseen that such Wrongful Act could lead to a claim.” The Seventh Circuit reversed in part, finding genuine issues of material fact regarding whether MedPro’s failure to settle was a Wrongful Act and whether MedPro could have foreseen a "claim" before the malpractice trial. View "Medical Protective Co. of Fort Wayne, Indiana v. American International Specialty Lines Insurance Co." on Justia Law

The Second Circuit affirmed the district court's summary judgment dismissal of all claims in the Second Amended Complaint against defendants in an action stemming from construction projects with the U.S. Army Corps of Engineers. The court held that MES's claims failed to articulate any support for its accusations that Safeco breached its contractual obligations or engaged in bad faith or tortious conduct. The court noted that the claim that Safeco acted inappropriately by attending the cure meetings was particularly frivolous. In this case, MES failed to identify any good faith basis, in law or on the basis of the agreements at issue, for its assertion that Safeco had no right to take steps to meet its obligations under the surety bonds. The court sua sponte awarded Safeco double costs. View "M.E.S., Inc. v. Safeco Insurance Co. of America" on Justia Law

Plaintiffs hold participating life-insurance policies from State Farm and Country Life that guarantee policyholders annual dividends from their insurers’ surpluses. The insurers decide the dividend amounts. Dissatisfied with their dividends, Plaintiffs filed nearly identical class-action complaints claiming that the dividend provisions in their policies violate the Illinois Insurance Code by failing to include a provision mandated by the Code. Plaintiffs concede that their annual dividends satisfied the terms of their respective policies. In consolidated appeals, the Seventh Circuit affirmed the dismissal of the claims. Illinois requires only that life-insurance policies of this type contain a provision for policyholders to participate in their insurers’ surpluses. The policies at issue here contain the required provision and are in compliance, despite allowing insurers discretion to set dividend amounts. View "Anderson v. Country Life Insurance Co." on Justia Law