Justia Contracts Opinion Summaries

MCI held a business owners insurance policy with an “Employment-Related Practices Liability Endorsement” from Society Insurance. When DirecTV sued MCI under 47 U.S.C. 521 for publicly displaying its programming in MCI’s two restaurants without paying the commercial subscription rate, Society denied MCI’s claim. MCI sued Society; the Seventh Circuit affirmed summary judgment for Society. The Endorsement requires Society to cover MCI for “damages resulting from a ‘wrongful act’ to which [the Policy] applies” and defines “wrongful act” to include, “[l]ibel, slander, invasion of privacy, defamation or humiliation.” There is no reasonable interpretation of the DirecTV complaint that could arguably fall within the category of libel, slander or defamation. That complaint alleged that MCI damaged DirecTV’s goodwill by showing its programming without paying the correct subscription fee; there are no allegations that MCI made any false, defamatory statement about DirecTV. DirecTV’s actions did not include allegations that MCI made any kind of statement at all. View "Martinsville Corral, Inc. v. Society Insurance" on Justia Law

The Supreme Court answered a certified question submitted by the United States District Court for the District of Nevada by holding that, under Nevada law, an insurer’s liability where it breaches its contractual duty to defend is not capped at the policy limits plus any costs incurred by the insured in mounting a defense. Instead, an insurer may be liable for any consequential damages caused by its breach. Further, good faith determinations are irrelevant for determining damages upon a breach of the duty to defend.Respondents filed suit against Appellant-insurer for breach of contract and other causes of action. The federal court concluded that Appellant did not act in bad faith but did breach its duty to defend. The federal court subsequently entered an order staying the proceedings until resolution of the certified question by the Supreme Court. The Supreme Court answered as set forth above, holding that an insured may recover any damages consequential to the insurer’s breach of its duty to defend, and therefore, an insurer’s liability for breach of that duty is not capped at the policy limits, even if the insurer did not act in bad faith. View "Century Surety Co. v. Andrew" on Justia Law

The Supreme Court affirmed the circuit court’s decision granting summary judgment in favor of Protective Life Insurance Company on Plaintiff’s complaint alleging breach of contract and bad faith, holding that there were no genuine issues of material fact indicating that Protective breached its contract with Plaintiff.Specifically, the Court held (1) Plaintiff’s claim that Protective breached the implied contractual duty of good faith and fair dealing was reviewable; (2) the circuit court did not err when it determined that Protective did not breach the implied contractual duty of good faith and fair dealing; and (3) the circuit court did not err in ruling that Protective did not commit bad faith in handling Plaintiff’s claims. View "Zochert v. Protective Life Insurance Co." on Justia Law

The issue this case presented for the Colorado Supreme Court's review were the insurance proceeds owed to petitioners Rosalin Rogers and Mark Thompson because of a failed property investment orchestrated by their broker-dealer, United Securities Alliance. Ten years into litigation, the issue of the amount of debt at issue has remained at issue, and unresolvable by the courts. United's insurer, Catlin Insurance, was ordered to pay petitioners under a professional liability policy; an appellate court upheld a district court's determination of attorney fees and costs that Catlin could deduct from the liability limit under the policy. The Supreme Court first addressed whether the "Thompson IV" division erred when it upheld the district court’s decision to consider new evidence on remand from Thompson v. United Securities Alliance, Inc. (Thompson III), No. 13CA2037, (Colo. App. Oct. 16, 2014). And Secondly, the Supreme Court addressed whether the Thompson IV division erred when it held that there was no legal basis for awarding prejudgment interest in a garnishment proceeding. As to the first issue, the Supreme Court affirmed the court of appeals; as to the second, it reversed and remanded for further proceedings. View "Thompson v. Catlin" on Justia Law

Plaintiff-petitioner Charissa Schultz was injured in a 2015 car accident in which the other driver failed to stop at a stop sign. The other driver’s insurance company settled for its $25,000 policy limit, and Schultz made a demand on her own uninsured/underinsured motorist benefits under her GEICO policy, which also had a $25,000 limit. In April 2017, after months of correspondence and apparent review of an MRI performed on Schultz in April 2015, GEICO offered Schultz its full policy limit, and it did so without requesting that she undergo an independent medical examination (“IME”). Indeed, GEICO’s claim logs reveal that at the time GEICO decided to offer Schultz its policy limits, it “concede[d] peer review wouldn’t be necessary,” indicating an affirmative decision not to request an IME. A few months later, Schultz filed the present lawsuit asserting claims for bad faith breach of an insurance contract and unreasonable delay in the payment of covered benefits. GEICO denied liability, disputing the extent and cause of Schultz’s claimed injuries and asserting that causation surrounding the knee replacement surgeries was “fairly debatable” because Schultz had preexisting arthritis, which GEICO claimed may independently have necessitated her surgeries. To establish its defense, GEICO ordered the IME and the district court granted that request. The Colorado Supreme Court concluded GEICO’s conduct had to be evaluated based on the evidence before it when it made its coverage decision and that, therefore, GEICO was not entitled to create new evidence in order to try to support its earlier coverage decision. The Court also concluded the district court abused its discretion when it ordered Schultz to undergo an IME over three years after the original accident that precipitated this case and a year and a half after GEICO had made the coverage decision at issue. View "Schultz v. GEICO Casualty Company" on Justia Law

The Supreme Court reversed the decision of the Court of Appeals affirming the decision of the district court granting summary judgment to The Bar Plan Mutual Insurance Company on Daniel Becker’s insurance coverage dispute with the company, holding that the lower courts erroneously relied upon certain caselaw in granting summary judgment and that, under the correct caselaw, questions of fact remained that were inappropriate for summary judgment.Specifically, the Court held (1) the lower courts erred in relying on the “expansion of coverage” rule in concluding that Becker was asking for the coverage to be expanded beyond the insurance contract’s terms and that that courts should instead have continued their analysis to see if estoppel was appropriate to apply to the facts under the “reservation of rights” rule; and (2) because several genuine issues of material fact remained on the issue of estoppel, this case must be remanded for further proceedings. View "Becker v. Bar Plan Mutual Insurance Co." on Justia Law

In 2013, while the disputed insurance policy was in effect, several guests at the Siloam Springs Hotel allegedly sustained injuries due to carbon monoxide poisoning stemming from an indoor-swimming-pool heater that had recently been serviced. The hotel sought coverage under the policy, and the insurer denied coverage based on the exclusion for “qualities or characteristics of indoor air.” This case made it back to the Tenth Circuit following a remand in which the district court was directed to determine whether there was complete diversity of citizenship between the parties, which was an essential jurisdictional issue that needed to be decided before it could properly address the merits of this case. On remand, the district court received evidence on this question and determined that diversity jurisdiction was indeed proper. The district court also certified a policy question to the Oklahoma Supreme Court, which held that the exclusion at issue in this case - however interpreted -should not be voided based on public policy concerns. Following the Oklahoma Supreme Court’s resolution of the certified question, the insurer asked the district court to administratively close the case, arguing that “no further activity in this case . . . remains necessary to render the [district c]ourt’s adjudication of the coverage issue which the case concerns a final judgment.” The hotel asked the court to reopen the case to either reconsider its previous order or to enter a final, appealable judgment against the hotel. The district court held that the case had already been administratively closed and it had no need to reopen the case, since “both its finding of diversity jurisdiction and the Oklahoma Supreme Court’s answer to the certified question did not alter in any way” the court’s summary judgment decision on the merits of the coverage dispute. The hotel appealed. The Tenth Circuit determined the hotel was entitled to coverage under the policy at issue, and reversed the district court's denial. The case was remanded for further proceedings on the question of damages. View "Siloam Springs Hotel v. Century Surety Company" on Justia Law

The DC Circuit vacated its previous opinion and substituted the following opinion.Homeowners filed suit against their insurance company for breach of contract when the company refused to cover flood damage to homeowners' residence. Homeowners also filed suit against their cleaning-and-restoration company for failing to adequately remedy the damage and prevent mold. The district court granted summary judgment for the insurance company and transferred the remaining claim to the district court based on lack of personal jurisdiction. The DC Circuit held that it lacked jurisdiction to review the transfer order. The court affirmed the grant of summary judgment, holding that homeowners' claim against the insurance company failed under Delaware law where there was no dispute that homeowners were away from their beach home for over 72 hours, which under the clear terms of the policy means the flooding occurred while the house was "unoccupied." View "Katopothis v. Windsor-Mount Joy Mutual Insurance Co." on Justia Law

Borsheim Builders Supply, Inc., doing business as Borsheim Crane Service, ("Borsheim") appealed a declaratory judgment granting summary judgment to Mid-Continent Casualty Company and dismissing Borsheim's claims for coverage. After review of the facts presented, the North Dakota Supreme Court concluded the district court erred in concluding Construction Services, Inc. ("CSI"), and Whiting Oil and Gas Corporation were not insureds entitled to defense and indemnity under the "additional insured" endorsement in the commercial general liability ("CGL") policy Mid-Continent issued to Borsheim. Furthermore, the Court concluded the court erred in holding Mid-Continent had no duty to defend or indemnify Borsheim, CSI, and Whiting under the CGL policy for the underlying bodily injury lawsuit. View "Borsheim Builders Supply, Inc. v. Manger Insurance, Inc." on Justia Law

In August 2013, the trial court entered a judgment against respondents Janet and Richard Buhler following a traffic accident in which appellant Mark Jones was seriously injured. By stipulation, the judgment awarded Mark $1,350,000 and his wife Melanie Jones $150,000 for loss of consortium. The Buhlers had an automobile insurance policy with IDS that provided coverage of $250,000 for bodily injury for each person and $500,000 for each occurrence. The issue this case presented for the Court of Appeal's consideration implicated the consortium claim: when a wife sues for loss of consortium after her husband is seriously injured in an automobile accident that is the defendant’s fault, was her claim subject to the same per person limit of the defendant’s insurance policy as her husband’s claim for bodily injury? The Court determined the language of the policy at issue here made clear that the damages for bodily injury include loss of consortium. Further, the policy language provided that so long as only one person suffered bodily injury, the per person limit applied. Although the plaintiffs here argued the language “to one person” modified “the maximum we will pay” rather than “bodily injury,” the Court disagreed. The Court affirmed the judgment in favor of defendant IDS Property Casualty Insurance Company (IDS). View "Jones v. IDS Property Casualty Ins. Co." on Justia Law