Justia Contracts Opinion Summaries

This appeal arose out of an agent contract dispute between Bret Kunz (“Bret”) and Nield, Inc. (“N.I.”) authorizing Bret to sell insurance on behalf of N.I. N.I. is owned by two brothers, Bryan Nield (“Bryan”) and Benjamin Nield. A dispute arose concerning the method and type of compensation available to Bret under the Contract. Bret filed a complaint seeking, inter alia, a declaratory judgment interpreting the Contract. The district court held the 2009 Contract did not provide for profit sharing as Bret claimed. Bret and his wife, Marti, (collectively, the “Kunzes”) appealed. Finding no reversible errors with respect to how the district court interpreted the Contract, the Idaho Supreme Court affirmed. View "Kunz v. Nield, Inc." on Justia Law

The rights that flow through a subrogation clause allow an insurer to seek reformation of a contract between its insured and a third party. After Associated paid the portion of the underlying settlement that was in excess of the Westfield policy, Associated sought reimbursement from Scottsdale, an insurer that issued a commercial umbrella policy to Alpha. The Fifth Circuit held that the district court erred in reading reformation’s privity requirement to necessitate a specific connection to the Alpha-Scottsdale insurance policy. Rather, privity in Texas focuses on the relationship to a party. In this case, the subrogation clause in the Associated-Alpha policy provided that connection. Accordingly, the court reversed and remanded. View "Associated International Insurance Co. v. Scottsdale Insurance Co." on Justia Law

This case presented for the Washington Supreme Court's review an award of attorney fees against five surety companies following a jury trial for breach of contract in a public works project. The parties litigated the issue of whether three construction firms had defaulted on a contract, thus triggering coverage under a performance bond issued by the surety companies. At issue was whether the existence of a statutory fee provision barred equitable remedies available at common law for coverage disputes and whether the trial court correctly determined that segregation between covered and uncovered fees was impossible. The Court of Appeals affirmed the award of Olympic Steamship fees and held that the trial court did not abuse its discretion in determining that the fees could not be segregated. Finding no reversible error in that judgment, the Washington Supreme Court affirmed. View "King County v. Vinci Constr. Grands Projets" on Justia Law

This appeal arose out of the Ponzi scheme orchestrated by Scott Rothstein through his law firm, Rothstein Rosenfeldt Adler (RRA). Trustees of RRA filed suit alleging breach of contract and bad faith claims against insurance carriers that reached a settlement with Gibraltar and its executives after originally denying coverage. The Eleventh Circuit applied Florida law and exercised plenary review, holding that coverage was barred by a "professional services exclusion" found in each of the policies. Accordingly, the court affirmed the district court's grant of the insurers' motion to dismiss. View "Stettin v. National Union Fire Insurance Co." on Justia Law

Plaintiff, a gas station owner, filed suit demanding that its insurer pay for damages when the fiberglass sheath of one of its underground gasoline storage tanks split after resting on a rock for 16 years. The Court of Appeal affirmed summary judgment to the insurer, holding that a substantial impairment of the tank's structural integrity did not constitute a "collapse" as a matter of law. View "Tustin Field Gas & Food v. Mid-Century Insurance Co." on Justia Law

Answering certified questions from the Eleventh Circuit, the Supreme Court of Georgia concluded that, while O.C.G.A. 9-11-67.1 sets forth certain terms and conditions that must be included in every written offer of settlement, nothing in Georgia law or the statute precludes parties from requiring "some additional act to effectuate acceptance;" O.C.G.A. 9-11-67.1 permits unilateral contracts whereby Pre-Suit Offers may demand acceptance in the form of performance before there was a binding enforceable settlement contract; and O.C.G.A. 9-11-67.1 does not preclude a Pre-Suit Offer from demanding timely payment as a condition of acceptance. In light of these answers, the Eleventh Circuit held that the district court correctly determined that O.C.G.A. 9-11-67.1 does not prohibit a party from requiring timely payment as a condition of acceptance of a settlement offer; the offer letter in this case unambiguously conditioned acceptance on timely payment; the insurers' issuance of two $50,000 checks with incomplete addresses, which never reached defendants or their attorney, did not satisfy this timely-payment condition; and the insurer failed to accept defendants' settlement offer, thus preventing the formation of a binding settlement agreement. Accordingly, the court affirmed summary judgment for defendants. View "Grange Mutual Casualty Co. v. Woodard" on Justia Law

The Supreme Court reversed the circuit court’s dismissal of Standard Fire Insurance Co.’s case against Continental Resources Inc. pursuant to S.D. Codified Laws 15-6-12(b)(5). Standard Fire brought suit seeking statutory reimbursement or, in the alternative, equitable subrogation of workers’ compensation benefits paid to an employee. The circuit court found that the terms of a settlement agreement barred further litigation and that res judicata applied. The Supreme Court disagreed and remanded the matter for further proceedings, holding that the circuit court erred when it determined that the plain language of the settlement agreement barred Standard Fire’s claim. View "Standard Fire Insurance Co. v. Continental Resources, Inc." on Justia Law

Lexington Insurance denied a claim by its insured, Double D Warehouse, for coverage of Double D’s liability to customers for contamination of warehoused products. One basis for denial was that Double D failed to document its warehousing transactions with warehouse receipts, storage agreements, or rate quotations, as required by the policies. PQ was a customer of Double D whose products were damaged while warehoused there. PQ settled its case against Double D by stepping into Double D’s shoes to try to collect on the policies. PQ argued that there were pragmatic reasons to excuse strict compliance with the policy’s terms. The Seventh Circuit affirmed summary judgment in favor of Lexington. PQ accurately claimed that the documentation Double D actually had (bills of lading and an online tracking system) should serve much the same purpose as the documentation required by the policies (especially warehouse receipts), but commercially sophisticated parties agreed to unambiguous terms and conditions of insurance. Courts hold them to those terms. To do otherwise would disrupt the risk allocations that are part and parcel of any contract, but particularly a commercial liability insurance contract. PQ offered no persuasive reason to depart from the plain language of the policies. View "PQ Corp. v. Lexington Insurance Co." on Justia Law

Plaintiff purchased an automobile insurance policy from Progressive. The policy included UM coverage with a limit of $25,000. Plaintiff was injured in an automobile accident with an uninsured motorist. Plaintiff filed a proof of loss for UM benefits with Progressive. ORS 742.061(1) generally provides for an award of attorney fees when an insured brings an action against his or her insurer and recovers more than the amount tendered by the insurer. Subsection (3) provides a “safe harbor” for the insurer: an insured is not entitled to attorney fees if, within six months of the filing of a proof of loss, the insurer states in writing that it has accepted coverage, that it agrees to binding arbitration, and that the only remaining issues are the liability of the uninsured motorist and the “damages due the insured.” At issue in this case was what the safe-harbor statute meant when it referred to the “damages due the insured.” The insurer, Progressive Classic Insurance Company, responded to plaintiff’s claim by agreeing that the accident was covered by the policy, but challenged the nature and extent of plaintiff’s injuries, as well as the reasonableness and necessity of his medical expenses. Plaintiff argued that, by reserving the right to challenge the nature and extent of his injuries, Progressive raised issues that went beyond the “damages due the insured.” The trial court, Court of Appeals and Oregon Supreme Court all rejected plaintiff’s construction of the safe-harbor statute. View "Spearman v. Progressive Classic Ins. Co." on Justia Law

In this declaratory judgment proceeding, petitioner Exeter Hospital, Inc. (Exeter) appealed a superior court order denying its motion for partial summary judgment as to the amount at which coverage was triggered under an umbrella policy (the policy) issued to Exeter by respondent Steadfast Insurance Company (Steadfast). In the spring of 2012, an outbreak of Hepatitis C infections among patients serviced by Exeter’s cardiac catheterization lab led investigators to discover that a technician had spread the virus to patients “through a clandestine drug diversion scheme.” The technician allegedly injected certain drugs into his body by way of intravenous needles, then reused the needles on patients, thereby infecting them with the virus. Numerous lawsuits were lodged against Exeter by affected patients. Exeter was primarily insured through a Self-Insurance Trust Agreement (SIT), which provided professional liability coverage in the amount of $1 million per medical incident, with a $4 million annual aggregate cap. Exeter also maintained the policy with Steadfast, which provided excess health care professional liability coverage. Steadfast maintained that it would pay damages only in excess of the $100,000 retained limit for each medical incident. Exeter filed this proceeding, seeking a declaration that it was not required to pay $100,000 retained limit per claim. The trial court interpreted the term “applicable underlying limit” as being a variable amount “dependent on the actual coverage remaining under [the] other [limits of] insurance,” here, the limits of the SIT. Because Exeter had paid out the limits of the SIT, the court found that the “applicable underlying limit” was zero, thereby rendering the $100,000 retained limit greater than the “applicable underlying limit.” Thus, the court determined that, pursuant to “Coverage A,” Steadfast was required “to pay damages in excess of $100,000 for each medical incident.” Exeter sought reconsideration of the court’s order, which the court denied. Although the New Hampshire Supreme Court did not agree with every underlying argument pressed by Exeter, it concluded that its overall argument regarding the interpretation of Coverage A was reasonable, and the trial court therefore erred in granting partial summary judgment as to the terms of Coverage A. View "Exeter Hospital, Inc. v. Steadfast Insurance Company" on Justia Law