Justia Contracts Opinion Summaries

Three matters consolidated for review resulted from separate automobile accidents between either an Allstate or a GEICO insured with Underinsured-Motorist (UIM) coverage and allegedly underinsured tortfeasors. In each case, it was undisputed that the applicable insurance policy contained a "consent-to-settle" clause requiring the provision of notice to, and the consent of, the affected insurer prior to the insured's settlement of any claims against the alleged underinsured tortfeasors and/or a release of the tortfeasors' liability. After review of the specific facts of each case, the Alabama Supreme Court concluded that because the insurers, in following the express directives of the Court, were deprived of their contractual rights as well as the benefit of the procedures set forth in the controlling case law, the insurers demonstrated a clear legal right to their requested relief. In case no. 1150511 and 1151266, the Court directed the applicable circuit court to vacate its respective orders purporting both to "enforce" the pro tanto settlement agreements against the insurer's consent and to dismiss the tortfeasors. In case no. 1150269, the Court dismissed the petition. View "Ex parte GEICO Indemnity Company." on Justia Law

The faulty, inadequate, or defective work exclusion did not apply to the loss in this case. At issue in this appeal was the dismissal of Plaintiff’s action seeking to recover under an insurance policy for the loss of her house caused when a renter, who had an option to purchase the house, demolished it. The district court held that coverage for such loss was excluded under the policy. The Supreme Court vacated the judgment of the district court and remanded this case for further proceedings. View "Fisher v. Garrison Property & Casualty Ins" on Justia Law

Gerardo Salvati died from injuries he sustained while doing maintenance work. Gerardo’s wife, Lucia (hereinafter referred to as Salvati) filed a lawsuit seeking damages for wrongful death and loss of consortium. The underlying defendants had a primary policy through Western World Insurance Company in the amount of $1 million and an excess policy through the American Insurance Company (AIC) in the amount of $9 million. AIC refused to provide coverage to the underlying defendants. Salvati and the underlying defendants eventually reached a $6 million settlement agreement. In exchange for tendering the full $1 million of the Western World primary insurance policy, the agreement released Western World and the underlying defendants from any further liability and assigned all rights held by the underlying defendants against AIC to Salvati. Thereafter, Salvati filed a complaint against AIC, alleging, inter alia, breach of contract and seeking a declaratory judgment that she was entitled to collect $5 million from AIC under the excess policy. The district court dismissed the complaint for failure to state a claim. The Supreme Court affirmed, holding (1) Salvati failed to show that the settlement agreement triggered AIC’s duty to indemnify; and (2) Salvati may not bring a claim under Mass. Gen. Laws ch. 176D, and therefore, none of her causes of action survived. View "Salvati v. American Insurance Co." on Justia Law

GRC, a manufacturer and supplier of refractory products designed to retain strength when exposed to extreme heat, previously included asbestos in its products. GRC was the defendant in 31,440 lawsuits alleging injuries from “exposure to asbestos-containing products manufactured, sold, and distributed by GRC” dating back to 1978. GRC’s insurers initially fielded these claims. During the 1970s and ‘80s, GRC had entered into primary liability insurance policies with several different insurers. GRC also secured additional excess insurance policies. In 1994 GRC’s liabilities from thousands of settled claims far exceeded the limits of its primary insurance coverage. In 2002, after years of continued settlements, GRC tendered the underlying claims to its excess insurance carriers. All denied coverage on the basis of a policy exclusion: It is agreed that this policy does not apply to EXCESS NET LOSS arising out of asbestos, including but not limited to bodily injury arising out of asbestosis or related diseases or to property damage. The district court ruled in favor of GRC. The Third Circuit reversed. The phrase “arising out of,” when used in a Pennsylvania insurance exclusion, unambiguously requires “but for” causation. The losses relating to the underlying asbestos suits would not have occurred but for asbestos, raw or within finished products. View "General Refractories Co. v. First State Insurance Co." on Justia Law

In 2009, plaintiff Dragen Perkovic was operating a semitruck in Nebraska when he swerved to avoid hitting a car that had spun out in front of him. Plaintiff’s truck then crashed into a wall. Plaintiff’s resulting injuries were treated at The Nebraska Medical Center. At the time of the accident, plaintiff maintained personal automobile insurance with Citizens Insurance Company of the Midwest (Citizens) and a bobtail insurance policy with Hudson Insurance Company (Hudson). Plaintiff’s employer was insured by defendant Zurich American Insurance Company. The issue this case presented for the Supreme Court's review centered on the notice requirements of the no-fault act, specifically those set forth in MCL 500.3145(1): whether a nonparty medical provider’s provision of medical records and associated bills to an injured person’s no-fault insurer within one year of the accident causing injury constitutes proper written notice under MCL 500.3145(1), so as to prevent the one-year statute of limitations in MCL 500.3145(1) from barring the injured person’s subsequent no-fault claim. The Michigan Supreme Court held that when, as in this case, the documentation provided by the medical provider contained all of the information required by MCL 500.3145(1) and was provided to the insurer within one year of the accident, the statutory notice requirement was satisfied and the injured person’s claim was not barred by the statute of limitations. Therefore, the Court reversed the judgment of the Court of Appeals, vacated the trial court’s order granting summary disposition in favor of defendant Zurich American Insurance Company, and remanded to the trial court for further proceedings. View "Perkovic v. Zurich American Ins. Co." on Justia Law

The issue presented in this case was whether, by signing a contract providing that plaintiff agreed “to reimburse [defendants’] attorney fees and costs as may be fixed by the court,” the parties agreed that the amount of reasonable attorney fees would be fixed by a court rather than a jury. After review, the Supreme Court held that the parties did so agree. Accordingly, the Court vacated part of the Court of Appeals’ opinion and reversed that portion of the judgment that reversed the award of contractual attorney fees and costs, as well as that portion of the judgment that reversed the award of case evaluation sanctions. The Court otherwise denied the application and cross-application for leave to appeal and left in place the remainder of the Court of Appeals’ opinion. View "Barton-Spencer v. Farm Bureau Life Ins. Co. of Michigan" on Justia Law

Wilbur Shriner, the holder of a homeowner’s insurance policy from Amica Mutual Insurance Company (Amica), appealed the trial court’s grant of summary judgment to Amica and denial of his cross-motion for summary judgment. Shriner owned a glassblowing studio in Burlington until he sold the property in December 2007 and moved the glassblowing equipment to his home in Charlotte. He and his friend set up the equipment in the garage at Shriner’s property and began making glass in late 2008 or early 2009. From 2009 to 2012, Shriner and his friend “sometimes made glass for a week or two, and then would shut down for weeks due to lack of money.” During that three-year period, they made glassware approximately one time per week on average, and glassmaking was never more than an occasional or part-time activity for him. Throughout those three years, Shriner earned income from glassblowing, as well as from the redevelopment and rental of investment properties and from an organic honey and vegetable operation. In early 2012, the furnace exhaust system in a piece of glassmaking equipment malfunctioned and caused a fire that destroyed the garage and all of the property and equipment inside it. At the time, Shriner’s home was covered by his homeowner’s policy with Amica, which covered losses from fire and provided replacement coverage for buildings and personal property. The policy carried a $25,000 deductible and contained an exclusion from coverage for structures from which a business was conducted. Shriner submitted a personal property inventory for the property destroyed in the fire, with a replacement cost totaling $88,354.91. Amica accepted Shriner’s fire-loss claim and determined the replacement cost of the garage to be $42,422.97. Amica applied the policy’s $25,000 deductible and made an actual cash-value payment of $1460.53 as an advance partial payment to Shriner for the garage. Amica then changed positions and, asserting that Shriner’s glassblowing activities constituted a “business” for the purposes of the policy’s exclusion, refused to make any further payments to replace the garage. Amica paid Shriner $11,613 for nonbusiness property that was destroyed in the garage but capped its payment for other property in the inventory at $2500, which was the maximum reimbursement permitted under the policy for “business” personal property. Shriner brought suit to recover the full amount of his claim, and the court granted summary judgment to Amica. This appeal followed. Finding no reversible error, the Vermont Supreme Court affirmed. View "Shriner v. Amica Mutual Ins. Co." on Justia Law

Appellant suffered injuries after being hit by another driver. The at-fault driver’s liability insurer paid Appellant $100,000, the full amount available under the policy. Appellant made a settlement demand on State Farm, with whom he had an underinsured-motorist policy that also had a $100,000 coverage limit. State Farm offered less than $30,000 to settle the claim. Appellant filed a complaint against State Farm alleging breach of contract and claiming that he was entitled to the full amount recoverable under the policy. The district court ultimately entered judgment in the amount of $98,800. Thereafter, Appellant amended his complaint to add a claim under Minn. Stat. 604.18, which authorizes the award of “taxable costs” when an insurer denies benefits without a reasonable basis. The district court concluded that State Farm had denied Appellant insurance benefits without a reasonable basis. The court then determined that the “proceeds awarded” to an insured under section 604.18 are capped by the insurance policy limit. The court of appeals affirmed after determining that the state was ambiguous. The Supreme Court affirmed, holding that section 604.18 unambiguously caps “proceeds awarded” at the amount recoverable under the insurance policy. View "Wilbur v. State Farm Mutual Automobile Insurance Co." on Justia Law

Owners Insurance Company issued Vicki and Chris Craig a policy with underinsured motorist (UIM) coverage. Vicki was injured in an accident when her vehicle was struck by a vehicle driven by another motorist. Vicki incurred damages exceeding $300,000. Shelter Insurance, which insured the at-fault motorist, paid the Craigs $50,000. The Craigs then sought from Owners $250,000, the declarations listed UIM limit amount. Owners paid the Craigs $200,000, citing the off-set provisions that allowed them to deduct the amount paid by Shelter. Thereafter, Owners sought a declaratory judgment over the disputed $50,000. The circuit court ruled that the policy was ambiguous and entered summary judgment in favor of the Craigs. The Supreme Court reversed, holding that the policy unambiguously provides for the $50,000 set-off, that the policy never promised to pay up to the full amount listed in the declarations, and that the declarations did not promise coverage. Remanded. View "Owners Insurance Co. v. Craig" on Justia Law

Plaintiff were a class of state employees and retirees who were enrolled in an Anthem Insurance group health insurance plan at the time of the 2001 demutualization of Anthem Insurance Companies. Plaintiffs brought suit against former Governor John Rowland, the State, Anthem Insurance, and other insurance company defendants alleging that their participation in the plan entitled them to membership in Anthem Insurance and a share of the demutualization proceeds. Plaintiffs claimed that Anthem Insurance and the other insurance company defendants breached their contractual obligations by not paying Plaintiffs for their membership interests and instead distributing their share of the proceeds to the State. The Supreme Court concluded that Plaintiffs’ claims against Rowland and the State were barred by the doctrine of sovereign immunity or otherwise should have been dismissed. After a trial, the trial court rendered judgment for the remaining defendants. The Supreme Court affirmed, holding that the trial court correctly concluded that the relevant contract provisions were ambiguous as to Plaintiffs’ eligibility for membership in Anthem Insurance and their entitlement to a share of the demutualization proceeds and properly considered extrinsic evidence to determine their meaning. View "Gold v. Rowland" on Justia Law