Justia Contracts Opinion Summaries

At issue in this appeal was the scope of the “covered profession” clause of a professional liability errors and omissions insurance policy issued to Utah County Real Estate, LLC (Prudential) by Houston Casualty Company. While working as a real estate agent for Prudential, Robert Seegmiller engaged in a professional relationship with the plaintiffs in this action (collectively, Investors) on a real estate deal that went sour. The Investors obtained a judgment against Seegmiller for negligence. Rather than execute the judgment against Seegmiller, the Investors settled with him, acquiring any claims he might have against Prudential’s insurer, Houston Casualty. The Investors then brought this action alleging that Houston Casualty breached the policy by failing to defend and indemnify Seegmiller. The district court granted summary judgment for Houston Casualty. The Supreme Court affirmed on the ground that Seegmiller’s conduct in the transaction was not covered by the policy because he was not providing services “for a fee” in the transaction. View "Compton v. Houston Casualty Co." on Justia Law

Plaintiffs brought a lawsuit against their insurance carrier (Defendant), claiming that Defendant had incorrectly denied coverage. The case proceeded to a jury trial. The jury’s unanimous verdict was for Defendant. Thereafter, Plaintiffs filed a motion for a new trial after learning that the jury foreperson had a prior felony conviction, arguing that the juror was not qualified to serve on the jury under 28 U.S.C. 1865(b)(5). The district court denied the motion for a new trial, concluding that Plaintiffs had not shown that the juror’s service deprived them of a fundamentally fair trial. The First Circuit affirmed, holding that the juror’s inclusion was not fatal to the jury’s verdict, and therefore, the district court properly denied Plaintiffs’ new-trial motion. View "Faria v. Harleysville Worcester Insurance Co." on Justia Law

Shelter Mutual Insurance Company issued the Swadley family a policy with underinsured motorist (UIM) coverage. The policy’s declarations page listed “100,000 Per Person” as the UIM limit. After Angela Swadley was killed in a collision, the Swadleys made a claim to Shelter pursuant to their policy’s UIM coverage. When Shelter denied the claim, the Swadleys filed a petition against Shelter. The circuit court ruled that the policy was ambiguous, entered partial summary judgment in favor of the Swadleys and awarded the Swadleys $100,000. The Supreme Court reversed, holding that the policy unambiguously precluded UIM coverage from applying to the Swadleys’ claim. View "Swadley v. Shelter Mutual Insurance Co." on Justia Law

In this insurance coverage dispute, Liberty Mutual, OES's insurer, denied OES's claim for reimbursement of funds OES spent defending against, and ultimately settling, the underlying tort suit. On appeal, Liberty Mutual claimed that the district court erred by permitting OES and Anadarko to equitably reform their master services contract (MSC), and that the district court interpreted the OES-Liberty Mutual policy erroneously by concluding that the policy obligated Liberty Mutual to reimburse OES for all of the attorney's fees OES incurred in connection with the tort suit, rather than a pro-rata portion of those fees. The court affirmed as to the MSC issue. In this case, OES and Anadarko met the higher clear-and-convincing evidence burden of establishing mutual error in the contract's creation. However, the court concluded that the insurance policy only obligated Liberty Mutual to pay a pro-rata share of the attorney's fees, and modified the attorney's fees award, determining that the policy entitled OES to attorney's fees totaling $168,695.96. View "Richard v. Anadarko Petroleum" on Justia Law

Defendant Century Surety Company (Century) issued a Commercial Lines Policy to Plaintiff Siloam Springs Hotel, L.L.C. (Siloam). This policy included general liability insurance coverage of Siloam's hotel in Siloam Springs, Arkansas, for the policy period from November 13, 2012, through November 13, 2013. The insuring agreement of the general liability coverage form provided that Century would pay sums the insured was legally obligated to pay as damages because of bodily injury to which the insurance applies and that Century would have the right and duty to defend the insured against any suit seeking such damages. On January 17, 2013, several guests inside of the hotel allegedly suffered bodily injury due to carbon monoxide poisoning. The carbon monoxide allegedly escaped into the air due to leakage from the hotel's indoor swimming pool heater. Siloam sought coverage under its policy from Century, which Century denied based on an Indoor Air Exclusion at issue. The United States District Court for the Western District of Oklahoma certified a single question of Oklahoma law to the Oklahoma Supreme Court under the Revised Uniform Certification of Questions of Law Act, 20 O.S. 2011 sections 1601-1611: “Does the public policy of the State of Oklahoma prohibit enforcement of the Indoor Air Exclusion, which provides that the insurance afforded by the policy does not apply to ‘Bodily injury', 'property damage', or 'personal and advertising injury' arising out of, caused by, or alleging to be contributed to in any way by any toxic, hazardous, noxious, irritating pathogenic or allergen qualities or characteristics of indoor air regardless of cause?” The Oklahoma Supreme Court answered the question in the negative. View "Siloam Springs Hotel, LLC v. Century Surety Co." on Justia Law

After Robert Fitte burned tree branches on his property, a fire rose from the ashes of the burn and erupted into a wildfire known as the Corral Fire. At the time of the fire, Fitte carried two insurance policies issued by Mountain West Farm Bureau Mutual Insurance Company, including the commercial automobile policy at issue in this appeal. Fitte stipulated to entry of a judgment in favor of Associated Dermatology and Skin Cancer Clinic of Helena, P.C. Profit Sharing Plan and Trust for the benefit of Stephen D. Behlmer, M.D. (Behlmer). Fitte and Behlmer subsequently entered into an agreement wherein Fitte assigned his rights in the Mountain West policies to Behlmer. Behlmer then filed this action seeking a declaration that the automobile policy provided coverage for the Corral Fire damages. The district court ruled in favor of Behlmer and directed that the insurance proceeds be deposited into the district court. The Supreme Court reversed, holding that the district court erred in holding that there was coverage for the Corral Fire damage under Mountain West’s commercial automobile policy. View "Associated Dermatology & Skin Cancer Clinic of Helena, P.C. Profit Sharing Plan & Trust for the Benefit of Stephen D. Behlmer v. Mountain West Farm Bureau Mutual Insurance Co." on Justia Law

Plaintiff had an Oregon auto insurance policy issued by defendant. In 2008, plaintiff was injured in a motor vehicle accident. Among other expenses, plaintiff incurred $430.67 in transportation costs to attend medical appointments and to obtain medication. She then applied for PIP medical benefits under her insurance policy. Defendant paid for plaintiff’s medical care, but it declined to pay for her transportation expenses to obtain her medical care. Plaintiff then filed a complaint for breach of contract, both for herself and on behalf of others similarly situated. She alleged that her claim for medical expenses under ORS 742.524(1)(a) included her transportation costs. Defendant moved for summary judgment, arguing ORS 742.524(1)(a) did not require it to pay for transportation costs. After a hearing, the trial court granted defendant’s motion and entered a judgment in defendant’s favor. The question on review was whether the PIP medical benefit in ORS 742.524(1)(a) included the insured plaintiff’s transportation costs to receive medical care. The Supreme Court held that PIP benefits for the “expenses of medical * * * services” do not include an insured’s transportation costs for traveling to receive medical care. Therefore, the Court affirmed the grant of summary judgment in favor of defendant. View "Dowell v. Oregon Mutual Ins. Co." on Justia Law

The United States Court of Appeals for the Ninth Circuit certified certain questions to the Supreme Court regarding what impact, if any, a lender’s full-credit bid made at an Arizona trustee’s sale has on an insurer’s liability under standard form title insurance policies. The policy provisions at issue were (1) Section 2, which provides that coverage continues in force when an insured acquires the property in a foreclosure sale but the amount of coverage is reduced by all payments made; (2) Section 9, which provides that payments of principal or the voluntary satisfaction or release of the mortgage reduce available insurance coverage, except as provided under Section 2(a); and (3) Section 7, which explains how the insurer’s liability is calculated. The Supreme Court answered the certified questions as follows: (1) Section 2 applies when a lender purchases property by full-credit bid at a trustee’s sale; (2) the full-credit bid does not constitute a “payment” under Sections 2 or 9 of the policy; and (3) accordingly, the full-credit bid neither terminates nor reduces coverage under Section 2 or Section 7. View "Equity Income Partners, LP v. Chicago Title Insurance Co." on Justia Law

In 2007, the legislature passed, and the voters ratified, the Insurance Fair Conduct Act (IFCA), RCW 48.30.015. IFCA gave insureds a new cause of action against insurers who unreasonably deny coverage or benefits. IFCA also directed courts to grant attorney fees and authorizes courts to award triple damages if the insurer either acts unreasonably or violates certain insurance regulations. The issue this case presented for the Supreme Court's review was whether IFCA also created a new and independent private cause of action for violation of these regulations in the absence of any unreasonable denial of coverage or benefits. The Court concluded it did not and affirmed. View "Perez-Crisantos v. State Farm Fire & Cas. Co." on Justia Law

In 2011, plaintiff discovered a leak under her kitchen sink, which had caused extensive damage to her home, and filed a claim with her insurer, Farmers Insurance Company of Oregon (Farmers). In early 2012, Farmers voluntarily paid plaintiff a sum that it determined constituted the actual cash value of plaintiff’s losses less a deductible, $3,300.45. At around that time, it also paid plaintiff $2,169.22 in mitigation expenses. A few weeks later, plaintiff submitted to Farmers a proof of loss that included estimates of her mitigation costs and the actual cash value of her losses that far exceeded the sum that Farmers had paid her. Because plaintiff had not yet replaced any of the damaged items, she did not, at that time, submit a proof of loss that included the replacement cost of her losses. A year later, the parties had not resolved plaintiff’s claim, and in January 2013, plaintiff initiated this action. ORS 742.061 required an insurer to pay its insured’s attorney fees if, in the insured’s action against the insurer, the insured obtains a “recovery” that exceeds the amount of any tender made by the insurer within six months from the date that the insured first filed proof of a loss. In this case, the Supreme Court found that, when an insured files an action against an insurer to recover sums owing on an insurance policy and the insurer subsequently pays the insured more than the amount of any tender made within six months from the insured’s proof of loss, the insured obtains a “recovery” that entitles the insured to an award of reasonable attorney fees. View "Long v. Farmers Ins. Co." on Justia Law