Justia Contracts Opinion Summaries

American Family Mutual Insurance Company (AFM) sought review of a Court of Appeals decision upholding the trial court's judgment in a garnishment proceeding requiring AFM to pay a judgment that plaintiffs FountainCourt Homeowners’ Association and FountainCourt Condominium Owners’ Association (FountainCourt) had obtained against AFM’s insured, Sideco, Inc. (Sideco). The underlying dispute centered on a housing development that was constructed between 2002 and 2004 in Beaverton. FountainCourt sued the developers and contractors seeking damages for defects in the construction of the buildings in the development. Sideco, a subcontractor, was brought in as a third-party defendant, and a jury eventually determined that Sideco’s negligence caused property damage to FountainCourt’s buildings. Based on that jury verdict, the trial court entered judgment against Sideco in the amount of $485,877.84. FountainCourt then served a writ of garnishment on AFM in the amount owed by Sideco, and, in response, AFM denied that the loss was covered by its policies. The trial court ultimately entered judgment against AFM, after deducting the amounts that had been paid by other garnishees. After review, the Supreme Court found no reversible error in the court of Appeals' judgment and affirmed the courts below. View "FountainCourt Homeowners v. FountainCourt Develop." on Justia Law

Defendant insurance company denied uninsured motorist coverage to a third party beneficiary injured in an automobile accident because it had cancelled the policy before the accident occurred. The third party sued, and the insurer sought summary judgment. The third party opposed, contending the cancellation was invalid because a written notice seeking information sent by the insurer to the insureds prior to cancellation was unreasonable as a matter of law, and disputed facts existed as to whether the insurer had mailed the notice of cancellation and actually cancelled the policy. The trial court granted summary judgment, and finding no error, the Court of Appeal affirmed. View "Mills v. AAA Northern CA, NV and Utah Ins. Exch." on Justia Law

Viking Pump, Inc. and Warren Pumps, LLC sought to recover under insurance policies issued to a third company, Houdaille Industries, Inc. In the 1980's, Viking and Warren acquired pump manufacturing businesses from Houdaille. As a result, Viking and Warren were confronted with potential liability flowing from personal injury claims made by plaintiffs alleging damages in connection with asbestos exposure claims dating back to when the pump manufacturing businesses were owned by Houdaille. Houdaille had purchased occurrence-based primary and umbrella insurance from Liberty Mutual Insurance Company. Above the Liberty umbrella layer, Houdaille purchased layers of excess insurance. In total, Houdaille purchased 35 excess policies through 20 different carriers (the "Excess Policies"). Viking and Warren sought to fund the liabilities arising from the Houdaille-Era Claims using the comprehensive insurance program originally purchased by Houdaille. The insurance companies that issued the Excess Policies (the "Excess Insurers") contended that Viking and Warren were not entitled to use the Excess Policies to respond to the claims. The Excess Insurers also disputed the extent of any coverage available, particularly with respect to defense costs. The Supreme Court held, after careful consideration of the policies at issue: (1) the Superior Court correctly held that the 1980-1985 Liberty Primary Policies were exhausted; (2) the Superior Court held that 33 of the Excess Policies at issue in this appeal provided coverage to Viking and Warren for their defense costs, with many payments contingent on insurer consent; (3) the Court of Chancery correctly held that there were valid assignments of insurance rights to Warren and Viking under the Excess Policies; (4) the Superior Court was affirmed in part and reversed in part with respect to its determination of the Excess Policies' coverage for defense costs; and (5) the Superior Court erred with respect to the trigger of coverage under the Excess Policies. View "In Re Viking Pump, Inc. and Warren Pumps, LLC Insurance Appeals" on Justia Law

The issue this case presented for the Louisiana Supreme Court's review was whether the duty to defend in long latency disease cases could be prorated between an insurer and its insured when occurrence-based policies provide coverage for only a portion of the time during which exposure occurred. In the underlying Arceneaux suit, plaintiffs alleged that they suffered hearing loss from exposure to unreasonably loud noise in the course of their work at American Sugar’s refinery in Arabi, Louisiana. Two sets of plaintiffs, the Barbe plaintiffs and the Waguespack plaintiffs, filed suit against American Sugar in 2006. These suits were consolidated with the Arceneaux action, which was filed in 1999 against American Sugar’s predecessor, Tate & Lyle North American Sugars, Inc. This opinion concerned only the Barbe and Waguespack plaintiffs, and not the Arceneaux plaintiffs whose claims had been litigated extensively in the trial court, the court of appeal, and the Louisiana Supreme Court. Continental Casualty Company argued that defense costs should have been prorated among insurers and the insured if there were periods of non-coverage. American Sugar Refining, Inc. claimed that the duty to defend as agreed upon in the policy provided for a complete defense so long as the duty to defend attached, even if some claims fell outside of coverage. The Supreme Court held that the duty to defend should have been prorated in this case based upon policy language. View "Arceneaux v Amstar Corp." on Justia Law

Relying on an advertiser’s claim that its fax advertising program complied with the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, Stevens & Ricci allowed the advertiser to fax thousands of advertisements to potential customers on its behalf. More than six years later, Hymed filed a class action TCPA lawsuit, which settled with a $2,000,000 judgment against Stevens & Ricci. While that suit was pending, Auto-Owners sought a declaratory judgment, claiming that the terms of the insurance policy it provided Stevens & Ricci did not obligate it to indemnify or defend Stevens & Ricci in the class action. The Third Circuit affirmed summary judgment, finding that the sending of unsolicited fax advertisements in violation of the TCPA did not fall within the terms of the insurance policy. The “Businessowners Insurance Policy” obligated Auto-Owners to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ to which this insurance applies.” The “advertising injury” deals only with the publication of private information, View "Auto-Owners Ins. Co. v. Stevens & Ricci Inc" on Justia Law

Zachery Edens was killed in when an oncoming car turned in front of his motorcycle. David Edens, Zachery's father and the Chief Executive Officer of Edens Structural Solutions LLC (Edens LLC), and Rhonda Edens, Zachery's mother, sent a demand letter to The Netherlands Insurance Company, claiming that Zachery was an insured under Edens LLC’s Netherlands insurance policy and demanding $1,000,000 in underinsured motorist benefits. After Netherlands denied coverage, David, Rhonda, and Edens LLC sued Netherlands. On summary judgment, the district court concluded that David was an insured under the policy because he was an executive officer of Edens LLC, and that Zachery was an insured as David's family member. Despite this, because David and Rhonda Edens owned Zachery's motorcycle, the district court concluded that the Netherlands policy didn’t cover his accident. David, Rhonda and Edens LLC appealed, arguing, among other things, that the policy’s coverage terms were ambiguous and should be construed in their favor. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "Edens v. Netherlands Insurance" on Justia Law

Kurtrina Smith and Rickey Levins separately initiated actions against defendants the African Methodist Episcopal Church, Inc. ("the AME Church"); James L. Davis, bishop and presiding officer of the AME Church's Ninth Episcopal District (collectively, "the Ninth District"); and Lincoln National Life Insurance Company ("Lincoln National") after Lincoln National denied their respective claims for benefits filed pursuant to a group life-insurance policy Davis had purchased from Lincoln National on behalf of the Ninth District. Smith and Levins alleged the group policy provided coverage for Smith's mother and Levins's father. The defendants moved the trial court hearing each action to compel arbitration pursuant to arbitration provisions that were allegedly part of the group policy and certificates. The trial court denied those motions, and defendants appealed. Finding that the trial court erred in denying the motion, the Supreme Court reversed and remanded for arbitration proceedings. View "African Methodist Episcopal Church, Inc. v. Levins" on Justia Law

Plaintiffs filed suit against Mercury for breach of contract and breach of the implied covenant of good faith and fair dealing. Judgment was entered in favor of plaintiffs for $3 million plus interest from the date of judgment in the underlying personal injury action. The court concluded that substantial evidence supports the finding that Mercury unreasonably refused to accept the modified release where the offering of the policy limits was not sufficient in and of itself to defeat a bad faith claim as a matter of law, and substantial evidence supports the referee’s finding that Mercury unreasonably rejected the policy limits settlement proposed by counsel for plaintiffs. Accordingly, the court affirmed the judgment. View "Barickman v. Mercury Cas. Co." on Justia Law

This dispute arose from the construction of Cypress Point, a luxury condominium complex in Hoboken. Co-defendants Adria Towers, LLC, Metro Homes, LLC, and Commerce Construction Management, LLC (collectively, the developer) served as the project's developer and general contractor, and subcontractors carried out most of the work. During construction, the developer obtained four CGL policies from Evanston Insurance Company, covering a four-year period, and three from Crum & Forster Specialty Insurance Company, covering a subsequent three-year period (collectively, the policies). In this appeal, issue before the Supreme Court was whether rain water damage caused by a subcontractor's faulty workmanship constituted property damage and an occurrence under the developer's commercial general liability (CGL) insurance policy. In a published decision, the Appellate Division reversed, holding that, under the plain language of the CGL policies, the unintended and unexpected consequential damages caused by the subcontractors faulty workmanship constituted property damage and an occurrence. The Supreme Court agreed and affirmed, finding that the consequential damages caused by the subcontractors faulty workmanship constituted property damage, and the event resulting in that damage water from rain flowing into the interior of the property due to the subcontractors faulty workmanship was an occurrence under the plain language of the CGL policies at issue here. View "CypressPoint Condominium Association, Inc. v. Adria Towers, L.L.C., et al." on Justia Law

At the center of this dispute was defective rebar that was incorporated into the construction of concrete pile caps that would form support for the Pinnacle Bank Arena. Some of the pile caps had to be modified in order to provide the necessary structural support for the Arena. The general contractor paid the costs of the correction and sought reimbursement from Drake-Williams Steel, Inc. (DWS), which fabricated the rebar. DWS reimbursed the general contractor and sought coverage from its insurers. The insurers denied the claim and commenced this action to determine their obligations under the policies of insurance. The district court granted summary judgment in favor of the insurers. The Supreme Court affirmed, holding that there was no coverage under the policies. View "Drake-Williams Steel, Inc. v. Continental Cas. Co." on Justia Law