Justia Contracts Opinion Summaries

Plaintiff was insured under a group long-term disability policy the county obtained from Hartford. After Hartford denied plaintiff's claim for disability benefits, she filed suit in Minnesota state court for breach of contract. Hartford timely removed to federal court based on diversity jurisdiction. The district court then granted Hartford summary judgment. Under the plain meaning of the statute, the court concluded that plaintiff's suit was time-barred. The court also concluded that the legislative distinction between individual and group policies does not violate the principles of equal protection under the United States and Minnesota constitutions. Accordingly, the court affirmed the district court's conclusion that plaintiff's suit was untimely. View "Walker v. Hartford Life and Accident Ins." on Justia Law

ACE Fire Underwriters Insurance Company appeals the district court’s declaration that a policy ACE issued offered total coverage up to $2 million for an accident involving two insured vehicles: a tractor and trailer. The trailer detached from the tractor. The driver pulled off the roadway to reattach, then hoped to make a quick u-turn and continue down the road. But before he could complete the turn, another vehicle collided with the trailer, killing the vehicle's driver. As the insurer of the tractor and the trailer, ACE reached a settlement with the Estate of the vehicle's driver. But the parties conditioned the settlement upon litigating the available limits of the policy. ACE maintained that the policy provisions limited its liability to $1 million per accident, regardless of the number of covered autos involved. The Estate, on the other hand, insisted that ACE’s liability under the policy was $1 million per covered auto involved in each accident. That interpretation of the policy would cap ACE’s liability in this case at $2 million because, according to the Estate, the tractor and the trailer were both involved in the accident. Under the terms of the settlement, ACE initially paid the Estate $1 million. But it agreed to pay it an additional $550,000 if the court accepted the Estate’s interpretation of the policy. Because the Tenth Circuit agreed with ACE that the policy instead limits its liability to only $1 million, it reversed. View "ACE Fire Underwriters v. Romero" on Justia Law

A wildfire destroyed David and Kristina Parks’ house, which was insured by Safeco Insurance Company (“Safeco”). The Parks purchased an existing house, and Safeco paid the Parks a total of $255,000, the cost of the replacement house less the value of the land. The Parks filed a complaint against Safeco alleging: (1) they were entitled to $440,195.55 under the policy; and (2) Safeco committed bad faith in handling the claim. Safeco filed a Motion for Summary Judgment asserting that the policy was not breached and its conduct did not constitute bad faith. The Parks filed a Cross-Motion for Summary Judgment asserting that Safeco misrepresented the policy. Additionally, the Parks moved to amend their complaint to include a claim for punitive damages. The district court held that: (1) there was no breach of contract because the policy was unambiguous and the Parks received the amount due under the clear language of the policy; (2) Safeco did not commit bad faith in handling the claim because it complied with the terms of the policy and paid the Parks the amount owed; and (3) the Parks had not established a reasonable likelihood of proving facts at trial sufficient to support an award of punitive damages. The Parks appealed, but finding no reversible error, the Idaho Supreme Court affirmed. View "Parks v. Safeco Ins Co of Illinois" on Justia Law

In early 2011, Trent Gearheart was severely injured in an automobile accident caused by an underinsured motorist (“UIM”). After the accident, Trent’s parents, Ronald Gearhart and Brandi L. McMahon, who were divorced, each attempted to collect on their separately held auto insurance policies with Enumclaw. Each of those policies provided maximum coverage of $300,000 for accidents caused by underinsured motorists. Enumclaw contended that because of anti-stacking language in the policies, the total UIM benefit under the combined policies was limited to $300,000. The district court held on summary judgment that the UIM anti-stacking provision in each policy was invalid and, therefore, ruled that Enumclaw was obligated for the full $300,000 policy limit on both policies. Enumclaw appealed. Finding no reversible error, the Idaho Supreme Court affirmed the district court's judgment. View "Gearhart v. Mutual of Enumclaw Ins Co" on Justia Law

Berg was a long‐time pit broker at the Chicago Mercantile Exchange. In 1991 and 1994, Berg bought disability‐income insurance policies. In 2005, he started to experience a tremor in his arms and hands, which interfered with his ability to write quickly and legibly. In 2007, the tremor forced him to leave his job. In 2010, a neurologist diagnosed Berg with an “essential tremor.” Berg applied for total disability benefits. Although the insurers approved Berg’s claim, they designated his disability onset date as February 2010, rather than September 2007. In 2012, Unum discontinued Berg’s total‐disability benefits, asserting that he was eligible only for residual‐disability benefits because when he applied, his regular occupation was “unemployed person.” The district court granted summary judgment to the defendants. The Seventh Circuit reversed, rejecting an argument that, until he saw a physician in 2010, Berg did not meet the policy’s definition: “Total Disability means that the Insured can not [sic] do the substantial and material duties of his or her regular job,” that “[t]he cause of the total disability must be an injury or a sickness,” and that “[t]he injury or sickness must be one which requires and receives regular care by a Physician.” The clause does not contain a temporal element. View "Berg v. New York Life Ins. Co." on Justia Law

At issue in this case were two provisions of a title insurance policy underwritten by Fidelity National Title Insurance Company. One provision insured against unmarketability of title, and the other insured against a lack of access to property. The owner of the policy, Woody Creek Ventures, LLC, contended that both provisions covered losses it sustained when it learned, after purchasing two parcels of land, that one parcel lacked permanent access. And although Fidelity obtained a 30-year right-of-way grant to that parcel, Woody Creek argued Fidelity failed to cure the lack of access and the title remained unmarketable. After review, the Tenth Circuit agreed with the district court’s conclusions that: (1) the policy did not insure a permanent right of access; (2) the right-of-way cured the lack of access to the parcel; and (3) the lack of permanent access did not render Woody Creek’s title unmarketable. View "Fidelity National Title v. Woody Creek Ventures" on Justia Law

Kern was injured in a rear-end collision in which the other driver was at fault. Kern filed an underinsured motorist (UIM) claim with Progressive Northern Insurance Company, his insurance provider. Months of settlement negotiations ended in a stalemate. Thereafter, Kern brought an action against Progressive for bad faith, alleging that Progressive’s settlement offers had been intentionally inadequate. Kern also sought unpaid UIM benefits. After a trial, the jury awarded Kern $18,650 in unpaid UIM damages and found that Progressive had not acted in bad faith. Kern appealed, alleging several errors. The Supreme Court affirmed, holding that none of Kern’s alleged errors required reversal and that the trial court did not clearly err by refusing to award attorney’s fees. View "Kern v. Progressive Northern Ins. Co." on Justia Law

Capson filed suit against MMIC seeking a declaration that MMIC was the primary professional liability insurer for Karl J. Hasik, M.D., and that Capson was the excess insurer. MMIC counterclaimed and filed a third-party complaint against Dr. Hasik and others, seeking rescission of its insurance policy or, in the alternative, a declaration that MMIC had no obligation to defend or indemnify Dr. Hasik for two medical negligence cases that had been filed against him. The district court granted MMIC’s motion for summary judgment. The court concluded that Dr. Hasik’s and the hospital’s nondisclosure of the Wilson lawsuit (a medical malpractice suit filed by a patient against Dr. Hasik) was the equivalent of a false assertion. Therefore, the court held that the elements of equitable rescission were satisfied in this case. Dr. Hasik’s and the hospital’s nondisclosure of the Wilson lawsuit was the equivalent of a material representation that was false. MMIC was entitled to rescind the prior-acts coverage it had agreed to provide. The court further held that Iowa law does not preclude a judgment of rescission in this case. Accordingly, the court affirmed the judgment and dismissed the cross-appeal as moot. View "Capson Physicians Ins. Co. v. MMIC Ins. Inc." on Justia Law

In June 2012, a hailstorm damaged Plaintiff KCOM’s motel. Soon a dispute arose between KCOM and its insurer, defendant Employers Mutual Casualty (EMC), over the extent of the damage. In October 2012, following receipt of an inspection report, KCOM submitted a proof of loss of $631,726.87. EMC admitted coverage but not the amount of loss. Dissatisfied, KCOM invoked the insurance contract’s appraisal provision. KCOM claimed there were issues with the appraisal process, prompting it to ultimately file suit against EMC, alleging breach of contract, unreasonable delay and denial of benefits, and bad faith breach of the insurance contract. The threshold question presented for the Tenth Circuit's review in this state law diversity action was whether the Court had appellate jurisdiction over the district court’s non-final order denying confirmation of a property loss appraisal. The Court concluded it did not, and dismissed the appeal. View "KCOM, Inc. v. Employers Mutual Casualty Co." on Justia Law

Plaintiff's almost-new Toyota Tundra Pickup sustained structural damage, while parked, as a result of a collision between the vehicles of Hollandsworth and Sebastian. Plaintiff had an insurance policy through AAA covering collision-related damages.Hollandsworth also had an AAA insurance policy, covering property damage that he caused through negligence. AAA refused to consider the pickup a “total loss,” had the vehicle repaired at a reported cost of $8,196.06, and provided a rental car during the interim. As a result of the collision and the repairs, the pickup’s future resale value was decreased by more than $17,100. Plaintiff sued Hollandsworth and Sebastian for negligence and sued AAA for breach of contract and bad faith. The trial court dismissed the claims against AAA, finding that plaintiff essentially was seeking reimbursement for the lost market value of his pickup, a loss that specifically was excluded under his insurance policy. The court of appeal affirmed, rejecting an argument that the resale value exclusion violated public policy and was void. The court stated that, in the insurance context, courts are not at liberty to imply a covenant (of good faith) directly at odds with a contract’s express grant of discretionary power, View "Baldwin v. AAA N. Cal." on Justia Law