Justia Contracts Opinion Summaries

Attorney Fleisher worked for two affiliated law firms. In 2013 Fleisher filed a written demand with the firms, claiming that when he retired, in 2011, he had accrued more than 90 weeks of unused vacation time and more than 322 days of unused sick leave, and that the firms were required by contract and by the Illinois Wage Payment and Collection Act, to pay him for those accruals. He estimated that he was owed about $950,000. The defendants sent a copy of Fleisher’s complaint to Hartford, seeking coverage under the “Employee Benefits Liability Provision” of their Business Owners Policy. It took five months for Hartford to reply that the matter was under consideration. Two months later Hartford denied coverage and sought a declaration that the insurance policy did not cover Fleisher’s claim, alleging that the failure to pay Fleisher was not the result of any negligent act, error, or omission in the administration of the employee benefits program, which was all that the policy covered. The district judge ruled that Hartford had no duty to defend under Illinois law and granted summary judgment. The Seventh Circuit affirmed, holding that delay was not a valid ground for estopping Hartford to deny coverage or a duty to defend. View "Hartford Cas. Ins. Co v. Karlin, Fleisher & Falkenberg" on Justia Law

After Tenant moved into her apartment, her apartment and several adjoining units were severely damaged in a fire that originated in Tenant’s clothes dryer. Insurer paid Landlord’s insurance claim and then sued Tenant for negligence and breach of the Apartment Lease Contract. The jury found that Tenant breached the lease agreement and awarded $93,498 in actual damages and attorney’s fees from Insurer. Tenant filed a motion for judgment notwithstanding the verdict, asserting several grounds for avoiding enforcement of the contract. The trial court granted Tenant’s motion and rendered a take-nothing judgment. The court of appeals affirmed, concluding that the residential-lease provision imposing liability on Tenant for property losses resulting from “any other cause not due to [the landlord’s] negligence or fault” was void and unenforceable because it broadly and unambiguously shifted liability for repairs beyond legislatively authorized bounds. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals properly rejected Tenant’s ambiguity defense; but (2) the court of appeals erred in invalidating the lease provision on public-policy grounds. Remanded. View "Philadelphia Indem. Ins. Co. v. White" on Justia Law

This matter stemmed from a public works project for the construction of a gymnasium in Terrytown. JaRoy Construction Inc. served as the general contractor, and pursuant to statute, furnished a surety bond to Jefferson Parish. Ohio Casualty Insurance Company was the surety. JaRoy entered into a written subcontract with Pierce Foundations, Inc. to provide and install pilings for the project. Once finished, Pierce alleged JaRoy failed to pay certain funds due under the subcontract. Pierce sued both JaRoy and Ohio Casualty Insurance, alleging they were jointly and severally liable to Pierce. JaRoy filed for bankruptcy, leaving only Ohio Casualty Insurance as party to the suit. When the project was substantially completed, the Jefferson Parish government filed a notice of acceptance of work with the Jefferson Parish mortgage records office. This occurred over a year after Pierce amended its lawsuit to add Ohio Casualty as a defendant. Pierce never filed a sworn statement of claim in the mortgage records. Ohio Casualty filed a motion for summary judgment, contending that Pierce was required to comply with statutory notice and recordation, and because it failed to do so within 45 days of Jefferson Parish’s acceptance of the project, Pierce could not recover from Ohio Casualty. Pierce argued that the statute did not affect its right to proceed in contract. After a bench trial, the trial court rendered judgment in favor of Pierce for sums owed under the contract plus judicial interest from the date of the original judgment. Ohio Casualty appealed, arguing that the trial court erred in not dismissing Pierce's claims. The court of appeal reversed and ruled in Ohio Casualty's favor. The Supreme Court, however, disagreed and affirmed the trial court judgment. View "Pierce Foundations, Inc. v. JaRoy Construction, Inc." on Justia Law

32nd Street filed suit against the insurers for quantum meruit, unjust enrichment, and vexatious refusal to pay an insurance claim, as well as injunctive relief arising out of medical services provided to the insurers' insureds. The district court granted summary judgment for the insurers and denied 32nd Street's motion to compel discovery. The court concluded that the plain language of the provisions at issue support the district court's conclusion that, in the ancillary-provider agreement, 32nd Street agreed to accept the Blue Traditional rate for services rendered to insureds belonging to all of the insurers’ networks; the district court did not err by finding that the equitable claims were barred by the contracts governing the reimbursement rates paid by the insurers; the district court did not err in granting summary judgment to the insurers on the vexatious-refusal claim where 32nd Street fails to establish any genuine issue of material fact that the insurers refused to pay an amount due under an insurance policy; and the district court did not abuse its discretion by denying 32nd Street's motion to compel. Accordingly, the court affirmed the judgment. View "32nd St. Surgery Ctr. v. Right Choice Managed Care" on Justia Law

American Family filed suit seeking a declaratory judgment as to whether an umbrella insurance policy issued to Todd Patton provided any coverage for an automobile accident in which a passenger in a vehicle driven by Todd's son, Jacob Patton, was seriously injured. The district court granted summary judgment for American Family. The court concluded that the Pattons breached the umbrella policy's cooperation clause by entering into a Miller-Shugart agreement after already being protected from personal liability in the Drake-Ryan settlement, and that such breach was material and prejudicial. Accordingly, the court affirmed the judgment. View "American Family Mutual Ins. v. Donaldson" on Justia Law

Stresscon Corporation, a subcontracting concrete company, filed suit against Travelers Property Casualty Company of America, alleging, among other things, that Travelers acted in bad faith, unreasonably delaying or denying its claim for covered insurance benefits; and Stresscon sought awards of two times the covered benefits along with fees and costs, as prescribed by statute. Stresscon’s claims for relief arose from a 2007 serious construction accident which was caused by a crane operator employed by a company that was itself a subcontractor of Stresscon. Stresscon’s general contractor, Mortenson, sought damages from Stresscon, asserting Stresson’s contractual liability for the resulting construction delays, and Stresscon in turn sought indemnification from Travelers. Travelers petitioned for review of the court of appeals’ judgment affirming the district court’s denial of its motion for directed verdict in a lawsuit brought by its insured, Stresscon. Much as the district court had done, the appellate court rejected Travelers’ contention that the no-voluntary-payments clause of their insurance contract relieved it of any obligation to indemnify Stresscon for payments Stresscon had made without its consent. Instead, the court of appeals found that the Colorado Supreme Court's opinion in "Friedland v. Travelers Indemnity Co.," (105 P.3d 639 (2005)) had effectively overruled the Court's prior “no voluntary payments” jurisprudence to the contrary and given Stresscon a similar opportunity. The Supreme Court reversed, finding that its adoption of a notice-prejudice rule in "Friedland" did not overrule any existing “no voluntary payments” jurisprudence. The Court declined to extend a notice-prejudice reasoning to Stresscon’s voluntary payments, made in the face of the no-voluntary-payments clause of its insurance contract with Travelers. View "Travelers Prop. Cas. Co. v. Stresscon Co." on Justia Law

Appellants’ homeowners insurance policy with State Farm Fire and Casualty Company provided that State Farm will be only the “actual cash value” at the time of the loss of damaged property. Appellants brought a putative class action lawsuit against State Farm, claiming that State Farm breached the terms of Appellants’ policy when it calculated the actual cash value of damaged property. Specifically, Appellants alleged that State Farm’s practice of depreciating embedded labor costs breached State Farm’s duty to indemnify the insured for the actual cash value of the damaged property. The district court certified a question regarding the issue to the Supreme Court. The Court answered that, absent specific language in the insurance policy that identifies the method of calculating actual cash value, the trier of fact may consider, among many other factors, embedded-labor-cost depreciation when such evidence logically tends to establish the actual cash value of a covered loss. View "Wilcox v. State Farm Fire & Cas. Co." on Justia Law

Plaintiff was injured in an automobile accident. Plaintiff filed a negligence suit against the adverse driver. Plaintiff settled the claim for the adverse driver’s automobile-liability-insurance policy limits. Before dismissing the suit, however, Plaintiff asserted a claim against his own automobile liability insurer, State Farm, for underinsured motorist benefits (UIM). Plaintiff’s insurance policy contained a limitation provision that gave Plaintiff two years from the date of the accident or date of the last basic reparation benefit payment within which to make a UIM claim. Plaintiff filed his UIM three years after the date of the accident. The trial court granted summary judgment in favor of State Farm, concluding that the explicit terms of Plaintiff’s policy rendered his UIM claim untimely. The court of appeals reversed, holding that State Farm’s time limitation on UIM claims was unreasonable and therefore void. The Supreme Court reversed, holding that the State Farm policy provision was not unreasonable. View "State Farm Mut. Auto. Ins. Co. v. Riggs" on Justia Law

APM, a property management company, sought a builders risk insurance policy from TCI Insurance Agency, Inc. to cover an apartment building under construction in Fargo. Jay Alsop, APM's president, discussed insurance policies with TCI's agent Devin Gaard. One policy in particular, from Philadelphia Insurance Company, covered lost rent and other "soft costs," such as interest. Alsop also received a quote from a different insurance agency for another policy from Travelers Insurance Company, which was cheaper than the Philadelphia policy. The Travelers policy did not have coverage for lost rent and soft costs. Alsop informed Gaard about the Travelers policy and requested Gaard to procure the policy as it was quoted by the other agency, without change. A fire at the construction site delayed the opening of the apartment building for five months. APM filed a claim under the insurance policy for damages caused by the fire, including lost rent and interest charges. Travelers paid part of the claim, but denied the claim for lost rent and interest because the policy did not provide coverage for those costs. APM sued TCI, alleging TCI and Gaard were negligent for failing to offer APM a policy endorsement that provided additional coverage for lost rent and soft costs. TCI denied liability and moved for summary judgment, claiming that APM did not request the additional coverage for lost rent and soft costs and that TCI and Gaard were not required to offer the additional coverage to APM. The district court granted TCI's motion, concluding APM failed to raise a genuine issue of material fact as to whether Gaard breached his duty to APM. The court also concluded Gaard's duty was not enhanced because APM failed to establish a genuine issue of material fact indicating a special relationship existed between APM and TCI. On appeal, APM argued the district court erred in deciding there were no genuine issues of material fact as to whether: (1) Gaard breached his duty to APM; and (2) a special relationship existed between APM and TCI. Finding no reversible error, the Supreme Court affirmed the grant of summary judgment to TCI. View "APM, LLP v. TCI Insurance Agency, Inc." on Justia Law

The court originally remanded this case to the district court for additional fact-finding to establish complete diversity of citizenship between all plaintiffs and all defendants with instructions to reenter summary judgment if federal subject-matter jurisdiction could be properly established. After dismissing a nondiverse plaintiff it found was not a real party in interest to this case, the district court reentered its earlier grant of summary judgment in favor of the insurer on all claims. The court affirmed the district court's dismissal of PMI Delaware and its grant of summary judgment to Lexington. The court concluded that the district court's dismissal of PMI Delaware pursuant to FRCP 21 as a "nominal or formal party" was proper because the district court found that though PMI Delaware was a named insured on the Insurance Policy, PMI Delaware would not be entitled to any portion of a successful judgment against Lexington because PMI Florida, not PMI Delaware, was the party against whom Blue Cross had filed suit and PMI Florida, not PMI Delaware, was the only party that made a claim for coverage to Lexington. Further, PMI Delaware was not even a party to the underlying Blue Cross contract, which provided healthcare coverage only to PMI Florida’s leased employees. Further, the court affirmed the district court's holding that Lexington owed no coverage to PMI Florida. Here, the court saw no contractual ambiguity; the Insurance Policy issued by Lexington explicitly excludes the coverage sought by PMI Florida. Therefore, the district court properly granted summary judgment to Lexington on PMI Florida’s claims for breach of contract and declaratory judgment. Finally, the district court properly granted summary judgment to Lexington on its claim of negligent misrepresentation where no jury could reasonably find that Yoohoo justifiably relied on the statement at issue as an indication that there would be coverage under the policy. View "Payroll Mgmt., Inc. v. Lexington Ins. Co." on Justia Law