Justia Contracts Opinion Summaries

Jonathan Quinn and his family were residential tenants of Barker & Little, Inc., when Quinn’s daughter was diagnosed with lead poisoning, Quinn sued Barker & Little for the injuries his daughter sustained from the high concentrations of lead in the leased premises. Barker & Little tendered the claim to Farmers Insurance Exchange (Farmers) and Truck Insurance Exchange (Truck). Farmers declined to defend Barker & Little under the applicable insurance policies. After a trial, the circuit court rendered judgment for Quinn. Quinn then asserted standing to bring all claims against Farmers and Truck that otherwise could have been brought by Barker & Little. Farmers and Truck moved for summary judgment on the basis of exclusions in the applicable policies. The circuit court granted the motion, concluding that Farmers had no duty to defend or indemnify Barker & Little in the underlying action. The Supreme Court reversed, holding that genuine issues of material fact existed that precluded summary judgment in this case. View "Quinn v. Farmers Ins. Exch." on Justia Law

An underinsured motorist collided with a city bus driven by Plaintiff. Plaintiff received a net workers’ compensation award of $71,958. Plaintiff also received $25,000 from the tortfeasor’s insurer. Plaintiff carried an underinsured (UM) policy issued by American Family Mutual Insurance Company that provided coverage up to $50,000 per person. Plaintiff submitted a UM claim to American Family, which denied coverage. Plaintiff filed a breach of contract action against American Family, asserting that he was entitled, under the terms of the policy, to $25,000 - the difference between his UM policy limit of $50,000 and the $25,000 he received from the tortfeasor’s insurer. The trial court granted summary judgment for American Family, concluding that the workers’ compensation benefits Plaintiff received operated as a setoff against the policy limit, thus reducing American Family’s liability to zero. The Supreme Court reversed, holding (1) the policy language unambiguously provided for a setoff against the policy limit; but (2) because this particular set-off would reduce the policy limit below the statutory minimum, Plaintiff was entitled to recover the remaining $25,000 from American Family. View "Justice v. Am. Family Ins. Co." on Justia Law

After Plaintiff was rear-ended by an underinsured motorist (UM), Plaintiff requested her $100,000 UM policy limits from State Farm. Plaintiff indicated that her damages were estimated to be $3.5 million because she suffered from reflex sympathetic dystrophy syndrome. State Farm responded that Plaintiff must schedule a compulsory medical examination (CME) pursuant to the terms of the policy. Plaintiff refused to attend a CME and instead filed suit against State Farm. The trial court entered judgment against State Farm for the UM policy limits. The court of appeal affirmed, holding (1) Plaintiff breached the contract when she failed to attend the CME; but (2) State Farm must plead and prove prejudice to avoid liability based on noncompliance with the CME clause, and State Farm failed to meet its burden in this case. The Supreme Court approved of the court of appeal’s decision, holding (1) the forfeiture of benefits under a UM policy will not automatically result upon an insured’s breach of a CME provision unless the insurer pleads and proves actual prejudice as an element of its affirmative defense; and (2) the undisputed facts demonstrate that State Farm was not prejudiced in this case. View "State Farm Mut. Auto. Ins. Co. v. Curran" on Justia Law

Truck Insurance Exchange (TIE) issued an apartment-owners insurance policy to appellant Jeanne Estates Apartments (JEA) that became effective in 1998. In 2006, Farmers Insurance Exchange (FIE) renewed the policy and continued to provide coverage. In 2008 and 2010, JEA became involved in three underlying lawsuits, which involved several appellants. JEA submitted claims for coverage to TIE/FIE in regard to those cases. TIE/FIE filed a complaint requesting that the circuit court declare that they owed no coverage to any person for any of the alleged misconduct which formed the basis of the claims in the underlying lawsuits and that they had no duty to provide a defense to any person or entity who was a defendant in the underlying lawsuits. The circuit court granted summary judgment in favor of TIE/FIE. The Supreme Court affirmed, holding that the apartment-liability contract issued by TIE/FIE did not provide an insured coverage for the type of harm alleged by the plaintiffs in the underlying suit. View "Kolbek v. Truck Ins. Exch." on Justia Law

Evan Ardente’s yacht was insured by Standard Fire Insurance Company. After Ardente purchased the yacht, it stopped navigating properly, and its top speed had decreased due to water damage to the yacht’s hull. Specifically, water was seeping into balsa wood, which is not waterproof, around installation holes and spreading throughout the hull. Ardente presented a claim to Standard Fire. Standard Fire denied coverage on the ground that the claim fell within an exclusion for manufacturing defects. Ardente sued Standard Fire for breach of contract, among other claims. The district court granted summary judgment for Standard Fire on all claims except for the breach of contract allegation. On that claim, the court granted Ardente summary judgment with respect to liability, concluding that the damage fell within an exception to the exclusion for manufacturing defects. The First Circuit Court of Appeals reversed the district court’s order granting Ardente summary judgment on his breach of contract claim, holding that the damage to the yacht did not fall within the exception to the manufacture-defect exclusion, and therefore, Standard Fire was entitled to summary judgment on the breach of contract claim. View "Ardente v. Standard Fire Ins. Co." on Justia Law

Ember Buckley was a passenger in a motor vehicle driven by Harvey Betts when the vehicle was involved in an accident. Buckley, who sustained injuries in the accident, settled with GEICO, Betts’ insurer, for the full policy limits and signed a full release of all claims against Betts and a hold harmless agreement in favor of GEICO. Buckley then attempted to recover for the remainder of her outstanding medical bills under her uninsured/underinsured motorist (“UM”) policy with The Brethren Mutual Insurance Company (“Brethren”), which denied coverage. Buckley filed suit, alleging breach of contract and seeking the policy limit in compensatory damages. The circuit court entered summary judgment for Brethren, concluding that the release was a general release, and thus released all entities from future claims, regardless of whether they were a party to the release. The court of special appeals reversed, holding that the general release did not prejudice Buckley’s claim against Brethren. The Court of Appeals affirmed, holding (1) the broad, all-inclusive language of the release must be read with an eye toward the parties’ overall intent; and (2) that the court of special appeals correctly held that the release did not waive Buckley’s UM claim against Brethren. View "Brethren Mut. Ins. Co. v. Buckley" on Justia Law

When Michael Lewis was sixteen years old, he was involved in a fatal car accident. At the time, Michael was driving a Ford pickup truck he had allegedly purchased from William Dodge. The other driver’s insurer paid Michael’s estate (Estate) its policy limit for liability. Michael’s mother, Angela, was insured by Concord General Mutual Insurance Company (Concord) at the time of the accident, and Michael’s father, David, was insured by Allstate Fire and Casualty Insurance Company (Allstate). The Concord and Allstate policies provided uninsured motorist (UM) benefits, as did Dodge’s policy with Property and Casualty Insurance Company of Hartford (Hartford). The Estate sought UM benefits from all three insurance companies. Each denied coverage, and the Estate filed suit against each company. The Superior court entered summary judgment in favor of Defendants. The Supreme Court vacated the judgment, holding that a genuine issue of material fact existed as to whether, pursuant to the agreement between Michael and Dodge, a final sale on the truck had been completed by the time of the accident. Remanded. View "Estate of Lewis v. Concord Gen. Mut. Ins. Co." on Justia Law

State Farm Mutual Automobile Insurance Company petitioned the Supreme Court for a writ of mandamus to direct the Clarke Circuit Court to vacate its order denying State Farm's motion to transfer this case to the Mobile Circuit Court and to enter an order granting the motion. The underlying action arose from an automobile accident that occurred in Mobile County in 2010. Sandra Banks, a resident of both Clarke and Mobile Counties, sued Robert Spray, a resident of Baldwin County, and State Farm. Banks alleged that she suffered injuries as a result of the wrongful, negligent, and/or wanton conduct of Spray when the vehicle he was driving and owned struck her vehicle. Additionally, Banks alleged that at the time of the accident she had a policy of insurance with State Farm, which included uninsured-/underinsured-motorist coverage, and that she was due proceeds under her coverage. Because both the "convenience of parties and witnesses" and the "interest of justice" prongs of the doctrine of forum non conveniens compelled the transfer of this case from Clarke County to Mobile County, the Supreme Court concluded the trial court abused its discretion in refusing to transfer the action. Therefore, the Court granted State Farm's petition and issued a writ directing the Clarke Circuit Court to vacate its order and to enter an order granting the motion. View "Banks v. Spray" on Justia Law

For twenty years, Defendants, various entities of OneBeacon American Insurance Company (collectively, “OneBeacon”), had a program known as Multiple Line Excess Cover (“MLEC Program”) under which OneBeacon entered into reinsurance contracts (“MLEC Agreements”) with various reinsurers. Employers Insurance Company of Wausau, National Casualty Company, and Swiss Reinsurance America Corporation (“Swiss Re”) participated as reinsurers in the MLEC Program. Some of the MLEC Agreements Wausau entered into with OneBeacon were practically identical to OneBeacon’s MLEC Agreements with Swiss Re. In 2007, OneBeacon demanded arbitration with Swiss Re seeking reinsurance recovery for losses arising out of claims against OneBeacon by policyholders. The arbitration panel decided in favor of Swiss Re. In 2012, OneBeacon demanded arbitration with Wausau and National Casualty for, according to Wausau, the same claims OneBeacon arbitrated and lost against Swiss Re. Wausau and National Casualty petitioned for a declaratory judgment that the prior arbitration award between OneBeacon and Swiss Re had preclusive effect on the arbitration pending between OneBeacon and Wausau. The district court denied the petition. The First Circuit Court of Appeals affirmed, holding that judicial confirmation of an arbitration award “does not warrant deviation from the general rule that the preclusive effect of a prior arbitration is a matter for the arbitrator to decide.” View "Nat'l Cas. Co. v. OneBeacon Am. Ins. Co." on Justia Law

A holding company, whose subsidiaries owned power-generating facilities, filed a complaint against multiple insurers regarding the terms of liability policies the company purchased in the 1970s and 1980s. At issue in this case was whether New York or Pennsylvania law applied to the interpretation of the policies. The circuit court granted summary judgment in favor of the holding company, determining that Pennsylvania law governed the interpretation of the policies. One of the insurers, TIG Insurance Company (“TIG”), appealed. The court of special appeals affirmed, concluding that there was no genuine dispute of material fact that the insurance contracts were made in Pennsylvania, and therefore, Pennsylvania law applied to the policies at issue. The Court of Appeals affirmed and adopted the opinion of the court of special appeals with the exception of the court’s discussion addressing TIG’s argument that the place of countersigning a policy determines the applicable state law because that argument was not preserved for appeal. View "TIG Ins. Co. v. Monongahela Power Co." on Justia Law