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Category Archives: Contractual Liability

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No claim of bad faith or breach of contract against rental car company where insurance was declined — Missouri

Posted in Contractual Liability, Duty to Defend, Insurance Bad Faith
In Clayborne v. Enterprise, Parker rented a car from Enterprise.  Parker declined insurance coverage and supplemental insurance when he rented the car.  Then he was in an accident and hit Clayborne.  Enterprise declined to defend the subsequent suit which Parker claimed was bad faith.  But summary judgment to Enterprise was affirmed.  Enterprise and ELCO (Enterprise’s… Continue Reading

O.K. to depreciate labor in property loss — Tenth Circuit applying Kansas law

Posted in Contractual Liability
In Graves v. American Family Mutual, Graves had roof damage and damage to her kitchen ceiling after a hailstorm. Her American Family homeowner’s insurance policy provided for recovery of the “actual cash value” at the time of a covered loss as well as the “replacement cost” of the damaged property once repairs are completed. She… Continue Reading

Insurer gets summary judgment for untimely notice – claims made policy — no prejudice required — 8th Circuit Minnesota

Posted in Contractual Liability, Duty to Defend
In Food Market Merchandising, Inc v. Scottsdale Indemnity Company, Food Market was required to pay additional commissions to an employee.  It provided notice to Scottsdale 7 months after the employee sued for his commissions.  The trial court said it was too late, and the Eighth Circuit agreed.  The policy required the policyholder to “give Insurer… Continue Reading

Ok to depreciate labor costs on property damage claim — Nebraska

Posted in Contractual Liability
In Henn v. American Family Mut. Ins. Co., Henn’s roof was damaged in a hailstorm.  She sued American Family and sought class certification when American Family depreciated labor costs in calculating actual cash value.  Under the policy, the insured will receive an actual cash value payment. If the insured repairs or replaces the damaged property,… Continue Reading

Breach of notification provision, failure to give insurance company prompt notice voids coverage — 8th Circuit, Arkansas

Posted in Contractual Liability
In American Railcar Industries v. Hartford Insurance Company, Tedder, American Railcar’s employee, was hurt while on a break at work.  Tedder sought workers compensation coverage for the claim, which was eventually denied by the Arkansas Workers’ Compensation Commission.  Then, Tedder filed a civil tort action against American Railcar (ARI) in federal court. ARI did not… Continue Reading

Summary judgment to homeowner insurance company reversed on burst pipe claim — 10th Circuit, Utah

Posted in Contractual Liability, Insurance Bad Faith
In Wheeler v. Allstate Insurance Company, Wheeler insured his cabin with Allstate.  A friend stopped by the cabin in the spring and found a pipe had burst and there was water in the basement.  There was extensive damage.  It was determined that the pipe burst two months before discovery and was likely caused by a… Continue Reading

Homeowners policy did not cover privacy, negligence claims where there was no physical injury to person or property — 10th Circuit, Oklahoma law

Posted in Contractual Liability, Duty to Defend
In State Farm Fire v. Dawson, Dawson was sued for negligence and privacy violations after receiving inappropriate photos of an under aged student. Dawson wanted State Farm to pay his defense and any judgment.  But State Farm claimed there was no physical injury to tangible property and no bodily injury such that the policy did… Continue Reading

Misrepresentations in insurance application let insurer off the hook for fatal building collapse — Pennsylvania

Posted in Contractual Liability
In Berkely Assurance Company vs Campbell, Campbell was hired to demolish a building in Philadelphia.  During the demolition, an unbraced wall fell onto an adjacent Salvation Army store killing and injuring employees and customers. Berkely issued a policy to Campbell, but claimed it was void because of misrepresentations in the application and because Campbell failed… Continue Reading

Habitation or vacancy clause in homeowner’s policy conditions section is an exclusion — Arkansas

Posted in Contractual Liability
In Farm Bureau v. Davenport, 2017 Ark. App. 207, Davenport had 2 houses, one in Michigan and one in Arkansas.  While at the Michigan house, the Arkansas house was broken into and set on fire.  Farm Bureau denied the claim because the house was unoccupied when the house was destroyed. One of the policy conditions,… Continue Reading

Insurer equitably estopped from denying coverage based on change of position on interrelated acts — 10th Circuit — NY law

Posted in Contractual Liability, Duty to Defend
In Brecek & Young Advisors v. Lloyds London, BYA told Lloyds about some claims (Wahl Arbitration) that fell within the 2006-2007 policy issued by Lloyds to BYA.  Lloyds first claimed that the Wahl Arbitration was related to another claim under a previous policy issued by Fireman’s Fund. Under the policy,“Interrelated Wrongful Acts” are “considered a… Continue Reading

Notice / Prejudice rule applied to claims made policy where notice was given within the date certain requirement — Federal Court, Colorado

Posted in Contractual Liability
In Childrens Hospital v. Lexington, Childrens (CHC) was sued for professional negligence.  It failed to provide notice to its insurer, Lexington, “as soon as practicable”, but gave notice within the “date certain” notice requirement of the claims-made policy.  As a result, the court determined it could use the notice prejudice rule to determine if the… Continue Reading

UM and Choice of law; law where the policy was issued applies — 8th Circuit North Dakota

Posted in Contractual Liability
In American Fire and Casualty Co. v. Hegel, Hegel’s decedent, Fetzer, was killed while delivering pizzas in an accident where Fetzer was not at fault.  The trial court found that North Dakota law applied (place of the accident) and that American Fire (Pizza company’s insurance company) owed UM.  The Eighth Circuit reversed.  North Dakota choice… Continue Reading

Criminal Acts exclusion did not apply to negligent conduct even if the conduct leads to a criminal conviction — Missouri

Posted in Contractual Liability, Insurance Bad Faith
In Pitt v. Leonberger, the Missouri Court of Appeals ruled that the criminal conduct exclusion did not apply. Leonberger, a school bus driver, struck and killed Pitts’ son.  The insurer, Missouri United School Insurance Council (MUSIC), accepted liability and even hired an attorney to represent Leonberger when a criminal charge of negligent homicide was filed against… Continue Reading

Mid-Continent off the hook on claim against bankrupt policyholder — 5th Circuit

Posted in Contractual Liability, Duty to Defend
In Kipp Flores Architects v. Mid-Continent Casualty Co.,  Hallmark (Mid-Continent’s policyholder) had a license to build one home per KFA blueprints, but ended up building hundreds, and not paying KFA for its plans.  After KFA sued for copyright infringement, 2 Hallmark entities filed for Chapter 7 bankruptcy, stating there would be no money to distribute… Continue Reading

No coverage for theft by a person who was both an employee and not an employee — 7th Circuit, Indiana

Posted in Contractual Liability
In Telamon v. Charter Oak, the Seventh Circuit ruled against coverage for employee theft. Underlying this insurance dispute is a regrettably common tale of greed and dishonesty. Telamon, an Indiana telecommunications firm, engaged Juanita Berry to work for it from 2005 to 2011 as its Vice President of Major Accounts. Berry used that position to… Continue Reading

Fireworks explosion was one occurrence, affirming summary judgment — 4th Circuit, Pennsylvania law

Posted in Contractual Liability
Liability policy limits are usually based on occurrences, with a new limit applied to each occurrence and an annual limit on top of that.  (This may not apply in claims made policies  which are usually issued to professionals) As a result, insurance companies are often litigating whether an incident is one or multiple occurrences.  For… Continue Reading

No Underinsured Motorist Coverage Where Tortfeasor Policy Limits Exceed Insured’s Policy Limits; Missouri (8th Circuit)

Posted in Contractual Liability, New Case
AMCO Ins. Co. v. Williams, arose from a fatal car crash. The insured’s estate sought underinsured (UIM) motorist coverage after recovering the tortfeasor’s policy limits. The claim was denied. The insured sought summary judgment establishing coverage. The insurer claimed there was no coverage because the tortfeasor’s vehicle was not underinsured. The insured said the policy… Continue Reading

Construction defect is not an “occurrence” or “accident” that triggers covered “property damage” within the meaning of a CGL policy – 7th Circuit, Illinois

Posted in Contractual Liability, Duty to Defend
In  Allied Prop. & Cas. Ins. Co. v. Metro N. Condo. Ass’n., Allied’s policyholder insured improperly installed windows on Metro’s property. Metro sued the insured for breach of the implied warranty of habitability. Metro and the insured entered into a settlement agreement assigning Metro the right to the insured’s insurance proceeds. Allied sought a declaratory… Continue Reading

Insurance company has standing to enforce arbitration against claimant — 9th Circuit California

Posted in Contractual Liability, New Case
Allied Professionals Insurance Company, v. Anglesey, When Allied denied Dr. Anglesey coverage for a malpractice claim made by the Gutierrezes, the doctor and the claimants settled, with an agreement not to execute against Anglesey, and apparently, an assignment of Anglesey’s claims against Allied to the Gutierrezes.  Allied sued the doctor and claimants, seeking (1) declaratory… Continue Reading

Indoor Air Pollution exclusion ok, not violative of state law — Oklahoma

Posted in Contractual Liability
In Siloam Springs Hotel v. Century Surety, 2017 OK 14, the issue was whether an exclusion for injury from indoor air was enforceable.  Apparently, some guests were injured from carbon monoxide at the hotel.  The insurance company did not cover the resulting claims based on the Indoor Air Exclusion, which stated the policy does not apply… Continue Reading

No coverage under builders risk policy for damage to the existing structure — 10th Circuit Colorado

Posted in Contractual Liability, Duty to Defend, Insurance Bad Faith
In Gerald H. Phipps, Inc. v. Travelers Property Casualty, the Tenth Circuit affirmed summary judgment to Travelers Property Casualty on a builders’ risk policy.  The policy covered the builder’s work on the property, not the property itself.  So, when water damaged the property while roof work was being performed by the policyholder, Phipps, there was… Continue Reading

Declaratory judgment on coverage premature when underlying liability has not been determined — South Dakota

Posted in Contractual Liability, Duty to Defend
In Western National Mutual Insurance Company v. Gateway, Gateway was involved in building some grain elevators that failed.  Gateway claimed the failure was due in part at least to work of its subcontractor.  Western filed a declaratory judgment action, claiming there was no coverage under the policy because of the “your work” exclusion,  the “professional… Continue Reading
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