Reinsurance Law Blog

Reinsurance Law Blog

Category Archives: Contractual Liability

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Policyholders may be covered for an entire property insurance claim where there are multiple concurrent causes of loss and at least one is covered under a policy — Florida

Posted in Contractual Liability, New Case
In Sebo v. American Home Assurance Co., the Florida supreme court ruled that an entire property insurance claim may be covered where there are multiple concurrent causes of loss and at least one is covered under a policy. Insurers might be able to defeat claims if they can show that an excluded risk prompted a… Continue Reading

Insurers split over other insurance provisions; limits for pro rata calculation — 10th Circuit Oklahoma

Posted in Contractual Liability
In Philadelphia Indemnity v. Lexington Insurance, both companies insured a school building which was damaged by fire.  The issue was which insurance company had to pay, and how much. The trial court ruled that Philadelphia had to pay 54% of the loss, while Lexington had to pay 46%.  Both insurance companies appealed and the Tenth… Continue Reading

Appraisal process, prevailing party, attorneys fees — 10th Circuit, Oklahoma

Posted in Contractual Liability
In re: Hayes Family Trust v. State Farm Fire & Cas. Co., involved a property damage claim where the policyholder invoked the appraisal process after the parties could not agree on the amount of the loss. The policy establishes a procedure whereby each party selects an impartial appraiser; the appraisers then select an impartial umpire.… Continue Reading

Insured vs Insured exclusion applies to preclude coverage under D&O policy — 8th Circuit Minnesota

Posted in Contractual Liability, Duty to Defend
In Jerry’s Enterprises, Inc. v. U.S. Specialty Insurance Co, Sullivan, a former director of the company, and her daughters (also shareholders) sued Jerry’s regarding the valuation of their stock.  Jerry’s settled, and then sued US Specialty for its defense costs and for sums paid under the settlement agreement.  The trial court said no coverage and… Continue Reading

Future promises do not constitute fraud and construction damages are subject to the Arkansas Statute of Repose; 8th Cir, Arkansas

Posted in Contractual Liability
Star City School Dist. v. ACI Bldg. Sys., L.L.C., arose from a construction contract dispute between Star City School District and a roofing manufacturer. Star City alleged the manufacturer failed to repair a roof. Judgment for the manufacturer was proper because Star City failed to properly allege reliance and the manufacturer’s future promise to repair… Continue Reading

Misrepresentation on application voids policy, 8th Circuit, Arkansas

Posted in Contractual Liability
In Nationwide Property and Casualty v. Faircloth, Faircloth applied for auto insurance on line.  When asked for the “primary use” of the vehicle, Faircloth chose Work/School (commute to/from, errands).  After Faircloth had an accident, Nationwide learned that Faircloth used the vehicle for deliveries, putting 1200 miles a week on it.  Nationwide said Faircloth should have… Continue Reading

Third Party Has Standing to Claim Benefits –Missouri

Posted in Contractual Liability
In Blankenship v. Old Missouri Insurance Company, the Missouri Court of Appeals reversed summary judgment for the insurance company, and found that a third party beneficiary had standing to bring a direct action against the insurance company.  The plaintiff was a farm worker, claiming entitlement to medical payments (med pay) coverage and liability coverage under… Continue Reading

Computer fraud provision did not cover payment to fraudulent bank accounts, Fifth Circuit, Texas

Posted in Contractual Liability
In Apache Corp. v. Great American Insurance, the Fifth Circuit vacated summary judgment to the policyholder insured on a computer fraud provision.  Apache was hoodwinked into paying legitimate vendor invoices to criminal bank accounts as a result of scheme initiated by email.  Great American Insurance Company, Apache’s insurer, denied its claim for coverage of its… Continue Reading

UM coverage on vehicle involved in the accident is primary — Arkansas App.

Posted in Contractual Liability, Vehicle
In Southern Farm Bureau Casualty Insurance Co. v. Shelter Mutual Insurance Co., 2016 Ark. App. 563, Roberson was injured while driving a car insured by Shelter.  Roberson had UM coverage through Southern Farm Bureau (Farm Bureau).  Shelter paid Roberson’s claim and argued that either Farm Bureau was liable for the damages under its “other insurance”… Continue Reading

Injury is either within the products completed work hazard or it isn’t — it cannot be both in order to increase limits. Alabama law

Posted in Contractual Liability
In Pharmacists Mutual Insurance Company v. Advanced Specialty Pharmacy, Advanced provided a tainted IV product which caused patient infections.  Pharmacists was Advanced’s insurer, and put $4 million into an interpleader fund to be divided among the claimants.  The claimants and Advanced claimed Pharmacists’ limits were $7 million and the trial court agreed on summary judgment. … Continue Reading

Reinsurance is discoverable as insurance agreements in initial disclosures, W.D. Tennessee

Posted in Contractual Liability
In First Horizon Nat’l Corp., v. Houston Cas. Comp., 2016 WL 5869580, 2:15-cv-2235 (W.D. Tenn. Oct. 5, 2016), the issue was whether the plaintiff insured was entitled to discovery of the defendant insurers’ reinsurance agreements and communications relating to them.  Federal Rule of Civil Procedure 26(a)(1) requires a party to produce with its initial disclosures, “any… Continue Reading

Misrepresentations in personal property valuation voids entire policy 8th Circuit, Missouri

Posted in Contractual Liability
In Neidenbach v. Amica Mutual Insurance Company, the personal property coverage in plaintiff’s  Neidenbach’s homeowner’s policy was void under the policy’s “Concealment of Fraud” provision because the plaintiffs intentionally misrepresented the value of their personal property in their proof of loss; the misrepresentation voided the entire policy, including the portions covering loss of their dwelling.… Continue Reading

Owned vehicle exclusion, underinsured motorist coverage, 8th Circuit, Missouri law

Posted in Contractual Liability, Vehicle
Walker v. Progressive Direct Ins. Co. Steve Walker died in a motorcycle accident. After his widow settled against the tortfeasor for policy limits of $25,000, she sought underinsured motorist coverage UIM under two Progressive Auto Policies insuring the Walkers’ six other cars. The trial court granted Progressive’s motion for summary judgment, concluding that the policies’… Continue Reading

Subsidiary not third party beneficiary and reformation claim time barred, 5th Cir., Texas and California law

Posted in Contractual Liability
AIG Specialty Insurance Company (formerly known as Chartis) v. Tesoro Corp., 5th Circuit applying California and Texas law. Tesoro Refining bought a refinery from Ultramar. Ultramar had an insurance policy from Chartis, and as part of the deal, assigned the policy to Tesoro Corporation. When a claim was made on the refinery, Chartis said its… Continue Reading

Insured contract provision puts insurer on the hook — ED Missouri

Posted in Contractual Liability
In Federal Insurance Co. v. Great American, 4:14CV1730 HEA, 2016 WL 5661623, (E.D. Mo. Sept. 30, 2016) the issue was priority of payment under various policies issued to Whispering Lake (Owner) and Yarco (Managing Agent). Owner agreed to indemnify Yarco in its agreement. Federal claimed this made the contract an insured contract and that Great… Continue Reading

Pharmacy owes decedent duty in prescription overdose wrongful death action

Posted in Contractual Liability, immunity, New Case
Carista v. Valuck was a wrongful death arising action from Plaintiff’s prescription overdose. Defendant was Plaintiff’s pharmacy. Defendant sought summary judgment alleging it owed Plaintiff no duty. Judgment for Plaintiff was proper because the Learned Intermediary Doctrine creates a duty whereby a pharmacist must advise patients of facially unreasonable prescriptions and known drug contradictions. Thus,… Continue Reading

Judgment against policyholder for fraudulent claims affirmed — 10th Circuit, Oklahoma

Posted in Contractual Liability
In Century Surety Co. v. Shayona Investment, Century paid claims submitted by its policyholder, Shayona, and then sued Shayona, arguing the claims were fraudulent.  At trial, the jury found in favor of Century, awarding it both the amount the company paid Shayona under the policy and the sum it spent investigating the claims.  The Tenth… Continue Reading

Failure to cooperate by producing income tax records results in judgment for insurance company 11th Circuit, applying Georgia law

Posted in Contractual Liability
In Hsu v. Safeco Ins., Hsu sued Safeco to recover on a homeowner’s policy.  But Hsu had not provided Safeco with the tax returns Safeco requested before Hsu filed suit.  Safeco got summary judgment because providing the tax returns was a condition precedent to filing suit. Specifically, the district court held that Plaintiffs were not… Continue Reading

7th Circuit affirms order requiring payment of life insurance benefits to a stranger with no insurable interest — Wisconsin law

Posted in Contractual Liability, Insurance Bad Faith
In U.S. Bank National Association v. Sun Life Assurance Company, (opinion by Judge Posner)Sun Life issued a $6M life policy on Margolin in 2007.  In 2011, US Bank bought the policy and kept up the premiums.  In 2014, Margolin died.  Sun said it was looking into whether it had to pay the policy and US… Continue Reading

Fact questions preclude summary judgment on breach of contract and bad faith claims — WD Oklahoma

Posted in Contractual Liability, Insurance Bad Faith
In Neill v. State Farm Fire & Cas. Co., CIV-13-627-D, 2016 WL 4384793, (W.D. Okla. Aug. 16, 2016), Neill sued State Farm for breach of contract and bad faith for failure to pay enough on a tornado claim.  There were factual issues which precluded summary judgment on the contract claim — specifically, whether the repair… Continue Reading