Reinsurance Law Blog

Reinsurance Law Blog

Tag Archives: Contractual Liability

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

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

No bad faith for delay in appraisal where there were coverage issues — 10th Cir Oklahoma

Posted in Insurance Bad Faith
This is the second case involving Hayes Family Trust v. State Farm Fire & Casualty.  The first case, involving the appraisal process, is discussed here.  In this case, the policyholder claimed that State Farm acted in bad faith when it delayed the appraisal process because of coverage issues and when it failed to adequately investigate… 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

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

E and O insurer had no duty to defend Realtor in claims arising after the sale — 7th Circuit, Illinois

Posted in Duty to Defend
In Madison Mutual Insurance Co v. Diamond State Insurance Co., the policyholder, Favre was sued by her neighbors, the Dribbens for harassment, intimidation and interference with their rights.  The Dribbens had purchased their property through Favre, a realtor, and had sued when they discovered the lake on the development had not been properly permitted.  After… 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

Summary judgment on governmental immunity properly denied where City did not provide proof of no insurance — Arkansas

Posted in immunity
In City of Little Rock v. Yang, Yang sued the City for mishandling a 911 call.  City claimed immunity. But City did not offer evidence it had no insurance.  Governmental immunity is only available under Arkansas law if there is no insurance.  Also, if the claim exceeds the insurance limits, there is immunity.  The denial… 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

Whether the insurer’s investigation of a claim was reasonable was a question of fact precluding summary judgment 10th Circuit, Colorado

Posted in Insurance Bad Faith
In Peden v. State Farm Mutual Auto Ins Co., the Tenth Circuit reversed a summary judgment in favor of State Farm on a uninsured / underinsured motorist claim.  State Farm had both the liability coverage and the UM / UIM coverage.  State Farm paid $240,000 on the liability coverage, and after suit was filed, paid… 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 occurring during rodeo event subject to athletic participation exclusion — MD Fla.

Posted in Duty to Defend
In Volusia County Cattlemen’s Association v. Western World Insurance Company; Case No: 6:15-cv-1239 (MD Fla), Desiree Cicero was participating in a cash grab event at the Cattlemen’s rodeo.  The event involved grabbing cash off of bulls running around in the arena.  Cicero was hurt and sued the Association.  The Association sought a defense and coverage… 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

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
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