Articles Posted in Insurance Law

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The Eighth Circuit affirmed the district court's grant of summary judgment deferring to an insurance policy interpretation made by the FCIC and a determination regarding the FCIC's authority made by the RMA. The court held that the clear language of the Federal Crop Insurance Act indicated that Congress intended the Corporation to have extensive and broad authority; given the FCIA's broad grant of authority to the Corporation, and the specific authority over the provisions of insurance and insurance contracts found in 5 U.S.C. 1505 and 1506, substantial deference was given to the FCIC's interpretation of the special provision; and, considering the plain language of the insurance contract and the deference given to the RMA in its role of supervisor of the FCIC, the RMA's determination that the FCIC was required to provide an interpretation of the special provision to the arbitrating parties was not clearly erroneous. View "Bottoms Farm Partnership v. Perdue" on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment to State Farm on plaintiff's bad faith tort claim and on an evidentiary ruling on the underinsured motorist coverage claim. The court held that the district court applied the proper legal standard of Arkansas substantive law, and that there was no genuine issue of material fact that State Farm's conduct did not constitute bad faith. The court also held that the district court did not err in excluding plaintiff's proposed evidence regarding State Farm's practice of denying claims as that evidence had no bearing on the amount of damages on plaintiff's underinsured motorist claim. View "Sims v. State Farm Mutual Automobile Insurance Co." on Justia Law

Posted in: Insurance Law

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Federal filed suit seeking a declaratory judgment determining the parties obligations and any priority coverage in an underlying wrongful death suit. The Eighth Circuit held that repeatedly shooting, and encouraging others to shoot, a handgun "in the general direction" of a small lake in a residential area of Kansas City, Missouri, which results in a young child's death, qualified as "gross negligence." In this case, the employee of the insured was convicted of reckless killing and his criminal conduct was determined through state court criminal proceedings. The court held that, because the conduct constituted gross negligence under the relevant indemnity clause, defendant Great American was not liable for the loss, and the district court erred in relying on the clause to require Great American to indemnify Federal and Zurich. The court vacated and remanded for further proceedings. View "Federal Insurance Co. v. Great American Insurance Co." on Justia Law

Posted in: Insurance Law

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Welspun filed suit against its insurer, Liberty Mutual, arguing that its unpaid mitigation costs were "necessary expenses" included in the policy's loss of business income coverage. The Eighth Circuit affirmed the district court's grant of summary judgment for Liberty Mutual. The court held that the district court did not err in limiting necessary expenses covered in Paragraph C.2. of the policy to expenses incurred to avoid or reduce a loss of business income; reading the loss of business income policy provisions together, in light of their historical roots and obvious purpose, the court agreed with the district court that "necessary expenses" in Paragraph C.2. were limited to expenses that reduce a covered business income loss; and the incremental costs Welspun incurred in shifting some Seaway production to an affiliate in India were not "necessary expenses" within the meaning of Paragraph C.2. of the policy. View "Welspun Pipes Inc. v. Liberty Mutual Fire Insurance Co." on Justia Law

Posted in: Insurance Law

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Fidelity filed suit seeking a declaration that a title insurance policy did not cover mechanics' liens. Captiva filed counterclaims, which sought a declaration that the policy covered the mechanics' liens and which asserted claims against Fidelity for failing to diligently defend and resolve the mechanics' liens claims and for tortiously interfering with Captiva's relationship with the attorneys Fidelity had hired to defend Captiva. The Eighth Circuit held that the district court did not apply the correct legal standard in deciding that Title Insurance Policy Exclusion 3(a) did not apply to the mechanics' liens at issue in this case; Exclusion 3(a) can apply under Missouri law even if the insured did not engage in intentional misconduct or inequitable dealings; Captiva failed to show that the title was unmarketable on or before the effective date of the policy and thus failed to prove its claim that Fidelity breached the policy's unmarketability-of-title provision; and thus the court affirmed the dismissal of the tortious interference claim, vacated the judgment and remanded for further proceedings, and also vacated the order awarding attorneys' fees and costs. View "Captiva Lake Investments v. Fidelity National Title Insurance" on Justia Law

Posted in: Insurance Law

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Fidelity filed suit seeking a declaration that a title insurance policy did not cover mechanics' liens. Captiva filed counterclaims, which sought a declaration that the policy covered the mechanics' liens and which asserted claims against Fidelity for failing to diligently defend and resolve the mechanics' liens claims and for tortiously interfering with Captiva's relationship with the attorneys Fidelity had hired to defend Captiva. The Eighth Circuit held that the district court did not apply the correct legal standard in deciding that Title Insurance Policy Exclusion 3(a) did not apply to the mechanics' liens at issue in this case; Exclusion 3(a) can apply under Missouri law even if the insured did not engage in intentional misconduct or inequitable dealings; Captiva failed to show that the title was unmarketable on or before the effective date of the policy and thus failed to prove its claim that Fidelity breached the policy's unmarketability-of-title provision; and thus the court affirmed the dismissal of the tortious interference claim, vacated the judgment and remanded for further proceedings, and also vacated the order awarding attorneys' fees and costs. View "Captiva Lake Investments v. Fidelity National Title Insurance" on Justia Law

Posted in: Insurance Law

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In the underlying lawsuit, A1's filed an action against Decker after the plastic bags Decker sold to A1's deteriorated in the sunlight because they were not manufactured with an ultraviolet inhibitor. In this appeal, the Eighth Circuit affirmed on remand the district court's grant of summary judgment to West Bend, Decker's insurer, holding that Decker's claims were properly dismissed because there was no property damage triggering coverage under West Bend's policies. The undisputed facts established that A1's landscaping materials were not physically injured due to the incorporation of the deteriorated packaging material. View "Decker Plastics Inc. v. West Bend Mutual Insurance Co." on Justia Law

Posted in: Insurance Law

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The Eighth Circuit affirmed the district court's grant of summary judgment to Zurich, holding that the district court did not err in concluding that the commercial general liability policy issued by Zurich to EPS did not provide coverage for damage EPS caused to an electrical transformer while working on it. In this case, the "particular part" exclusion applied and there was no coverage for the claimed damage, because the damage to the coil at issue was caused by EPS's incorrect performance of its work in detaching the lead cable from the bushing. View "Electric Power Systems International, Inc. v. Zurich American Insurance Co." on Justia Law

Posted in: Insurance Law

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The Insurer appealed the district court's grant of summary judgment for the insured in a dispute regarding damage from a hailstorm to windows in the insured's home. An appraisal panel issued an appraisal award but the parties disputed the meaning of the award. The Eighth Circuit held that the appraisal award was ambiguous and the district court should have returned the matter to the appraisal panel for clarification. Accordingly, the court vacated the judgment and remanded. View "Herll v. Auto-Owners Insurance Co." on Justia Law

Posted in: Insurance Law

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Plaintiffs filed suit against Allstate after the insurance company denied their homeowner's insurance claim. The Eighth Circuit affirmed the district court's grant of Allstate's motion for judgment as a matter of law. In regard to the breach of contract claim, the court held that plaintiffs failed to present sufficient evidence of the home's value and the personal property's value before or after the fire. Furthermore, a bankruptcy filing was insufficient to establish value. In this case, plaintiffs could have submitted an estimate of the personal property's value immediately before the fire, but they did not. Values on their proof-of-loss list were estimates of original purchase prices and it did not account for deterioration, obsolescence, or other depreciation as required by the policy and under Missouri law. Because plaintiff's vexatious refusal claim was derivative of their breach of contract claim, the court affirmed as to that claim. View "Aziz v. Allstate Insurance Co." on Justia Law