Articles 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

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Plaintiff filed a putative class action, alleging that State Farm's practice of deducting "labor depreciation" from estimated replacement cost in determining actual cash value breached the insurance contract. The Eighth Circuit reversed the district court's denial of State Farm's motion to dismiss and certify a class. Although the court did not rule out the possibility that State Farm's use of the estimating methodology tool would produce an unreasonable estimate of the actual cash value of some partial losses, this issue may only be determined based on all the facts surrounding a particular insured's partial loss. Therefore, there were no predominant common facts at issue. Furthermore, the district court's order upholding premature classwide discovery was vacated. The court remanded with directions to dismiss the complaint and held that State Farm's petition for writ of mandamus was moot. View "In Re: State Farm Fire & Casualty Co." on Justia Law

Posted in: Insurance Law

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The Eighth Circuit affirmed the district court's grant of summary judgment for four insurance companies in an action filed by UnitedHealth, seeking indemnity and defense costs for underlying litigation settlements under its professional liability excess insurance policies. The court held that the district court properly concluded that UnitedHealth failed to present sufficient evidence as to how the settlement should be allocated between covered and non-covered claims; it was not enough under Minnesota law for UnitedHealth to show simply that its $350 million settlement included a covered claim of an unspecified amount; UnitedHealth failed to provide non-speculative evidence to allocate the $350 million settlement between the potentially covered AMA suit and non-covered Malchow suit; and the court declined to disturb the district court's grant of summary judgment for the Insurers on the matter of defense costs in the AMA litigation. View "UnitedHealth Group Inc. v. Executive Risk Specialty Ins." on Justia Law

Posted in: Insurance Law

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The Eighth Circuit reversed the district court's award of damages to plaintiff for injuries that she sustained in a vehicle-related accident. The court held that the district court improperly applied a heightened duty to the sober designated driver for a group of intoxicated passengers. In this case, the findings of fact were insufficient to support apportioning greater fault to the driver based on her duty to exercise reasonable care in driving the vehicle. Accordingly, the court remanded for new findings and conclusions on the allocation of fault. View "Hiltner v. Owners Insurance Co." on Justia Law

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The Eighth Circuit affirmed the district court's grant of defendants' motion to dismiss plaintiff's suit seeking reimbursement of premiums, enhanced damages and fees, alleging claims of unjust enrichment, breach of contract, and civil conspiracy. The court held that plaintiff had standing because, if the policy was deemed void ab initio due to non-compliance with state law, then plaintiff will have suffered a compensable economic injury fairly traceable to defendants' actions. Even if the policies were not void, standing still existed because plaintiff had described a concrete and redressable economic injury properly alleged to have been caused by defendants. The court also held that plaintiff's unjust enrichment was time-barred under Arkansas' three-year statute of limitations and tolling of the statue of limitations was not applicable in this case; plaintiff's breach of contract claim was not time-barred; but the breach of contract claim failed as a matter of law because the policy unambiguously granted the insurer an unconditional right to terminate the policy on thirty-days' notice. View "Graham v. Catamaran Health Solutions LLC" on Justia Law

Posted in: Insurance Law

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Plaintiff filed suit against defendants, alleging claims of breach of fiduciary duty, breach of contract, and negligence. The Eighth Circuit affirmed the district court's motion to dismiss the breach of contract and negligence claims because plaintiff failed to plead sufficient facts to state a plausible claim for breach of contract or negligence. In this case, the language of the policy was unambiguous in describing what the parties intended their contract to be—the policy itself and the written application for the policy. Because the loan forms plaintiff relied on to support the breach of contract claim were not part of the insurance policy, the claim failed. Likewise, the negligence claim failed because it relied on the loan forms being part of the insurance contract. View "Torti v. John Hancock Life Insurance Co." on Justia Law

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After a jury found that Charter Oak was liable for breach of contract and deceit for its handling of plaintiff's underinsured motorist (UIM) claim, the district court partly granted judgment as a matter of law and approved some of the compensatory damages, as well as all of the punitive damages. The Eighth Circuit affirmed, holding that the independent duty rule did not bar plaintiff's deceit claim; there was sufficient evidence to support the jury's verdict that there was deceit and the deceit harmed plaintiff; the evidence supported the jury's finding that Charter Oak's breach of contract prevented plaintiff from submitting her UIM claim sooner and award of interest on UIM monies from the delay; the district court did not err by failing to conform plaintiff's pleadings, and properly nullified the award for mental and emotional harm; the district court properly applied South Dakota law and applied a 15% interest rate on the $900,000 payment of the UIM claim; and the evidence supported the award of punitive damages and the award was not excessive. View "Dziadek v. The Charter Oak Fire Ins." on Justia Law

Posted in: Insurance Law

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After plaintiff was injured in a car accident while driving a loaner vehicle from Billion, she filed suit against Billion's insurer, Travelers, for coverage under the commercial insurance policy. The Eighth Circuit affirmed the district court's dismissal of the suit for failure to state a claim. Although plaintiff did not allege facts showing that her tort or punitive damages or attorneys fees would exceed $75,000, it was not legally impossible that she could recover at least that amount. Therefore, the district court had jurisdiction over the suit. The court held that, reading the endorsement together with the declarations page, the district court properly found the policy did not cover auto medical payments; because plaintiff was not insured under the auto medical coverage provision of the policy, the district court properly dismissed her remaining claims; and the district court did not abuse its discretion in denying her motions to reconsider or amend. View "Peterson v. The Travelers Indemnity Co." on Justia Law

Posted in: Insurance Law

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Defendant-appellant Christopher Klick was seriously injured after suffering carbon monoxide poisoning while aboard a friend’s fishing boat. An exhaust pipe had broken off at the spot where it connected with the engine. As a result, the engine had been expelling carbon monoxide gas into the engine compartment rather than through the exhaust pipe and out behind the boat. When the engine compartment hatch from within the wheelhouse was opened, carbon monoxide flowed up into the wheelhouse. Klick quickly lost consciousness and fell into the engine compartment. He awoke there several hours later, severely burned from lying on the engine. He also suffered brain damage from the carbon monoxide. The gas killed the boat’s two other occupants, but Klick survived. Klick sued the boat dealer in state court. The dealer had an insurance policy from Travelers Property Casualty Company of America that required Travelers to pay for liabilities resulting from bodily injury. The policy, however, had a pollution exclusion providing that the policy did not cover liability for injuries arising out of the release, dispersal, or migration of certain pollutants. Travelers sued in federal court, seeking a declaration that the policy did not cover liability for Klick’s injuries. The district court granted summary judgment for Travelers. We conclude that the pollution exclusion applies, and we therefore affirm. View "Travelers Property Casualty v. Klick" on Justia Law

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McShane filed suit against Gotham for failing to pay its insurance claim related to the alleged improper installation of a fire protection and suppression system by one of McShane's subcontractors, Mallory. The Eighth Circuit affirmed the district court's grant of Gotham's motion to dismiss for failure to state a claim. The court held that McShane's statutory claims were properly dismissed because neither rests upon a private right of action; McShane failed to state a claim for which relief can be granted with regard to its breach of contract theories where McShane failed to allege a legal obligation to pay any judgment covered under the terms of the policy; and McShane failed to state a claim upon which relief could be granted based upon waiver or estoppel. View "McShane Construction Co. v. Gotham Insurance Co." on Justia Law

Posted in: Insurance Law