Articles Posted in Insurance Law

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The Supreme Court reversed the judgment of the circuit court entering summary judgment in favor of the Doe Run Resources Corporation in this insurance coverage dispute. Doe Run was sued by several minor plaintiffs allegedly injured by toxic pollution released from Doe Run’s smelting facility in Peru. Doe Run sued St. Paul Fire and Marine Insurance Company, its insurer, for reimbursement of defense costs incurred during the litigation of these claims. St. Paul alleged that coverage was barred under the insurance policy’s pollution exclusion. The circuit court found the pollution exclusion ambiguous and unenforceable. The Supreme Court reversed, holding that the pollution exclusion unambiguously barred coverage and that St. Paul had no duty to defend Doe Run from the lawsuits. View "Doe Run Resources Corp. v. American Guarantee & Liability Insurance" on Justia Law

Posted in: Insurance Law

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Nevils was a federal employee insured through a plan governed by the Federal Employee Health Benefits Act (FEHBA) when she was injured in an automobile accident. Coventry paid her medical expenses and asserted a subrogation lien against a settlement Nevils received from the party responsible for the accident. Nevils filed a class action, arguing Missouri law does not permit subrogation of personal injury claims. Coventry obtained summary judgment, based on FEHBA’s preemption clause: The terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, ... which relates to health insurance, 5 U.S.C. 8902(m)(1). Initially, the Missouri Supreme Court concluded Congress did not manifest a clear intent to preempt state anti-subrogation laws. The Office of Personnel Management subsequently promulgated a rule providing that an insurer’s rights to subrogation and reimbursement under federal employee health benefits contracts “relate to the nature, provision, and extent of coverage or benefits” under FEHBA. On remand, the Missouri Supreme Court held the rule did not alter its analysis. The U.S. Supreme Court then held an insurer’s subrogation rights “relate to . . . payments with respect to benefits” and that FEHBA “manifests the same intent to preempt state law” as other federal preemption statutes despite the different “linguistic formulation” of section 8902(m)(1). In light of that holding, the Missouri Supreme Court affirmed the trial court’s judgment. View "Nevils v. Group Health Plan, Inc." on Justia Law

Posted in: Insurance Law

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Owners Insurance Company issued Vicki and Chris Craig a policy with underinsured motorist (UIM) coverage. Vicki was injured in an accident when her vehicle was struck by a vehicle driven by another motorist. Vicki incurred damages exceeding $300,000. Shelter Insurance, which insured the at-fault motorist, paid the Craigs $50,000. The Craigs then sought from Owners $250,000, the declarations listed UIM limit amount. Owners paid the Craigs $200,000, citing the off-set provisions that allowed them to deduct the amount paid by Shelter. Thereafter, Owners sought a declaratory judgment over the disputed $50,000. The circuit court ruled that the policy was ambiguous and entered summary judgment in favor of the Craigs. The Supreme Court reversed, holding that the policy unambiguously provides for the $50,000 set-off, that the policy never promised to pay up to the full amount listed in the declarations, and that the declarations did not promise coverage. Remanded. View "Owners Insurance Co. v. Craig" on Justia Law

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Shelter Mutual Insurance Company issued the Swadley family a policy with underinsured motorist (UIM) coverage. The policy’s declarations page listed “100,000 Per Person” as the UIM limit. After Angela Swadley was killed in a collision, the Swadleys made a claim to Shelter pursuant to their policy’s UIM coverage. When Shelter denied the claim, the Swadleys filed a petition against Shelter. The circuit court ruled that the policy was ambiguous, entered partial summary judgment in favor of the Swadleys and awarded the Swadleys $100,000. The Supreme Court reversed, holding that the policy unambiguously precluded UIM coverage from applying to the Swadleys’ claim. View "Swadley v. Shelter Mutual Insurance Co." on Justia Law

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Franklin Allen obtained a $16 million personal injury award against Wayne Bryers after Bryers’ handgun discharged, seriously injuring Allen. Thereafter, Allan filed a Mo. R. Civ. P. 90 garnishment action seeking proceeds from an insurance policy issued by Atain Specialty Insurance Company (Insurer), which insured the premises where the shooting occurred. Allen alleged that Insurer wrongfully refused to defend Bryers and acted in bad faith when it refused to defend Bryers. The garnishment court ordered Insurer to pay Allen $16 million. Insurer appealed, arguing, inter alia, that the circuit court erred in denying its motions to intervene and to set aside the underlying tort judgment on the basis of fraud. The Supreme Court dismissed the appeal in part and affirmed as modified the remainder of the garnishment court’s judgment, holding (1) the garnishment court’s rulings on Insurer’s motions to intervene and to set aside the judgment were void; (2) Insurer wrongfully refused to defend Bryers and was bound by the result of the underlying tort action, including the findings related to coverage; but (3) the garnishment court exceeded its authority in awarding Allen the full amount of the underlying tort judgment because Allen was only entitled to receive the $1 million policy limit from Insurer. View "Allen v. Bryers" on Justia Law

Posted in: Insurance Law

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Charles and Deborah Bate were both seriously injured in a head-on vehicle collision. After obtaining a judgment against the driver of the opposing vehicle the Bates sued Greenwich Insurance Company seeking underinsured motorist coverage under a policy allegedly issued to Charles Bate’s employer by Greenwich. Greenwich did not answer the petition, and the Bates obtained a default judgment in the amount of $3 million. More than two years later, Greenwich filed an amended motion to set aside the default judgment as void, arguing that service of process was invalid. The trial court set aside the default judgment as void, stating that there was no valid service of process. The Supreme Court reversed, holding that the Bates properly effected service of process under Mo. Rev. Stat. 375.906 and complied with all service requirements of that statute. View "Bate v. Greenwich Ins. Co." on Justia Law

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Randy Spalding filed suit against Stewart Title Guaranty Company, alleging breach of contract and vexatious refusal to pay in regard to a title insurance policy. After a jury trial, the circuit court entered an amended judgment in favor of Spalding. The Supreme Court affirmed, holding that the circuit court did not err in (1) overruling Stewart Title’s motions for directed verdict and judgment notwithstanding the verdict where the title insurance policy was not time barred and where Spalding made a submissible case as to the existence and amount of the damages for the breach of contract; (2) refusing to give Stewart Title’s proposed instruction concerning its statute of limitations defense; (3) admitting evidence from an appraiser in regard to damages sustained from the title defect under the policy; and (4) giving a certain jury instruction regarding the measure of damages. View "Spalding v. Stewart Title Guaranty Co." on Justia Law

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Linda Nunley was killed while working for a charcoal manufacturer. Plaintiffs, Nunley’s three children and her mother, obtained a judgment for wrongful death against Junior Flowers, the company’s sole owner, director, and executive officer. Flowers requested a defense from his insurer (ILM), but ILM refused to defend Flowers. Flowers subsequently assigned his insurance claims to Plaintiffs. Plaintiffs sued ILM for breach of duties to defend and indemnify under commercial general liability (CGL) and umbrella policies. The circuit court granted summary judgment for ILM after applying the policies’ employees exclusions, which prevented coverage for work-related injuries to employees of the insured. The Supreme Court affirmed, holding that the policies barred Plaintiffs’ claims through unambiguous language that excluded liability to employees. View "Piatt v. Ind. Lumbermen's Mutual Ins. Co." on Justia Law

Posted in: Insurance Law

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Client retained Attorney to handle various legal claims pertaining to the management of a trust. Attorney later came to represent Client and his wife in matters of their own estate planning and administration. Upon Attorney’s advice, Client made loans to both the Attorney’s law firm and to a business from which Attorney received a commission for the referral. Attorney did not make a written disclosure or advise Client to seek independent legal advice regarding these transactions. The loans were never repaid. Client filed a malpractice action against Attorney for breach of fiduciary duty. Judgment was entered in favor of Client. Client subsequently filed an equitable garnishment action against Attorney’s malpractice insurer (Insurer) seeking to recover the judgment under the policy. The trial court granted summary judgment for Insurer, concluding that coverage was excluded under the policy’s “legal representative of investors” exclusionary clause. The Supreme Court affirmed, holding that, under the facts of this case, the trial court was correct in holding that the exclusionary clause unambiguously excluded coverage for Attorney’s injurious acts and omissions. View "Taylor v. Bar Plan Mut. Ins. Co." on Justia Law

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Barbara Hiles purchased two American Family Mutual Insurance policies on two vehicles she owned, a Nissan and a Ford. While driving her Nissan, Hiles was involved in a motor vehicle accident that injured Adam Dutton. Dutton sued Hiles and made a settlement demand of $50,000, which was the combined policy limits of the Nissan policy added to what Dutton claimed were the minimum policy limits required under the Motor Vehicle Financial Responsibility Law (MVFRL) for the Ford policy. Dutton, Hiles, and American Family entered into a settlement under which Dutton received $25,000 under the Nissan policy and was assigned Hiles’ right to sue American Family for issues arising from the Ford policy. Dutton then filed a declaratory judgment action against American Family seeking a determination whether the Ford policy provided $25,000 additional coverage for his injuries. The trial court entered judgment for American Family. The Supreme Court affirmed, holding that the Ford policy’s plain language did not require American Family to provide coverage for the accident, and the MVFRL did not require American Family to pay the statutory minimum of $25,000 of liability coverage on the Ford policy because the Nissan was owned by the insured but not designated in the Ford policy. View "Dutton vs. American Family Mut. Ins. Co." on Justia Law

Posted in: Insurance Law