Insurance Law

Plaintiff filed a breach of contract lawsuit against the insurance company that issued her a long term care insurance policy after the insurance company denied her claim for home care expenses. Plaintiff had elected to receive post-surgical care at home instead of at a nursing home after she broke her hip. The district court entered summary judgment for defendant and plaintiff appealed. The Seventh Circuit affirmed, finding that nothing in the language of the policy entitled plaintiff to a home health care benefit and that an alternative plan of care provision required that any alternative be mutually-agreed on by the insurance company. (SCUDDER, concurring and RIPPLE, concurring in part and dissenting in part)

The Seventh Circuit considered the appeal of an insurance coverage dispute after certifying a question to the Illinois Supreme Court regarding a question of Illinois law about the meaning and scope of the pollution exclusion in standard-form commercial general liability policies. The Illinois Supreme Court held that the pollution exclusion applied under the facts of the case, which the Seventh Circuit noted was dispositive and reversed the district court’s entry of judgment that was inconsistent with that interpretation of the language of the insurance policy. (ST. EVE and KIRSCH, concurring)

In an insurance coverage matter arising out of damage caused by a fire, the insured filed a lawsuit alleging breach of contract and bad-faith denial of the insured’s replacement-cost claim after the parties disputed the cost to replace a building damaged by the fire. The insurer filed for summary judgment, arguing that the insurer failed to comply with its contractual obligation to repair or replace the damaged property as soon as reasonably possible and, as a result, no further payment was due. The district court granted summary judgment and plaintiff appealed. The Seventh Circuit affirmed, finding that the arguments raised on appeal were forfeited because they were raised for the first time on appeal and, even if they were not, the case did not qualify for plain-error review. (BRENNAN and HAMILTON, concurring)

In an insurance coverage case arising out of an underlying wrongful death action, the parties filed a declaratory judgment action to determine which of two insurance policies should pay first for damages in the underlying lawsuit. The district court concluded that the companies had equal payment priority. The Seventh Circuit affirmed, agreeing that the insurance companies had equal payment priority as excess policies and were required to pay the amount proportionate to their respective coverage limits. (EASTERBROOK and ST. EVE, concurring)