Insurance Law

The plaintiff filed a declaratory judgment complaint against its insurer, seeking a declaration that its insurance policy covered economic losses from the Covid-19 pandemic. The trial court granted defendant’s motion to dismiss and plaintiff appealed. The appellate court affirmed, explaining that multiple state and federal courts previously have found that the Covid-19 pandemic did not cause physical loss or damage to property under the same or similar language to the policy in this case and that there were no facts that supported deviation from that precedent. (C.A. WALKER and GAMRATH, concurring)

Plaintiff, an insurance company in the status of a subrogee, filed a lawsuit against the defendant, a subcontractor on a construction project, for breach of contract alleging that the defendant’s designs caused building damage that resulted in the original insurance claim. The circuit court granted summary judgment to the defendant but the appellate court affirmed, finding that plaintiff could act as a subrogee even though its claimed status as subrogee was based on a payment made to a third party. The supreme court affirmed, finding that nothing about the facts precluded the plaintiff’s subrogation action where there was an insured loss compensated by the plaintiff insurance company. (THEIS, NEVILLE, HOLDER WHITE, CUNNINGHAM, ROCHFORD, and O’BRIEN, concurring)

In an insurance coverage matter, the defendant insurance company appealed from a trial court order granting summary judgment in favor of the plaintiff and finding that the defendant had a duty to defend the plaintiff in a class action lawsuit filed by the plaintiff’s employees that alleged violations of the Biometric Information Privacy Act. On appeal, defendant argued that it had no duty to defend because the allegations of the complaint did not potentially fall within the coverage of the insurance policy at issue and that the plaintiff did not timely report the lawsuit. The appellate court reversed and remanded, finding that there was no duty to defend because the data breach section of the policy relied on by the plaintiffs only applied to allegations that an unauthorized third party accessed individuals’ personal information. The appellate court also found that the policy specifically excluded coverage of claims like the ones contained in the plaintiff’s complaint. (D.B. WALKER, concurring and REYES, dissenting)

In a subrogation matter, the plaintiff appealed from the circuit court’s grant of the defendant’s motion to dismiss, arguing that the trial court erred by interpreting the language of a lease to limit a tenant’s liability for negligent conduct that resulted in smoke damage to a unit rented by the tenant as well as other units in a multi-unit building. The appellate court affirmed, finding that the trial court properly limited the subrogee’s recoverable damages when it found that the lease showed that the parties did not intend the tenant to be liable for damages outside of a single unit. (ODEN JOHNSON and HYMAN, concurring)

In an insurance coverage matter, the plaintiff insurance company sought declaratory relief regarding its duty to defend and indemnify its insured, a towing company, in a matter arising out of a physical altercation between one of the insured’s employees and a customer. The trial court entered summary judgment in favor of the insured on both questions and plaintiff appealed. The appellate court affirmed, finding that the trial court did not err in finding that plaintiff had a duty to defend and rejecting its arguments that the incident giving rise to the claim did not fall under the definition of “garage operations,” finding instead that the trial court did not err when it concluded that the allegations of negligent hiring fell within the policy definition. The appellate court also rejected the insurance company’s argument that the “expected or intended injury” policy exclusion applied or that the insured failed to give reasonable notice of the claim. The appellate court likewise found no error in the trial court’s determination that the insurance company had a duty to indemnify. Finally, the appellate court noted that plaintiff’s brief contained multiple examples of misstated facts and that this, along with an argument regarding the presumed accent of a witness, undermined the plaintiff’s credibility with the court and were contrary to expectations of professionalism. (D.B. WALKER and R. VAN TINE, concurring)