Insurance Law

Dist. Ct. did not err in granting defendant-insurance company’s motions for summary judgment and declaratory judgment in plaintiff-insured’s action, alleging that it was entitled to insurance proceeds arising out of defendant’s aircraft insurance policy, where plaintiff’s president and pilot of Cessna airplane covered by said policy died in airplane crash. Relevant exclusion in policy provided that there would be no coverage if pilot did not have current and valid medical certificate from FAA, and defendant could properly deny coverage, since owner did not have said certificate at time of airplane crash. Ct. rejected plaintiff’s contention that Endorsement in policy created exception to instant exclusion, or that exclusion did not apply because of cause of crash, i.e., mechanical failure, did not pertain to any health issue of owner.

Dist. Ct. did not err in granting defendant-plan administrator’s motion to dismiss plaintiffs’ claim for bad-faith denial by defendant-plan administrator of their application for coverage for mental health benefits under employer’s self-insurance medical plan. Record showed that while defendant was hired by employer to approve or deny claims for benefits, defendant had no contractual relationship with plan beneficiaries like plaintiffs. Ct. of Appeals found that plaintiffs could not pursue instant bad-faith claim under Wisconsin law, since plaintiffs had no contractual relationship with defendant. Dist. Ct. could also dismiss plaintiffs’ related claims for statutory interest and punitive damages, where: (1) statutory interest claim required finding that there were “overdue payments”, and plaintiffs could not recover interest for alleged benefits wrongly denied; and (2) plaintiffs could not recover punitive damages, where plaintiffs’ substantive claims had been dismissed.

Dist. Ct. did not err in granting defendant-insured’s motion for summary judgment in plaintiff-insurance company’s action, seeking declaration that it had no obligation to defend defendant in underlying class actions, alleging that defendant violated Illinois Biometric Information Privacy Act (BIPA) by selling rights to class members’ facial images that had been collected and scanned into database by third party. Plaintiff asserted that provision contained in its business-owner’s insurance policy that excluded claims arising out of statutes that prohibited or limited dissemination of material or information precluded coverage for claims in underlying class actions alleging violations of BIPA, and thus it had no duty to defend same. While Ct. of Appeals agreed that underlying lawsuits fell within broad language of exclusion, it also agreed with Dist. Ct. that language in exclusion was ambiguous, where it also appeared to exclude coverage for claims that other provisions of policy covered. As such. Dist. Ct. could properly construe instant ambiguity in favor of defendant-insured so as to require defendant to defend defendant in underlying class actions. Ct. of Appeals also rejected defendant’s proposal to give narrowed construction of exclusion so as to resolve any ambiguity, where language of exclusion would not support said proposed construction.

Dist. Ct. did not err in granting defendant-insurance company’s motion to dismiss plaintiff-insured’s action seeking declaration that defendant’s insurance policy covered $85 million in losses that plaintiff incurred when paying COVID-19-related costs associated with cleaning and sanitizing its medical facilities during pandemic and adapting said facilities to provide testing and screening for COVID-19. Dist. Ct. could properly find that COVID-19 did not cause physical damage or loss to plaintiff’s facilities so as to have said losses come within general coverage provisions of instant all-risk policy. Moreover, said losses were excluded by policy’s contamination exclusion. Also, Dist. Ct. could properly find that certain losses were covered under separate, additional coverage provision that had maximum $1 million benefit for losses stemming from plaintiff’s communicable disease response.