Insurance Law

Plaintiffs purchased casualty insurance policy from Defendant insurer, to insure their warehouse building and its contents from accidental loss. Water pipes burst and flooded the building when weather was below freezing. Insurer refused to cover the damages. Court properly entered judgment for insurer, finding that policy exclusion applied and that there was no coverage for the building's water damage under the policy. Under plain language of policy exclusion, insurer agreed to cover a loss due to frozen water pipes but only if the insureds maintained proper heating in the building. Court properly found that Plaintiffs failed to make reasonable efforts to maintain heat in the building, and made no effort to remedy the known problem with the building's heating system. (CATES and MOORE, concurring.)

Defendant was injured while unloading grain from a truck owned by his father. He stepped onto the auger when attempting to open the truck's gate to let grain into the auger. Because the auger's protective shield had been removed, his foot was exposed to the turning shaft; his right leg was amputated above the knee as a result of the injury. The "mechanical device" exclusion in the auto policy covering the grain truck is unambiguous and enforceable, and is not against public policy. The auger was a machine or tool designed to move grain from one place to another, and was a device "operated by a machine or tool", and thus the exclusion applied and precluded coverage for the injury. (A. BURKE, GARMAN, KARMEIER, THEIS, and NEVILLE, concurring.)

Plaintiffs sought uninsured motorist coverage from insurer, stemming from an auto accident where Plaintiff's minor son was a passenger in a vehicle being driven by an uninsured motorist. Insurer denied Plaintiffs' claim, claiming that minor was not an insured under his father's policy, as it was a nonowner's policy that did not afford coverage to father's family members. Under family expense statute, the minor child's father was legally obligated to pay the medical expenses of his minor son. Although the injury was to the minor, the submitted claim was for father's own economic loss. As there was some question of fact as to whether minor was included as an insured under father's policy, court erred in granting judgment on the pleadings in favor of insurer. (CATES and WHARTON, concurring.)

Plaintiff made a claim on the all risk insurance policy provided by its insurer. The insurer denied the claim in part based on the policy's "Earth Movement Exclusion", which excluded coverage for losses due to freezing and expansion of soil underground. After both parties rested at end of jury trial, insurer moved for a directed verdict; court reserved ruling on the motion and submitted case to the jury, which returned verdict for Plaintiff. Court erred in granting insurer's motions for directed verdict on the exclusion and motion for Judgment nothwithstanding the verdict, vacating the jury verdict. There was evidence to support the jury's conclusion that there was at least $204,000 in damage to the insulation that occurred prior to any damage that occurred from earth movement and thus was not barred by the exclusion. (HOWSE and BURKE, concurring.)

Plaintiff insurer filed complaint seeking declaration that it did not owe a duty to defend or indemnify Defendants as additional insureds on its policy. Subcontract explicitly required Defendant's insured to obtain insurance in accordance with requirements that it name Defendants as additional insureds and to obtain CGL insurance on a primary and non-contributory basis that covered them. As insured agreed in the subcontract to name Defendants as additional insureds, they are covered by the plain terms of the CGL policy. Thus, court properly granted summary judgment for Defendants. (MIKVA and GRIFFIN, concurring.)

Defendant corporation was sued for assisting Village to conceal the release of contaminated well water to its residents. Defendant tendered defense of the suits to its 2 insurers. Cases settled for $18.3 million. One insurer, General Casualty, denied coverage and sued for a declaration that it had no duty to defend or indemnify Defendant for its intentional conduct. Residents filed counterclaim alleging that insurer breached its contract by denying coverage and acted in bad faith. Court properly granted General Casualty's motion for summary judgment on its complaint and on the counterclaim. Residents' complaints failed to allege facts that trigger coverage and duty to defend. General Casualty was not required to indemnify Defendant for settlement and did not act in bad faith. (GRIFFIN, concurring; WALKER, dissenting.)