Insurance Law

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action seeking declaration that it had no duty to defend defendant-insured in three underlying actions alleging that defendant was guilty of either fraudulent or negligent misrepresentation in supplying customers with non-certified lumber that caused damage to other aspects of customers’ building projects. Dist. Ct. could properly find that if defendant had supplied non-certified lumber, then resulting damage in tearing out said lumber and replacing it with certified lumber could not be said to have been caused by “accident,” as required for coverage under relevant policies. Moreover, underlying complaints did not allege “occurrence” or “accident,” where said complaints alleged that defendant had deliberately shipped uncertified lumber and concealed said fact. Fact that defendant believed that supplied lumber would have eventually been certified did not require different result.

Dist. Ct. did not err in entering judgment in favor of defendant-insurance company in plaintiff-insured’s ERISA action alleging that defendant wrongfully terminated her disability benefits under defendant’s disability insurance policy, after defendant claimed that plaintiff could perform duties of her regular occupation as president of company. Although Dist. Ct. agreed with plaintiff that she could not perform duties of her regular occupation, plaintiff failed to present any evidence to meet her burden of establishing that she could not work at other occupations so as to support her claim for disability benefits. Fact that plaintiff had previously obtained Social Security disability benefits did not require different result, where: (1) Social Security disability determination was only one factor for ERISA benefits determination; (2) said determination occurred eight years prior to defendant’s termination of benefits; and (3) instant lack of evidence as to whether plaintiff could perform other occupations precluded finding that Dist. Ct. “clearly erred” in finding that plaintiff had failed in her burden that she could not perform other occupations. Also, Dist. Ct. did not err in denying plaintiff’s motion to reopen discovery, where said motion was filed after Dist. Ct. had rendered instant judgment.

Dist. Ct. did not err in granting defendant-excess insurance company’s motion for summary judgment in plaintiffs-excess insurance companies’ action seeking declaration that insurance policy issued to insured required defendant to contribute additional $2.5 million to cover insured’s losses in two underlying personal injury settlements that plaintiffs had otherwise covered pursuant to their excess insurance policies with insured. Focus of dispute was whether aggregate corroder deductible (ACD) clause diminished amount that defendant owed on any of underlying claims, and whether insured’s payments towards ACD eroded defendant’s layer of required payments. Instant policy language was ambiguous, where policy failed to define whether ACD payments eroded policy limits. However, extrinsic evidence in form of negotiations between insured and both plaintiffs and defendant, as well as conduct of insured, indicated that combined liability of insured (which was self-insured with respect to first $3 million of each claim) and defendant was capped at $5 million per occurrence, such that plaintiffs would begin payments at $5 million level rather than $7 or $7.5 million level as asserted by plaintiffs.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in plaintiff-insured’s action alleging that defendant breached terms of insurance policy by failing to fully pay on plaintiff’s claim for hail damage to 33 roofs of plaintiff’s buildings, as well as processed plaintiff’s claim in bad faith. After exchanging competing appraisals, umpire chosen by both parties issued proposed award of $154,391.77 that represented costs of some repairs for metal damage on 33 buildings, but was less that $1.5 million plaintiff sought to completely replace shingles on all 33 roofs. Instant appraisal provision in policy was unambiguous, and plaintiff failed to identify any unfairness, fraud, collusion or misfeasance committed by umpire that could set aside his proposed award that was ultimately signed by defendant, which made it binding on parties. Moreover, plaintiff’s appraiser found no hail damage to 20 of plaintiff’s buildings. Fact that ultimate award was more than defendant’s initial appraisal did not require finding that defendant acted in bad faith when processing plaintiff’s claim, where there was no evidence that defendant had deceived plaintiff, delayed payment to plaintiff or exercised unfair advantage to pressure plaintiff to settle claim.