Insurance Law

Plaintiff, a restaurant tenant in commercial building, and the building owner, purchased insurance policies from Defendant insurer.  The building partially collapsed, and Plaintiff submitted insurance claims for loss of building and for lost business income. Jury found that Defendant had breached insurance contracts, and after bench trial on Section 155 (of Insurance Code) claims, court entered judgment for Plaintiff. Court did not abuse its discretion in finding that Defendant had engaged in unreasonable and vexatious delay in settling the claims and was worthy of sanctions under Section 155. An insurer owes a duty of good faith and fair dealing to provide a damage estimate so insured can proceed knowing scope of coverage.(BIRKETT, concurring; McLAREN, specially concurring.)

When customers have the opportunity to read their insurance policy and can reasonably be expected to understand its terms, the cause of action for negligent failure to procure insurance accrues as soon as the customers receive the policy. (KARMEIER, THOMAS, BURKE, and NEVILLE, concurring.)

Plaintiff's husband, whose body was found 2 months after he was reported missing, was determined by medical examiner to have committed suicide. Plaintiff sued insurer for breach of contract, for failure to pay death benefit on life insurance policy. Court erred in finding for Plaintiff, as policy required "due proof" of death, which was never provided. "Due proof" requires more than mere notice of a subject's death. That insurer obtained husband's death certificate on its own, after Plaintiff filed suit, does not obviate her responsibility under the policy before suit. Court properly denied Plaintiff's motion to amend complaint to reinstate a count of "bad faith" as untimely, filed less than 3 months before trial. (PUCINSKI and WALKER, concurring.)

Pharmacy sued insurer, alleging that insurer breached insurance policy by denying its claim; insurer filed counterclaim seeking declaratory judgment that claim barred by policy exclusions. Claim involved water damage to insured's above-ground premises, caused by AT&T and its subcontractor doing directional boring behind insured's premises. Engineer determined that water from struck line flowed through under concrete slab and came up through the ground to infiltrate insured's premises. Court properly found policy exclusion for water below the surface of the ground applied. Policy expressly contemplates damage here, where water below surface of the ground seeped through the insured's floor and cause damage. (CARTER and O'BRIEN, concurring.)

Insurer filed declaratory judgment action to determine whether it owed coverage to insured for claim arising from accident when insureds vehicle came into contact with a utility pole.Court properly entered judgment in favor of Defendant insured, based on stipulated facts. Insured claimed that policy was void ab initio, because it learned that insured failed to disclose, in his initial application for coverage, that a vehicle registered to his parents was kept at his residence. Court properly found that this was not a material misrepresentation and thus policy was not void. Increase in premium, without any evidence of increased risk to insured, is insufficient to justify rescission of policy under Section 5154 of Insurance Code. (LAMPKIN and ROCHFORD, concurring.)