Insurance Law

Dist. Ct. erred in granting defendant-insurance company’s motion for summary judgment in action by plaintiff-decedent’s estate seeking to recover proceeds of accidental death policy issued by defendant under circumstances where: (1) decedent tore his left Achilles tendon playing basketball; (2) on day before scheduled surgery, plaintiff displayed symptoms of deep vein thrombosis (blood clot) in his injured leg; and (3) shortly after his surgery, plaintiff died when blood clot from injured leg became lodged in his lung. While defendant argued that decedent was not entitled to proceeds of policy since instant pulmonary embolism was not consequence of injury, but rather was consequence of surgery, Ct. of Appeals found that plaintiff was entitled to judgment since defendant had failed to make any plausible showing that surgery, rather than accident that necessitated surgery, caused decedent’s death.

Dist. Ct. did not err in denying defendant-excess insurance company’s motion to include it in pending arbitration between plaintiff-insurance company and third-party insurance company regarding coverage dispute for machinery and equipment that was destroyed in fire of insured’s building. Although Joint Loss Agreement (JLA) containing arbitration provision that was included in plaintiff’s policy was also incorporated in defendant’s policy, terms of JLA required that defendant receive request for payment of disputed claim by insured and payment of disputed claim by defendant to trigger any agreement to arbitrate disputed claim. As such, while plaintiff and third-party insurance company satisfied said provisions of JLA to arbitrate disputed claim regarding which insurance company should pay disputed claim, said agreement to arbitrate did not include defendant.

Dist. Ct. did not err in dismissing plaintiff’s action seeking reimbursement for $500,000 deductible that it paid for workers’ compensation benefits arising out of injuries that four of defendants’ workers sustained on plaintiff’s construction project. While plaintiff’s workers’ compensation insurer may have viable cause of action to split cost of workers’ compensation benefits with one defendant‘s insurer, plaintiff could not seek compensation for deal it made with its insurer to pay instant $500,000 deductible on its own insurance policy. Moreover, Ct. rejected plaintiff’s claim that one defendant, which had separate workers’ compensation insurance policy, was unjustly enriched by not having to pay anything for said workers’ compensation benefits, where Ct. found that said defendant was not obligated to purchase policy that would get plaintiff out of its obligation to pay instant deductible.

Dist. Ct. did not err in granting plaintiff’s (purchaser of life insurance policy) motion for summary judgment in action seeking declaration that plaintiff was entitled to proceeds of said policy, even though plaintiff, which had purchased policy as part of investment vehicle, did not have insurable interest in insured who had died seven years after policy had been issued. Under Wisc. law, no policy is invalid merely because policyholder had no insurable interest in insured, and defendant-insurance company could pay proceeds to someone other than policy owner, who had equitable claim to said proceeds. However, plaintiff was entitled to said proceeds since no one who was equitably entitled to said proceeds claimed entitlement to said proceeds. Ct. rejected defendant’s argument that its refusal to pay death benefits was authorized by Wisc. statute that voided all gambling contracts.

Dist. Ct. erred in entering judgment on pleadings in favor of defendant in plaintiff-insurance company’s action seeking declaration that it owed no duty to defend defendant in underlying action alleging that defendant and others persuaded credit union to fund loans by overstating value of certain life insurance policies that would serve as collateral for said loans. Dispute between instant parties was whether defendant was independent contractor to insured, and Ct. agreed with plaintiff that Dist. Ct. could not enter judgment on pleadings for defendant, because plaintiff was entitled to conduct discovery and offer evidence regarding true "non-independent contractor" nature of defendant’s relationship to insured prior to any judgment being entered in case. Ct. rejected defendant’s claim that in all duty-to-defend disputes Dist. Ct. was limited to review of allegations in underlying complaint, and Ct. further noted that defendant’s argument would be correct if plaintiff had attempted to deny coverage without having sought instant declaratory judgment or having defended defendant in underlying action under reservation of rights.