Insurance Law

Court properly determined, on summary judgment, that home insurer had no duty to defend or indemnify homeowners in underlying suit filed by their neighbor, seeking to relocate a driveway easement that crosses over a portion of her property. Neighbor alleged that location and size of driveway easement contributed to poor storm water drainage on her property, which caused frequent and severe flooding of her home. Recurring flood damage alleged was a natural and ordinary consequence of Defendants' conduct in repeatedly refusing to allow neighbor to relocate driveway easement and was reasonably expected by Defendants, and thus was not the product of an accident, and thus not result of an "occurrence".  (ROCHFORD and HOFFMAN, concurring.)

(Modified upon denial of rehearing 1/28/16.) After evening out with friends, 21-year-old died of methadone intoxication in bedroom of one Defendant, who lived at his parents’ home. Father of decedent filed wrongful death suit against Defendant and his parents.  Underlying complaint contains allegations within, or potentially within, the coverage of both homeowners’ and umbrella policies. Thus, insurer has duty to defend. Complaint alleges that Defendant son failed to request emergency medical assistance for decedent within a reasonable period of time; and discovering she ingested methadone or other illegal substances in the Defendants’ home; and that Defendant son refused to allow decedent’s 2 friends to check on her or render aid to her. Presence of genuine issue of material fact precludes summary judgment.  Question of negligence can be resolved only after a full hearing on facts and circumstances. (NEVILLE and SIMON, concurring.)

Safeway insureds were in auto accident with another driver who was driving a rental car; that driver declined the rental car company's supplemental liability insurance, and relied on his own insurance which had $20,000  and $40,000 limits. Safeway insureds recovered $40,000 policy limits from other drivers insurer, and then claimed underinsured motorist coverage and demanded arbitration of their claims under Safeway policy. Safeway's policy is triggered; its underinsured motorist provision applies before rental car's liability under financial responsibility statute. Thus, Safeway is obligated to comply with its policy's process to handle underinsured motorist claims, which is by arbitration, if insured and insurer do not reach agreement. (DELORT and CUNNINGHAM, concurring.)

Plaintiff was injured in motor vehicle accident while working for his employer.  Plaintiff received workers' compensation benefits through his employer's worker's compensation carrier. Plaintiff also reached settlement with insurer for third-party tortfeasor (other driver), for full policy limit, and Plaintiff paid worker's compensation insurer from  that settlement the amount required to satisfy workers' compensation lien. Plaintiff filed UIM claim with his employer's auto insurance carrier. Employer's auto policy does not treat workers’ compensation as an element of loss under a “Liability Coverage Form.” Plaintiff should be allowed to present all elements of loss in UIM arbitration, including those elements paid through workers’ compensation. However, those elements will be subject to the set off for the amount Plaintiff actually recovered on his workers’ compensation claim and on his claim against other driver. (HUTCHINSON and ZENOFF, concurring.)

Declaratory judgment action involving dispute over insurance coverage for fax-blast case, alleging property damage arising out of violation of Telephone Consumer Protection Act (TCPA), as faxes were sent without required opt-out language. Policy exclusion for claims arising out of TCPA or similar statutes applies to allegations in the complaint in the underlying litigation, and thus insurer's duty to defend its insured restaurant was never triggered. The term "arising from" in policy is not ambiguous and thus need not be interpreted in favor of coverage. (JORGENSEN and BIRKETT, concurring.)

Plaintiff companies which marketed and sold high-caffeine malt beverage, "Four Loko", filed declaratory judgment action against their commercial liability insurer, seeking declaration of duty to defend them in lawsuits filed by persons injured by drivers who drove recklessly and behaved erratically after consuming these drinks. Court properly found that insurer had no duty to defend, as each suit alleged injury caused by intoxicated persons, and thus suits fell squarely within liquor liability policy exclusion.(GORDON and PALMER, concurring.)

Twenty-one plaintiffs filed suit against livestock producer, seeking to have proposed hog factory facility declared a nuisance before it became operational. Plaintiffs alleged that facility would be a source of disagreeable noises, odors, dust particles, surface water contaminations, and loss of property values.Allegations in underlying complaint constituted a claim for damages and set forth the elements necessary to trigger a duty to defend, including injury or damage caused by an "occurrence". Pollution exclusions do not apply to abrogate insurer's duty to defend.(CHAPMAN, concurring; MOORE, dissenting.)

Court erred in granting petition by State Liquidator of insurance company for disallowance of a contested claim by 23 individual governmental employees who obtained a judgment against construction company in negligence action for injury from exposure to toxic mold in buildings constructed in Texas. Court erroneously construed definitions and language of policy Exclusion broadly to include mold-related claims when any policy exclusion, regardless of its label, that excludes coverage must be narrowly construed. Policy's Exclusion did not include the words "mold" or "fungi" although insurer could have easily inserted the words in the Exclusion to avoid different interpretations. (NEVILLE and HYMAN, concurring.)