Insurance Law

Dist. Ct. did not err in finding that plaintiff-insurance company had no duty to defend four underlying actions alleging negligence and strict liability arising out of individuals sustaining personal injuries after consuming alcoholic beverages manufactured by defendant-insured, where subject policy contained Liquor Liability Exclusion that precluded coverage for bodily injury by reason of causing or contributing to intoxication of any person. Language of exclusion applied to each underlying lawsuit, where each case concerned allegations that injuries were related to drinking defendant’s alcoholic beverage, and Ct. rejected defendant’s claim that its act of adding stimulants to its alcoholic beverage constituted separate act that placed its conduct outside instant exclusion and triggered plaintiff‘s duty to defend underlying actions.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in breach of contract action alleging that defendant’s method of calculating its cost of insurance was contrary to terms of policy, which stated that applicable rate would be “based on the insured’s sex, issue age, policy year and payment class,” where defendant used additional factors not mentioned in policy when calculating rate. Ct. rejected plaintiff’s claim that contract language required that defendant base rate exclusively on sex, issue age, policy year and payment class and agreed with defendant that its rate did not violate terms of policy, where stated factors in policy made up significant portion of rate calculation, and where instant rate did not exceed guaranteed ceiling rate in policy.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action seeking declaration that defendant-insurance company’s policy covered underlying section 1983 action alleging that insureds (County and State’s Attorney) subjected two individuals to false imprisonment and malicious prosecution on murder charges, such that defendant was required to reimburse plaintiff for costs in defending insureds in section 1983 action. Defendant’s policy specifically mentioned County as named insured, and State’s Attorney was covered as elected official of political subdivision located within County as contemplated under policy. Moreover, plaintiff could assert successful unjust enrichment theory against defendant where: (1) plaintiff accepted representation of County and State’s Attorney in section 1983 action under reservation of rights; (2) defendant’s predecessor eventually refused to contribute to defense costs of both County and State’s Attorney even though both County and State’s Attorney were covered under defendant’s policy; (3) plaintiff continued to pay defense costs up until Ct. of Appeals in earlier decision found that plaintiff was not liable for said costs under its policy; and (4) plaintiff’s contributions for said costs would constitute improper benefit to defendant.

Dist. Ct. erred in granting plaintiffs-insurance companies’ motion for summary judgment in actions seeking declaration that they owed no duty to pay defendant-insured on underlying tort action alleging false advertising against defendant concerning defendant’s statements regarding competitor’s less expensive infant formula, where Dist. Ct. believed that defendant violated timely notification clause in both polices by failing to notify both plaintiffs of existence of underlying lawsuit until after conclusion of trial on underlying claim that resulted in $13.5 million jury verdict in competitor’s favor. Under Indiana law, while instant late notice created rebuttable presumption of harm to plaintiffs that would have allowed them to disclaim coverage, plaintiffs could disclaim coverage only if there was prejudice caused by said late notice. Moreover, remand was required to establish whether either plaintiff had incurred any harm where: (1) one plaintiff’s policy limit was only $2 million, such that it was not obvious how said plaintiff could have obtained either jury verdict or settlement that was less than $2 million had it been in control of defense in underlying lawsuit; and (2) although other plaintiff’s excess insurance policy provided coverage up to $25 million, said plaintiff suggested that it would have used same law firm/tactics that defendant had used in underlying lawsuit.

Dist. Ct. erred in granting defendant-insurance company’s motion for summary judgment in action by plaintiff-insured seeking declaration that defendant owed plaintiff for replacement cost insurance payments, even though plaintiff had sold apartment complex that had incurred damages that was subject of policy prior to filing instant lawsuit. While defendant argued that it did not owe any such payments because plaintiff had lost its insurable interest when it sold damaged property to third-party, and where plaintiff had not actually repaired property prior to said sale, Mississippi law does not require insured to continue to hold its interest in damaged property up to filing of lawsuit since insurable interest is measured either at time of policy formation or at time of loss, and plaintiff satisfied both time frames in instant case. Moreover, fact that plaintiff had not repaired property by time it filed lawsuit did not defeat claim for payments since policy language did not require that plaintiff personally make such repairs. On remand, defendant may pursue defense that property was not repaired within reasonable time.