Insurance Law

Dist. Ct. did not err in dismissing for lack of standing plaintiffs’ breach of contract and other related actions alleging that defendant-insurance company’s failure to make timely and adequate payments required by insurance policy issued to insured arising out of property damages incurred to insured’s plant caused plaintiffs, who either did business with insured or who operated insured, to incur financial losses stemming from loss of business with insured. Plaintiffs lacked standing to pursue instant lawsuit since it essentially sought damages based on defendant’s alleged failure to fulfill duties owed to insured rather than failure to fulfill alleged duties owed to plaintiffs, and thus plaintiffs were not real parties in interest to bring instant lawsuit. Moreover, fact that certain plaintiffs were named as additional insureds in policy did not otherwise confer standing to bring instant lawsuit where plaintiffs were not alleging any failure of defendant to fulfill obligations owed to them under policy.

Dist. Ct. erred in granting defendant-title insurance company's motion for summary judgment in action by plaintiff-insured alleging that defendant acted in bad faith and breached it duties to defend and indemnify plaintiff in underlying counterclaim by third-party alleging that third-party's mechanic's lien had priority over plaintiff's mortgage in plaintiff's action seeking to enforce mortgage. Duty to defend arose where plaintiff had purchased endorsement in policy that required defendant to defend against any enforcement of mechanic's lien claim where said claim alleged priority or sharing of parity with plaintiff's mortgage, and where defendant had otherwise acknowledged during course of proceedings that third-party's counterclaim was attempt to seek declaration that mechanic's lien was superior to plaintiff's mortgage. Fact that third-party's counterclaim lacked merit under Indiana law did not excuse defendant from assuming defense of counterclaim. Moreover, while policy contained exclusion for claims "created, suffered or assumed" by plaintiff, said exclusion did not apply since defendant did not argue that third-party's lien resulted from intentional misconduct on part of plaintiff.

Dist. Ct. did not err in finding that three insurers of general contractor were responsible for paying $2.9 million settlement of claim brought by injured worker of subcontractor. Ct. noted that cross-liability exclusion contained in different umbrella policy, which excluded coverage for claims brought by any insured against another insured, precluded coverage where injured worker suffered bodily injuries, and where injured worker and general contractor were insureds under umbrella policy. Ct. rejected insurers’ argument that instant exclusion impermissibly made policy illusory by purporting to grant coverage for subcontractor’s indemnity obligations to general contractor, but then denying such coverage under language of exclusion.

Dist. Ct. did not err in granting defendant-insurance company's motion for summary judgment in action by plaintiff-insured seeking declaration that commercial general liability policy issued by defendant required defendant to represent plaintiff in underlying lawsuit alleging claims of patent infringement, slander of title as to ownership of said patents and unfair competition. Instant policy contained exclusion that prohibited coverage for disparagement of property, and underlying lawsuit alleged only disparagement of property claim, as opposed to implicit claim of defamation of character that would have been covered under policy.