Articles Posted in Insurance Law

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The Supreme Court affirmed the decision of the court of appeals ruling that the allegations in Abbott Laboratories’ complaint against Ixthus Medical Supply, Inc. alleged a potentially covered advertising injury and, as a result, triggered West Bend Mutual Insurance Company’s duty to defend under the commercial general liability policy West Bend issued to Ixthus, holding that the court of appeals properly concluded that West Bend had a duty to defend Ixthus. The circuit court concluded that, although the allegations in Abbott’s complaint fell within the initial grant of coverage, the “knowing violation” exclusion applied, thereby eliminating any duty West Bend had to defend. The court of appeals reversed, concluding that the knowing violation exclusion did not apply. The Supreme Court affirmed, holding (1) the allegations in the complaint fell within the initial grant of coverage; and (2) neither the knowing violation nor the “criminal acts” exclusions applied to remove West Bend’s duty to defend because the complaint alleged at least one potentially covered claim unaffected by either exclusion. View "West Bend Mutual Insurance Co. v. Ixthus Medical Supply, Inc." on Justia Law

Posted in: Insurance Law

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The Supreme Court affirmed in part and reversed in part the decision of the court of appeals affirming the circuit court’s grant of summary judgment to Steadfast Insurance Company giving Steadfast the right to recover from Greenwich Insurance Company, holding, among other things, that Greenwich breached its duty to defend. Steadfast’s right to recover from Greenwich was based on the two insurer’s relationships with Milwaukee Metropolitan Sewerage District (MMSD), which was sued for alleged negligent maintenance and operation of Milwaukee’s sewerage system. After MMSD tendered its defense to the insurers, Steadfast accepted the tender but Greenwich did not. Steadfast then sued Greenwich to recover the defense costs it paid to MMSD. The Supreme Court held (1) both Greenwich and Steadfast were primary and successive insurers in regard to MMSD; (2) Greenwich breached its contractual duty to defend MMSD; (3) Steadfast had a contractual duty to defend MMSD that was not abrogated by Greenwich’s breach of its contractual duty to defend MMSD, and therefore, defense costs are allocated between Steadfast and Greenwich; and (4) Steadfast is entitled to recover attorney fees from Greenwich. View "Steadfast Insurance Co. v. Greenwich Insurance Co." on Justia Law

Posted in: Insurance Law

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In this insurance dispute, the Supreme Court reversed the decision of the court of appeals affirming the circuit court’s interlocutory order that determined that the fire at issue constituted multiple occurrences instead of a single occurrence, holding that the fire constituted a single occurrence pursuant to the commercial general liability (CGL) policy. The court of appeals concluded (1) under the CGL policy, there was an occurrence each time the fire spread to a new piece of real property, and (2) therefore, the $2 million aggregate limit applied rather than the $500,000 per-occurrence limit for property damage due to fire arising from logging and lumbering operations. Both the circuit court and court of appeals purported to apply the “cause theory.” The Supreme Court reversed, holding that the court of appeals’ approach was unpersuasive and had unreasonable consequences and that the $500,000 per-occurrence limit for property damage applied. View "SECURA Insurance v. Lyme St. Croix Forest Company, LLC" on Justia Law

Posted in: Insurance Law

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The business-owners liability insurance policy in this case did not provide coverage for a negligent supervision claim arising out of an alleged employee’s intentional act of physically punching a customer in the face. The circuit court granted summary judgment in favor of the Insurer, concluding that there was no coverage under the policy for either the employee’s intentional act or the negligent supervision claim against the employer arising out of the employee’s intentional act. The court of appeals reversed. The Supreme Court reversed, holding that where the negligent supervision claim pled rested solely on the employee’s intentional and unlawful act without any separate bais for a negligence claim against the employer, no coverage existed. View "Talley v. Mustafa" on Justia Law

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The business-owners liability insurance policy in this case did not provide coverage for a negligent supervision claim arising out of an alleged employee’s intentional act of physically punching a customer in the face. The circuit court granted summary judgment in favor of the Insurer, concluding that there was no coverage under the policy for either the employee’s intentional act or the negligent supervision claim against the employer arising out of the employee’s intentional act. The court of appeals reversed. The Supreme Court reversed, holding that where the negligent supervision claim pled rested solely on the employee’s intentional and unlawful act without any separate bais for a negligence claim against the employer, no coverage existed. View "Talley v. Mustafa" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals affirming the circuit court’s grant of summary judgment to Plaintiffs’ underinsured motorist (UIM) carrier, Allstate Property and Casualty Co. (Allstate), holding that the court of appeals erred in concluding that Plaintiffs failed to provide Allstate with timely notice of the UIM claim and that they failed to rebut the presumption that Allstate was prejudiced by the untimely notice. Specifically at issue in this case was whether the court of appeals misinterpreted the UIM policy’s “proof of claim” provision as a “notice of accident” provision. The Supreme Court held (1) the operative event triggering the notice requirement in Plaintiffs’ UIM is the tender of the tortfeasor’s underlying policy limit, not the accident itself; (2) Wis. Stat. 631.81(1) does not apply to the UIM policy provision at issue; and (3) therefore, Plaintiffs provided Allstate with timely proof of their UIM claim as required by the policy. The Court remanded the case to the circuit court for further proceedings. View "Shugarts v. Mohr" on Justia Law

Posted in: Insurance Law

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Plaintiff, the insured of Dairyland, sustained bodily injury and property damage while operating his motorcycle. After paying plaintiff all proceeds to which he was entitled under the Dairyland policy, and after plaintiff had settled with the tortfeasor's insurer, Dairyland sought and obtained subrogation from the tortfeasor's insurer for the property damages that it previously paid to plaintiff. Plaintiff then demanded Dairyland pay him the funds it obtained on its subrogation claim. When Dairyland refused, plaintiff filed suit for breach of contract and bad faith. The court concluded that the made whole doctrine does not apply to preclude Dairyland from retaining the funds it received from its subrogation claim because the equities favor Dairyland: (1) Dairyland fully paid plaintiff all he bargained for under his Dairyland policy, which included the policy's limits for bodily injury and 100% of plaintiff's property damage; (2) plaintiff had priority in settling with the tortfeasor's insurer; and (3) if Dairyland had not proceeded on its subrogation claim, plaintiff would have had no access to additional funds from the tortfeasor's insurer. The court also concluded that Dairyland did not act in bad faith. Accordingly, the court reversed the court of appeals decision in all respects. View "Dufour v. Progressive Classic Ins. Co." on Justia Law

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Water Well, which was insured under a commercial general liability primary policy (CGL policy) with Consolidated Insurance Company, was sued by Argonaut Insurance Company. The complaint alleged that Water Well and its employees were negligent in the installation and reinstallation of a water pump and breached their contractual obligations. Water Well tendered its defense to its insurer. Consolidated denied Water Well’s defense tender, stating that it had no duty to defend or indemnify Water Well under the CGL policy. After settling with Argonaut, Water Well filed suit against Consolidated, alleging that Consolidated breached its duty to defend Water Well in the action initiated by Argonaut. The circuit court granted summary judgment in favor of Consolidated, concluding that “there is no covered claim and therefore there was no duty to defend.” Applying the four-corners rule, the court of appeals affirmed. The Supreme Court affirmed, holding (1) Water Well’s request to craft a limited exception to the four-corners rule is rejected; and (2) Consolidated did not breach its duty to defend Water Well because certain exclusions in the CGL policy eliminated coverage. View "Water Well Solutions Serv. Group Inc. v. Consolidated Ins. Co." on Justia Law

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From 2007 to 2009, a number of lawsuits involving Plaintiff, the trustee of two trusts, were filed throughout the country. Plaintiff asked his professional liability insurer, Houston Casualty Company, to defend him in the lawsuits. Houston Casualty determined that it had no obligation to either defend or indemnify Plaintiff in connection with any of the lawsuits. Plaintiff filed a complaint against Houston Casualty alleging, inter alia, breach of the duty to defend and bad faith. The circuit court granted summary judgment in favor of Houston Casualty, concluding that the insurer had not breached its duty to defend Plaintiff. The court of appeals affirmed. The Supreme Court affirmed, holding that the complaints and counterclaim against Plaintiff did not allege facts which, if proven, would constitute claims covered under the policy Houston Casualty issued to Plaintiff, and therefore, Houston Casualty did not breach its duty when it refused to defend Plaintiff in the lawsuits at issue. View "Marks v. Houston Cas. Co." on Justia Law

Posted in: Insurance Law

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The complex insurance coverage dispute arose out of a 2007 fire that destroyed portions of a home that was still under construction. Fontana Builders, Inc., the construction contractor, and James and Suzy Accola, the occupants/presumptive purchasers, had separate insurance policies. The Accolas settled with Chubb Insurance Co., the insurer that provided their homeowner’s policy. Assurance Company of America, which had issued a builder’s risk policy to Fontana, denied all coverage for the fire. Fontana commenced this action against Assurance alleging breach of the insurance contract and bad faith failure to pay under the policy. Fontana’s lender, AnchorBank, FSB, eventually intervened. After a retrial, the jury found that the Assurance policy did not provide coverage for Fontana’s fire loss, concluding that the Chubb policy “applied” to the underlying facts so as to terminate Fontana’s builder’s risk coverage. The court of appeals affirmed. The Supreme Court reversed, holding that that the homeowner’s policy issued by Chubb to the Accolas did not apply so as to terminate Fontana’s builder’s risk policy from Assurance. Remanded. View "Fontana Builders, Inc. v. Assurance Co. of Am." on Justia Law