Articles Posted in Commercial Policies

Here is a United States District Court, Southern Division opinion.  It is styled, Lauger Companies, Inc. v. Mid-Continent Casualty Company and is a commercial case opinion.

A company sold defective concrete to a builder.  The builder seeks to recover damages caused by the concrete’s failure in the building from the seller’s insurer.  The builder will recover by way of summary judgment.

M.W. Rentals & Services, Inc., hired Lauger Companies to build a warehouse in Victoria, Texas, to store heavy construction equipment.

A lot of insurance policies written for commercial or business coverage are Lloyd’s insurance companies.  Suing a Lloyd’s company and keeping it out of Federal Court is a little easier than if the company were not a Lloyd’s company.  Though this did not happen in this case, it is explained in an Eastern District, Marshall Division opinion styled, North Dallas Lawn Care and Landscape Inc. et al. v. Hartford Lloyd’s Insurance Company.

Regardless of the parties’ agreement that this case should proceed before the Federal District Court, the court has an independent obligation to determine whether subject-matter jurisdiction exists.  Hartford asserts that this Court has jurisdiction pursuant to 28 U.S.C. Section 1334(b).

Out of concern that jurisdiction may not exist in this case, the Court ordered Hartford to file a declaration of citizenship and the citizenship of its underwriters.

Insurance lawyers will run across situation where the insurance company is a surplus lines insurance company.

Surplus lines insurance is dealt with, in part, it chapter 981 of the Texas Insurance Code.  Specific points about surplus lines carriers are discussed throughout the insurance code.

The May 25, 2017, Insurance Journal ran a story dealing with surplus lines that was recently passed into law by the legislature and signed by Gov. Greg Abbot.  The law takes effect on September 1, 2017.  The title of the story is, Texas ‘Industrial Insureds” Surplus Lines Bill Signed Into Law.

An Arlington insurance attorney will have someone come into their office and show the attorney lawsuit papers that have been filed against them and then will show a copy of an insurance policy that is suppose to defend against the lawsuit. The problem will be that the insurance company is refusing to honor the policy. This is the situation in a recent 5th Circuit opinion. The style of the case is, Castle Point National Insurance Company v. Everado Chuca Lalo, Jr.

Castle Point National Insurance Co. is obligated to defend a trucking company in connection with an accident because there is no evidence the person injured in the incident was an employee and would therefore fall under its policy’s exclusions, says the 5th Circuit Court of Appeals in New Orleans, in reversing a lower court ruling.

New York-based Castle Point had issued a commercial auto liability policy with a $1 million limit to El Paso, Texas, based B.S. Trucking that covered the period Aug. 29, 2009, to Aug. 29, 2010, according to court papers in Thursday’s ruling.

Commercial insurance attorneys in Dallas need to read this opinion from the Northern District, Dallas Division. The case is styled, Meritt Buffalo Events Center, LLC v. Central Mutual Insurance Company, et al.

In this case, the carrier, Central, and the adjuster were sued in State Court and Central and the adjuster removed the case to Federal Court, where this motion to remand was filed by Meritt.

According to Meritt Central initially assigned Massey to investigate and adjust the claim, and later reassigned the claim to Cagle. Meritt alleges that Massey failed to reasonably investigate the claim, incorrectly calculated the loss, and represented that Meritt was covered for business income and extra expenses, but delayed full and prompt payment; Cagle continued adjusting the claim but failed to conduct a reasonable investigation, neglected to follow the Policy and Texas law, and did not pay for the property damage; and, although Meritt’s representatives provided documentation to support the claim, some of which Massey approved, Meritt has been underpaid by more than $900,000, causing Meritt to suffer additional business loss.

Insurance attorneys, when looking at an insurance policy, want to know who is covered under the policy. You have the named insured and then you have those who are assumed to be covered under the policy. What about a situation where a business changes it’s legal status by incorporating or becoming a partnership rather than what it was when the policy originated? The answer may depend on the state you are in.
Justia US Law circulated a story dealing with this issue. It is from a U.S. Tenth Circuit opinion in a opinion styled, Christy v. Travelers Indemnity.
Plaintiff-Appellant Corey Christy purchased a commercial general-liability insurance policy from Travelers in the name of his sole proprietorship, K&D Oilfield Supply. Subsequently, Christy registered his business as a corporation under the name K&D Oilfield Supply, Inc. Christy renewed his CGL Policy annually, but did not notify Travelers that he had incorporated his business. After Christy formed K&D, Inc., he was in an accident and made a claim under the CGL Policy. Travelers denied coverage based on Christy’s failure to inform it of the change in business form, and Christy filed this action. On cross motions for summary judgment, the district court found in favor of Travelers. Because there was a material factual dispute as to whether Christy knew or should have known Travelers would have considered the formation of K&D, Inc. material to its decision to renew the Policy, summary judgment based on Christy’s legal duty to speak was inappropriate. And because the existence of a legal duty governs whether Christy engaged in a material misrepresentation by not informing Travelers he had formed K&D, Inc., the Tenth Circuit held the district court erred in reforming the Policy on that basis at this stage of the proceedings. Accordingly, the Court reversed the district court’s grant of summary judgment and remanded for further proceedings. But because Christy had not met his burden to come forward with evidence in support of his claim for breach of the implied covenant of good faith and fair dealing, the Tenth Circuit affirmed the district court’s grant of summary judgment on that claim.

Reading and understanding policy exclusions is important to an insurance lawyer. This is illustrated in a U.S. District Court, S.D. Texas, Houston Division case. The style of this case is, Scottsdale Indemnity Company v. Rural Trash Service, Inc., et al.

This is a summary judgment that was granted in favor of Scottsdale.

Scottsdale filed a declaratory judgment action seeking a judgment that it has no duty to defend its insured, Rural Trash, in a tort lawsuit. The tort lawsuit was brought by an employee, Joseph Rios, in connection with injuries he suffered on the job.