Articles Posted in Insurance Law

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laintiff was a car repair business in Rutland, Vermont. Defendant insured the vehicles of dozens of plaintiff’s customers (“the insureds”) who hired plaintiff to repair damage to their vehicles between 2009 and 2014. Over seventy insurance claims, which all arose under identical insurance policies, were combined in this breach-of- contract case. In each instance, defendant paid less than what plaintiff had billed to complete the repair, a "short pay." Plaintiff submitted to defendant a final invoice and a “supplemental report” itemizing each of the repairs performed. For each claim involved in this case, although defendant did not pay a portion of what the repair shop believed was owed under the policy, defendant did pay significant sums. Defendant initially paid what its claims adjuster believed to be covered by the insurance policy after having conducted a visual inspection of the damage. Defendant generally would make at least one additional payment based on information provided by plaintiff after plaintiff disassembled the damaged vehicle in preparation to repair it, a "supplemental payment." After an adjuster’s initial estimate was paid to plaintiff and any supplemental payments were made, there was still an outstanding balance for the repair bill on each claim involved in this case. Plaintiff believed these were covered by the insurance policy yet had been unpaid by the insurer. However, defendant maintained that these unpaid portions of the repair bill between plaintiff and each insured were not covered under the policy. A jury ultimately awarded plaintiff $41,737.89 in damages. After the trial, the court concluded that plaintiff could not show that his assignors were damaged by a breach of contract by defendant and granted defendant's motion for judgment as a matter of law. The Vermont Supreme Court reversed this determination, vacated the judgment that was entered in favor of defendant, and remanded with direction to the superior court to reinstate the jury’s verdict and its award of damages. View "Parker's Classic Auto Works, Ltd. v. Nationwide Mutual Insurance Company" on Justia Law

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Appellant Rainforest Chocolate, LLC appealed the grant of summary judgment motion in favor of appellee Sentinel Insurance Company, Ltd. Rainforest was insured under a business-owner policy offered by Sentinel. In May 2016, Rainforest’s employee received an email purporting to be from his manager. The email directed the employee to transfer $19,875 to a specified outside bank account through an electronic-funds transfer. Unbeknownst to the employee, an unknown individual had gained control of the manager’s email account and sent the email. The employee electronically transferred the money. Shortly thereafter when Rainforest learned that the manager had not sent the email, it contacted its bank, which froze its account and limited the loss to $10,261.36. Rainforest reported the loss to Sentinel. In a series of letters exchanged concerning coverage for the loss, Rainforest claimed the loss should be covered under provisions of the policy covering losses due to Forgery, for Forged or Altered Instruments, and for losses resulting from Computer Fraud. Sentinel denied coverage. In a continuing attempt to obtain coverage for the loss, Rainforest also claimed coverage under a provision of the policy for the loss of Money or Securities by theft. Sentinel again denied coverage, primarily relying on an exclusion for physical loss or physical damage caused by or resulting from False Pretense that concerned “voluntary parting” of the property—the False Pretense Exclusion. Finding certain terms in the policy at issue were ambiguous, the Vermont Supreme Court reversed summary judgment and remanded for the trial court to consider in the first instance whether other provisions in the policy could provide coverage for Rainforest's loss. View "Rainforest Chocolate, LLC v. Sentinel Insurance Company, Ltd." on Justia Law

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In 2014, Michael Messier and Kay Bushman were involved in an auto accident. Both were the drivers of their respective vehicles and were then-alleged to be Vermont residents. In 2017, shortly before the statute of limitations was to expire, Messier filed suit against Bushman and her auto insurer, Travelers, for damages he claimed to have sustained in the accident. The claim against Bushman sounded in negligence, the claim against Travelers asserted breach of the Vermont Consumer Protection Act (CPA). The trial court granted a motion for judgment on the pleadings filed by Bushman and a motion to dismiss filed by Travelers. Messier appeals both decisions. The Vermont Supreme Court determined the motion filed by Bushman was one that challenged the sufficiency of service of process: the trial court, without holding an evidentiary hearing, found that Messier did not send a copy of the return of service on the Commissioner to Bushman as required by 12 V.S.A. 892(a). The Supreme Court reversed as to Bushman's motion because the issues concerning what was included in the mailing and whether the affidavit contained sufficient specificity to comply with section 892(a) were contested and needed to be resolved through factual determination by the trial court. Regarding Messier's claim against Travelers, the Supreme Court found his claim was brought under the CPA, but references unfair claims settlement practices which were part of Vermont Insurance Trade Practices Acts (ITPA). The Court found Messier did not purchase anything from Travelers- his only connection was that Bushman was insured by Travelers. Thus, Messier was not a consumer with respect to Bushman's Travelers insurance policy, and therefore had to CPA claim against them. The case was remanded for further proceedings with respect to the claim against Bushman; dismissal of the claim against Travelers was affirmed. View "Messier v. Bushman" on Justia Law

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In December 2009, defendant Randell Blake was convicted of filing a false insurance claim in connection with a 2007 fire at his house. Subsequent to his criminal convictions, the trial court ordered defendant to pay restitution to his insurer, Safeco Insurance Company of America (Safeco). Defendant appealed the trial court’s restitution order, arguing the order should be vacated because a general release, signed by Safeco in a related civil case, relieved him of any duty to pay it restitution. He also argued the order should be vacated because the trial court failed to make findings regarding his ability to pay restitution. The Vermont Supreme Court found that restitution and civil damages originated within separate systems, were not substitutes for each other; a civil court’s award of damages to a plaintiff did not discharge the criminal court’s duty or authority to consider and order restitution. Therefore, a civil settlement or release cannot entirely preclude a criminal restitution order because: (1) the statutory obligation to impose restitution when necessary leaves no room for private parties to preclude a court from ordering it; (2) a release does not address the underlying purposes of restitution; and (3) the victim has no standing and is not a party in the restitution proceeding, and may seek a separate remedy in an action for civil damages. Here, defendant initiated a civil suit against Safeco for payment he claimed it owed him relating to the house fire and Safeco counterclaimed. The exchange of releases extinguished these competing civil claims. The release Safeco signed did not, however, preclude an order of restitution in the related criminal proceeding. The Supreme Court therefore affirmed the trial court’s determination on this matter; but reversed because the trial court by not considering his ability to pay. View "Vermont v. Blake" on Justia Law

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Wilbur Shriner, the holder of a homeowner’s insurance policy from Amica Mutual Insurance Company (Amica), appealed the trial court’s grant of summary judgment to Amica and denial of his cross-motion for summary judgment. Shriner owned a glassblowing studio in Burlington until he sold the property in December 2007 and moved the glassblowing equipment to his home in Charlotte. He and his friend set up the equipment in the garage at Shriner’s property and began making glass in late 2008 or early 2009. From 2009 to 2012, Shriner and his friend “sometimes made glass for a week or two, and then would shut down for weeks due to lack of money.” During that three-year period, they made glassware approximately one time per week on average, and glassmaking was never more than an occasional or part-time activity for him. Throughout those three years, Shriner earned income from glassblowing, as well as from the redevelopment and rental of investment properties and from an organic honey and vegetable operation. In early 2012, the furnace exhaust system in a piece of glassmaking equipment malfunctioned and caused a fire that destroyed the garage and all of the property and equipment inside it. At the time, Shriner’s home was covered by his homeowner’s policy with Amica, which covered losses from fire and provided replacement coverage for buildings and personal property. The policy carried a $25,000 deductible and contained an exclusion from coverage for structures from which a business was conducted. Shriner submitted a personal property inventory for the property destroyed in the fire, with a replacement cost totaling $88,354.91. Amica accepted Shriner’s fire-loss claim and determined the replacement cost of the garage to be $42,422.97. Amica applied the policy’s $25,000 deductible and made an actual cash-value payment of $1460.53 as an advance partial payment to Shriner for the garage. Amica then changed positions and, asserting that Shriner’s glassblowing activities constituted a “business” for the purposes of the policy’s exclusion, refused to make any further payments to replace the garage. Amica paid Shriner $11,613 for nonbusiness property that was destroyed in the garage but capped its payment for other property in the inventory at $2500, which was the maximum reimbursement permitted under the policy for “business” personal property. Shriner brought suit to recover the full amount of his claim, and the court granted summary judgment to Amica. This appeal followed. Finding no reversible error, the Vermont Supreme Court affirmed. View "Shriner v. Amica Mutual Ins. Co." on Justia Law

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This case stems from the rate filing submitted to the Green Mountain Care Board (GMCB) by MVP Health Insurance Company (MVP) with respect to the Agri-Services health insurance plan. The State of Vermont, GMCB found that the 2015 Agri-Services rate filing would not promote access to quality health care and denied it for that reason. MVP appealed, arguing: (1) that GMCB’s disapproval was an arbitrary use of discretion based on vague standards that unconstitutionally delegated authority to GMCB; (2) that GMCB’s decision was not supported by the record; and (3) that GMCB’s statutory interpretation of its authority was compelling error. After review, the Supreme Court held that 8 V.S.A. 4062 was constitutional, but found that GMCB’s conclusions were not supported by specific findings on the statutory criteria required for approval of health insurance rates and, accordingly, reversed and remanded for new findings. View "In re MVP Health Insurance Company" on Justia Law

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Defendant Dylan Stinson appealed a judgment finding him liable to plaintiffs Kevin and Linda Flanagan for damage to their vacation home from a fire started in an outdoor fireplace on their deck by a group of teenagers who were there without their permission. Stinson contended that: (1) there was insufficient evidence to find him liable for the damage under a concerted-action theory; (2) it was improper for the trial court to admit and rely on evidence of the actual cash value of the lost personal property; and (3) the pre and postjudgment interest rate awarded by the trial court was unconstitutional under the U.S. and Vermont Constitutions. Finding no reversible error, the Supreme Court affirmed. View "Concord General Mutual Insurance Company v. Gritman" on Justia Law

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Plaintiffs Neil and Patricia Whitney asserted that damage to their home and personal property resulting from the spraying within their home of a pesticide known as chlorpyrifos was covered by their homeowners policy. Defendant Vermont Mutual Insurance Company argued that the pollution exclusion in the policy barred the Whitneys’ claim. The superior court granted the Whitneys’ summary judgment motion on the question of coverage, concluding that the exclusion in question was ambiguous, and construing the ambiguous provision in favor of coverage. After review of the policy at issue, the Supreme Court concluded that the property damage to the Whitneys’ home was an excluded risk in the policy and reversed. View "Whitney v. Vermont Mutual Insurance Company" on Justia Law

Posted in: Insurance Law

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Equinox on the Battenkill Management Association, Inc., appealed a superior court's grant of summary-judgment denying insurance coverage. The appeal arose from a declaratory judgment action against management association’s insurer, Philadelphia Indemnity Insurance Company, Inc., to determine coverage under a commercial general liability policy for damage to cantilevered balconies on condominium units it managed in Manchester. The issue this case presented for the Vermont Supreme Court's review centered on whether "Gage v. Union Mutual Fire Insurance Co,." (169 A.2d 29 (1961)) was still good law with regards to the meaning of "collapse" and whether "Gage" controlled the result here. After review, the Court concluded that the policy language in this dispute was broader than the language in Gage and that therefore Gage did not control. The Court reversed the trial court’s summary judgment and remanded the case for that court to resolve disputed questions of fact and interpret the applicable policy language. View "Equinox on the Battenkill Management Assn., Inc. v. Philadelphia Indemnity Ins. Co." on Justia Law

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Insurer Cincinnati Specialty Underwriters Insurance Company appealed a trial court's order granting summary judgment to defendants Energy Wise, Inc. and Michael and Shirley Uhler in this declaratory-judgment action. Energy Wise was a Vermont corporation that specialized in insulating buildings and homes. It purchased a commercial general liability (CGL) policy from insurer, effective March 1, 2010 to March 1, 2011. In late 2010, Energy Wise installed spray-foam insulation at the Shrewsbury Mountain School. A school employee, Shirley Uhler, and her husband later filed suit against Energy Wise. Ms. Uhler asserted that she was "exposed to and encountered airborne chemicals and airborne residues" from the spray-foam insulation and suffered bodily injury as a result. The Uhlers raised claims of negligence, res ipsa loquitur, and loss of consortium. Energy Wise requested coverage under its CGL policy, and insurer agreed to defend Energy Wise under a bilateral reservation of rights. In September 2012, insurer filed a complaint for declaratory judgment, asserting that its policy did not cover the claims at issue. Insurer cited the "Total Pollution Exclusion Endorsement" in its policy, which excluded coverage for "[b]odily injury . . . [that] would not have occurred in whole or in part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants' at any time." Insurer argued that the court should have granted summary judgment in its favor because the "total pollution exclusion" in its policy plainly and unambiguously precludes coverage in this case. After review, the Supreme Court agreed with insurer, and therefore reversed the trial court's decision and remanded with instructions to enter judgment in insurer's favor. View "Cincinnati Specialty Underwriters Ins. Co. v. Energy Wise Homes, Inc." on Justia Law