Articles Posted in Insurance Law

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In this insurance coverage dispute, the Supreme Court affirmed the denial of summary judgment in favor of Insurer but reversed the denial of summary judgment in favor of General Contractor. Homeowners sued General Contractor and Subcontractor for damages to their home. General Contractor, which was insured under a commercial general liability policy (CGL), requested defense and indemnification from Insurer. Insurer defended General Contractor under a reservation of rights. Insurer then filed a declaratory judgment action seeking a judgment that the CGL policy did not provide coverage for General Contractor in the underlying case. General Contractor and Insurer filed cross-motions for summary judgment. The circuit court denied the motions on the ground that a genuine issue of material fact existed regarding the foreseeability of Homeowners’ damages. The Supreme Court reversed the judgment denying General Contractor’s motion and remanded for further proceedings, holding that the CGL policy required Insurer to defend General Contractor against Homeowners’ suit for damages and that factual questions regarding foreseeability were not relevant to the existence of coverage under the policy. View "Owners Insurance Co. v. Tibke Construction, Inc." on Justia Law

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The Supreme Court reversed the circuit court’s dismissal of Standard Fire Insurance Co.’s case against Continental Resources Inc. pursuant to S.D. Codified Laws 15-6-12(b)(5). Standard Fire brought suit seeking statutory reimbursement or, in the alternative, equitable subrogation of workers’ compensation benefits paid to an employee. The circuit court found that the terms of a settlement agreement barred further litigation and that res judicata applied. The Supreme Court disagreed and remanded the matter for further proceedings, holding that the circuit court erred when it determined that the plain language of the settlement agreement barred Standard Fire’s claim. View "Standard Fire Insurance Co. v. Continental Resources, Inc." on Justia Law

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Dakota Mill & Grain, Inc. filed suit against Gateway Building Systems, Inc. Gateway had purchased a commercial general liability insurance policy from Western National Mutual Insurance Company, which was in effect during the period at issue. Western National provided Gateway with a defense in the action but issued a reservation of rights letter. Western National subsequently filed a complaint for declaratory judgment regarding coverage under the policy. The circuit court granted summary judgment in favor of Western National, concluding that the policy between Gateway and Western National provided an initial grant of coverage in the Dakota Mill suit but that exclusions defeated coverage. The Supreme Court reversed, holding that disputed material facts precluded summary judgment in this declaratory action. Remanded. View "Western National Mutual Insurance Co. v. Gateway Building Systems, Inc." on Justia Law

Posted in: Insurance Law

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James Mordhorst was injured while working for Fischer Furniture. Almost one year later, Dakota Truck Underwriters and Risk Administration Services (collectively, Insurers) terminated all workers’ compensation benefits. The South Dakota Department of Labor subsequently ordered Insurers to pay all past medical bills and interest as well as future medial expenses. Mordhorst then filed an action seeking punitive damages for an alleged bad-faith denial of workers’ compensation benefits. The circuit court granted Insurers’ motion to dismiss for failure to state a cause of action upon which relief could be granted. The Supreme Court reversed, holding that the circuit court erred by granting Insurers’ motion to dismiss because Mordhorst asserted facts that, if true, state a claim for bad faith denial of a workers’ compensation claim and that Insurers’ reliance on an independent medical examiner’s report to deny benefits was not per se reasonable. View "Mordhorst v. Dakota Truck Underwriters" on Justia Law

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Dusty Groom’s handgun discharged, shooting Brody Heitmann in the head. Heitmann survived and sued Groom. Heitmann obtained a judgment against Groom and also obtained an assignment from Groom of Groom’s right to enforce coverage under an insurance policy issued to Groom’s grandmother by American Family Mutual Insurance. Heitmann subsequently filed a declaratory judgment action against American Family seeking ruling that, on the date of the shooting, Groom was an insured under the policy for purposes of liability coverage. The circuit court granted summary judgment in favor of American Family. The Supreme Court affirmed, holding that a relative of the insured residing on the insured’s premises, and not in the household of the insured, is not a “resident relative” under the policy. View "Heitmann v. American Family Mut. Ins. Co." on Justia Law

Posted in: Insurance Law

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Kern was injured in a rear-end collision in which the other driver was at fault. Kern filed an underinsured motorist (UIM) claim with Progressive Northern Insurance Company, his insurance provider. Months of settlement negotiations ended in a stalemate. Thereafter, Kern brought an action against Progressive for bad faith, alleging that Progressive’s settlement offers had been intentionally inadequate. Kern also sought unpaid UIM benefits. After a trial, the jury awarded Kern $18,650 in unpaid UIM damages and found that Progressive had not acted in bad faith. Kern appealed, alleging several errors. The Supreme Court affirmed, holding that none of Kern’s alleged errors required reversal and that the trial court did not clearly err by refusing to award attorney’s fees. View "Kern v. Progressive Northern Ins. Co." on Justia Law

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After a severe storm, Richard and Lorayna Papousek discovered that ninety-three of their cattle were dead. It was determined that the cause of the cattle’s death was drowning. At the time, the Papouseks had in effect a farmowner-ranchowner policy purchased from De Smet Farm Mutual Insurance Company of South Dakota. De Smet denied the Papouseks’ claim filed under the drowning provision of the policy because none of the cattle were found submerged in water. The Papouseks filed a declaratory judgment action seeking a declaration that the policy covered the cattle losses. The circuit court granted summary judgment in favor of De Smet. The Supreme Court reversed, holding that the Papouseks established coverage under the drowning provision, and De Smet did not prove an exclusion to coverage under the policy. View "Papousek v. De Smet Farm Mut. Ins. Co." on Justia Law

Posted in: Insurance Law

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Charles Korzan and his brother, Michael Korzan, were transporting hay bales in a semi-trailer when the the hay ignited and spread fire to nearby lands. Plaintiffs sued the Korzans, alleging nuisance, negligence, trespass, and punitive damages for the fires. Charles’s insurance carrier, North Star Mutual Insurance Company, filed a separate action seeking a determination as to whether it had a duty to defend and indemnify the Korzans for the fires. The circuit court granted North Star’s motion for summary judgment, concluding that no coverage existed under the policy. The Supreme Court affirmed, holding that coverage was precluded under the policy. View "N. Star Mut. Ins. v. Korzan" on Justia Law

Posted in: Insurance Law

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David Zerfas swerved to avoid a deer carcass in his lane of travel and lost control of his vehicle. Zerfas died after his vehicle was hit by oncoming traffic. Zerfas’s wife, Stacey, sought uninsured motorist benefits with their automobile insurance company, AMCO Insurance Company, alleging that an unidentified driver left the deer carcass in the lane of travel, which caused Zerfas to lose control of his vehicle. AMCO denied Stacey’s claim on the grounds that Stacey would not legally be entitled to recover damages from the unidentified driver. Stacey subsequently brought a breach of contract action against AMCO. The circuit court granted summary judgment in favor of AMCO, concluding that the unidentified driver did not have a legal duty to Zerfas to remove the carcass or warn of its existence. The Supreme Court affirmed, holding that no common law or statutory duty existed between the unidentified driver and Zerfas, and therefore, the circuit court did not err in granting AMCO summary judgment. View "Zerfas v. AMCO Ins. Co." on Justia Law

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Dakota Trailer Manufacturing, which makes radiator components for an unrelated company, performs its component work in one of Dakota Trailer’s locations that was originally classified as a “machine shop” for workers compensation insurance rating purposes. After an inspection, the National Council on Compensation Insurance changed the location’s classification to “welding or cutting.” Both the Workers’ Compensation Appeals Board and the South Dakota Department of Labor affirmed the new classification. The circuit court reversed and reinstated the machine shop code. The Supreme Court reversed, holding that the circuit court properly found that Dakota Trailer’s activities fit within the machine shop code. View "Dakota Trailer Mfg. v. United Fire & Cas. Co." on Justia Law