Articles Posted in Insurance 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

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Employee was injured when he ran from a co-worker on the job site after tricking that co-worker. Employee sought workers’ compensation benefits. Employer and Insurer denied workers’ compensation benefits, asserting that Employee’s injury did not “arise out of” or “in the course of” his employment because Employer specifically prohibited horseplay by its employees. Employee petitioned for a hearing. The Department of Labor concluded that Employee’s injury arose “out of” his employment because, but for his work with Employer” he would not have been at the job site where he was injured, but that the injury did not occur “in the course of” the employment. The circuit court affirmed. The Supreme Court reversed in part, affirmed in part, and remanded for an award of benefits, holding that the Department (1) correctly concluded that Employee’s injury arose “out of” the employment; and (2) erred when it did not consider the effect of the mandatory lull in Employee’s work when it determined that the injury did not occur “in the course of” his employment. Because Employee’s act of horseplay was not a substantial deviation from his employment, it occurred “in the course of the employment.” View "Petrik v. JJ Concrete, Inc." on Justia Law

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Troy Dowling, the operator of a crop-spraying business, owned a John Deere sprayer that was a scheduled item on his commercial general liability insurance policy through Berkley Regional Insurance Company. Dowling also had a commercial automobile insurance policy with Great West Casualty Company. Dowling had borrowed a different sprayer and was driving the sprayer to one of his customer’s fields when the sprayer collided with a motorcycle. James and Kimberly Seiler, who were both seriously injured in the collision, sought damages. The circuit court granted declaratory judgments for Berkley and Great West, concluding that the insurers had no duty to defend or indemnify Dowling. The Supreme Court affirmed the judgment for Berkley and reversed and remanded the judgment for Great West, holding (1) under the terms of Dowling’s policy with Berkley, Berkley had no duty to defend or indemnify Dowling for any claims arising from the accident; and (2) under the terms of Dowling’s policy with Great West, Great West had the duty to defend and indemnify Dowling for claims related to the accident. View "Berkley Reg’l Specialty Ins. Co. v. Dowling Spray Serv." on Justia Law

Posted in: Insurance Law