Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Brown was injured at a Gurnee, Illinois Target store when a fitting room door came off its hinges and fell on her. In Brown’s negligence suit, Target filed a third-party complaint against Harbor, Target’s supplier of fitting rooms for the store, seeking contribution and indemnification. Discovery revealed that the same door fell on another Target customer approximately one week before it fell on Brown. Target and Harbor settled with Brown. Target tendered its defense of Brown’s lawsuit to Harbor’s insurer, Selective, claiming that it was an additional insured under its contract with Harbor. Selective sought a declaratory judgment that it had no duty to defend or indemnify. The Seventh Circuit affirmed summary judgment of $714,450.24 in favor of Target, concluding that: Target was an additional insured on Harbor’s policy because of a Supplier Qualification Agreement that required Harbor to designate Target as an additional insured and their Program Agreement for the fitting rooms; Brown’s allegations fell within the scope of the policy, since they could reasonably be read to assert a bodily injury caused by Harbor’s product; and Target had settled the lawsuit Brown in reasonable anticipation of liability. View "Selective Insurance Co. of South Carolina v. Target Corp." on Justia Law

Prather, age 31, tore his left Achilles tendon playing basketball. He scheduled surgery for July 22. On July 21, he called the surgeon’s office complaining of swelling and that an area of the left calf was sensitive and warm to the touch. The surgery was uneventful and he was discharged from the hospital the same day. He returned to work and was doing well in a follow-up visit to his surgeon on August 2. Four days later he collapsed, went into cardiopulmonary arrest, and died as a result of a blood clot in the injured leg that had traveled to a lung. Prather’s widow applied for benefits under his Sun Life group life insurance policy (29 U.S.C. 1132(a)(1)), which limited coverage to “bodily injuries ... that result directly from an accident and independently of all other causes.” The district court granted Sun Life summary judgment. The Seventh Circuit reversed, noting that deep vein thrombosis and pulmonary embolism are risks of surgery, but that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot. The forensic pathologist who conducted a post-mortem examination of Prather did not attribute his death to the surgery. View "Prather v. Sun Life & Health Insurance Co." on Justia Law

After a 2013 fire at the Milwaukee County Courthouse, the county filed a claim with its primary insurer, the State of Wisconsin Local Government Property Insurance Fund. The Fund had engaged Lexington as either its reinsurer or excess insurer (the parties disagree) and maintained a separate insurance policy with Cincinnati Insurance that covered machinery and equipment at the Courthouse. The Fund paid all but a small portion of the county’s claimed losses, filed a reimbursement claim with Lexington, and insisted that the remaining unpaid portion of the county’s claim should be paid by Cincinnati. Pursuant to separate Joint Loss Agreements (JLA) in the county’s policies, the Fund and Cincinnati agreed to arbitrate their dispute. The district court denied Lexington’s motion to be allowed to participate in the arbitration. The Seventh Circuit affirmed. The Fund policy JLA provides a procedure whereby the parties could “signify” an agreement to arbitrate. No such signals were exchanged between Lexington and any other party; no agreement to arbitrate exists between Lexington and the other insurers. Absent such an agreement, Lexington is not entitled to insert itself into the arbitration between the Fund and Cincinnati. View "State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co." on Justia Law

In 2014, Lend Lease, the construction manager of the Chicago River Point Tower Project, hired Cives as a subcontractor. Cives hired Midwest Steel. Midwest had, years before, hired AES to supply Midwest with additional workers, who were co‐employed by Midwest and AES. Lend Lease entered into a “contractor-controlled insurance program” with Starr Liability with a $500,000 deductible. All subcontractors were to join in the policy. AES had, several years earlier, obtained workers’ compensation for its workers from TIC, so that injured AES‐Midwest workers could obtain workers’ compensation from either Starr (or Lend Lease under the deductible) or TIC. Four ironworkers, jointly employed by Midwest and AES and performing work for Midwest were injured on the job and sought workers’ compensation. The claims exceeded $500,000, so Lend Lease had to pay its full deductible. Starr paid the remaining claims. Lend Lease filed suit against TIC, AES’s insurer, and AES, seeking reimbursement of the $500,000. The district court dismissed. The Seventh Circuit affirmed. Lend Lease made a deal with Starr and is bound by it. The court rejected an argument that AES has been unjustly enriched; AES was not obligated to purchase an insurance policy that would cover Lend Lease's deductible. View "Lend Lease (US) Construction, Inc. v. Administrative Employer Services, Inc." on Justia Law

Hilger, the president of Allied, which provides customized products to financial institutions, was named in separate lawsuits brought by credit unions in Michigan and Tennessee. Hilger’s codefendants include O’Malley, who sells life insurance through O’MA, and Phillips, who brokers the sale of life-insurance to third parties through Berkshire and Capital. The credit unions allege that the defendants persuaded them to fund loans used to pay life-insurance premiums by overstating the value of the policies that would serve as collateral. Hilger tendered his defense to Landmark under a professional liability policy held by O’MA. Although Hilger is not a named insured under O’MA’s policy, the policy defines “covered persons and entities” to include O’MA’s independent contractors. Landmark sought a declaratory judgment that it has no duty to defend, arguing that Hilger did not perform the professional services at issue in the Michigan and Tennessee suits as an O’MA independent contractor. The district court, applying Illinois law, entered judgment on the pleadings for Hilger. The Seventh Circuit reversed. Landmark is entitled to take discovery and offer evidence regarding the true nature of Hilger’s relationship to O’MA. Judgment on the pleadings was inappropriate. Under Illinois law an insurer that seeks a declaration of its duty to defend may offer evidence outside the underlying complaint for purposes of establishing that no duty exists. View "Landmark Am. Ins. Co v. Hilger" on Justia Law

In 2011, Linda Phillips, an employee of Hoker Trucking, driving a semi‐truck in Indiana, struck a vehicle driven by Robbins, who died as a result of the injuries he sustained in the accident. The truck driven by Phillips was pulling a trailer Hoker borrowed from Lakeville. Lakeville had a Great West Casualty insurance policy covering the trailer. There was a separate suit concerning the liability of Phillips and Hoker. To preempt a possible claim against Lakeville’s policy, Great West sought a declaratory judgment against Hoker, Phillips, and Robbins’s estate, that it did not have to indemnify Hoker and Phillips for any liability in connection with the accident. The district court granted summary judgment in favor of Great West. The Seventh Circuit affirmed, rejecting arguments that Great West’s policy was ambiguous as to whether Hoker and Phillips were excluded from coverage and should be construed against Great West; that even if the exclusions are not ambiguous, they do not exclude Hoker and Phillips from coverage; and regardless of whether the exclusions apply to Hoker and Phillips or not, such exclusions are invalid under Wisconsin law, the state where the trailer is registered. The court found the policy unambiguous. View "Great West Cas. Co. v. Robbins" on Justia Law

Rizvi and his company, Prime Builders, performed repair work for Alikhan, whose house was damaged in a fire. When the work was completed in 2009, Alikhan paid Rizvi only part of what he owed. Rizvi sued for breach of contract in federal court, invoking diversity jurisdiction under 28 U.S.C. 1332. (Rizvi and Prime are Illinois citizens. Alikhan is a citizen of Texas.) When Alikhan failed to appear, plaintiffs obtained a default judgment, then served a citation to discover assets on Allstate under an Illinois statute that governs supplementary proceedings to assist in collecting on a judgment. Allstate responded that Alikhan had no accounts of any sort with Allstate, had no claims pending with Allstate, and was not owed any insurance payments by Allstate. Plaintiffs then asked the court to order Allstate to remit “outstanding insurance proceeds of $110,926.58” and to impose sanctions, arguing that Allstate had participated in negotiating the repair contract and had made a partial payment to Alikhan in 2008. The court ultimately dismissed the supplemental action. The Seventh Circuit affirmed. Allstate is a citizen of Illinois, the supplemental proceeding against Allstate was sufficiently independent of the underlying case as to require its own basis for subject matter jurisdiction. View "Rizvi v. Allstate Corp." on Justia Law

In 2012, Williams visited the Van de Venters in Monroe County, Indiana. They told Williams that their labrador retriever, Emma, would ring a bell by the door if she needed to go out and he should let her out. Williams chose to walk Emma on a leash. When a neighborhood dog barked, Emma lurched toward the sound, pulling Williams to the ground and seriously injuring his shoulder. Williams sued the Van de Venters. Their AmFam home-insurance policy included personal liability coverage indemnifying them for damages for bodily injury and guaranteeing a defense against such suits. The policy contained a provision stating: “Intra-Insured Suits. We will not cover bodily injury to any ‘insured’,” defined as “any person ... legally responsible for a[n] ... animal owned by [a named insured or resident relative of a named insured] to which [the policy’s personal-liability coverages] apply.” The district court rejected AmFam’s position that these provisions relieved it of the duty to defend or indemnify. The Seventh Circuit affirmed. It would make no sense to treat Williams as if he were “legally responsible” for his own injuries resulting from the dog’s actions; he was not an insured for purposes of this incident. View "Am. Family Mut. Ins. v. Williams" on Justia Law

In 1991 Cheney began working as an attorney at Kirkland. She became a partner in 1997. She suffered from a spinal disease that led her to seek ergonomic accommodations in 1994 and ultimately resulted in a three‐level anterior cervical discectomy and fusion and removal of her C5 vertebra. After making various accommodations, the firm approved a leave, from January 3, until July of 2012. Her last day of work was December 19, 2011. On April 17, 2012, Cheney's neurosurgeon advised her to complete a 12‐week intensive physical therapy program and receive cervical epidural injection therapy. After the program failed to improve Cheney’s condition, the neurosurgeon recommended cervical spinal fusion surgery, which Cheney received on August 27. Cheney submitted her claim for long‐term disability benefits on July 17, before the surgery. Kirkland’s insurer denied her claim, stating that her coverage had ended in March because she was able, through March, to perform her job. Cheney sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132. The court found in favor of Cheney. The Seventh Circuit vacated, finding that the district court made unsupported factual findings and misinterpreted the governing documents relating to whether Cheney’s situation fell within allowable absences from “active work.” View "Cheney v. Standard Ins. Co." on Justia Law

Berg was a long‐time pit broker at the Chicago Mercantile Exchange. In 1991 and 1994, Berg bought disability‐income insurance policies. In 2005, he started to experience a tremor in his arms and hands, which interfered with his ability to write quickly and legibly. In 2007, the tremor forced him to leave his job. In 2010, a neurologist diagnosed Berg with an “essential tremor.” Berg applied for total disability benefits. Although the insurers approved Berg’s claim, they designated his disability onset date as February 2010, rather than September 2007. In 2012, Unum discontinued Berg’s total‐disability benefits, asserting that he was eligible only for residual‐disability benefits because when he applied, his regular occupation was “unemployed person.” The district court granted summary judgment to the defendants. The Seventh Circuit reversed, rejecting an argument that, until he saw a physician in 2010, Berg did not meet the policy’s definition: “Total Disability means that the Insured can not [sic] do the substantial and material duties of his or her regular job,” that “[t]he cause of the total disability must be an injury or a sickness,” and that “[t]he injury or sickness must be one which requires and receives regular care by a Physician.” The clause does not contain a temporal element. View "Berg v. New York Life Ins. Co." on Justia Law