Penford Corp., et al. v. Natl. Union Fire Ins. Co., et al., No. 10-3068 (8th Cir. 2011)
Annotate this CasePlaintiff brought suit seeking declaratory judgment and asserted claims for breach of contract and bad faith when its insurers asserted that certain sublimits in plaintiff's policy capped reimbursement for damages caused by flood and that those sublimits applied to both property damage and business interruption losses. Plaintiff claimed that the sublimits only applied to property damage. The court concluded that there was no factual dispute regarding whether an insurance brokerage employee shared the same understanding as the underwriters and whether that understanding bound plaintiff. Consequently, the interpretation of the contract did not depend "on the credibility of extrinsic evidence or on a choice among reasonable inferences that can be drawn from the extrinsic evidence," and thus the district court did not err when it granted insurers' judgment as a matter of law on the declaratory judgment and breach of contract claims.
Court Description: Civil case - Insurance. District court did not err in granting the insurers' motion for judgment as a matter of law on insured's claim that the insurers had acted in bad faith by failing to investigate the claim properly and by failing to make timely payments as the insurers had an objectively reasonable basis for interpreting the policy's sublimits as they did and their payment schedule complied with the policy's requirements; district court did not err in concluding that sublimits in the flood policy capped the insured's property damage.
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