INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Landslide triggers dispute
BrunoBuilt, Inc., contracted with William and Amy Dempsey to build a home on real property they owned in the Boise Foothills. In 2015, after contracting with the Dempseys, BrunoBuilt added the Dempsey project to its Tailored Protection Policy (TPP). With the assistance of a local insurance agent, Randy L. Richardson, and his agency, Richardson Insurance Services, Inc. (collectively Richardson), BrunoBuilt purchased a TPP from Auto-Owners that included builders risk coverage. The policy excluded damage caused by landslides.
In 2016, the Dempsey project was not included in the TPP renewal, allegedly because of Richardson’s negligence. Shortly after, the nearly completed Dempsey home was damaged by a landslide. BrunoBuilt sued Richardson and Auto-Owners, claiming that Richardson negligently failed to advise about landslide coverage and failed to renew the Dempsey project. BrunoBuilt also claimed that Auto-Owners was vicariously liable for Richardson’s negligence.
Damage to the land beneath the Dempsey home caused by the landslide became noticeable sometime between April and June 2016. BrunoBuilt, with Richardson’s assistance, filed a claim with Auto-Owners. On July 1, 2016, an employee of BrunoBuilt emailed one of the agents at Richardson Insurance regarding the insured value of the Dempsey project. The Richardson Insurance agent responded that the value was set at $669,943. The BrunoBuilt employee requested that the value be increased to $850,000.
About one week later, the Richard-son Insurance agent responded that Auto-Owners “said that Randy [Richardson] had this location deleted per you guys [BrunoBuilt] effective the renewal, March 28th, 2016.” BrunoBuilt claimed that this was the first time it learned that the Dempsey project had not been included in the 2016 renewal.
Richardson, who was not a party to this appeal, claimed that the Dempsey project was not included in the 2016 policy at BrunoBuilt’s request. BrunoBuilt requested that Auto-Owners reinstate coverage for the Dempsey project retroactive to the renewal date, but Auto-Owners declined and closed BrunoBuilt’s claim.
On March 20, 2020, Auto-Owners argued that it was entitled to summary judgment on BrunoBuilt’s “failure to renew” claim because, even if Richardson had included the Dempsey project in the 2016 renewal, the 2016 policy excluded coverage for damage resulting from landslides. Therefore, BrunoBuilt could not establish any damages resulting from Richardson’s alleged negligence.
On April 3, 2020, the district court concluded that there was no genuine issue of material fact, and that Richardson was not acting as Auto-Owners’ agent when he added the Dempsey project to the 2015 policy and failed to include it in the 2016 renewal. Bruno appealed.
The Supreme Court of Idaho reviewed the case and found that the district court erred in granting summary judgment. The court held that the 2015 policy, which excluded only naturally occurring landslides, might still apply because Auto-Owners did not provide the required notice of the reduction in coverage in the 2016 policy, which excluded both naturally occurring and human-caused landslides. The court also determined that Auto-Owners bore the burden of proving the applicability of the landslide exclusion.
The case was reversed and re-manded for further proceedings to determine whether the 2015 policy’s coverage continued and whether Richardson was acting as Auto-Owners’ agent when he failed to renew the policy.
The court did not award attorney fees to either party.
BrunoBuilt, Inc. v. Auto-Owners Insurance Company and Randy L. Richardson, an individual, and Richardson Insurance Services, Inc., an Idaho corporation—Supreme Court of Idaho—No. 49587-2022—December 31, 2024.