Justia Insurance Law Opinion Summaries

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Laura Miller appeals from a summary judgment entered by the Jefferson Circuit Court ("the circuit court") in favor of the City of Birmingham ("the City"), Sandy Roberts, and Alice Crutchfield (collectively, "the City defendants"). Robert Miller, Laura's husband, was employed by the City as a firefighter. Unum Life Insurance Company of America ("Unum") issued a group life and accidental death and dismemberment policy. According to the summary of benefits, the policy included different life-insurance benefits for active employees and for retired employees. Under the policy, as an active employee, the City paid Robert's insurance premiums, thereby entitling him to a life-insurance benefit of $151,000. However, if Robert were to retire, he would be required to pay his life-insurance premiums and would be entitled to only a $50,000 life-insurance benefit. The summary of benefits specified that, in order to be eligible for a waiver of the life-insurance premiums, the insured had to "be disabled through your elimination period," which was nine months. In 2012, Robert was diagnosed with brain cancer and soon became unable to perform the duties of his job. Laura contended once the Millers learned of Robert's condition, they "sought to obtain information about [Mr. Miller's] life insurance benefit and all other benefits that might be available." The Millers did not have a copy of the policy or the summary of benefits at that time. The Millers and Ed Bluemly, Mrs. Miller's brother-in-law, met with Sandy Roberts, the assistant benefit administrator and the pension coordinator for the Jefferson County Personnel Board, and Alice Crutchfield, a personnel technician for the Jefferson County Personnel Board, to learn about the available benefits. The Millers asked for a copy of the policy, and there was a dispute over whether the Crutchfield gave the Millers a copy. The Millers ultimately sued the City for negligence with respect to the policy and collection of the benefits to which Robert was entitled. After review of this matter, the Supreme Court affirmed the circuit court's summary judgment in favor of the City insofar as the circuit court based its summary judgment in favor of the City on the City defendants' argument that the City was entitled to immunity from Laura's claim alleging wanton and reckless misrepresentation. However, the Court reversed the circuit court's summary judgment in favor of the City defendants in all other respects. The Case was remanded for further proceedings. View "Miller v. City of Birmingham et al." on Justia Law

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GRC, a manufacturer and supplier of refractory products designed to retain strength when exposed to extreme heat, previously included asbestos in its products. GRC was the defendant in 31,440 lawsuits alleging injuries from “exposure to asbestos-containing products manufactured, sold, and distributed by GRC” dating back to 1978. GRC’s insurers initially fielded these claims. During the 1970s and ‘80s, GRC had entered into primary liability insurance policies with several different insurers. GRC also secured additional excess insurance policies. In 1994 GRC’s liabilities from thousands of settled claims far exceeded the limits of its primary insurance coverage. In 2002, after years of continued settlements, GRC tendered the underlying claims to its excess insurance carriers. All denied coverage on the basis of a policy exclusion: It is agreed that this policy does not apply to EXCESS NET LOSS arising out of asbestos, including but not limited to bodily injury arising out of asbestosis or related diseases or to property damage. The district court ruled in favor of GRC. The Third Circuit reversed. The phrase “arising out of,” when used in a Pennsylvania insurance exclusion, unambiguously requires “but for” causation. The losses relating to the underlying asbestos suits would not have occurred but for asbestos, raw or within finished products. View "General Refractories Co. v. First State Insurance Co." on Justia Law

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Wise Regional, a Texas municipal hospital authority, filed suit against Aetna, an insurance plan administrator, in state court over a dispute regarding medical insurance claims Wise Regional submitted on behalf of its patients. Aetna removed to federal court under 28 U.S.C. 1442, but the district court remanded to state court, awarding attorneys' fees. The court concluded that it had appellate jurisdiction over the remand order because Aetna relied upon the federal officer removal statute in its notice of removal; remand was proper because Aetna's notice of removal was untimely; and the district court did not abuse its discretion in awarding attorneys' fees where Aetna lacked an objectively reasonable basis for seeking removal of this action almost five months after expiration of the thirty-day deadline for removal. Accordingly, the court affirmed the judgment. View "Decatur Hospital Authority v. Aetna Health, Inc." on Justia Law

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The Federal Employees Health Benefits Act (FEHBA) authorizes the Office of Personnel Management to contract with private carriers for federal employees’ health insurance; 5 U.S.C. 8902(m)(1) states that the “terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law . . . which relates to health insurance.” OPM’s regulations make a carrier’s “right to pursue and receive subrogation and reimbursement recoveries" a condition of the provision of benefits under the plan’s coverage. In 2015, OPM confirmed that subrogation and reimbursement rights and responsibilities “relate to the nature, provision, and extent of coverage or benefits” under section 8902(m)(1). Nevils, insured under a FEHBA plan offered by Coventry, was injured in an automobile accident. Coventry paid his medical expenses and asserted a lien against the settlement Nevils recovered from the driver who caused his injuries. Nevils satisfied the lien, then filed a state court class action, citing Missouri law, which does not permit subrogation or reimbursement in this context. The Missouri Supreme Court ruled in favor of Nevils. The Supreme Court reversed. Because contractual subrogation and reimbursement prescriptions plainly “relate to . . . payments with respect to benefits,” they override state laws barring subrogation and reimbursement. When a carrier exercises its right to reimbursement or subrogation, it receives from either the beneficiary or a third party “payment” respecting the benefits it previously paid. The carrier’s very provision of benefits triggers that right to payment. Strong and “distinctly federal interests are involved,” in uniform administration of the FEHBA program, free from state interference, particularly concerning coverage, benefits, and payments. The regime is compatible with the Supremacy Clause. The statute, not a contract, strips overrides state law View "Coventry Health Care of Missouri, Inc. v. Nevils" on Justia Law

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In 2009, plaintiff Dragen Perkovic was operating a semitruck in Nebraska when he swerved to avoid hitting a car that had spun out in front of him. Plaintiff’s truck then crashed into a wall. Plaintiff’s resulting injuries were treated at The Nebraska Medical Center. At the time of the accident, plaintiff maintained personal automobile insurance with Citizens Insurance Company of the Midwest (Citizens) and a bobtail insurance policy with Hudson Insurance Company (Hudson). Plaintiff’s employer was insured by defendant Zurich American Insurance Company. The issue this case presented for the Supreme Court's review centered on the notice requirements of the no-fault act, specifically those set forth in MCL 500.3145(1): whether a nonparty medical provider’s provision of medical records and associated bills to an injured person’s no-fault insurer within one year of the accident causing injury constitutes proper written notice under MCL 500.3145(1), so as to prevent the one-year statute of limitations in MCL 500.3145(1) from barring the injured person’s subsequent no-fault claim. The Michigan Supreme Court held that when, as in this case, the documentation provided by the medical provider contained all of the information required by MCL 500.3145(1) and was provided to the insurer within one year of the accident, the statutory notice requirement was satisfied and the injured person’s claim was not barred by the statute of limitations. Therefore, the Court reversed the judgment of the Court of Appeals, vacated the trial court’s order granting summary disposition in favor of defendant Zurich American Insurance Company, and remanded to the trial court for further proceedings. View "Perkovic v. Zurich American Ins. Co." on Justia Law

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The issue presented in this case was whether, by signing a contract providing that plaintiff agreed “to reimburse [defendants’] attorney fees and costs as may be fixed by the court,” the parties agreed that the amount of reasonable attorney fees would be fixed by a court rather than a jury. After review, the Supreme Court held that the parties did so agree. Accordingly, the Court vacated part of the Court of Appeals’ opinion and reversed that portion of the judgment that reversed the award of contractual attorney fees and costs, as well as that portion of the judgment that reversed the award of case evaluation sanctions. The Court otherwise denied the application and cross-application for leave to appeal and left in place the remainder of the Court of Appeals’ opinion. View "Barton-Spencer v. Farm Bureau Life Ins. Co. of Michigan" on Justia Law

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Nationwide Mutual Fire Insurance Company and Nationwide Mutual Insurance Company (together, Nationwide) brought a claim for declaratory judgment requesting that the trial court determine the priority of five separate insurance policies provided by Nationwide and Erie Insurance Exchange (Erie). The trial court determined the priority of coverage as (1) Nationwide Business Auto Policy, $1 million; (2) Nationwide Commercial General Liability Policy, $1 million; (3) Nationwide Commercial Umbrella Policy, $1 million; (4) Erie Commercial Auto Policy, $1 million; and (5) Erie Business Catastrophe Liability Policy, $5 million. The Supreme Court reversed, holding that the order of priorities for the applicable insurance policies in this case was (1) Erie Auto Policy; (2) Nationwide Auto Policy; (3) Nationwide Umbrella Policy and Erie Umbrella Policy, pro rata. View "Nationwide Mutual Fire Insurance Co. v. Erie Insurance Exchange" on Justia Law

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Plaintiff filed suit against F&G, an insurance company and its affiliates, under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1964(c), alleging that F&G committed numerous acts of mail and wire fraud in the course of a bookcooking scheme. The district court granted F&G's motion to dismiss for failure to state a claim on which relief can be granted based on the McCarran-Ferguson Act, 15 U.S.C. 1012(b). The court concluded that plaintiff's RICO claims would interfere with state regulation of the insurance business, and the claims were thus barred by the McCarran-Ferguson Act. Accordingly, the court affirmed the judgment. View "Ludwick v. Harbinger Group, Inc." on Justia Law

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In 2008, Chicago Abstract was sued in state court by a title insurance company and financial firms. Chicago Abstract tendered these lawsuits to its “errors and omissions” liability insurer, TIAC. TIAC could defend without reservation; defend while reserving its rights; seek a declaratory judgment concerning the scope of coverage; or decline to defend. Under Illinois law, when a liability insurer unjustifiably refuses to defend, the insurer is estopped from later asserting policy defenses to coverage. TIAC declined to defend. Years passed without further communications between TIAC and its insured. In 2014, a state court plaintiff filed an amended complaint. An attorney appointed by TIAC made an appearance in that case. TIAC then sought a declaration that coverage was unavailable based on policy exclusions. Chicago Abstract did not defend; the company had been involuntarily dissolved. Plaintiffs from the state-court litigation against Chicago Abstract appeared in the federal case as defendants. The Seventh Circuit affirmed judgment in favor of those defendants. The undisputed facts show that TIAC breached its duty to defend in the underlying litigation and is estopped from asserting “at this very late stage” any policy defenses to coverage that might have been available if TIAC had made a different choice when the complaints were first tendered. View "Title Industry Assurance Co., R.R.G. v. First American Title Insurance Co." on Justia Law

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After Hurricane Ike struck Galveston island, Insured contracted her Insurer and reported that the storm had damaged her home. Insurer determined that its policy covered some of the damage but declined to pay Insured benefits because the total estimated repair costs did not exceed the policy’s deductible. Insured sued Insurer for breach of the insurance policy and for unfair settlement practices. As damages, Insured sought only insurance benefits under the policy, plus attorney’s fees and costs. The jury found that Insurer violated the Texas Insurance Code, and the violation resulted in Insured’s loss of benefits Insured should have paid under the policy but did not find that Insurer failed to comply with its obligations under the policy. The trial court entered final judgment in Insured’s favor. The court of appeals affirmed. The Supreme Court reversed the judgment of the court of appeals and remanded the case to the trial court for a new trial in the interest of justice after announcing five rules that address the relationship between contract claims under an insurance policy and tort claims under the Insurance Code. View "USAA Texas Lloyds Co. v. Menchaca" on Justia Law