Justia Insurance Law Opinion Summaries

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The United States Court of Appeals for the Eleventh Circuit certified to three questions of law to the Georgia Supreme Court relating to a lawsuit brought in federal district court by Fife Whiteside, the trustee of the bankruptcy estate of Bonnie Winslett. Whiteside sued GEICO to recover the value of Winslett’s failure-to-settle tort claim against GEICO so that the bankruptcy estate could pay creditor Terry Guthrie, who was injured in an accident caused by Winslett. The certified questions certified asked the Supreme Court to analyze how Georgia law applied to an unusual set of circumstances that implicated both Winslett’s duty to give GEICO notice of suit and GEICO’s duty to settle the claim brought against Winslett. The Supreme Court was unable to give unqualified “yes” or “no” answers to two of the certified questions as they were posed; rather, the Court answered the questions only in the context of the circumstances of this particular case. "Winslett remains liable to Guthrie, even if her bankruptcy trustee succeeds on the failure-to-settle claim against GEICO; therefore, if the bankruptcy estate does not recover enough from GEICO to satisfy Guthrie’s judgment, the estate would not be fully compensated for Winslett’s damages, and GEICO would escape responsibility for breaching its settlement duty to Winslett. Such an outcome would deny Winslett the full measure of compensatory damages allowed under Georgia law." View "GEICO Indemnity Co. v. Whiteside" on Justia Law

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In this insurance dispute, the Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing the district court's determination that the insurance policy at issue covered all of the claimed property damage and that a Miller-Shugart settlement agreement was reasonable and unenforceable against Insurer, holding that the policy did not cover all of the claimed property damage.The court of appeals concluded that the settlement agreement was "unreasonable as a matter of law and unenforceable" against the insurer because the agreement failed to allocate between covered and uncovered claims. The Supreme Court reversed in part, holding (1) the policies in this case covered some, but not all, of the property damage claimed by the insured; and (2) determining the reasonableness of an unallocated Miller-Shugart settlement agreement involves a two-step inquiry set forth in this opinion. View "King's Cove Marina, LLC v. Lambert Commercial Construction LLC" on Justia Law

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An Alaska State Commission for Human Rights (State) employee with preexisting medical conditions was involved in a work-related motor vehicle accident in January 2017. The employee consulted with Dr. Teresa Bormann two days after the accident; Dr. Bormann referred the employee to chiropractic treatment. After several month of treatment, Dr. Bormann referred the employee to physical therapy at United Physical Therapy (UPT) for chronic neck pain and headache. After an evaluation UPT recommended eight weeks of twice weekly physical therapy. Dr. Bormann endorsed the treatment plan, and the employee’s symptoms improved enough that she reduced her physical therapy visits to once a week beginning in mid-January. She saw UPT three times in February 2018. Payment for these February visits became the main dispute before the Board. The State arranged an employer’s medical evaluation (EME) with a neurologist and an orthopedist. The EME doctors diagnosed the employee with a cervical strain caused by the accident as well as several conditions they considered preexisting or unrelated to the work injury. After the State filed a retroactive controversion of medical treatment, the employee’s healthcare provider filed a workers’ compensation claim seeking payment for services it provided before the controversion was filed. The State disputed its liability for payment, and after several prehearing conferences, the Alaska Workers’ Compensation Board set a hearing on the merits of the provider’s claim. The Board ordered the State to pay the provider approximately $510.00 for the services. The State appealed, disputing several procedural aspects of the decision, and the Alaska Workers’ Compensation Appeals Commission affirmed the Board’s decision. Finding no reversible error, the Alaska Supreme Court affirmed the Commission’s decision. View "Alaska, Department of Health and Social Services v. Thomas et al." on Justia Law

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American Modern Home filed suit against defendants for insurance fraud after a fire destroyed their home, and the jury found in favor of defendants.The Eighth Circuit reversed, concluding that the district court did not err by refusing to admit evidence of one of the defendant's three prior convictions for sex offenses because they were highly probative on credibility. Furthermore, the danger of unfair prejudice, undue delay, and confusion did not substantially outweigh the probative value of the evidence. In view of the uncertainty in Missouri law, the court concluded that the district court did not abuse its discretion in its instruction about the meaning of "material" in cases regarding misrepresentations about the fire's cause or a proof of loss. The court also concluded that the district court did not abuse its discretion in giving a supplemental instruction on vexatious refusal to pay in response to a jury question, and the district court did not err in excluding expert testimony on the grounds it was untimely disclosed and cumulative. Accordingly, the court remanded for a new trial. View "American Modern Home Insurance Co. v. Thomas" on Justia Law

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The Supreme Court affirmed the order of the district court denying a political subdivision's motion for summary judgment in this subrogation action, holding that summary judgment was improper.Great Northern Insurance Company filed this subrogation action seeking compensation from Transit Authority of the City of Omaha, d/b/a Metro Area Transit, under the Political Subdivisions Tort Claims Act, Neb. Rev. Stat. 13-901 et seq., for funds paid on an insurance claim on behalf of its insured. Metro filed a motion for summary judgment. The district court denied the motion, finding that Metro had failed to demonstrate that there was no genuine issue concerning Great Northern's affirmative defense of equitable estoppel. The Supreme Court affirmed, holding that summary judgment was not proper under the facts of this case. View "Great Northern Insurance Co. v. Transit Authority of Omaha" on Justia Law

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Bennie Stapleton sued GEICO for abusing the judicial process after GEICO obtained a default judgment against him that was later set aside. An interlocutory appeal arose from the circuit court's denial of GEICO’s motion to dismiss Stapleton’s complaint on statute-of-limitations grounds. The Mississippi Supreme Court took the opportunity presented by this case to overrule the recent judicial expansion of Mississippi Code Section 15-1-35 (Rev. 2019) because earlier Supreme Court decisions "strayed too far from the statute’s clear text." The Supreme Court affirmed the circuit court’s order and remanded the case for further proceedings. View "GEICO Casualty Company, et al. v. Stapleton" on Justia Law

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The Ninth Circuit affirmed the district court's grant of summary judgment to Starr in an action brought by Adir, seeking insurance defense coverage. The panel held that California Insurance Code section 533.5(b) — which nullifies an insurance company’s duty to defend — does not facially violate a party's due process right to retain counsel. The panel explained that, in civil cases, courts have recognized a denial of due process only if the government actively thwarts a party from obtaining a lawyer or prevents it from communicating with counsel. In this case, Adir has made no such allegation.The panel also rejected Adir's statutory argument that section 533.5 applies to actions involving only monetary relief. Rather, under the plain text of the statute, it applies to actions that seek injunctive relief along with monetary relief. Because it turns out that there is no duty to defend nor to indemnify, the panel affirmed the district court's determination that Starr is entitled to reimbursement under the explicit language of the insurance policy. View "Adir International, LLC v. Starr Indemnity and Liability Co." on Justia Law

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Plaintiff, together with her parents, filed suit against FAIR Plan, alleging bad faith insurance allegations founded in their dissatisfaction with how FAIR Plan handled their claim of smoke damage to the home's contents. In this case, the parents lived with plaintiff in their home and the insurance policy at issue listed the parents as the insured. Furthermore, the FAIR Plan expressly disclaimed coverage for unnamed people, and the policy does not name plaintiff.The Court of Appeal affirmed the judgment and award of costs in favor of FAIR Plan, concluding that the trial court properly sustained the demurrer to plaintiff's cause of action without leave to amend. The panel concluded that plaintiff lacks standing to sue FAIR Plan for bad faith because she was not a signatory to the policy; she was not an additional insured person under the particular policy; and she was not a third party beneficiary of the FAIR Plan contract. Therefore, plaintiff lacked a contractual relationship with FAIR Plan. The panel also concluded that the relevant insurance provisions are unambiguous; concluded that plaintiff incorrectly claims precedent supports her; and rejected her claim under the insurable interest doctrine where a sound view of this legal doctrine reveals that the parents obviously had an insurable interest in plaintiff's property in their home. View "Wexler v. California Fair Plan Association" on Justia Law

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The Supreme Court granted writs of prohibition and mandamus to prevent Cuyahoga County Common Pleas Court Judge John O'Donnell from exercising jurisdiction over a civil action that was transferred from the Lyndhurst Municipal Court but denied the writ of mandamus ordering Lyndhurst Municipal Court Judge Dominic Coletta to dismiss the case upon its return from the common pleas court.Plaintiff filed a complaint against State Farm Mutual Insurance Company in the small claims division of the Lyndhurst Municipal Court. Judge Coletta granted Plaintiff's subsequent motion to transfer the case to Cuyahoga County Court of Common Pleas, where it was assigned to Judge O'Donnell. State Farm filed a motion to return the case to the municipal court, but Judge O'Donnell denied the motion. State Farm then brought this action. The Supreme Court granted a writ of prohibition to prevent Judge O'Donnell from hearing the case in the Cuyahoga County Court of Common Pleas and granted a peremptory writ of mandamus ordering Judge O'Donnell to return the matter to the Lyndhurst Municipal Court, holding the peremptory writ was appropriate. View "State ex rel. State Farm Mutual Insurance Co. v. O'Donnell" on Justia Law

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In December 2015, Joseph Gill was injured in an on-the-job car accident when he was struck by a truck owned by Swift Transportation Company, LLC (“Swift”), driven by Christopher Waltz. As a result of the injuries he suffered in the accident, Gill obtained workers’ compensation benefits through Pinnacol Assurance (“Pinnacol”) to cover his medical expenses. Gill’s medical providers produced bills totaling $627,809.76 for the services he received. However, because Colorado’s workers’ compensation scheme caps the amount that medical providers can charge, Pinnacol satisfied all of Gill’s past medical expenses for significantly less. Pinnacol then pursued, and ultimately settled, its subrogation claim with Swift. Gill and his wife subsequently sued Swift and Waltz for damages resulting from the accident, and the case was removed from state court to the U.S. District Court for the District of Colorado. Swift sought partial summary judgment , relying on case law which, in applying Colorado’s workers’ compensation law, concluded that an injured employee lacked standing to pursue damages for services that were covered by workers’ compensation after the insurer had settled its subrogated claims with the third-party tortfeasor. While the federal district court was considering Swift’s motion, the Colorado Court of Appeals issued its opinion in Scholle v. Delta Air Lines, Inc., 2019 COA 81M, in which a divided court disagreed with the case law. Instead, it determined that a plaintiff-employee could seek damages for medical services covered by workers’ compensation insurance if the billed amounts were higher than the paid amounts, even after the insurer had settled its subrogation claim. The Colorado Supreme Court reversed, finding that a settlement between a workers’ compensation insurer and a third-party tortfeasor for all past medical expenses paid as a result of an on-the-job injury extinguished the plaintiff-employee’s claim to recover damages for those past medical expenses from the third-party tortfeasor. "As a result, while Joseph Gill may still pursue his claims for noneconomic damages and any economic damages not covered by his workers’ compensation insurer, he no longer has any claim to recover economic damages based on services paid for by workers’ compensation. There is consequently no reason to present evidence of either the amounts billed or the amounts paid for those services, and the collateral source rule is not implicated in this case." View "Gill v. Waltz" on Justia Law