Justia Insurance Law Opinion Summaries
Mitchell v. State Farm Fire & Casualty Co.
The term "Actual Cash Value" is ambiguous with respect to the withholding of labor depreciation in Mississippi homeowners insurance policies that provide no further definition of ACV. The Fifth Circuit affirmed the district court's denial of State Farm's motion to dismiss with respect to plaintiff's breach of contract claim. The court found that, in the context of a Mississippi homeowners policy that refers to "Actual Cash Value" without further definition, both interpretations are reasonable. Therefore, the court held that the contract was ambiguous and the court applied Mississippi's interpretive canons, which provides that an ambiguous insurance contract is interpreted against the insurance company. The court reversed the district court's denial of State Farm's motion to dismiss with respect to plaintiff's tort claims. The court explained that, because the law on this question of interpreting "Actual Cash Value" in Mississippi was unsettled, State Farm had an arguable basis to depreciate labor costs. The court also found that the district court did not abuse its discretion in certifying a class of Mississippi State Farm policyholders similarly situated to plaintiff, who received "Actual Cash Value" payments in which labor was depreciated and whose contracts similarly did not define "Actual Cash Value." View "Mitchell v. State Farm Fire & Casualty Co." on Justia Law
Lewis v. Liberty Mutual Insurance Co.
After plaintiffs were awarded more than $45 million in a products liability suit brought against EcoSmart, EcoSmart declared bankruptcy and plaintiffs brought a direct action against EcoSmart's insurer, LMIC, for payment on the judgment. LMIC argued that its policy with EcoSmart had a forum-selection clause designating Australian courts as the exclusive forum. The district court granted LMIC's motion to dismiss on grounds of forum non conveniens. The Ninth Circuit held that, because plaintiffs stand in the shoes of EcoSmart, their third-party creditors' rights are derivative of the rights and limitations held by the bankrupt insured, and thus the forum-selection clause applies. The panel also held that plaintiffs have not shown that the clause violates California public policy or that Australia is an inadequate forum for suit. Accordingly, the panel affirmed the district court's judgment. View "Lewis v. Liberty Mutual Insurance Co." on Justia Law
Farmers Texas County Mutual Insurance Co. v. Beasley
The Supreme Court reversed the judgment of the court of appeals reversing the trial court's judgment granting Defendant's plea to the jurisdiction and dismissing Plaintiff's suit, holding that the court of appeals erred in concluding that Plaintiff's allegations were sufficient to establish standing. At the time Plaintiff was injured in a car accident he had a personal injury protection (PIP) policy through Farmers Texas County Mutual Insurance Company (Defendant). Defendant paid Plaintiff's incurred medical expenses pursuant to the policy, but the amount Defendant paid was not the medical providers' list rate but, rather, the negotiated rate between Plaintiff's health care insurer and the medical providers. Plaintiff demanded an additional payment amounting to the difference between what Defendant paid Plaintiff and the PIP policy maximum. After Defendant refused, Plaintiff sued. Defendant filed a plea to the jurisdiction, arguing that Plaintiff lacked standing to sue under the PIP policy because Plaintiff alleged no actual or threatened injury. The trial court granted the plea and dismissed the suit. The court of appeals reversed, concluding that Plaintiff's allegations were sufficient to establish standing to sue under the PIP policy. The Supreme Court reversed, holding that the evidence supported Defendant's contention that Plaintiff had not suffered any actual or threatened injury. View "Farmers Texas County Mutual Insurance Co. v. Beasley" on Justia Law
Maryland Casualty Co. v. Asbestos Claims Court
The Supreme Court allowed hundreds of former employees of W.R. Grace & Company's Zonolite Division in Libby (Grace) to continue their asbestos-related personal injury claims against Maryland Casualty Company (MCC), Grace's former workers' compensation insurance provider, holding that MCC owed Grace workers a direct common law duty under Restatement (Second) of Torts 324A(b)-(c) to use reasonable care under the circumstances to warn them of the known risk of exposure to airborne asbestos in certain Grace workplaces. The Supreme Court assumed supervisory control over proceedings pending before the Montana Asbestos Claims Court. Here the Court addressed on extraordinary review MCC's assertion that the district court erred in concluding that MCC owed a duty of care to warn third-party employees of Grace of a known risk of airborne asbestos exposure in or about Grace facilities in and about Libby, Montana between 1963 and 1970. The Supreme Court held that, based on MCC's affirmative assumption of employee-specific medical monitoring and Grace's reliance on MCC to perform that function, MCC owed Grace workers a legal duty to use reasonable care to warn them of the risk of airborne asbestos. View "Maryland Casualty Co. v. Asbestos Claims Court" on Justia Law
North Star Mutual Insurance v. Ackerman, et al.
North Star Mutual Insurance appealed a declaratory judgment holding that a commercial general liability policy it issued to Jayme Ackerman, doing business as Ackerman Homes, provided coverage for Ackerman’s potential liability arising from an accident involving Kyle Lantz, and that North Star has a duty to defend Ackerman. North Star argued the district court erred in finding coverage because the policy excluded accidents arising out of the use of an automobile. Finding no reversible error in the trial court's judgment, the North Dakota Supreme Court affirmed. View "North Star Mutual Insurance v. Ackerman, et al." on Justia Law
Cruson v. Jackson National Life Insurance, Co.
Plaintiff and other Texas residents filed a putative class action against a life insurance company that sells annuities, alleging that the company overcharged them by miscalculating early-withdrawal fees in breach of the annuities contracts. The Fifth Circuit vacated the class certification order and remanded for further proceedings. The court held that the company did not waive its personal jurisdiction as to any non-Texas class members. The court also held that the district court erred in its predominance analysis by failing to assess how state-law variations may impact adjudication of the breach question and also by failing to consider the individualized evidence relevant to the company's affirmative defenses of waiver and ratification. Finally, the court held that plaintiffs failed to offer a damages model adequate to support class treatment, an issue they virtually conceded at oral argument. View "Cruson v. Jackson National Life Insurance, Co." on Justia Law
Chartis Property Casualty Co. v. Inganamort
The Inganamorts docked their 65-foot fishing vessel behind their part-time Boca Raton, Florida residence. In 2011, while they were at their New Jersey home, the ship sank enough to sustain serious damage. They reported the loss to their insurer, Chartis, with whom they had an all-risk policy. Chartis sent a claims specialist, who reported three inches of standing water in the starboard forward cabin bilge and multiple potential sources of water ingress, including a hole in the hull the size of a screw. He found that the electrical breakers were severely rust-stained and blackened from an electrical failure; subsequent testing revealed obvious water intrusion. The final review confirmed the initial findings and identified that the battery charger was not working; without a source of power, the ship’s bilge pumps had ceased functioning. Chartis sought a declaratory judgment that it was not liable for the damage and claimed that the Inganamorts were liable for misrepresentation. The Inganmorts neither filed a statement of facts nor opposed Chartis’s statement of undisputed facts. The district court treated Chartis’s statement of facts as undisputed and granted Chartic summary judgment, finding that the Inganamorts “ha[d] no evidence to demonstrate a fortuitous loss[.]” The Third Circuit affirmed. An insured bears the burden of proving fortuity; the Inganamorts did not meet that burden. View "Chartis Property Casualty Co. v. Inganamort" on Justia Law
Plavin v. Group Health Inc.
The Court of Appeals accepted questions certified to it by the United States Court of Appeals for the Third Circuit and answered that, in this case, Plaintiff sufficiently alleged consumer-oriented conduct to assert claims under N.Y. Gen. Bus. Law 349 and 350 for damages incurred due to an insurance company's alleged materially misleading representations. Plaintiff brought this action based on Defendant-insurance company's allegedly misleading representations made directly to the City of New York's employees and retirees about the terms of its insurance plan to induce them to select its plan from among the eleven health insurance plans made available to over 600,000 current and former City employees. The district court dismissed the complaint for failure to state a claim, concluding that the claims failed to plead consumer-oriented conduct. On appeal, the federal court of appeals certified questions to the Court of Appeals regarding whether Defendant had engaged in consumer-oriented conduct. The Court of Appeals answered the questions in the affirmative, holding that, under the circumstances, the complaint adequately alleged consumer-oriented conduct. View "Plavin v. Group Health Inc." on Justia Law
Jalbert v. Zurich Services Corp.
In this insurance dispute, the First Circuit affirmed the judgment of the district court granting summary judgment in favor of Defendants and dismissing Plaintiff's suit to recover unreimbursed defense costs that a former investment advisory firm (Firm) incurred in connection with a Securities and Exchange Commission (SEC) investigation of the Firm, holding that the Firm was not entitled to coverage. Plaintiff, in his capacity as trustee of a trust established during the bankruptcy proceedings of the Firm, filed this suit against Defendants, two of the Firm's excess insurers, seeking to recover defense costs that the Firm incurred in connection with the SEC investigation. The district court granted summary judgment for Defendants, concluding that an SEC order issued before the start of Defendants' coverage period initiated the investigation of the Firm, and this order triggered the policy's "deemed-made" clause, meaning that the claim was deemed first made prior to Defendants' policy taking effect. The First Circuit affirmed, holding (1) the SEC investigation was a claim that was deemed to have been made when the SEC order issued prior to the inception of Defendants' policies; and (2) accordingly and the claim was outside of the policies' coverage period, and Defendants were not obligated to reimburse the Firm for its defense costs. View "Jalbert v. Zurich Services Corp." on Justia Law
Lovely, et al. v Baker Hughes, Inc., et al.
A construction contractor’s employees were injured on the job and received workers’ compensation benefits from their employer. The workers later brought a negligence suit against three other corporations: the one that had entered into the construction contract with their employer, that corporation’s parent corporation, and an affiliated corporation that operated the facility under construction. The three corporations moved for summary judgment, arguing that all three were “project owners” potentially liable for the payment of workers’ compensation benefits and therefore were protected from liability under the exclusive liability provision of the Alaska Workers’ Compensation Act. The superior court granted the motion, rejecting the workers’ argument that status as a “project owner” was limited to a corporation that had a contractual relationship with their employer. After review, the Alaska Supreme Court concluded a project owner, for purposes of the Act, "must be someone who actually contracts with a person to perform specific work and enjoys the beneficial use of that work." Furthermore, the Court found the workers raised issues of material fact about which of the three corporate defendants satisfied this definition. Judgment was therefore reversed and the matter remanded for further proceedings. View "Lovely, et al. v Baker Hughes, Inc., et al." on Justia Law