Justia Insurance Law Opinion Summaries
Aronstein v. Massachusetts Mutual Life Insurance Co.
The First Circuit affirmed the judgment of the district court ruling against defendant Massachusetts Mutual Life Insurance Company (MassMutual) and against Plaintiff's class action claims in this insurance dispute, holding that the district court did not err.In 2003, MassMutual decided to cut the minimum guaranteed interest rates paid to purchasers of some of its annuities. MassMutual chose to change the interest rate by an endorsement that its staff warned would result in consumer confusion and introduce ambiguity into its annuity certificate. Plaintiff in this case believed that he had bought an annuity that guaranteed him three percent annual interest, but MassMutual claimed that it promised only 1.5 percent annual interest. The district court ruled against MassMutual and against Plaintiff's class action claims. The First Circuit affirmed, holding (1) the annuity did not unambiguously set the minimum guaranteed interest rate at 1.5 percent; (2) the district court did not err in denying Plaintiff's motion for class certification; and (3) MassMutual waived its challenge to prejudgment interest. View "Aronstein v. Massachusetts Mutual Life Insurance Co." on Justia Law
AKC, Inc. v. United Specialty Insurance Co.
The Supreme Court held that a provision found in just about every commercial and personal-property insurance policy issued in Ohio that bars coverage for damage caused by "water that backs up or overflows from a sewer" includes damage caused by sewage carried into an insured property by a backup or overflow event.Sewage from the local sewer system backed up into the Bank Nightclub, a bar that was insured at the time by United Specialty Insurance Company. The bar subsequently hired Cleantech to clean up the site and submitted a claim to its insurer. United Specialty denied the claim, citing an exclusion in the bar's policy for damage caused by water that backs up or overflows from a sewer. The bar assigned AKC any claims it might have against United Specialty, and AKC then brought this breach of contract claim. The trial court granted summary judgment in favor of United Specialty. The court of appeals reversed. The Supreme Court reversed, holding that the water-backup exclusion in the policy included damage caused by the sewage. View "AKC, Inc. v. United Specialty Insurance Co." on Justia Law
Banerjee v. Super. Ct.
Following a preliminary hearing, petitioner Dr. Sanjoy Banerjee was charged in an information with two counts of presenting a false or fraudulent health care claim to an insurer (a form of insurance fraud, counts 1-2), and three counts of perjury (counts 3-5). The superior court denied Banerjee’s motion to dismiss the information as unsupported by reasonable or probable cause. Banerjee petitioned for a writ of prohibition to direct the superior court to vacate its order denying his Penal Code section 995 motion and to issue an order setting aside the information. The Court of Appeal issued an order to show cause and an order staying further proceedings on the information, pending the Court's resolution of the merits of Banerjee’s petition. The State filed a return, and Banerjee filed a traverse. The State argued the evidence supported a strong suspicion that Banerjee committed two counts of insurance fraud and three counts of perjury, based on his violations of Labor Code section 139.3(a) between 2014 and 2016. During that period, Banerjee billed a workers’ compensation insurer for services he rendered to patients through his professional corporation and through two other legal entities he owned and controlled. The insurance fraud charges are based on Banerjee’s 2014-2016 billings to the insurer through the two other entities. The perjury charges were based on three instances in which Banerjee signed doctor’s reports, certifying under penalty of perjury that he had not violated “section 139.3.” Banerjee argued: (1) the evidence showed he did not violate the statute's referral prohibition; (2) even if he did not comply with section 139.3(e), the “physician’s office” exception to the referral prohibition applied to all of his referrals to his two other legal entities; and (3) the patient disclosure requirement of section 139.3(e), the referral prohibition of section 139.3(a), and the physician’s office exception to the referral prohibition were unconstitutionally vague. The Court of Appeal concluded: (1) Banerjee did not violate section 139.3(a) by referring his patients to his two other legal entities; and (2) the evidence supported a strong suspicion that Banerjee specifically intended to present false and fraudulent claims for health care benefits, in violation of Penal Code section 550(a)(6), by billing the workers’ compensation insurer substantially higher amounts through his two other legal entities than he previously and customarily billed the insurer for the same services he formerly rendered through his professional corporation and his former group practice. Thus, the Court granted the writ as to the perjury charges but denied it as to the insurance fraud charges. View "Banerjee v. Super. Ct." on Justia Law
Mudpie, Inc. v. Travelers Casualty Insurance Co. of America
The Ninth Circuit affirmed the district court's order dismissing Mudpie's claims against its insurer in a putative class action brought by Mudpie, seeking to recover under the insurance policy's "Business Income" and "Extra Expense" coverage after state and local authorities in California issued several public health orders in response to the COVID-19 pandemic. Mudpie claimed that the public health orders prevented it from operating its children's stores. Mudpie sought declaratory relief and asserted claims for breach of contract and breach of the implied covenant of good faith and fair dealing.The panel affirmed the district court's ruling that Mudpie's claimed losses are not covered by the policy and the district court did not err in dismissing the claims for declaratory relief, breach of contract, and breach of the covenant of good faith and fair dealing. The panel explained that California courts would construe the phrase "physical loss of or damage to" as requiring an insured to allege physical alteration of its property. In this case, Mudpie did not identify a distinct, physical alteration of the property. The panel also concluded that the policy's Virus Exclusion bars coverage of Mudpie's claimed losses. View "Mudpie, Inc. v. Travelers Casualty Insurance Co. of America" on Justia Law
BonBeck Parker, et al. v. Travelers Indemnity
The issue on appeal in this case stemmed from an insurance claim filed by Bonbeck Parker, LLC and BonBeck HL, LC (collectively, BonBeck) for hail damage. The Travelers Indemnity Company of America (Travelers) acknowledged that some of the claimed damage to BonBeck’s property was caused by a covered hailstorm, but argued the remaining damage was caused by uncovered events such as wear and tear. BonBeck requested an appraisal to determine how much damage occurred, but Travelers refused this request unless BonBeck agreed the appraisers would not decide whether the hailstorm in fact caused the disputed damage. When BonBeck rejected this condition, Travelers filed suit, seeking a declaration that the appraisal procedure in BonBeck’s policy did not allow appraisers to decide the causation issue. The district court disagreed, ruling that the relevant policy language allowed appraisers to decide causation. After the appraisal occurred, the district court granted summary judgment to BonBeck on its breach of contract counterclaim, concluding that Travelers breached the policy’s appraisal provision. Travelers appealed. Applying Colorado law, the Tenth Circuit Court of Appeals affirmed: the disputed policy provision allowed either party to request an appraisal on “the amount of loss,” a phrase with an ordinary meaning in the insurance context that unambiguously encompassed causation disputes like the one here. "And contrary to Travelers’ view, giving effect to this meaning aligns both with other related policy language and with the appraisal provision’s purpose of avoiding costly litigation. For these reasons, the district court appropriately allowed the appraisers to resolve the parties’ causation dispute and granted summary judgment for BonBeck on its breach of contract claim." View "BonBeck Parker, et al. v. Travelers Indemnity" on Justia Law
Nichols v. Zurich American Insurance Co.
The Supreme Court reversed the decision of the court of appeals affirming the judgment of the circuit court concluding that Zurich American Insurance company had a reasonable basis to deny James Nichols' claim for underinsured motorist benefits under a policy issued by Zurich to Nichols' employer, holding that the trial court erred.Zurich issued a commercial fleet policy to Nichols' employer providing underinsured motorist (UIM) coverage with $1,000,000 limits. Nichols was severely injured in an automobile collision and relied on various acknowledgments that the UIM coverage had $1,000,000 limits in settling with the tortfeasor. Zurich denied coverage, and Nichols filed this action to collect under the UIM provision. The trial court denied the motion. The Supreme Court remanded. On remand, Defendant amended his complaint to assert common law bad faith. Zurich settled Nichols' UIM claim for the police limits of $1,000,000, and the trial court granted Zurich's summary judgment motion for summary judgment on the bad faith claims. The Supreme Court reversed, holding that Nichols presented sufficient evidence to survive summary judgment on the bad faith claim. View "Nichols v. Zurich American Insurance Co." on Justia Law
People v. Bankers Insurance Co.
On February 22, a criminal complaint was filed against the defendant for unlawful driving or taking of a vehicle. On February 26, the defendant was in custody and present in court for a pretrial hearing. The court continued the matter to March 20. The Surety posted a bond of $25,000 for the defendant’s release from custody. At the March 20 pretrial hearing, the defendant was not present. The court told defense counsel “I’ll give you a week to bring him back in. … Bench warrant of 35,000 held … it’s not likely to waste your family and friends money and then FTA on a 10851.” On March 28, the defendant again failed to appear. The court ordered bail forfeited. A notice of forfeiture was mailed to the parties on March 29.On October 2, the Surety moved to vacate, forfeit, and exonerate bail or to extend time, arguing that the court lost jurisdiction over the bond because it failed to declare a forfeiture (Penal Code 13051) when the defendant did not appear on March 20. The court of appeal affirmed the denial of the motion. The trial court had a rational basis for believing there may have been an excuse for the defendant’s failure to appear sufficient to warrant continuing the case without declaring a forfeiture and retained jurisdiction to later declare the bail forfeited. View "People v. Bankers Insurance Co." on Justia Law
Jung v. Starr Surplus Lines Insurance Co.
The Fifth Circuit reversed the district court's grant of summary judgment in favor of the insurer in an insurance coverage dispute regarding flood damage to the property at issue. The insureds interpreted the flood deductible in the policy as covering most of the damage to the property, but the district court determined that the policy is unambiguous and adopted the insurer's interpretation.The court applied Louisiana law and concluded that the policy is ambiguous. The court explained that the predominant use of "Total Contract Value" to denote the value of the entire project indicates that the policy, read in its entirety, does not provide clarity regarding the term "total insured values at risk . . . as respects flood." The court remanded for the district court to determine whether extrinsic evidence resolves the ambiguity. View "Jung v. Starr Surplus Lines Insurance Co." on Justia Law
High Country Paving, Inc. v. United Fire & Casualty Co.
HC purchased commercial auto liability, commercial umbrella, and commercial general liability (CGL) coverage from United. An HC employee was operating a company truck and trailer. The trailer detached and hit another vehicle, killing the driver and injuring a passenger. To settle the resulting claims, United paid the combined $3 million limits of the commercial auto and umbrella policies but denied coverage under the CGL policy based on the Aircraft, Auto or Watercraft (AAW) exclusion, and the Multiple Liability Coverages Limitation (MLCL) endorsement. United argued that the injuries arose out of the use of a vehicle pulling a loaded equipment trailer, thus arising out of the use of an “auto,” precluding coverage under the CGL policy under the AAW exclusion. Because coverage was provided under the commercial auto policy, United argued that the CGL policy did not provide coverage, pursuant to the MLCL endorsement.The district court found the provisions unambiguous but unenforceable because they were not listed in a table of contents or notice section of important provisions. The Ninth Circuit certified the question to the Montana Supreme Court: Whether, when an insurance policy does not include either a table of contents or a notice section of important provisions, in violation of Mont. Code 33-15-337(2), the insurer may nonetheless rely on unambiguous exclusions or limitations to the policy’s coverage, given that 33-15-334(2) provides that 33-15-337(2) is “not intended to increase the risk assumed under policies subject to” its requirements? View "High Country Paving, Inc. v. United Fire & Casualty Co." on Justia Law
Ben E. Keith Company, Inc. v. Lyndon Southern Insurance Company
Ben E. Keith Company, Inc. ("BEK"), appealed a circuit court order entering summary judgment in favor of Lyndon Southern Insurance Company ("Lyndon") on Lyndon's complaint for a declaratory judgment. On December 14, 2018, Felicia Edwards and Robert Allen Marak were involved in a motor-vehicle accident in Dadeville. Felicia was driving a 2009 Toyota Camry automobile that was owned by Annette Edwards and insured by Lyndon. Marak was driving a tractor-trailer that was owned by BEK. As a result of the accident, BEK incurred damage to its tractor-trailer. BEK sued Felicia and Annette claiming negligence and wantonness against both Felicia and Annette and a claim of negligent entrustment against Annette. BEK later amended the complaint to add a negligent-maintenance claim against Annette. Lyndon filed a complaint for a declaratory judgment against Felicia, Annette, and BEK, asserting the policy it issued to Annette excluded coverage for "[a]ny operator of a vehicle who is not listed as a driver on the Policy Applications, Declarations, and/or added by Endorsement who is under the age of twenty-five and is either a Family Member or resides in the same household as the Named Insured" and for "[a]n operator of a vehicle who is an unlicensed driver or whose driving privileges have been terminated or suspended." BEK argued the trial court erroneously granted Lyndon's motion for a summary judgment because Lyndon did not produce substantial admissible evidence to establish that Felicia was a noncovered person under the policy that insured Annette's vehicle at the time of the accident. Specifically, it contended Lyndon did not produce substantial admissible evidence to establish that Felicia did not have a valid driver's license at the time of the accident or to establish Felicia's age and residence at the time of the accident. After review, the Alabama Supreme Court concurred Lyndon did not produce substantial evidence to establish that Felicia did not have a valid driver's license at the time of the accident and did not produce substantial evidence to establish that Felicia was under the age of 25 and resided in Annette's household at the time of the accident. Therefore, Lyndon did not shift the burden of proof to BEK. Accordingly, the trial court erred in granting Lyndon's motion for a summary judgment. Judgment was therefore reversed. View "Ben E. Keith Company, Inc. v. Lyndon Southern Insurance Company" on Justia Law