Justia Insurance Law Opinion Summaries
Nationwide Mutual Insurance Co. v. Shilling
The Court of Appeals held that the statute of limitations begins to run in an underinsured motorist claim against an insurer when the insurer breaches the contract to provide underinsured motorist benefits by denying the insured's claim. Insured was injured in an automobile accident with an underinsured motorist. The underinsured tortfeasor extended to Insured a policy limits settlement offer of $20,000. Insured accepted the offer and then attempted to collect additional underinsured motorist benefits from Insurer. The motor vehicle liability insurance policy covered up to $300,000 per person for bodily injury caused by an uninsured or underinsured motorist. Insured later filed suit against Insurer seeking the balance of unpaid damages not covered by the $20,000 settlement. The circuit court dismissed the complaint as untimely. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding (1) the statute of limitations in an underinsured motorist claim begins to run when the insurer denies an insured's demand for benefits, thereby breaching the insurance contract; and (2) Insured's underinsured motorist claim was not time barred. View "Nationwide Mutual Insurance Co. v. Shilling" on Justia Law
Turner v. State Farm Mutual Insurance Company
David Turner appealed the grant of summary judgment entered in favor of State Farm Mutual Insurance Company. In August 2017, Turner was on duty as a paramedic and was riding in the passenger seat of an ambulance while responding to an emergency call. While traversing an intersection, the ambulance collided with a vehicle being driven by Michael Norris. Turner suffered multiple injuries, including a broken leg. In November 2017, Turner sued Norris, asserting claims of negligence and "recklessness." Norris answered the complaint, denying that he had been negligent or reckless. Because the Alabama Supreme Court Held that State Farm was discharged from its obligation to pay Turner UIM benefits based on State Farm's payment of a "Lambert" advance and Turner's repudiation of his policy with State Farm, the Court pretermitted consideration of Turner's alternative argument regarding State Farm's failure to disclose the substance of its investigation of Turner's claim for UIM benefits, and expressed no opinion concerning that issue. The Court also expressed no opinion regarding any potential liability State Farm may or may not have to Turner in tort because Turner did not assert such a claim in this action. View "Turner v. State Farm Mutual Insurance Company" on Justia Law
Erie Insurance Exchange v. Alba
The Supreme Court reversed the decision of the circuit court finding that a condominium association's insurance provider waived subrogation against the tenant of an individual unit owner where the tenant was not a named or additional insured, holding that the circuit court erred. As a result of losses sustained from a fire to property managed by Chimney Hill Condominium Association, and consistent with its coverage obligations, Erie Insurance Exchange made payments for the benefit of the Association. Standing in the shoes of the Association, Erie then brought suit against Naomi Alba to recover the payments it made, alleging that Alba negligently caused the fire. Alba, who lived in the unit where the fire originated under a residential lease agreement, filed a third-party complaint against John Sailsman, the unit's owner, for indemnification. The circuit court granted Alba's motion for declaratory judgment, holding that Erie could not pursue subrogation against Alba. The Supreme Court reversed, holding that Alba was not an implied insured of the Association because no contractual relationship or agreement existed between the two parties to allocate risks and responsibilities and because the surrounding circumstances reflected the contrary intention of not absolving non-unit owners of responsibility for harm caused by their negligent acts. View "Erie Insurance Exchange v. Alba" on Justia Law
Sparks v. Old Republic Home Protection Co., Inc.
The Oklahoma Supreme Court granted certiorari to address first impression questions of: (1) whether a home warranty plan met the definition of an insurance contract; (2) and if it was insurance, whether a forced arbitration clause in such a contract was unenforceable under the Oklahoma Uniform Arbitration Act; (3) whether 12 O.S. 2011 section 1855 of the Oklahoma Uniform Arbitration Act was a state law enacted for the purpose of regulating insurance under the McCarran-Ferguson Act; and (4) whether pursuant to the McCarran-Ferguson Act, did section 1855 preempted the application of the Federal Arbitration Act. The Supreme Court answered all questions in the affirmative. View "Sparks v. Old Republic Home Protection Co., Inc." on Justia Law
Genworth Life and Annuity Insurance Co. v. TVPX ARS, Inc.
In 2018, TVPX filed an amended class action complaint in the Eastern District of Virginia against Genworth, alleging that Genworth violated the terms of one of its life insurance policies by imposing inflated "cost of insurance" (COI) charges on its insureds. Genworth brought this action in district court seeking to enjoin TVPX's Virginia lawsuit, arguing that TVPX's claims were barred by a 2004 agreement settling a prior class action about the same life insurance policies. The district court then granted Genworth's motion to enjoin TVPX's Virginia action, finding that TVPX's complaint was barred by the doctrine of res judicata. The Fifth Circuit vacated the district court's order enjoining TVPX's Virginia lawsuit. Although the primary right and duty at issue in TVPX's complaint were also at issue in the settlement, the court held that the record does not support the district court's finding that Genworth's "cost of insurance" (COI) practices remain unchanged since the settlement. The court remanded to the district court for limited discovery on whether Genworth has in any way changed how it calculates and charges COI since the settlement. Finally, the court held that, when read in its entirety, the Pre-Settlement Policy Administration does not constitute a preservation of rights, but instead clarifies that Genworth may continue administering its policies in the same manner that it did before the settlement. View "Genworth Life and Annuity Insurance Co. v. TVPX ARS, Inc." on Justia Law
Affinity Living Group, LLC v. Starstone Specialty Insurance Co.
After Affinity was sued for allegedly submitting Medicaid reimbursement claims for services that they never provided, it sought coverage for the suit under its insurance policy with StarStone. StarStone denied coverage because the lawsuit's claims did not fall within the policy's coverage for "damages resulting from a claim arising out of a medical incident." The district court agreed and granted judgment on the pleadings against Affinity on a declaratory judgment claim and breach of contract claim. The Fourth Circuit first found that it had appellate jurisdiction over the appeal, because Affinity properly appeals from a "final" decision. In this case, Affinity properly appealed the district court’s order dismissing its contractual claims after voluntarily dismissing extra-contractual claims that were necessarily precluded by the order. On the merits, the court applied North Carolina law and held that the allegations in the underlying complaint fall within the insurance policy's coverage provision. The court found that the False Claims Act action "arises out of" a medical incident as required to fall under the coverage provision of StarStone's policy. Accordingly, the court vacated the district court's order granting StarStone's motion for judgment on the pleadings and vacated the order denying Affinity's motion for partial summary judgment. View "Affinity Living Group, LLC v. Starstone Specialty Insurance Co." on Justia Law
Pan Am Equities, Inc. v. Lexington Insurance Co.
This insurance coverage case concerns flood damage from Hurricane Harvey to two office buildings owned by Pan Am and insured by Lexington. The Fifth Circuit affirmed the district court's grant of summary judgment in favor of Lexington. The court held that the unequivocal language of the "Windstorm" deductible, which covered flood damage, controls. Therefore, Pan Am may not recover because its buildings were damaged solely by flooding. Furthermore, even if the generic $100,000 "Flood" deductible were to also apply, the 5% TIV-based deductible would prevail under the policy's anti-stacking clause. View "Pan Am Equities, Inc. v. Lexington Insurance Co." on Justia Law
Mosley v. Pacific Specialty Ins. Co.
Plaintiffs-appellants James and Maria Mosley rented out a home they owned that defendant-respondent Pacific Specialty Insurance Company (PSIC) insured under a homeowners’ policy (the Property). The Mosleys’ tenant started growing marijuana in the Property. To support his marijuana-growing operation, the tenant re-routed the Property’s electrical system to steal power from a main utility line. The tenant’s re-routed electrical system caused a fuse to blow, which started a fire that damaged the Property. PSIC denied coverage, citing a provision in the Mosleys’ policy that excluded any loss associated with “[t]he growing of plants” or the “manufacture, production, operation or processing of . . . plant materials.” The Mosleys sued, but the trial court granted summary judgment in favor of the insurance company, finding that the Mosleys had control over their tenant's conduct. A divided Court of Appeals reversed, finding no evidence the Mosleys were aware of their tenant's marijuana growing operation, and because the record was silent as to what the Moseleys could or should have done to discover it. "[T]he Mosleys did not use the Property in a prescribed way that would have allowed PSIC to suspend their insurance and deny all coverage. More importantly, contrary to PSIC’s assertion and the trial court’s finding, there was no evidence Mosleys knowingly increased a risk of fire hazard. In addition, a fact issue remains as to whether [the Tenant's] hazard-increasing conduct was within their control. If it was, then PSIC properly denied coverage. But by denying the Mosleys coverage for Lopez’s conduct, regardless of the Mosleys’ control over or knowledge of it, the Policy did not provide 'substantially equivalent' coverage to that required under [Insurance Code] section 2071." View "Mosley v. Pacific Specialty Ins. Co." on Justia Law
O’Donnell v. Allstate Indemnity Company
Plaintiff John O’Donnell appealed a superior court order granting summary judgment to defendant Allstate Indemnity Company. Following a November 2015 motor vehicle accident, O’Donnell filed an underinsured motorist claim under a personal umbrella insurance policy that he had purchased from Allstate. Allstate denied the claim. O’Donnell then filed this declaratory judgment action to determine whether his policy provided uninsured motorist coverage. The trial court concluded that O’Donnell’s policy did not provide uninsured motorist coverage, finding that a written waiver of uninsured motorist coverage that O’Donnell had executed in September 2011 remained in effect at the time of the accident. Finding no reversible error in that judgment, the New Hampshire Supreme Court affirmed. View "O'Donnell v. Allstate Indemnity Company" on Justia Law
Plein v. USAA Cas. Ins. Co.
Richard and Debra Plein sued USAA Casualty Insurance Company, alleging insurance bad faith. The Pleins hired three attorneys, two of whom were members of the Keller Rohrback LLP lawfirm (Keller), to represent them. But Keller had previously defended USAA in bad faith litigation for over 10 years. Under the Rules of Professional Conduct, Keller would have been barred from representing the Pleins if the prior representation was in a matter "substantially related" to the Plein matter. Interpreting the "substantially related" language in the Rules of Professional Conduct was one of first impression for the Washington Supreme Court. The Court held that under RPC 1.9(a), USAA failed to show a "substantial risk" that Keller obtained 'confidential factual information" that would 'materially advance" the Pleins’ case. Accordingly, Keller did not represent former client USAA on any matter "substantially related" to the instant case. The Court therefore reversed the Court of Appeals decision that disqualification was required, and reinstated the trial court’s order that disqualification was not required. View "Plein v. USAA Cas. Ins. Co." on Justia Law