Justia Insurance Law Opinion Summaries

Sierra Mattson was a front-seat passenger in her own vehicle, which was driven by Caleb Ratcliffe with her permission. Ratcliffe, driving the wrong way, caused a fatal head-on collision that resulted in the deaths of both Mattson and Ratcliffe, among others. Mattson’s vehicle was insured by Milbank Insurance Company, while Ratcliffe owned another vehicle insured by Erie Insurance, which was not involved in the accident. The Estate received liability proceeds from both insurers, but claimed these were insufficient and sought underinsured motorist (UIM) coverage under Mattson’s Milbank policy, treating Ratcliffe’s Erie-insured (uninvolved) vehicle as the “underinsured motor vehicle.” Milbank denied the claim, leading to a declaratory judgment action.The Circuit Court of Ohio County granted summary judgment in favor of the Estate, finding UIM coverage was available under the Milbank policy, as Ratcliffe’s Erie-insured vehicle qualified as an “underinsured motor vehicle” under West Virginia Code § 33-6-31(b). The circuit court determined that the policy did not require the underinsured vehicle to be involved in the accident. The Intermediate Court of Appeals of West Virginia reversed, holding that the Milbank policy’s UIM endorsement required the underinsured owner or operator’s liability to “arise out of the ownership, maintenance or use” of the underinsured vehicle, and remanded with instructions to enter summary judgment for Milbank.The Supreme Court of Appeals of West Virginia reviewed the case de novo. It held that UIM coverage is available because Ratcliffe’s vehicle meets the statutory definition of “underinsured motor vehicle.” The Court concluded that Milbank’s UIM endorsement, to the extent it imposes more restrictive requirements than West Virginia Code § 33-6-31(b), is void as against public policy and unenforceable. The Court reversed the ICA’s decision and remanded to reinstate summary judgment for the Estate on UIM coverage. View "Showalter v. Milbank Insurance Co." on Justia Law

After being rear-ended in 2018, the plaintiff claimed various injuries including concussion, neck pain, cognitive deficits, psychological issues, and TMJ dysfunction. She settled with the at-fault driver’s insurer for $45,000 but believed her damages exceeded that amount. She sought $25,000—the full underinsured motorist (UIM) policy—from her own insurer, Safeco. Safeco evaluated her claim, excluded certain medical expenses such as TMJ treatment, and initially offered $4,000, inviting further negotiation. The plaintiff rejected this and filed suit for breach of contract, enhanced damages (Hayseeds), and violations of the West Virginia Unfair Trade Practices Act (WVUTPA).The case originated in West Virginia state court but was removed by Safeco to the United States District Court for the Northern District of West Virginia. During discovery, the plaintiff produced new expert reports estimating much higher damages. Safeco then offered the full UIM policy limit of $25,000, which was memorialized in a joint motion signed by both parties, explicitly resolving the claim for policy proceeds and leaving only extracontractual and bad faith claims. The district court found the contractual claim settled, denied the plaintiff’s attempt to later seek reformation for higher policy limits, and granted summary judgment to Safeco on all claims. It found Safeco’s conduct reasonable and no evidence of a pattern of unfair trade practices.Reviewing the appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s summary judgment. The court held the breach of contract claim was resolved for $25,000 based on undisputed settlement evidence, rejected the plaintiff’s reformation argument, found Safeco’s conduct did not necessitate litigation for Hayseeds damages, and concluded there was no evidence of a general business practice violating WVUTPA. The judgment and orders of the district court were affirmed. View "Kreitzer v. Safeco Insurance Company of America" on Justia Law

A Montana-based workers’ compensation insurer was sued by a Texas company in federal court, with the suit alleging breach of contract and seeking over $8 million in damages. The litigation was settled confidentially, but before settlement, the insurer filed its annual financial statement with the Montana Commissioner of Securities and Insurance, failing to specifically disclose the existence of the federal lawsuit. The Commissioner repeatedly directed the insurer to amend its statement to include the ongoing litigation, but the insurer declined to do so.After the insurer refused to comply, the Commissioner initiated administrative proceedings, seeking both a supplement to the annual statement and a $25,000 fine. A Hearing Examiner partially granted summary judgment, permitting the Commissioner to supplement the statement with the existence of the litigation but not the settlement, since the settlement occurred outside the reporting period. The Special Deputy Insurance Commissioner adopted these findings and imposed the maximum fine. The First Judicial District Court, Lewis and Clark County, reviewed the agency’s final decision and affirmed it fully, holding that the Commissioner was empowered to impose the fine without explanation.On appeal, the Supreme Court of the State of Montana affirmed the lower courts’ and agency’s finding that the insurer violated the Insurance Code by failing to disclose the federal lawsuit in its annual statement. The Court held that the Commissioner’s orders to supplement the statement were lawful and within statutory authority. However, the Court reversed the imposition of the $25,000 fine, concluding that the agency’s failure to explain its exercise of discretion in setting the fine amount was arbitrary and capricious. The case was remanded for the agency to provide a cogent explanation before imposing any fine. View "Victory Insurance v. State Auditor" on Justia Law

The case concerns an automobile accident in which the insured, Consul, rear-ended another driver, Choisser, causing injuries and significant vehicle damage. Consul’s insurer, Progressive, provided coverage with $10,000 bodily injury and $10,000 property damage limits. After the accident, Progressive determined Consul was fully at fault. Progressive and Choisser’s attorney began settlement negotiations, during which Progressive sought a release of any loss of consortium claim from Choisser’s wife and required transfer of the vehicle title for what it deemed a total loss. Choisser’s attorney objected to these conditions, stating he did not represent the wife and disputing the total loss valuation. Negotiations stalled, and Choisser ultimately sued Consul. The property damage claim settled, but the bodily injury claim proceeded to trial, resulting in a judgment exceeding $1 million against Consul.Following the judgment, Consul sued Progressive in the United States District Court for the Middle District of Florida, alleging bad faith in Progressive’s settlement negotiations and communications. Progressive moved for summary judgment, arguing it had acted reasonably under the circumstances. The district court granted summary judgment in Progressive’s favor, concluding there was no evidence of bad faith and that Progressive’s actions were reasonable, including its handling of the consortium waiver and title transfer issues.On appeal, the United States Court of Appeals for the Eleventh Circuit held that summary judgment was improper. The appellate court found that genuine disputes of material fact existed regarding whether Progressive acted in bad faith, particularly concerning the reasonableness of requiring the consortium waiver, the handling of the vehicle title, and communication with Consul. The Eleventh Circuit vacated the district court’s judgment and remanded the case for further proceedings, holding that a reasonable jury could find Progressive failed to fulfill its duty of good faith under Florida law. View "Consul v. Progressive American Insurance Company" on Justia Law

A commercial real estate lender provided a loan to a hotel operator to purchase a resort in Ohio, secured by a mortgage. The borrower, obligated to secure insurance on the property, worked with an insurance broker to obtain coverage. However, after policy cancellations and changes, the lender’s interest as a mortgagee was not fully protected under the final insurance policy. The borrower defaulted, and the lender sued for breach of contract, fraud, and related claims, ultimately settling by accepting a deed in lieu of foreclosure, which was considered full payment of the borrower’s debt. The settlement also included an additional payment obligation secured by a consent judgment.Following the settlement, the lender brought suit in the United States District Court for the Northern District of Ohio against the insurance broker, the insurance provider, and an underwriter, seeking damages for not properly securing its mortgagee interest. The claims included breach of contract, negligence, and misrepresentation. The district court granted summary judgment in favor of all defendants, finding that the lender’s mortgagee interest had been extinguished by the settlement and deed in lieu of foreclosure, thereby eliminating any insurable interest required to support its claims.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision de novo, applying Ohio law. The appellate court held that a mortgagee’s insurable interest is tied to the existence of the underlying debt; once the debt is satisfied or released, the mortgagee’s interest and right to insurance proceeds are extinguished. The court found that the settlement agreement and acceptance of the deed in lieu of foreclosure satisfied the debt and ended the lender’s insurable interest. The appellate court affirmed the district court’s summary judgment for the defendants. View "Sinmier, LLC v. Everest Indemnity Ins. Co." on Justia Law

In 2019, a county initiated a project involving the drilling of new foundations for guy wires attached to a communications tower. The county hired a general contractor, which then subcontracted drilling work to another company. An employee of the subcontractor, while working near the site, carried a steel cable into contact with an overhead high voltage power line owned by an electric cooperative, resulting in his electrocution and subsequent death. The power line was not part of the communications tower and the contractors were not working on it.The estate of the deceased employee sued the electric cooperative, the general contractor, and the subcontractor in the Circuit Court of Accomack County, alleging negligence under Virginia’s Overhead High Voltage Line Safety Act (OHVLSA) for failing to implement safety measures near the power line. The circuit court dismissed the subcontractor based on the exclusivity provision of the Virginia Worker’s Compensation Act. The general contractor settled with the estate, and the electric cooperative also settled before a verdict was reached. Subsequently, the electric cooperative’s insurer, as subrogee, filed a federal suit seeking indemnification from the contractors under the OHVLSA. The United States District Court for the Eastern District of Virginia dismissed the claim, holding that the work performed fell within an exemption in the OHVLSA.On appeal, the United States Court of Appeals for the Fourth Circuit certified two questions of Virginia law to the Supreme Court of Virginia. The Supreme Court of Virginia held that the exemption in Virginia Code § 59.1-413 applies to the contractors’ work on the communications tower, thereby excluding them from the OHVLSA’s requirements. As a result, the court found the second certified question—concerning indemnification requirements—to be moot. View "A&N Electric Cooperative v. Dietzel Enterprises" on Justia Law

A group of current and former policyholders brought a lawsuit in federal court against their automobile insurance companies, alleging that the insurers’ rate-setting practices violated Massachusetts law. The insurers, who serve present and former U.S. military members, determine eligibility for insurance with each affiliate based on the policyholders’ highest military pay grade. The plaintiffs claimed that, by using “income” and “occupation” in this way, the insurers violated state regulations prohibiting such criteria in setting insurance rates. The plaintiffs sought declaratory and injunctive relief, as well as restitution for alleged overcharges.The United States District Court for the District of Massachusetts denied the insurers’ motion to dismiss under Rule 12(b)(6). The court then certified for interlocutory appeal the question of whether the filed rate doctrine bars the relief that the plaintiffs seek. The district court reasoned that some of the requested remedies might not be barred by the doctrine and clarified that the controlling question raised several distinct sub-questions about the application of the doctrine under Massachusetts and federal law. The parties did not seek administrative review of the insurance rates in question, and the Massachusetts Attorney General did not intervene in the administrative or judicial proceedings.The United States Court of Appeals for the First Circuit reviewed the case. The court held that Massachusetts law, not the federal filed rate doctrine, governs whether private parties can bring suit under Chapter 93A for alleged violations involving insurance rates approved by the state Commissioner of Insurance. The First Circuit found that there is no controlling precedent under Massachusetts law and certified two questions to the Massachusetts Supreme Judicial Court regarding whether such private suits are authorized and whether the answer differs by the type of relief sought. The First Circuit retained jurisdiction pending the SJC’s response. View "Wright v. United Services Automobile Association" on Justia Law

A marine-equipment dealership purchased insurance policies through its agent, who obtained those policies from a wholesale insurance broker. The dealership alleged it paid its insurance agent a sum significantly greater than the premiums that were ultimately forwarded to the broker and that, after canceling the policies, the agent failed to return the excess amount. The broker refunded a portion of the unearned premiums to the agent, but the dealership maintained that it was also owed the larger sum it paid in excess, as those funds had not been properly applied or returned.The dealership filed suit in the Baldwin Circuit Court against the insurance agent, alleging negligence, wantonness, recklessness, and/or fraud for mishandling and wrongfully retaining premium payments. The insurance agent, in response, moved to interplead the smaller, refunded amount from the broker into court in exchange for its dismissal from the case. The circuit court granted the agent’s motions to interplead those funds, awarded attorney’s fees to the agent from that amount, and dismissed the agent from the action. The dealership’s motion for reconsideration was denied, and subsequently, the dealership and the wholesale broker petitioned for relief.The Supreme Court of Alabama reviewed the petition for a writ of mandamus. It held that interpleader was not proper in this situation because the funds at issue were not exposed to double or multiple liability, and the claims against the agent included independent allegations of liability beyond the interpleaded sum. The court determined that the trial court erred in dismissing the agent from the lawsuit based solely on the interpleader. The Supreme Court of Alabama granted the petition and issued the writ, directing the circuit court to vacate its order. View "In re: Gulf Shores Power Sports, Inc. v. McCarron Insurance Group, Inc." on Justia Law

First Solar Electric LLC was constructing a solar power plant in Georgia when five heavy rain events damaged the project. First Solar held a builders risk insurance policy with Zurich American Insurance Company, which covered both water and flood damage but applied different deductibles: $100,000 for water damage and $2.5 million for flood damage. Zurich initially determined the damage was water-related and issued three advance payments to First Solar, applying the lower deductible and not reserving rights to later change its determination. Subsequently, Zurich reversed its coverage decision, classified the events as floods, and asserted that the higher deductible applied, concluding First Solar’s losses did not exceed the deductible and closing the claim.The United States District Court for the Middle District of Georgia reviewed the dispute. It granted partial summary judgment to both parties, finding that, absent waiver, the flood deductible applied, but Zurich had waived its right to enforce the flood deductible for all events by its conduct. The court also ruled that the policy’s suit-against-the-company provision did not bar First Solar’s suit as untimely. The case proceeded to a jury trial solely on damages, after which the court denied Zurich’s motion to strike a damages witness and entered final judgment in favor of First Solar.On appeal, the United States Court of Appeals for the Eleventh Circuit held that: (1) Georgia law permits an insurer to waive a deductible provision that limits payment, but not coverage; (2) Zurich waived the flood deductible for the first three rain events by its unconditional payments and conduct, but a genuine factual dispute remains as to waiver for the last two events; (3) the suit-against-the-company provision is not a suit-limitation bar; (4) the district court did not abuse its discretion in denying sanctions; and (5) absent waiver, the flood deductible applies. The judgment was affirmed in part, vacated in part, and remanded for further proceedings. View "Zurich American Insurance Co. v. First Solar Electric LLC" on Justia Law

A homeowner held an insurance policy with an insurer from April 2019 to April 2020. After experiencing water damage, she filed a claim in May 2019. The insurer paid part of the claim, but the homeowner disputed the amount and requested additional payment based on independent repair bids. On July 1, 2021, a new Florida statute went into effect requiring claimants to provide presuit notice to the state Department of Financial Services before suing an insurer over a property policy. In August 2021, the homeowner filed suit against her insurer over the 2019 claim without providing this notice.The trial court, a Florida circuit court, dismissed her complaint without prejudice, holding that the presuit notice requirement applied retroactively to her claim, even though her policy was issued before the statute’s effective date. On appeal, the Sixth District Court of Appeal reversed, finding no clear legislative intent for retroactive application of the statute. The appellate court concluded that the statute’s language about applying to “all suits” did not provide a clear command for retroactivity and rejected contrary reasoning from the Fourth District Court of Appeal in Cole v. Universal Property & Casualty Insurance Co.The Supreme Court of Florida reviewed the case to resolve a conflict among the district courts of appeal. The Court held that the presuit notice requirement in section 627.70152, Florida Statutes, does not apply retroactively to insurance policies issued before the statute’s effective date. The Court found no clear legislative intent for retroactive application in the statutory text, and it concluded that the statute significantly altered substantive rights and obligations. The Supreme Court affirmed the Sixth District’s decision and disapproved the Fourth District’s contrary holding. View "Universal Property & Casualty Insurance Company v. Hughes" on Justia Law