Justia Insurance Law Opinion Summaries

In this insurance dispute, the First Circuit remanded the case for additional factfinding, holding that where the record was conflicted as to whether there was complete diversity of citizenship when the action was commenced, remand was required. Appellants were two affiliated insureds who owned and operated a commercial bakery in Pittsfield, Massachusetts. Appellee, their insurer, had in effect a commercial business insurance policy covering the bakery. When a pipe erupted in the bakery, causing covered losses, the parties were unable to settle the ensuing insurance claims. Appellants commenced a civil action against Appellee in the United States District Court for the District of Massachusetts, invoking federal diversity jurisdiction and alleging that complete diversity existed between the parties. The magistrate judge ultimately granted Appellee's motion for summary judgment. The First Circuit noted a jurisdictional hurdle and remanded the case, holding that remand was required for the district court to determine whether there was complete diversity between the parties at the time the action was commenced. View "Bearbones, Inc. v. Peerless Indemnity Insurance Co." on Justia Law

Bonni Genzer, an Uber driver, contended James River Insurance Company, Uber’s insurer, breached its contractual obligations by declining coverage for injuries she sustained in an accident on the return leg of a lengthy fare. Genzer also contended that, under Oklahoma law, the “mend the hold” doctrine limited James River to the grounds it gave for declining coverage before she sued. The district court granted summary judgment in James River’s favor, first ruling that Oklahoma had not adopted the mend-the-hold doctrine, and next holding that Genzer’s claim falls outside the scope of the governing insurance policy. The Tenth Circuit agreed as to both issues. View "Genzer v. James River Insurance Company" on Justia Law

Due to an unsafe condition on the premises, Osborne suffered a broken arm at the Center, which is owned and operated by Metro Nashville. Osborne obtained a state court judgment against Metro under the Tennessee Governmental Tort Liability Act; the damages included specific medical expenses related to the incident and found Osborne’s comparative fault to be 20 percent. Before the state court suit, Osborne incurred medical expenses for which Metro did not pay at the time. Medicare made conditional payments to Osborne totaling at least $9,453.09. Osborne claims he incurred—in addition to the costs of his state court litigation—the cost of his co-pays, deductibles, and co-insurance for treatments not covered through Medicare. Osborne alleged Metro is a primary payer who failed to pay under the Medicare Secondary Payer Act (MSPA), 42 U.S.C. 1395y(b), and was therefore liable for reimbursement of Medicare’s conditional payments and a double damages penalty under section 1395y(b)(3)(A). Metro claimed it paid the judgment in full, including discretionary costs. The Sixth Circuit affirmed that Osborne lacked statutory standing to sue for his individual losses and the conditional payments made by Medicare because the MSPA does not permit a private cause of action against tortfeasors. Because the MSPA is not a qui tam statute and financial injury suffered by Medicare is not attributed to Osborne, he also lacked Article III standing to sue for Medicare’s conditional payments. View "Osborne v. Metropolitan Government of Nashville and Davidson County" on Justia Law

In 2013, Rachel Dixon was driving a car owned by her boyfriend, Rene Oriental-Guillermo (“Policyholder”), when she was involved in an accident with a vehicle in which Priscila Jimenez was a passenger, and which was owned by Iris Velazquez, and operated by Alli Licona-Avila. At the time of the accident, Dixon resided with Policyholder, who had purchased a personal automobile insurance policy (“Policy”) for his vehicle through Safe Auto Insurance Company (“Safe Auto”). The Policy contained an unlisted resident driver exclusion (“URDE”), which excluded from coverage any individuals who lived with, but were not related to, the policyholder, and whom the policyholder did not specifically list as an additional driver on the insurance policy. Jimenez and her husband Luis (collectively, “Appellants”) filed a personal injury lawsuit against Dixon, Policyholder, and Licona-Avila. On May 13, 2015, Safe Auto filed a complaint against Dixon, Policyholder, and Appellants, seeking a declaratory judgment regarding the enforceability of the URDE with respect to Dixon. The trial court granted summary judgment in favor of Safe Auto, finding the URDE unambiguous, valid, and enforceable, and concluding that Safe Auto had no duty under the Policy to defend or indemnify Dixon in the underlying personal injury lawsuit. Appellants timely appealed to the Superior Court, arguing: (1) the trial court erred in holding the URDE was valid and enforceable; (2) that the URDE violated the provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”); and (3) that the URDE violated public policy. The Superior Court affirmed the order of the trial court in a divided, published opinion. The Pennsylvania Supreme Court concurred the URDE at issue in this case was enforceable, and affirmed the Superior Court. View "Safe Auto v. Oriental-Guillermo" on Justia Law

Insured Directors, plaintiffs in this declaratory judgment action seeking to allocate defense costs among insured and uninsured parties, appealed the district court's adverse grant of summary judgment in favor of National Union. The court affirmed and held that the Insured Directors' failure to carry their burden of showing entitlement to 100% coverage was the dispositive issue before the district court and was dispositive on appeal. In this case, the district court appropriately considered the only issue properly raised before it. Therefore, the district court did not err in concluding that the Insured Directors failed to meet their burden of proving an allocation different from that proposed by National Union. View "Brand v. National Union Fire Insurance Co." on Justia Law

The Plaintiffs, purportedly the assignees of certain private insurers (Medicare Advantage Organizations), brought a putative class action against State Farm to recover payments State Farm allegedly should have made to them as reimbursement for certain medical costs. The district court dismissed the action with prejudice, and imposed sanctions under Federal Rule of Civil Procedure 11 against one of the plaintiffs, MSP. and its attorneys. The Seventh Circuit concluded that the district court erred in dismissing plaintiffs’ case with prejudice, when the problem was a fundamental lack of Article III standing so that the court lacked jurisdiction to decide the case. However, the court acted within its discretion when it denied plaintiffs a third opportunity to cure the defects in their pleadings. The court’s order, in substance, was a jurisdictional dismissal without prejudice with denial of leave to amend dismissal is without prejudice. The district court exceeded the bounds of its discretion when it imposed Rule 11 sanctions on Recovery Claims and its attorneys. View "MAO-MSO Recovery II, LLC v. State Farm Mutual Automobile Insurance Co." on Justia Law

The Ninth Circuit certified the following question of state law to the Supreme Court of Arizona: What is the standard for determining whether National Union unreasonably withheld consent to Apollo's settlement with shareholders in breach of contract under a policy where the insurer has no duty to defend? View "Apollo Education Group, Inc. v. National Union Fire Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the circuit court holding that a settlement agreement between Plaintiff and her underinsured motorist carrier did not entitle the underinsured defendant (Defendant) to a statutory reduction of the jury verdict rendered against her pursuant to the offset provision of Va. Code 8.01-35.1, holding that the tortfeasor remains primarily responsible for fully compensating the plaintiff for the injury the tortfeasor has caused. Plaintiff sustained injuries when her vehicle was struck by Defendant's vehicle. Plaintiff sued Defendant, asking for compensatory and punitive damages. Prior to trial, Plaintiff settled her underinsured motorist (UIM) claims against her insurance provider. The jury returned a verdict awarding Plaintiff damages against Defendant. Defendant moved to reduce the verdict against her because of the amount paid to Plaintiff by Plaintiff's insurer. The circuit court denied the motion. The Supreme Court affirmed, holding that the circuit court did not err in refusing to reduce the judgment Plaintiff obtained against Defendant by the amount of the proceeds Plaintiff received from her UIM policy. View "Llewellyn v. White" on Justia Law

In 2008, Deerfield’s employee, Graff, had an automobile accident with Keeping. Deerfield had a primary commercial automobile insurance policy through American that covered it for up to $1 million in liability. Deerfield's broker, Gallagher, also helped Deerfield obtain an excess insurance policy from Landmark, to kick in after Deerfield’s liability exceeded $1 million. After Graff’s accident, Deerfield informed American and Gallagher through an intermediary company, Laurus. No one notified Landmark, even after Keeping filed suit. American assumed the defense and hired attorney Olmstead. American never offered the full policy value to settle the suit. More than a year before trial, Keeping made a $1.25 million demand, which was high enough to trigger Deerfield’s excess insurance coverage. American counter-offered $75,000. In 2014, weeks before trial, Landmark learned about Keeping’s lawsuit. Its claims adjuster evaluated the case at $500,000-$750,000. Before trial, Landmark was receiving regular updates as a passive bystander. Before the verdict was announced, American assumed that the jury had sided with the defense and did not resume settlement negotiations. Deerfield did not know about the negotiations, although Olmstead was involved. Landmark knew and advised that American should settle within the primary policy limit. The jury reached a verdict that remitted to $2.3 million. Landmark sought a declaratory judgment that it did not have to cover the loss. The Seventh Circuit affirmed summary judgment for Landmark, holding that Deerfield’s notice was unreasonably late as a matter of law. View "Landmark American Insurance Co. v. Deerfield Construction, Inc." on Justia Law

After a subcontractor (Capsco) was held liable, in state court, to a company (Ground Control) with which it had contracted for what the latter had expended for labor and materials on a construction project, the subcontractor's liability insurers (Greenwich) successfully sought a declaration in federal court that it did not owe a duty to indemnify. Applying Alabama law, the Fifth Circuit affirmed, holding that Capsco's obligation was to pay the party with whom it contracted for its work; because of the failure of either party to get a certificate of responsibility, any right to recovery in the litigation shifted from contract to quantum meruit; and thus Capsco was obligated to pay the reasonable value of the services Ground Control provided, rather than for property damage or loss of its use. Finally, the court denied Ground Control's motion to vacate the district court's judgment and dismiss the case without prejudice. View "Greenwich Insurance Co. v. Capsco Industries, Inc." on Justia Law