Justia Insurance Law Opinion Summaries
Gray v. Quicken Loans, Inc.
Plaintiff filed suit against Quicken, on behalf of himself and others similarly situated, alleging causes of action for breach of fiduciary duty and violations of Civil Code section 2954.8 and Business and Professions Code section 17200, contending that section 2954.8 requires a lender to pay interest on insurance proceeds held in escrow following the partial or total destruction of the insured's residence or other structure. In this case, plaintiff's home was destroyed by Ventura's Thomas Fire and his hazard insurance policy jointly paid him and his mortgage lender, Quicken, a total of $1,342,740. The Deed of Trust allowed Quicken to hold the insurance proceeds in escrow and to disburse the funds as repairs to the home were being made.The Court of Appeal affirmed the trial court's decision sustaining Quicken's demurrer to the complaint without leave to amend, concluding that neither section 2954.8 nor the parties' loan agreement required the payment of interest. Based upon the statutory and contractual language, the court agreed with Lippitt v. Nationstar Mortgage, LLC (C.D.Cal. Apr. 16, 2020, No. SA CV 19-1115-DOC-DFM) 2020 U.S. Dist. Lexis 122881, that section 2954.8 "applies to common escrows maintained to pay taxes, assessments, and insurance premiums -- not to the comparatively unique example of hazard insurance proceeds held by a lender pending property rebuilding." Therefore, the court concluded that the insurance proceeds held by Quicken pursuant to section 5 of the Deed of Trust fall outside the scope of section 2954.8. Furthermore, plaintiff's secondary reliance on the purported purposes of section 2954.8 does not and cannot circumvent the statute's plain language. View "Gray v. Quicken Loans, Inc." on Justia Law
Appeal of Andrew Panaggio
Petitioner Andrew Panaggio appealed a New Hampshire Compensation Appeals Board (Board) determination that respondent, CNA Insurance Company (the insurer), could not be ordered to reimburse him for his purchase of medical marijuana because such reimbursement would have constituted aiding and abetting his commission of a federal crime under the federal Controlled Substances Act (CSA). When Panaggio appealed the insurer’s denial to the New Hampshire Department of Labor, a hearing officer agreed with the insurer. Panaggio appealed the hearing officer’s decision to the Board, which unanimously found that his use of medical marijuana was reasonable and medically necessary. Nonetheless, the Board upheld the insurer’s refusal to reimburse Panaggio, concluding that “the carrier is not able to provide medical marijuana because such reimbursement is not legal under state or federal law.” The New Hampshire Supreme Court surmised the issue on appeal raised a question of federal preemption, "which is essentially a matter of statutory interpretation and construction." Although it was an issue of first impression for the New Hampshire Court, other courts considered whether the CSA preempted a state order requiring reimbursement of an employee’s purchase of medical marijuana. Panaggio reasoned that “[b]ecause New Hampshire law unambiguously requires the insurer to pay for the claimant’s medically related treatment,” an insurer that reimburses a claimant for the purchase of medical marijuana acts without the volition required by the federal aiding and abetting statute. The insurer asserted Panaggio’s argument leads to an absurd result, observing that “[c]onflict preemption applies because state law requires what federal law forbids.” The New Hampshire Supreme Court ultimately concluded the CSA did not make it illegal for an insurer to reimburse an employee for his or her purchase of medical marijuana. "[A] Board order to reimburse Panaggio does not interfere with the federal government’s ability to enforce the CSA. Regardless of whether the insurer is ordered to reimburse Panaggio for his medical marijuana purchase, the federal government is free to prosecute him for simple possession of marijuana under the CSA." Under these circumstances, the Court concluded the “high threshold” for preemption “is not met here.” The Board's decision was reversed and the matter remanded for further proceedings. View "Appeal of Andrew Panaggio" on Justia Law
ALPS Property & Casualty Insurance Co. v. Keller
The Supreme Court affirmed the order of the district court granting summary judgment in favor of ALPS Property & Casualty Insurance Company and declaring that ALPS owed no duty to defend or indemnify Defendants in a malpractice suit, holding that the district court correctly granted summary judgment to ALPS.ALPS brought this action seeking a declaration that it owed no duty to defendant or indemnify Keller, Reynolds, Drake, Johnson & Gillespie, P.C. (the firm) or any of its members for claims Bryan Sandrock, GG&ME, LLC and DRAES, Inc. (collectively, Sandrock) asserted in a malpractice suit against the firm and three of its attorneys. In granting summary judgment for ALPS, the district court held that the firm's ALPS policy did not provide coverage for Sandrock's claim. The Supreme Court affirmed, holding that the district court correctly concluded that there was no coverage under the policy because a member of the firm knew the basis of the legal malpractice claim before the effective date of the policy. View "ALPS Property & Casualty Insurance Co. v. Keller" on Justia Law
Corinth Pellets, LLC v. Arch Specialty Insurance Co.
The Supreme Judicial Court vacated the judgment of the superior court dismissing for failure to state a claim Corinth Pellets, LLC's complaint alleging that a fire loss at Corinth's wood pellet mill was covered under a commercial property insurance policy issued by Arch, holding that the superior court erred in its interpretation of Maine's surplus lines insurance law, Me. Rev. Stat. 24-A, 2009-A.On appeal, Corinth argued that the fire loss was covered under the policy, despite having occurred after the policy term had expired, because Arch failed notify Corinth of its intention not to renew the policy as required by section 2009-A, and therefore, the policy was automatically renewed at the end of the term. The Supreme Judicial Court vacated the judgment, holding that section 2009-A(1) requires a surplus lines insurer to give written notice of its intent either to cancel a policy or not to renew a policy at least fourteen days before the effective date of cancellation or nonrenewal. View "Corinth Pellets, LLC v. Arch Specialty Insurance Co." on Justia Law
Carlile v. Reliance Standard Life Ins.
Reliance Standard Life Insurance (“Reliance”) appealed district court’s orders: (1) concluding that Reliance wrongly denied David Carlile’s claim for long-term disability benefits; (2) refusing to remand the case and instead ordering an award of benefits; (3) awarding attorney fees and costs to Carlile; and (4) denying Reliance’s motion to amend or alter judgment. After reviewing the policy at issue here, the Tenth Circuit determined the relevant policy language was ambiguous and therefore construed it in Carlile’s favor, and in favor of coverage. Furthermore, the Court concluded the district court did not err in refusing to remand the case back to Reliance or in awarding attorney fees and costs to Carlile. View "Carlile v. Reliance Standard Life Ins." on Justia Law
Guastello v. AIG Specialty Insurance Company
A subcontractor built a retaining wall that collapsed years later, causing damage to a nearby residential lot. The homeowner sued the subcontractor, obtained a default judgment, and then sued the subcontractor’s insurance company to enforce the default judgment. The insurance company moved for summary judgment, arguing the homeowner’s damages occurred long after the insurance policy had expired, and therefore the insurance company had no duty to cover the default judgment. The trial court agreed and granted the motion. On appeal, the homeowner alleged “continuous and progressive” damage began to occur shortly after the subcontractor built the retaining wall during the coverage period of the insurance policy. The insurance company disagreed. The Court of Appeal determined that was a triable issue of material fact, thus reversing the trial court’s grant of summary judgment. View "Guastello v. AIG Specialty Insurance Company" on Justia Law
Allstate Property & Casualty Ins. Co. v. Harbin
Defendant Allstate Property and Casualty Insurance Company ("Allstate"), appealed a circuit court's order granting the posttrial motion of the plaintiff, Doyle Harbin, which sought the imposition of sanctions based on Allstate's purported violation of a pretrial mediation order. In 2015, Harbin was injured as the result of a motor-vehicle accident that he alleged was caused by Irvin Stewart. Harbin subsequently filed a complaint in the trial court asserting a negligence claim against Stewart. In the same complaint, Harbin also named Allstate, Harbin's automobile insurance carrier, as a defendant and sought to recover uninsured/underinsured-motorist ("UIM") benefits under his Allstate policy. Following Stewart's dismissal, Harbin, without opposition from Allstate, requested that the scheduled trial date be continued and the matter referred to mediation. Unable to reach a settlement, the matter proceeded to trial. A jury returned a $690,000 verdict in Harbin's favor. Approximately two weeks later, Harbin filed a "Motion for Entry of Judgment and Motion for Sanctions," essentially contending Allstate in bad faith failed to abide by the Order which set the Court-ordered mediation in which Allstate had agreed to participate. The motion requested Allstate pay Harbin's trial-related attorneys' fees. The Alabama Supreme Court found the evidence failed to show Allstate violated the trial court's mediation order, thus it exceeded its discretion by issuing Harbin's requested sanctions. The Court therefore reversed the portion of the trial court's order imposing sanctions exceeding Harbin's request for costs and fees totaling $57,516.36, and remanded this matter for further proceedings. View "Allstate Property & Casualty Ins. Co. v. Harbin" on Justia Law
State Farm Fire & Casualty Co. v. TFG Enterprises, LLC
The Supreme Court affirmed the judgment of the district court finding that State Farm Fire & Casualty Company had no obligation to defend or indemnify TFG Enterprises, LLC and its principal, Jeffrey Leonard, in a lawsuit, holding that the district court correctly concluded that State Farm had no potential liability under the insurance policy at issue.Jeffrey Barkhurst filed a lawsuit against TFG and Leonard (together, Defendants) asserting that they were liable for breach of contract, negligent misrepresentation, and fraudulent concealment. State Farm agreed to defend Defendants in a reservation of rights and then filed this action seeking a declaration that it owed no coverage obligations to Defendants under the rental policy State Farm had issued to TFG. The district court granted summary judgment in favor of Stat Farm, finding that State Farm had no coverage obligations. The Supreme Court affirmed, holding the State Farm had no potential liability from the underlying lawsuit under the rental policy and thus had no duty to defend or indemnify Defendants. View "State Farm Fire & Casualty Co. v. TFG Enterprises, LLC" on Justia Law
Ryser v. Shelter Mutual Insurance
The issue this case presented for the Colorado Supreme Court's review centered on whether an injured passenger riding in a vehicle negligently driven by one co-worker and owned by another co-worker, when all three were acting within the course and scope of their employment, could recover UM/UIM benefits under the vehicle owner’s insurance policy. Although the parties disputed the meaning of the phrases “legally entitled to recover” and “legally entitled to collect” under section 10-4-609, C.R.S. (2020) the Court did not resolve that dispute here because, assuming without deciding that plaintiff Kent Ryser’s interpretation was correct, the Court concluded that he still could not prevail. Specifically, the Court found an injured co-worker was barred by operation of the Workers’ Compensation Act's (“WCA”) exclusivity and co-employee immunity principles from recovering UM/UIM benefits from a co-employee vehicle owner’s insurer for damages stemming from a work-related accident in which another co-employee negligently drove the owner’s vehicle and the injured party was an authorized passenger. Though the Court's reasoning differed from the appellate court's judgment, it affirmed the outcome: summary judgment was properly entered in favor of the insurance company. View "Ryser v. Shelter Mutual Insurance" on Justia Law
WSI v. Cherokee Services Group, et al.
Cherokee Services Group, LLC; Cherokee Nation Government Solutions, LLC; Cherokee Medical Services, LLC; Cherokee Nation Technologies, LLC (collectively referred to as the “Cherokee Entities”); Steven Bilby; and Hudson Insurance Company (“Hudson Insurance”) appealed district court orders and a judgment reversing an administrative law judge’s (“ALJ”) order. The ALJ’s order concluded the Cherokee Entities and Bilby were protected by tribal sovereign immunity and Workforce Safety and Insurance (“WSI”) had no authority to issue a cease and desist order to Hudson Insurance. The district court reversed the ALJ’s determination. The Cherokee Entities were wholly owned by the Cherokee Nation; Bilby served as executive general manager of the Cherokee Entities. Hudson Insurance provided worldwide workers’ compensation coverage to Cherokee Nation, and the Cherokee Entities were named insureds on the policy. WSI initiated an administrative proceeding against the Cherokee Entities, Bilby, and Hudson Insurance. WSI determined the Cherokee Entities were employers subject to North Dakota’s workers’ compensation laws and were liable for unpaid workers’ compensation premiums. WSI also ruled that Bilby, as executive general manager, was personally liable for unpaid premiums. WSI ordered the Cherokee Entities to pay the unpaid premiums, and ordered Hudson Insurance to cease and desist from writing workers’ compensation coverage in North Dakota. The Cherokee Nation had no sovereign land in North Dakota, and the Cherokee Entities were operating within the state but not on any tribal lands. The North Dakota Supreme Court reversed the district court judgment, and reinstated and affirmed the ALJ’s order related to the cease and desist power of WSI, but the matter was remanded to the ALJ for further proceedings on the issue of sovereign immunity. View "WSI v. Cherokee Services Group, et al." on Justia Law