Justia Insurance Law Opinion Summaries

Plaintiffs, representing a class of drivers, alleged that Progressive Specialty Insurance and Progressive Advanced Insurance systematically underestimated the actual cash value (ACV) of their totaled vehicles, thereby breaching their insurance agreements. The plaintiffs claimed that Progressive's method of calculating ACV, which included a "Projected Sold Adjustment" (PSA) to account for the fact that used cars often sell for less than their listed prices, was improper and resulted in underpayment.The United States District Court for the Eastern District of Pennsylvania certified two damages classes, finding that the plaintiffs' claims centered on the legitimacy of the PSAs and that this issue could be resolved on a class-wide basis. The court held that the plaintiffs had standing and rejected Progressive's arguments against commonality, predominance, superiority, and adequacy.The United States Court of Appeals for the Third Circuit reviewed the case and concluded that the District Court had abused its discretion in certifying the classes. The Third Circuit held that proving whether Progressive undercompensated each class member was an individual issue that could not be resolved on a class-wide basis. The court emphasized that the key issue was whether each class member received less than the true ACV of their vehicle, which would require individualized inquiries. As a result, the court found that common issues did not predominate over individual ones, and the District Court's certification of the classes was reversed and remanded for further proceedings. View "Drummond v. Progressive Specialty Insurance Co." on Justia Law

Geovanni Quijadas Silva was charged with committing a lewd act on a child, and his bail was set at $100,000. The North River Insurance Company posted the bail bond. Silva failed to appear for a plea hearing, leading the trial court to declare the bond forfeited. North River was notified and given 180 days to either produce Silva or demonstrate reasons to set aside the forfeiture. North River requested and received an additional 180-day extension. Near the end of this period, North River located Silva in Mexico and filed a motion to vacate the forfeiture, arguing that the bond should be exonerated if the prosecution chose not to seek extradition.The trial court denied North River’s motion, stating that the prosecution had not made an extradition decision within the appearance period and no statutory provisions required them to do so. The court also denied the request to toll the appearance period or continue the matter, as the prosecution had not agreed to a continuance. Summary judgment was entered against North River for $100,000.North River appealed, and the Court of Appeal initially affirmed the trial court’s decision but later reversed it upon rehearing. The appellate court held that the trial court should either compel the prosecution to make an extradition decision or continue the hearing to allow time for such a decision.The California Supreme Court reviewed the case and concluded that section 1305 does not authorize the trial court to compel the prosecution to make an extradition decision or require the court to continue the hearing on the motion to vacate until the prosecution makes such a decision. The court emphasized that the statutory language and legislative history indicate that prosecuting agencies have exclusive control over extradition decisions. The judgment of the Court of Appeal was reversed. View "P. v. The North River Ins. Co." on Justia Law

Jose Cruz-Muniz and Sandra Cruz were injured in a car accident in 2018 and received treatment from C-Spine Orthopedics, PLLC. They assigned their rights to seek personal protection insurance (PIP) benefits from Progressive Michigan Insurance Company to C-Spine. C-Spine then assigned its accounts receivable, including the claims for unpaid benefits, to several factoring companies. Progressive argued that C-Spine lacked standing to seek payment because it had assigned its rights to the factoring companies. C-Spine countered with signed counter-assignments from the factoring companies, purportedly restoring its right to bring suits. The trial court initially denied Progressive's motion but later granted it, concluding that C-Spine lacked standing when the complaints were filed.In a separate case, Parie Wallace was injured in a bus accident and received treatment from several providers, including C-Spine. Wallace assigned her rights to seek PIP benefits to these providers. She later filed a lawsuit against Suburban Mobility Authority for Regional Transportation (SMART) seeking payment of PIP benefits. SMART argued that Wallace could not bring the action because she had assigned her rights to the providers. The trial court allowed Wallace to obtain revocations of the assignments, which she did, and then denied SMART's motion for summary disposition. The Court of Appeals reversed, holding that Wallace was not the real party in interest when she filed her complaint and that her claims were barred by the one-year-back rule.The Michigan Supreme Court held that both C-Spine and Wallace had standing to file their lawsuits but were not the real parties in interest at the time they filed suit because they had assigned their claims. The Court ruled that defects in real party in interest status could be cured after filing a lawsuit. In C-Spine's case, the Court of Appeals' judgment was affirmed on alternate grounds, and the case was remanded to the trial court for further proceedings. In Wallace's case, the Court of Appeals' judgment was affirmed in part, reversed in part, and vacated in part, and the case was remanded for the trial court to consider whether equitable rescission was warranted and whether the real party in interest defect could be cured. View "C-Spine Orthopedics PLLC v. Progressive Michigan Insurance Company" on Justia Law

C-Spine Orthopedics, PLLC, filed two actions in the Macomb Circuit Court against Progressive Michigan Insurance Company to recover personal protection insurance (PIP) benefits for care provided to Jose Cruz-Muniz and Sandra Cruz, who were injured in a 2018 car accident. Jose and Sandra assigned their rights to seek PIP benefits to C-Spine, which then assigned its accounts receivable, including these claims, to factoring companies. Progressive moved for summary disposition, arguing C-Spine lacked standing as it had assigned its rights. The trial court initially denied but later granted the motion, concluding C-Spine lacked standing when the complaints were filed. The Court of Appeals reversed, holding C-Spine retained its claims for PIP benefits under MCL 500.3112.Parie Wallace filed an action in the Wayne Circuit Court against Suburban Mobility Authority for Regional Transportation (SMART) seeking PIP benefits after being injured in a bus accident. Wallace assigned her rights to PIP benefits to her medical providers. SMART moved for summary disposition, arguing Wallace could not bring the action due to the assignments. The trial court allowed Wallace to obtain revocations of the assignments, which she did, and then denied SMART’s motion. The Court of Appeals reversed, holding Wallace was not the real party in interest when she filed her complaint and that her claims were barred by the one-year-back rule.The Michigan Supreme Court held that both C-Spine and Wallace had standing to file their lawsuits but were not real parties in interest at the time of filing due to their assignments. The Court ruled that defects in real party in interest status could be cured after filing. In C-Spine’s case, the Court of Appeals’ judgment was affirmed on alternate grounds, and the case was remanded to the trial court to consider whether C-Spine could cure the defect. In Wallace’s case, the Court of Appeals’ judgment was affirmed in part, reversed in part, and vacated in part, and the case was remanded for the trial court to consider whether equitable rescission was warranted and whether the real party in interest defect could be cured. View "Wallace v. Smart" on Justia Law

Michael Swanson killed a motorcyclist while driving his parents' car. After a wrongful-death lawsuit settled, Swanson's personal automobile-liability policy paid up to its coverage limits. The remaining question was which insurer should pay next: Hartford Fire Insurance Company, which provided a commercial automobile policy to Swanson's employer, or Chubb Custom Insurance Company, which provided group excess-liability benefits. Both insurers had "excess clauses" requiring the other to pay first, leading to a dispute.The United States District Court for the Western District of Missouri determined that the excess clauses were mutually repugnant, meaning they canceled each other out. The court granted summary judgment to Hartford, denied Chubb's motion for judgment on the pleadings, and ordered both insurers to share the remaining settlement amount pro rata.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court found that Hartford's policy was "excess over any other collectible insurance," while Chubb's policy was "excess over any other insurance," making it a true excess policy. The court concluded that Hartford's policy should pay before Chubb's because Hartford's policy was excess over collectible insurance, which included Swanson's personal automobile-liability policy. Chubb's policy, being a true excess policy, would only come into play after all other insurance was exhausted.The Eighth Circuit vacated the district court's judgment and remanded the case with instructions to grant Chubb's motion for judgment on the pleadings, determining that Hartford should pay before Chubb. View "Hartford Fire Insurance Company v. Chubb Custom Insurance Company" on Justia Law

The case involves the Massachusetts Insurers Insolvency Fund (MIIF) seeking cost-of-living adjustment (COLA) payment reimbursements from the Workers' Compensation Trust Fund (trust fund). MIIF, a nonprofit entity created by statute, administers and pays certain claims against insolvent insurers. Between 1989 and 2013, MIIF paid workers' compensation benefits, including COLA payments, on behalf of several insolvent insurers. MIIF filed claims with the trust fund for reimbursement of these payments, but the trust fund denied the claims, arguing that MIIF is not an "insurer" under the relevant statutes and does not participate in the trust fund.The Department of Industrial Accidents (DIA) administrative judge denied MIIF's claims, and the Industrial Accident Reviewing Board (board) affirmed the decision. The board relied on the Appeals Court's decision in Home Ins. Co. v. Workers' Compensation Trust Fund, concluding that MIIF, like the insolvent insurers, does not collect and transmit assessments to the trust fund and is therefore not entitled to reimbursement.The Supreme Judicial Court of Massachusetts reviewed the case and concluded that MIIF is eligible for COLA-payment reimbursements. The court determined that MIIF, when taking on an insolvent insurer's covered claims, is "deemed the insurer" and has "all rights, duties, and obligations" of the insolvent insurer under G. L. c. 175D, § 5 (1) (b). The court also found that the plain language of the relevant statutes does not exclude MIIF from reimbursement eligibility and that the trust fund's funding mechanism, which is paid for by employers, supports MIIF's entitlement to reimbursement.The Supreme Judicial Court reversed the board's decision and remanded the case for further proceedings consistent with its opinion. View "Massachusetts Insurers Insolvency Fund v. Workers' Compensation Trust Fund" on Justia Law

An insurer, Arrowood Indemnity Company, entered run-off in 2003, ceasing to issue new policies but continuing to manage existing claims, including workers' compensation for a Scully Signal Company employee who sustained a second work-related injury in 2001. Arrowood sought second-injury reimbursements from the Massachusetts Workers' Compensation Trust Fund, which reimburses insurers for a portion of workers' compensation benefits paid to employees with exacerbated injuries. Arrowood and the Trust Fund settled in 2009, with Arrowood receiving reimbursements until 2013.The Department of Industrial Accidents (DIA) began denying Arrowood's reimbursement requests in 2015, citing a precedent that insurers in run-off, who no longer collect and transmit employer assessments to the Trust Fund, are ineligible for reimbursements. Arrowood's subsequent complaint in Superior Court was dismissed, and the Appeals Court affirmed the dismissal, directing Arrowood to seek administrative review. The DIA administrative judge and the Industrial Accident Reviewing Board upheld the denial, leading Arrowood to appeal to the Appeals Court.The Appeals Court reversed the Board's decision, ruling that the statutory language of the Massachusetts workers' compensation act does not preclude insurers in run-off from receiving second-injury reimbursements. The Supreme Judicial Court of Massachusetts granted further appellate review and agreed with the Appeals Court. The Court held that the plain language of the act does not exclude insurers in run-off from reimbursement eligibility and that the statutory scheme supports this interpretation. The Court reversed the Board's decision and remanded for further proceedings consistent with its opinion. View "Arrowood Indemnity Company v. Workers' Compensation Trust Fund" on Justia Law

Two hospitals in Tennessee, Saint Francis Hospital and Saint Francis Hospital-Bartlett, sued Cigna Health and Life Insurance Company, claiming that Cigna routinely underpaid them for emergency services provided to Cigna members. The hospitals, which are out-of-network providers for Cigna, argued that Cigna had a quasi-contractual obligation to pay the reasonable value of their services based on federal and state laws requiring hospitals to treat emergency patients and insurers to cover emergency care.The United States District Court for the Western District of Tennessee dismissed the hospitals' claims. The court found that the hospitals' complaint did not meet the pleading standards of Rule 8, that Tennessee common law did not support their claims, and that the Employee Retirement Income Security Act (ERISA) preempted their claims.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's dismissal. The Sixth Circuit held that neither federal law (specifically the Affordable Care Act) nor Tennessee law imposed a duty on Cigna to pay the full value of out-of-network emergency services. The court noted that the ACA's requirement for insurers to provide "coverage" for emergency services did not mean that insurers had to pay the full cost. The court also found that Tennessee common law did not support the hospitals' claims for quantum meruit and unjust enrichment, as there was no contractual or statutory duty for Cigna to pay the full value of the services.The Sixth Circuit concluded that the hospitals' claims failed because they could not establish that Cigna had a legal obligation to pay more than what was stipulated in its contracts with its members. The court did not address the ERISA preemption issue, as the dismissal was affirmed on other grounds. View "AMISUB (SFH), Inc. v. Cigna Health & Life Ins. Co." on Justia Law

A general contractor, Keluco General Contractors, Inc., secured a workers’ compensation and employers’ liability policy through Travelers Property Casualty Company of America. The policy was set to last one year, expiring on March 5, 2017. After the policy expired, a Keluco employee was injured at work. Keluco attempted to make a claim on its workers’ compensation policy and discovered it had expired. Travelers claimed to have sent a notice of nonrenewal to Keluco and its insurance agent, Gretchen Santerre, but Keluco claimed it never received the notice.Keluco sued Santerre and her employer, Country Mutual Insurance Company, for failing to inform it of the nonrenewal notice. Santerre filed a third-party complaint against Travelers. The Superior Court of Alaska granted partial summary judgment against Travelers, ruling that it failed to send the nonrenewal notice in the manner required by statute, specifically by not obtaining a certificate of mailing from the United States Postal Service (USPS). The court found that Travelers breached its contract with Keluco.The Supreme Court of the State of Alaska reviewed the case. The court affirmed the Superior Court’s rulings on summary judgment, agreeing that Travelers violated AS 21.36.260 by not obtaining a certificate of mailing from USPS and thus breached its contract with Keluco. The court also affirmed the dismissal of Travelers’ contribution claim against Santerre, noting that Alaska law allows for the allocation of fault to a party who has settled out of a case.However, the Supreme Court reversed the Superior Court’s determination of when prejudgment interest began to accrue. The Supreme Court held that prejudgment interest should begin to accrue on September 20, 2017, the date the Keluco employee was injured and entitled to workers’ compensation benefits, rather than January 9, 2017. The case was remanded for recalculation of prejudgment interest. View "Travelers Property Casualty Company of America v. Keluco General Contractors" on Justia Law

In April 2018, Le’Onsha Scott was severely injured in a car accident caused by Ellen Cahill, who admitted fault. Cahill was insured under two policies: her own Hartford policy and a Nationwide policy as a "resident relative" of her son, John Duggan. The Nationwide policy covered liability for vehicles listed in its declarations, which did not include Cahill's 2018 Hyundai Ioniq, the car she was driving during the accident. Nationwide denied coverage for the accident, leading Scott to seek indemnification for the balance of a $424,140.26 judgment awarded after arbitration.The United States District Court for the District of Colorado granted summary judgment in favor of Nationwide, ruling that the policy's limitation to specified vehicles did not violate Colorado public policy. The court found that Colorado statutes and case law allowed insurers to exclude liability coverage based on whether a vehicle is specifically named in the policy. Scott's cross-motion for summary judgment, which argued that the policy's vehicle-based coverage limitation was void against Colorado public policy, was denied.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the Nationwide policy's limitation to specified vehicles did not violate Colorado public policy. The court noted that Colorado's motor vehicle insurance statutes and case law support the practice of limiting liability coverage to vehicles explicitly named in the policy. The court also distinguished this case from Pacheco v. Shelter Mutual Insurance Co., which involved uninsured/underinsured motorist coverage, a different context with person-oriented statutes. The appellate court denied Scott's request for appellate costs. View "Scott v. Nationwide Agribusiness Insurance" on Justia Law