The Second Circuit held that, when applied, Section 5‐335 of the New York General Obligations Law prohibited Aetna's reduction of plaintiff's disability benefits. In this case, neither the Employee Retirement Income Security Act's, 29 U.S.C. 1001 et seq., preemptive force nor the Plan's choice of law provision compelled a different conclusion; and the court rejected Aetna's forfeiture argument. Therefore, the district court erred in granting Aetna's motion for summary judgment and denying plaintiff's motion for summary judgment in regard to plaintiff's entitlement to the past and ongoing benefits that Aetna has withheld on the ground that they are duplicative of plaintiff's personal injury settlement. Accordingly, the court reversed in part and remanded. View "Arnone v. Aetna Life Ins. Co." on Justia Law

In this declaratory judgment proceeding, petitioner Exeter Hospital, Inc. (Exeter) appealed a superior court order denying its motion for partial summary judgment as to the amount at which coverage was triggered under an umbrella policy (the policy) issued to Exeter by respondent Steadfast Insurance Company (Steadfast). In the spring of 2012, an outbreak of Hepatitis C infections among patients serviced by Exeter’s cardiac catheterization lab led investigators to discover that a technician had spread the virus to patients “through a clandestine drug diversion scheme.” The technician allegedly injected certain drugs into his body by way of intravenous needles, then reused the needles on patients, thereby infecting them with the virus. Numerous lawsuits were lodged against Exeter by affected patients. Exeter was primarily insured through a Self-Insurance Trust Agreement (SIT), which provided professional liability coverage in the amount of $1 million per medical incident, with a $4 million annual aggregate cap. Exeter also maintained the policy with Steadfast, which provided excess health care professional liability coverage. Steadfast maintained that it would pay damages only in excess of the $100,000 retained limit for each medical incident. Exeter filed this proceeding, seeking a declaration that it was not required to pay $100,000 retained limit per claim. The trial court interpreted the term “applicable underlying limit” as being a variable amount “dependent on the actual coverage remaining under [the] other [limits of] insurance,” here, the limits of the SIT. Because Exeter had paid out the limits of the SIT, the court found that the “applicable underlying limit” was zero, thereby rendering the $100,000 retained limit greater than the “applicable underlying limit.” Thus, the court determined that, pursuant to “Coverage A,” Steadfast was required “to pay damages in excess of $100,000 for each medical incident.” Exeter sought reconsideration of the court’s order, which the court denied. Although the New Hampshire Supreme Court did not agree with every underlying argument pressed by Exeter, it concluded that its overall argument regarding the interpretation of Coverage A was reasonable, and the trial court therefore erred in granting partial summary judgment as to the terms of Coverage A. View "Exeter Hospital, Inc. v. Steadfast Insurance Company" on Justia Law

Where an insurance policy provides that the insurer has the “duty to defend any claim” initiated against the insured, the insurer’s duty to defend does not require it to prosecute affirmative counterclaims on behalf of its insured. In this case, a policy imposed two duties on Insurer with respect to any wrongful termination claim brought against Insured. When a wrongful termination claim was commenced against Insured, Insurer filed a complaint for declaratory judgment seeking a ruling that its duty to Insured did not require that it prosecute or pay for the prosecution of a counterclaim for misappropriation of funds. A federal district court issued a judgment in favor of Insurer. On appeal, the United States Court of Appeals for the First Circuit certified three questions to the Massachusetts Supreme Judicial Court. The court answered the first two certified questions and did not reach the third. View "Mount Vernon Fire Insurance Co. v. Visionaid, Inc." on Justia Law

This case involved an allision causing significant damage to a submerged moor line for a mobile offshore drilling unit used by Shell. Tesla, an offshore survey company, contracted with International to provide and operate the tow vessel. On appeal, International and Tesla challenged the district court's grant of summary judgment dismissing their indemnity and insurance claims. The Fifth Circuit held that a warning to Tesla's party chief that the tow vessel was moving too close to the moor line was a gratuitous act that had no effect on the outcome of the litigation. The court also held that none of the insurance policies were in the record nor was there any other evidence from which the policy language could be definitively discerned. Accordingly, the court vacated the district court's judgment as to Tesla's and International's insurance claims and remanded. View "International Marine, LLC v. Integrity Fisheries, Inc." on Justia Law

Bob Hensley (Buyer) purchased real estate by contract for deed. He sued the insurer of the property's previous owner, State Farm Fire & Casualty, alleging breach of the implied-in-law duty of good faith. Insurer filed a motion for summary judgment and argued buyer was a stranger to the insurance contract and could not bring an action against insurer. The trial court granted the insurer's motion for summary judgment. The judgment was appealed and affirmed by the Court of Civil Appeals. After review, the Oklahoma Supreme Court held the buyer's action in this case for breach of the implied-in-law duty of good faith by an insurer was based upon his status as an insured or third party beneficiary; and buyer's equitable title to property arising from a contract for deed is insufficient by itself to confer upon him the status of an insured. The Court also held the buyer presented facts on the issue whether he was an intended third party beneficiary, and these facts and their inferences were disputed by insurer. Whether buyer was a third party beneficiary and an insured under the policy based upon disputed facts and inferences was a matter for the trier of fact, and summary judgment for insurer was improvidently granted. View "Hensley v. State Farm Fire & Casualty Co." on Justia Law

Reid founded Capitol, which owned commmunity banks, and served as its chairman and CEO. His daughter and her husband served as president and general counsel. Capitol accepted Federal Reserve oversight in 2009. In 2012, Capitol sought Chapter 11 bankruptcy reorganization and became a “debtor in possession.” In 2013, Capitol decided to liquidate and submitted proposals that released its executives from liability. The creditors’ committee objected and unsuccessfully sought derivative standing to sue the Reids for breach of their fiduciary duties. The Reids and the creditors continued negotiation. In 2014, they agreed to a liquidation plan that required Capitol to assign its legal claims to a Liquidating Trust; the Reids would have no liability for any conduct after the bankruptcy filing and their pre-petition liability was limited to insurance recovery. Capitol had a management liability insurance policy, purchased about a year before it filed the bankruptcy petition. The liquidation plan required the Reids to sue the insurer if it denied coverage. The policy excluded from coverage “any claim made against an Insured . . . by, on behalf of, or in the name or right of, the Company or any Insured,” except for derivative suits by independent shareholders and employment claims (insured-versus-insured exclusion). The Liquidation Trustee sued the Reids for $18.8 million and notified the insurer. The Sixth Circuit affirmed a declaratory judgment that the insurer had no obligation with respect to the lawsuit, which fell within the insured-versus-insured exclusion. View "Indian Harbor Insurance Co. v. Zucker" on Justia Law

No fiduciary duty arises in a consumer transaction for the purchase of a whole life insurance policy based upon the advice of a financial advisor where the consumer purchasing the policy does not cede decision -making control over the purchase to the financial advisor. In 1995, Bryan Holland, a financial advisor for IDS Life Insurance Corporation, made an unsolicited telephone contact, a "cold call," to Eugene and Ruth Yenchi. At a subsequent meeting and for a fee of $350, Holland presented the Yenchis with a financial management proposal containing a notice that it had been prepared by "your American Express financial advisor" (Holland) and that "[alt your request, your American Express financial advisor can recommend products distributed by American Express Financial Advisors and its affiliates as investment alternatives for existing securities." The Proposal offered the Yenchis a number of general recommendations, including that they monitor monthly expenses, consolidate their debt, consider various savings plans, consolidate current life insurance policies into one policy, review long-term care coverage, keep accurate records for tax purposes (medical expenses and charitable contributions), transfer 401(k) funds into mutual funds, and continue estate planning with an attorney and their financial advisor. The Yenchis implemented some of these recommendations. In 2000, the Yenchis had their portfolio independently reviewed. Through this process, they were advised that Holland’s recommendations would be financially devastating to the Yenchis. In April 2001, the Yenchis sued Holland and his company, American Express Financial Services Corporation, American Express Financial Advisors Corporation, and IDS Life Insurance Company. The Yenchis' asserted claims of negligence/willful disregard, fraudulent misrepresentation, violation of the Uniform Trade Practices and Consumer Protection Law ("UTPCPL"), bad faith, negligent supervision, and breach of fiduciary duty. Of relevance here, with respect to the breach of fiduciary duty claim, the trial court held that no fiduciary relationship was established between the Yenchis and Holland because the Yenchis continued to make their own investment decisions. The Pennsylvania Supreme Court concluded that, consistent with its jurisprudence, no fiduciary duty arose in such a situation. Consequently, the Court reversed the Superior Court's decision to the contrary. View "Yenchi v. Ameriprise Financial" on Justia Law

Plaintiff-appellee Elizabeth Cates filed on her behalf and a putative class asserting claims against the defendant-appellee INTEGRIS Health, Inc. for breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, specific performance, and punitive damages. INTEGRIS successfully moved to dismiss the claims based on the ground that they are all preempted by the Employee Retirement Income Security Act. Cates appealed. Because the trial court in this matter did not take into consideration the federal Tenth Circuit Court of Appeals’ decision in Salzer v. SSM Health Care of Oklahoma Inc., 762 F.3d 1130 (10th Cir. 2014), which was factually similar to the facts of this case and found that the plaintiff’s claims were not preempted, the Oklahoma Supreme Court reversed and remanded the trial court in this matter for reconsideration in light of Salzer. View "Cates v. Integris Health, Inc." on Justia Law

Plaintiff Carmen Zubillaga was injured in an automobile accident. The other driver was at fault. Her insurer, defendant Allstate Indemnity Company (Allstate), rejected her demand for $35,000, the full amount of her remaining underinsured motorist (UIM) coverage, although it made her a series of offers increasing to $15,584 instead. After an arbitrator awarded plaintiff $35,000, the amount of her demand, she sued Allstate for breach of the implied covenant of good faith and fair dealing. While an insurance company has no obligation under the implied covenant of good faith to pay every claim its insured makes, the insurer cannot deny the claim, without fully investigating the grounds for its denial. To protect its insured’s contractual interest in security and peace of mind, it is essential that an insurer fully inquire into possible bases that might support the insured’s claim before denying it. The Court of Appeal found the problem in this case was that the undisputed facts showed the insurer’s opinions were rendered in October and November 2012, but insurer continued to rely on them through the arbitration in September 2013, without ever consulting with its expert again or conducting any further investigation. Summary judgment in favor of the insurer was reversed and the matter remanded for further proceedings. View "Zubillaga v. Allstate Indemnity Company" on Justia Law

Plaintiff, who was injured while rendering roadside aid as a Good Samaritan, was “occupying” the insured vehicle for purposes of underinsured motorist (UM) coverage and was therefore entitled to recover under the terms of a GEICO Insurance Agency, Inc. policy. Plaintiff was a passenger in a Saab driven by Gregory Hurst when the two witnessed an automobile collision. Plaintiff exited the Saab and was attempting to render assistance when she was struck by another car. Plaintiff settled a claim against the driver of the vehicle that hit her but claimed that she was not fully compensated for her injuries. Consequently, Plaintiff filed a claim with GEICO (Defendant) seeking relief through Hurst’s GEICO policy that insured the Saab. Defendant denied the claim on the ground that Plaintiff was not “occupying” the insured vehicle at the time of her injuries. Plaintiff then filed this action. The trial justice agreed with Defendant, concluding that Plaintiff could not recover UM benefits under the terms of the GEICO policy. The Supreme Court vacated the judgment of the superior court, holding that Plaintiff was entitled to recover under the terms of the policy. View "Hudson v. GEICO Insurance Agency, Inc." on Justia Law