Justia Insurance Law Opinion Summaries

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In this case concerning the sequence in which Montrose Chemical Corporation, which was sued by causing environmental damage in the Los Angeles area, may access its excess insurance policies covering the period from 1961 to 1985, the Supreme Court held that Montrose may seek indemnification under any excess policy once it has exhausted the underlying excess policies in the same policy period. Montrose purchased primary and excess comprehensive general liability insurance to cover its operations at its Torrance facility from defendant insurers between 1961 and 1985. Montrose's primary insurance was exhausted in litigation due to environmental contamination allegedly caused by Montrose's operation of this facility. At issue was whether Montrose was required to exhaust other insurance coverage from other policy periods. The Supreme Court held (1) Montrose was entitled to access otherwise available coverage under any excess policy once it has exhausted directly underlying excess policies for the same policy period; and (2) an insurer called on to provide indemnification may seek reimbursement from other insurers that would have been liable to provide coverage under excess policies for any period in which the injury occurred. View "Montrose Chemical Corp. of California v. Superior Court" on Justia Law

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Travelers Property Casualty Company of America (“Travelers”) filed suit against SRM Group, Inc. (“SRM”), seeking to recover unpaid premiums due under a workers’ compensation insurance policy. In response, SRM asserted counterclaims against Travelers for breach of contract, breach of duty of good faith and fair dealing, and attorney fees based on Travelers’ audit of SRM’s employee risk classifications and subsequent refusal to reclassify those employees, which resulted in a substantial retroactive increase in the premium. A jury awarded Travelers damages based on SRM's failure to pay some of the alleged increased premium due under the policy. However, the jury found that Travelers had also breached the contract and acted in bad faith in conducting the audit and failing to reclassify certain SRM employees. The issue this case presented for the Georgia Supreme Court's review centered on whether a counterclaimant asserting an independent compulsory counterclaim could seek attorney fees and litigation expenses under Georgia case law. The Supreme Court overruled Byers v. McGuire Properties, Inc, 679 SE2d 1 (2009), and Sponsler v. Sponsler, 699 SE2d 22 (2010). "Thus, a plaintiff-in-counterclaim asserting an independent claim may seek, along with that claim, attorney fees and litigation expenses under OCGA 13-6-11, regardless of whether the independent claim is permissive or compulsory." In this case, the Court reversed that part of the Court of Appeals' opinion that followed Byers. View "SRM Group, Inc. v. Travelers Property Cas. Co. of America" on Justia Law

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In 2014, plaintiff George Blair filed a petition for damages in which he alleged that a 2011 Ford Escape driven by Lori Brewer struck his 2008 Honda Civic in 2013. According to Plaintiff, at the time of the collision he was at a complete stop at a traffic signal when his vehicle was suddenly struck from the rear by Brewer’s vehicle, propelling him into the intersection. At the time of the accident, Ms. Brewer was in the course and scope of her work and was driving a company vehicle owned by AmerisourceBergen Drug Corporation (“Amerisource”), which, according to the Petition, had a policy of motor vehicle liability insurance with ACE American Insurance Company Inc. (“ACE”) insuring against the negligent acts of Ms. Brewer (together with Amerisource and ACE, “Defendants”). Plaintiff alleged that the collision caused injuries to his neck and back for which he sought damages from Defendants related to, inter alia, his physical pain and suffering, mental pain, anguish, and distress, medical expenses, and loss of enjoyment of life. In an apparent effort to disprove a causal connection between Plaintiff’s injuries and the collision, Defendants sought to introduce at trial the expert opinion of Dr. Charles E. “Ted” Bain. Dr. Bain west forth his calculation of a low impact collision and the likely preexisting nature of Plaintiff's injuries, thus concluding that plaintiff was not subject to forces and acceleration that would have caused serious or long-lasting injuries. Plaintiff moved to exclude the expert's report, and the trial court granted the motion. The court of appeal would reverse that order, and the issue this case presented for the Louisiana Supreme Court's review was whether the appellate court was correct in summarily reversing the trial court's exclusion. Finding no abuse of discretion in the trial court's determination that Dr. Bain's testimony was not based on sufficient facts or data, the Supreme Court reversed the appellate court and reinstated the trial court's judgment. View "Blair v. Coney" on Justia Law

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Beginning in 1965, Honeywell and the labor union negotiated a series of collective bargaining agreements (CBAs). Honeywell agreed to pay “the full [healthcare benefit] premium or subscription charge applicable to the coverages of [its] pensioner[s]” and their surviving spouses. Each CBA contained a general durational clause stating that the agreement would expire on a specified date, after which the parties would negotiate a new CBA. In 2003, the parties negotiated a CBA obligating Honeywell to pay “not . . . less than” a specified amount beginning in 2008. The retirees filed suit, arguing that the pre-2003 CBAs vested lifetime, full-premium benefits for all pre-2003 retirees and that the CBAs of 2003, 2007, and 2011 vested, at a minimum, lifetime, floor-level benefits for the remaining retirees. The Sixth Circuit agreed with the district court that none of the CBAs vested lifetime benefits. Without an unambiguous vesting clause, the general durational clause controls. Reversing in part, the court held that the “not . . . less than” language unambiguously limited Honeywell’s obligation to pay only the floor-level contributions during the life of the 2011 CBA. The court rejected a claim that Honeywell acquired a "windfall" at the retirees' expense. View "International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Honeywell International, Inc." on Justia Law

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In this case brought against an insurer in Plaintiff's attempt to collect on a judgment in his favor in a strict liability and negligent failure to warn action, the Court of Appeals held that damages from a continuous bodily injury judgment must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by Plaintiff's injuries. Almost forty years after exposure to asbestos at his place of work, Plaintiff was diagnosed with mesothelioma. Plaintiff won a nearly $2.7 million judgment against the asbestos installer. Plaintiff then initiated garnishment proceedings against Defendant as insurer of the asbestos installer. At issue before the circuit court was how to allocate loss among various trigger insurance policies because the installer was only insured by Defendant from 1974 to 1977 through four comprehensive general liability policies. The circuit court concluded that Plaintiff's damages must be allocated on a pro rata, time-on-the risk basis across all insured and insurable periods triggered by Plaintiff's injuries. The Supreme Court affirmed, holding that the circuit court properly applied the pro rata allocation approach rather than a joint-and-several approach that would have required the insurer to cover the entire judgment. View "Rossello v. Zurich American Insurance Co." on Justia Law

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Theresa Driskell, with the help of an insurance agent, submitted applications for a life insurance policy and a disability income rider. When reviewing the application, the insurance company discovered Driskell was ineligible for the disability income rider. So it issued her a life insurance policy that varied from her application: a policy that did not provide disability income. Driskell received this policy and reviewed it. She did not reject or return it. Instead, she accepted the policy and began making premium payments. Nearly three years later, Driskell made a claim with the insurer for disability income. Because the policy did not include a disability income rider, the insurer denied her claim. Driskell sued the insurer, citing her expectation of disability income coverage. The insurer moved for summary judgment, which the trial judge denied. The Mississippi Supreme Court granted the insurer’s interlocutory appeal to decide if summary judgment was wrongly denied. After review, the Court determined it was clear the policy issued to Driskell and accepted by her did not include a disability income rider. Therefore, it reversed the denial of summary judgment and rendered a judgment in the insurer’s favor. View "Mutual of Omaha Insurance Co. v. Driskell" on Justia Law

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Plaintiff filed suit against her ex-husband’s estate alleging that his life insurance proceeds rightly belong to her. The court held that the district court correctly determined that the Interspousal Agreement and the Final Judgment could not be orally amended. The court explained that, by its plain terms, the Interspousal Agreement requires any modification to be in writing and executed with the same formalities as the agreement. In this case, plaintiff had no proof any oral amendment to the Final Judgment related to the policy. Furthermore, New Jersey law automatically revokes the beneficiary designation on divorce unless the "express terms" of a court order say otherwise. Because plaintiff's affidavit cannot change the express terms of a court order and the court order does not expressly mention the policy, summary judgment was appropriate. View "Rose v. Estate of Joel S. Bernstein" on Justia Law

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In this diversity case, the First Circuit affirmed the district court's entry of summary judgment against Clarendon National Insurance Company's claim that Philadelphia Indemnity Insurance Company breached its contract with Lundgren management Group, Inc. when Philadelphia declined to tender a defense to Lundgren, holding that the district court did not err in granting summary judgment against Clarendon. Clarendon provided indemnity insurance to Lundgren, a building management corporation, from 2004 to 2005. Philadelphia insured Lundgren from 2007 to 2008. In 2009, Denise Doherty, a resident in a Lundgren-managed building, filed the underlying complaint against Lundgren after mold was discovered in her residence. Lundgren tendered the defense of the underlying complaint to Philadelphia. Philadelphia denied coverage, and Clarendon financed the defense of Lundgren. After the case settled, Philadelphia denied Clarendon's claim for contribution. Clarendon received an assignment from Lundgren of the claim arising in the Doherty matter and then filed the instant suit. The district court entered summary judgment dismissing Clarendon's complaint. The First Circuit affirmed, holding that the district court (1) did not err by granting summary judgment on the duty to defend issue; and (2) properly entered summary judgment dismissing the claims alleging violations of Mass. Gen. Laws ch. 93A and 176D. View "Clarendon National Insurance Co. v. Philadelphia Indemnity Insurance Co." on Justia Law

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The term "Actual Cash Value" is ambiguous with respect to the withholding of labor depreciation in Mississippi homeowners insurance policies that provide no further definition of ACV. The Fifth Circuit affirmed the district court's denial of State Farm's motion to dismiss with respect to plaintiff's breach of contract claim. The court found that, in the context of a Mississippi homeowners policy that refers to "Actual Cash Value" without further definition, both interpretations are reasonable. Therefore, the court held that the contract was ambiguous and the court applied Mississippi's interpretive canons, which provides that an ambiguous insurance contract is interpreted against the insurance company. The court reversed the district court's denial of State Farm's motion to dismiss with respect to plaintiff's tort claims. The court explained that, because the law on this question of interpreting "Actual Cash Value" in Mississippi was unsettled, State Farm had an arguable basis to depreciate labor costs. The court also found that the district court did not abuse its discretion in certifying a class of Mississippi State Farm policyholders similarly situated to plaintiff, who received "Actual Cash Value" payments in which labor was depreciated and whose contracts similarly did not define "Actual Cash Value." View "Mitchell v. State Farm Fire & Casualty Co." on Justia Law

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After plaintiffs were awarded more than $45 million in a products liability suit brought against EcoSmart, EcoSmart declared bankruptcy and plaintiffs brought a direct action against EcoSmart's insurer, LMIC, for payment on the judgment. LMIC argued that its policy with EcoSmart had a forum-selection clause designating Australian courts as the exclusive forum. The district court granted LMIC's motion to dismiss on grounds of forum non conveniens. The Ninth Circuit held that, because plaintiffs stand in the shoes of EcoSmart, their third-party creditors' rights are derivative of the rights and limitations held by the bankrupt insured, and thus the forum-selection clause applies. The panel also held that plaintiffs have not shown that the clause violates California public policy or that Australia is an inadequate forum for suit. Accordingly, the panel affirmed the district court's judgment. View "Lewis v. Liberty Mutual Insurance Co." on Justia Law