Justia Insurance Law Opinion Summaries

Gunn brought a putative class action against Continental, which had issued a group long-term care insurance policy to Gunn’s employer, the federal judiciary, in Washington D.C. Gunn alleged that Continental breached its contract, committed torts, and violated consumer protection laws by raising his premiums dramatically. The district court dismissed the case on the pleadings based on Continental’s assertion of a filed-rate defense, relying on the Washington state Insurance Commissioner’s approval of the new, higher premiums for individual insureds in Washington. The Seventh Circuit reversed, noting that choice of law is critical in this case, which involves employees in every state. It is unclear which state’s or states’ law creates Gunn’s causes of action, whether that jurisdiction recognizes an applicable filed-rate defense and within what contours, and which state or states have authority to approve premium rates under the group policy. The court remanded to allow the district court to address those questions. View "Gunn v. Continental Casualty Co." on Justia Law

The Eighth Circuit affirmed the district court's grant of Kinsale's motion to dismiss actions brought by TMI for breach of an indemnity policy. TMI bought a liability insurance policy from Kinsale and the policy excluded a "pollution incident" unless properly reported by TMI. The court held that TMI cannot invoke waiver and estoppel because timely notice "modifies coverage" to include pollution incidents. In this case, TMI learned that an employee suffered injury from a pollution incident, but TMI did not timely report the incident per the plain language of the contract. View "Topp's Mechanical, Inc. v. Kinsale Insurance Co." on Justia Law

Appellants filed suit against Liberty in Texas state court claiming breach of contract and violations of Sections 541 and 542 of the Texas Insurance Code. After Liberty removed to federal court, the district court granted Liberty's motion for summary judgment and denied appellants' partial motion for summary judgment. After determining that it has appellate jurisdiction, the Fifth Circuit affirmed, holding that the insurance policy does not provide coverage for appellants' claims. The court need not determine whether the policy at issue is an all-risks policy because the court construed the policies one at a time. The court held that an ensuing loss provision like the one presented here is only triggered when one (excluded) peril results in a distinct (covered) peril, meaning there must be two separate events for the exception to trigger. In the underlying action, appellants' welding operation involved falling slag, which damaged the exterior glass of Energy Center 5. The court explained that the welding operation is inseparable from the falling slag and that they are not two separate events. Furthermore, the court held that the policy is not illusory. Therefore, appellants have not met their burden to show that the exception to the exclusion reinstates coverage. Finally, appellants' ambiguity argument is forfeited. View "Balfour Beatty Construction, LLC v. Liberty Mutual Fire Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the district court awarding taxable costs for denying a first-party insurance claim in violation of Minn. Stat. 604.18, subd. 2(a), holding that the district court did not clearly err. After a bench trial, the district court found that Western National Mutual Insurance Company did not have a reasonable basis for denying Alison Joel Peterson's claim for insurance benefits and acted in reckless disregard of its lack of a reasonable basis in denying the claim. The Supreme Court affirmed, holding (1) the district court did not clearly err in determining that a reasonable insurer, who had the information that Western National had, would not have denied Peterson's claim for benefits; and (2) the district court did not clearly err by finding that Western National knew, or recklessly disregarded information that would have allowed it to know, that it lacked an objectively reasonable basis for denying benefits to Peterson. View "Peterson v. Western National Mutual Insurance Co." on Justia Law

The Supreme Court held that a federal regulation does not impose a duty on insurers to issue policies that satisfy a motor carrier's minimum level of financial responsibility because compliance with the financial responsibility requirements under Neb. Rev. Stat. 75-363 and the pertinent federal regulations is the duty of the motor carrier and not its insurer. Through Neb. Rev. Stat. 75-363 the Nebraska Legislature adopted several parts of the Federal Motor Carrier Safety Regulations and made those regulations applicable to certain intrastate motor carriers otherwise not subject to the federal regulations. One of the federal regulations adopted by section 75-363(3)(d) sets out minimum levels of financial responsibility for motor carriers. At issue before the Supreme Court was whether 49 C.F.R. 387 imposes a duty on an insurer to issue a policy with liability limits that satisfy the motor carrier's financial responsibility. The Supreme Court held that compliance with section 75-363 and section 387 is the responsibility of the motor carrier, not on the insurer. View "Shelter Insurance Co. v. Gomez" on Justia Law

AEGIS filed suit alleging that it does not have a duty to defend or indemnify its insured ECI in an underlying state court action brought by a former tenant against ECI. In the underlying action, the tenant alleged that ECI wrongfully withheld the security deposits of current and former tenants in violation of Georgia's security deposit law. The Eleventh Circuit reversed the district court's grant of summary judgment in favor of AEGIS, holding that AEGIS has a duty to defend ECI in the underlying state court lawsuit against it because that action and certain relief sought, if proved, would constitute a covered "Loss" under the insurance policy. Although an award of the allegedly wrongfully withheld security deposit would not constitute a "Loss" under the policy, the court explained that any award of attorney's fees that ECI might become obligated to pay as part of the judgment in the underlying litigation would also fall within the policy's definition of "Loss." The court held that any award of attorney's fees under Georgia's security deposit law could constitute a potential "Loss" under the policy, and thus AEGIS maintains a duty to defend ECI. The court declined to offer any opinion as to whether AEGIS, in addition to its duty to defend, has any duty to indemnify ECI. View "AEGIS Electric & Gas International Services Ltd. v. ECI Management LLC" on Justia Law

Meemic Insurance Company filed suit against Louise and Richard Fortson, individually and as conservator of their son, Justin Fortson, alleging that Richard and Louise had fraudulently obtained payment for attendant-care services they did not provide to Justin. In 2009, Justin was injured when he fell from the hood of a motor vehicle, necessitating constant supervision and long-term care. Richard and Louise opted to provide attendant care to Justin in their home on a full-time basis. Justin received benefits under his parents’ no-fault policy with Meemic, and from 2009 until 2014, Louise submitted payment requests to Meemic for the attendant-care services she and her husband provided, asserting that they provided full-time supervision; Meemic routinely paid the benefits. In 2013, Meemic investigated Richard and Louise’s supervision of Justin, and discovered Justin had been periodically jailed for traffic and drug offenses and had spent time at an inpatient substance-abuse rehabilitation facility at times when Richard and Louise stated they were providing full-time supervision. The underlying policy contained an antifraud provision stating that the policy was void if any insured person intentionally concealed or misrepresented any material fact or circumstance relating to the insurance, the application for it, or any claim made under it. Louise and Richard counterclaimed, arguing that Meemic breached the insurance contract by terminating Justin’s benefits and refusing to pay for attendant-care services. Meemic moved for summary judgment, and the trial court initially denied the motion, reasoning that under the innocent-third-party rule, Meemic could not rescind the policy on the basis of fraud to avoid liability for benefits owed to Justin, an innocent third party. Meemic moved for reconsideration of that decision after the Court of Appeals later concluded in Bazzi v. Sentinel Ins. Co., 315 Mich App 763 (2016), the innocent-third-party rule was no longer good law. On reconsideration, the trial court granted summary judgment in favor of Meemic. Louise and Richard appealed. The Court of Appeals reversed, first reasoning that Bazzi did not apply because the fraud in this case did not occur in the procurement of the policy and did not affect the validity of the contract. The court concluded, however, that the policy’s antifraud provision was invalid because it would enable Meemic to avoid the payment of personal protection insurance (PIP) benefits mandated by MCL 500.3105. The Michigan Supreme Court affirmed, holding that contractual provisions like the one asserted by Meemic, in the context of the mandate of the no-fault act, are valid when based on a defense to mandatory coverage provided in the no-fault act itself or on a common-law defense that has not been abrogated by the act. Because Meemic’s fraud defense was grounded on neither the no-fault act nor the common law, it was invalid and unenforceable. Accordingly, the Court of Appeals was affirmed on different grounds, and the case remanded to the trial court for further proceedings. View "Meemic Ins. Co. v. Fortson" on Justia Law

FCE administered health insurance policies underwritten by the Insurers. After a few years, the Insurers became dissatisfied with FCE’s performance and invoked the Agreement’s arbitration clause. In Phase I of the arbitration, the arbitrators awarded the Insurers damages of more than five million dollars. The Insurers attempted to confirm this award under the Federal Arbitration Act, 9 U.S.C. 9, but the district court concluded that the case was not yet ripe for adjudication. The arbitrators had not yet resolved all matters that had been submitted to them. In Phase II, the arbitrators denied the Insurers’ remaining claim for reimbursement of excessive administrative fees and FCE’s counterclaim for lost profits. The district court confirmed the arbitration results in their entirety. The Seventh Circuit affirmed. The court rejected FCE’s arguments that the Phase II Award superseded the Phase I Award such that the district court could confirm only the Phase II Award; that part of the Phase I Award must be vacated because the arbitrators exceeded their authority by hearing and deciding the Insurers’ indemnification claims; and that it was reversible error for the court to confirm the portion of the Phase I Award labeled as damages for “embezzlement.” View "Standard Security Life Insurance Co. of New York v. FCE Benefit Administrators, Inc." on Justia Law

In two cases involving similar underlying facts and an identical legal issue the Court of Appeals held that the phrase "damage to property," incorporated by reference in the uninsured motorist statute, requires an insurer to reimburse loss of use damages, such as rental car costs, to an insured. At issue was whether the Maryland Uninsured Motorist statutory provision of Md. Code Ann., Ins. 19-509(e)(1) and the provisions of Title 17 of the Transportation Article and Title 20 Subtitle 6 of the Insurance Article require an insurer to pay benefits for loss of use of a vehicle damaged by an uninsured driver. The Court of Appeals held that the phrase "damage to property," as incorporated by reference in the uninsured motorist statute, embraces loss of use damages caused by an uninsured driver, regardless of any limitations or omissions that may exist in the applicable policy of insurance. View "Berry v. Queen" on Justia Law

Sigler totaled his 2001 Dodge Ram and filed a claim with GEICO, his auto insurer, for the loss. GEICO paid him for the value of the car, adjusted for depreciation, minus his deductible. Sigler claims he is entitled to sales tax and title and tag transfer fees for a replacement vehicle, though he did not incur these costs. He filed a proposed class action against GEICO seeking damages for breach of contract. The district court dismissed the suit, holding that neither the GEICO policy nor Illinois insurance law requires payment of these costs when the insured does not incur them. The Seventh Circuit affirmed. The premise of Sigler’s suit, that sales tax and title and tag transfer fees are always part of “replacement cost” in a total-loss claim regardless of whether the insured incurs these costs, misreads the policy and Illinois insurance regulations. GEICO’s policy does not promise to pay sales tax or title and tag transfer fees; the Illinois Administrative Code requires a settling auto insurer to pay these costs only if the insured actually incurs and substantiates them with appropriate documentation. View "Sigler v. Geico Casualty Co." on Justia Law