Justia Insurance Law Opinion Summaries

National Western Life Insurance Company (NWL) appealed a jury verdict holding the company liable for negligence and elder abuse arising from an NWL annuity sold to Barney Williams by Victor Pantaleoni, an independent agent. In 2016, Pantaleoni sold a $100,000 NWL annuity to Williams, who had contacted Pantaleoni to revise a living trust after the death of Williams’ wife. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages, totaling almost $3 million. NWL moved for judgment notwithstanding the verdict, which was denied. The Court of Appeal reversed: “Assuming NWL had monitored Pantaleoni as Williams suggested, there was no evidence showing that NWL knew or should have known of Pantaleoni’s fraud. … That Williams wrote the note cancelling the first annuity and Pantaleoni apparently wrote the letter requesting that it be reissued for Williams’ signature did not suggest to NWL that the letter was forged.” View "Williams v. National Western Life Insurance Co." on Justia Law

Wesley Zoo Yang brought an action against Everest National Insurance Company (Everest) and Motorist Mutual Insurance Company (Motorist), seeking to recover personal protection insurance (PIP) benefits under a no-fault insurance policy issued by Everest to Yang and his wife. Everest issued Yang a six-month no-fault insurance policy, the term of which ran from September 26, 2017, through March 26, 2018. On October 9, 2017, Everest mailed Yang a bill for the second monthly payment, stating that if Yang failed to pay the amount due by October 26, 2017, the policy would be canceled, effective October 27, 2017; the policy provided that the cancellation notice did not apply if Yang paid the premium on time. Yang did not pay the premium on time, and Everest sent Yang an offer to reinstate, explaining that the policy was canceled but that Yang could reinstate the policy with a lapse in coverage. On November 15, 2017, plaintiffs were struck by a car when they were walking across a street; Motorist insured the driver of the vehicle that struck plaintiffs. Two days later, on November 17, 2017, Yang sent the monthly premium payment to Everest; the policy was reinstated effective that day, and the notice informed Yang that there had been a lapse in coverage from October 27, 2017, through November 17, 2017. Plaintiffs sued when Everest refused plaintiffs’ request for PIP benefits under the policy. Everest moved for summary judgment, maintaining the policy had been canceled and was not in effect at the time of the accident, and that the policy’s cancellation provision was not inconsistent with MCL 500.3020(1)(b); Motorist disagreed with Everest’s motion and argued that it was entitled to summary disposition under MCR 2.116(I)(2) because it was not the insurer responsible for the payment of PIP benefits. The trial court denied Everest’s motion and granted summary judgment in favor of Motorist, reasoning that Everest’s notice of cancellation was not valid because it was sent before the nonpayment occurred and that Everest was therefore responsible for the payment of PIP benefits; the court thus dismissed Motorist from the action. Everest appealed. The Court of Appeal affirmed the trial court’s order, concluding that the cancellation notice was not valid under MCL 500.3020(1)(b) because Everest sent the notice before the premium was due and that the notice did not satisfy the terms of plaintiffs’ no-fault policy itself. Finding no reversible error, the Michigan Supreme Court affirmed the Court of Appeal. View "Yang v. Everest National Ins. Co." on Justia Law

The plaintiffs retired from the Louisville Metropolitan police department and received free health insurance, administered by Kentucky Retirement Systems. Kentucky initially paid all of their healthcare costs. After the officers turned 65, Medicare became the primary payer, leaving Kentucky to cover secondary expenses. Each officer came out of retirement, joining county agencies different from the ones they served before retiring. They became eligible for healthcare benefits in their new positions. Kentucky notified them that federal law “mandate[d]” that it “cannot offer coverage secondary to Medicare” for retirees “eligible to be on [their] employer’s group health plan” as “active employees.” Some of the officers then paid for insurance through their new employers; others kept their retirement insurance by quitting or going part-time. The officers sued.The district court granted summary judgment to the officers, ordered Kentucky to reinstate their retirement health insurance, and awarded the officers some of the monetary damages requested. The Sixth Circuit affirmed. The officers have a cognizable breach-of-contract claim. Under Kentucky law, the Kentucky Retirement Systems formed an “inviolable contract” with the officers to provide free retirement health insurance and to refrain from reducing their benefits, then breached that contract. The Medicare Secondary Payer Act of 1980 did not bar Kentucky from providing Medicare-eligible police officers with state retirement insurance after they reentered the workforce and became eligible again for employer-based insurance coverage, 42 U.S.C. 1395y. View "River City Fraternal Order of Police v. Kentucky Retirement Systems" on Justia Law

At issue in this appeal is whether the district court had subject matter jurisdiction over an interpleader action commenced by a liability insurance company, whose policy was exposed to conflicting and excess claims. In this case, AmGuard, a Pennsylvania corporation with its principal place of business in Pennsylvania, commenced this action in the nature of an interpleader and for a declaratory judgment against its insured and the claimants to the proceeds of its policy, all of whom were South Carolina citizens.The Fourth Circuit reversed the district court's dismissal of the action based on lack of subject matter jurisdiction. The court explained that, because AmGuard disputed the amount that the claimants maintained was available under AmGuard's policy, having acknowledged coverage for only a lesser amount, it was a "claimant" adverse to the other claimants to the proceeds of the policy. Therefore, the diverse citizenship between AmGuard and the South Carolina claimants provided the district court with the minimal diversity needed for jurisdiction under 28 U.S.C. 1335. Furthermore, 28 U.S.C. 1332 also provided the district court with jurisdiction to resolve AmGuard's declaratory judgment claim, yet the district court dismissed the entire action without addressing why it did not have jurisdiction under section 1332. The court concluded that this error also required reversal. The court remanded for further proceedings. View "AmGuard Insurance Co. v. SG Patel and Sons II LLC" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to Integrity in an action brought by plaintiff for negligent performance of an undertaking. Plaintiff filed suit after he was injured in a cab driven by a drunk driver, alleging that Integrity should have done a better background check on the cab driver.The court concluded that Integrity did not owe any duty to plaintiff under Iowa law. The court explained that, even assuming Integrity could have discovered the cab driver's Minnesota DWI, its review of his records did not put plaintiff in a worse situation because the cab company put the driver behind the wheel. Therefore, plaintiff failed to state a duty as a matter of law under the Restatement (Second) of Torts, Sec. 324A. The court also concluded that there was no liability under Sec. 324A(c) of the Restatement because the cab company did not rely on the insurer's background check and conducted its own review of the driver's record. View "Foster v. Integrity Mutual Insurance Co." on Justia Law

Progressive Northwest Insurance Company (“Progressive”) insured Dean and Laura Lautenschlager with a combined single limit policy of $500,000, which provided liability coverage, in addition to underinsured and uninsured motorist coverage. The Lautenschlagers were subsequently injured in a collision between their motorcycle, driven by Dean, and a van, driven by an underinsured motorist. Both Dean and Laura individually recovered the policy limits of $15,000 per-person from the underinsured motorist. In addition, Laura recovered a $375,000 settlement from Progressive due to Dean’s partial responsibility for the collision. Progressive then filed this lawsuit seeking a declaration that Progressive was only responsible for an additional $95,000 in underinsured motorist benefits under the policy following the various settlements. The district court granted summary judgment in Progressive’s favor, concluding that the offset provisions in the Lautenschlagers’ policy did not violate Idaho public policy and that the remaining coverage from Progressive was limited to $95,000. The Lautenschlagers appealed, arguing that the offset provisions of their insurance policy are void on public policy grounds and that the policy is ambiguous with respect to the amount of coverage offered. Finding no reversible error, the Idaho Supreme Court affirmed the district court. View "Progressive Northwest Insurance Company v. Lautenschlager" on Justia Law

Two trees fell on Christopherson’s home, months apart, resulting in its total destruction. The village ordered demolition. Christopherson’s insurer, ASI, had advanced living expenses but did not provide the requested demolition payment by the village's deadline, so Christopherson razed the house himself. He did not provide invoices for the demolition or for his own labor. Christopherson sued, alleging bad-faith denial of policy benefits and informed ASI that, excluding personal property losses and additional living expenses yet to be determined, Christopherson’s losses were $143,384: the $135,000 dwelling coverage limit, $6,884 for demolition, and $1,500 for tree removal. ASI indicated that it would pay that amount, noting that it had not yet received any notice of claims for personal property.The court granted ASI a discovery protective order with respect to the bad faith claim, reasoning that Christopherson could not establish any underlying breach of the policies. ASI had already paid the full limits of his 2018–19 policy, Christopherson’s claims under his 2017–18 policy, and his additional living expenses under both policies. ASI obtained summary judgment. Christopherson had not presented evidence of costs actually incurred but not paid by ASI and could not show a breach; he had nearly exhausted the limits under both policies.The Seventh Circuit affirmed, rejecting an argument that the case should be remanded to state court. Christopherson’s arguments ignore policy provisions that the insured must first incur the expenses and then provide the insurer with documentation before the insurer is obliged to pay. View "Christopherson v. American Strategic Insurance Co." on Justia Law

In this legal malpractice action by an insurer against a law firm retained to represent its insured in a separate prior litigation, the Supreme Court held that, where the insurer had a duty to defend, the insurer had standing through its contractual subrogation provision to maintain the malpractice action against counsel hired to represent the insured.The trial court granted summary judgment in favor of the law firm, concluding that the insurer lacked standing to directly pursue a legal malpractice action because there was no privity between the law firm and the insurer. The Fourth District Court of Appeal affirmed, concluding that the insurer lacked standing to pursue the professional negligence action. The Supreme Court quashed the decision below, holding that the insurer had standing to maintain this legal malpractice action because the insurer was contractually surrogated to the insured's rights under the insurance policy. View "Arch Insurance Co. v. Kubicki Draper, LLP" on Justia Law

The Supreme Court answered a certified question in the positive and held that the costs incurred by Plaintiffs complying with an injunction in the underlying case were "damages" within the meaning of the policies with their insurance carrier, Liberty Mutual Insurance Company.In the underlying action, Plaintiffs were sued for negligence and nuisance. Liberty Mutual agreed to defend against the suit under Plaintiffs' homeowners policy and a personal liability policy. A permanent injunction was entered against Plaintiffs. Liberty Mutual, however, stated that it would not indemnify Plaintiffs for the costs they incurred in complying with the injunction on the grounds that the costs did not constitute covered damages under Plaintiffs' policies. Plaintiffs then filed suit against Liberty Mutual, alleging breach of the duty to indemnify. The federal district court certified to the Supreme Court the question of whether Liberty Mutual must indemnify Plaintiffs for the cost of complying with the injunction. The Supreme Court answered the question in the positive, holding that the costs incurred by Plaintiffs to comply with the injunction constituted covered "damages" under the Liberty Mutual policies. View "Sapienza v. Liberty Mutual Insurance" on Justia Law

After plaintiff filed suit against Reliance for denying his long-term disability claim, the district court granted summary judgment in favor of Reliance. The district court concluded that plaintiff's absence on medical leave at the time Reliance took over his group policy created a gap in his coverage and rendered his complained-of disability an excluded preexisting condition.The Fifth Circuit reversed and rendered judgment in favor of plaintiff, concluding that the district court misread the policy. The court held that the insurance plan's Transfer Provision, which determines whether employees covered under the group's previous plan with Prudential remained continuously insured when Reliance's policy took effect, applies to plaintiff. Therefore, the plan covered plaintiff when it took effect on September 1, 2015, during his leave, and thus Reliance wrongly denied his disability claim. Accordingly, the court remanded for determining the amount of plaintiff's benefit. View "Miller v. Reliance Standard Life Insurance Co." on Justia Law