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Plaintiffs Jimmy Larry Beddingfield ("Larry"), his wife, Rebecca, and their adult son, James Cody Beddingfield ("Cody") appealed the grant of summary judgment in favor of the defendants Mullins Insurance Company, Mullins & Company Insurance, Rand Mullins, and David Mullins (referred to collectively as "Mullins"), on the Beddingfields' claims stemming from Mullins's alleged failure to properly procure insurance coverage. In 1997, Larry and Rebecca purchased a homeowners' liability-insurance policy from Rand Mullins that protected Larry and Rebecca's primary residence. In 2001, Larry and Rebecca purchased a second liability-insurance policy that provided coverage for a rental house located in Florence; they later constructed another house in Guntersville and, in 2003, purchased an additional liability-insurance policy for that property. In July 2003, Mullins canceled the insurance policy on the Florence house allegedly based on a belief that "the policy was issued in duplicate." Allegedly unbeknownst to Larry and Rebecca, however, the requested cancellation left the Florence house uninsured. One month later, pursuant to a mortgage refinance on the Beddingfields' residence, Larry and Rebecca paid one year's insurance premium on that residence; the check was endorsed and deposited into Mullins's account. In March 2004, the policy on the Beddingfields' residence was canceled because of nonpayment of the premium; neither Larry nor Rebecca, however, was able to recall receiving notice of the cancellation. After those two events, Larry and Rebecca were without insurance on their residence and the Florence house, leaving them with liability insurance only on their Guntersville house. In July 2004, a minor guest at the Beddingfields' Guntersville house, Trace Linam, suffered a serious eye injury in a fireworks-related incident. In 2008, Linam and his father, Linam, sued the Beddingfields, alleging that they, and particularly Cody (who was a minor at the time), were responsible for the injury. Because the underwriter of the Beddingfields' policy had been placed into receivership in Texas in 2006, the Alabama Insurance Guaranty Association ("AIGA") covered the Beddingfields' legal-defense costs in the Linam litigation; however, the maximum amount of liability coverage available was limited to $100,000 –- the amount of the liability- insurance policy Larry and Rebecca had obtained from Mullins to insure that property -- and not $500,000, the amount they say would have been available had the other two policies not been canceled. In February 2011, a judgment was entered on a $600,000 jury verdict against the Beddingfields in the Linam litigation. The Beddingfields appealed that decision. Because, however, AIGA did not post the requisite supersedeas bond, and the Beddingfields were allegedly unable to obtain a bond, execution of the judgment was not stayed during the pendency of the appeal. In July 2011, while their appeal was pending, the Beddingfields sued Mullins, alleging numerous counts of negligence and wantonness with relation to Mullins's handling of the various insurance policies. After review of the trial court record, the Alabama Supreme Court affirmed summary judgment as to the negligence claims, reversed as to the wantonness claims, and remanded the case for further proceedings. View "Beddingfield et al. v. Mullins Insurance Company et al." on Justia Law

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The IHSS program (Welf. & Inst. Code 12300) provides in-home services to elderly or disabled persons so that they may avoid institutionalization. For purposes of the state unemployment insurance system, IHSS service recipients are considered employers of their service providers if the providers are directly paid by the program or the recipient receives IHSS funds to pay their providers (Unemp. Ins. Code 683.) Generally, an employee of a close family member (child, parent or spouse) is excluded from unemployment insurance coverage. The California Unemployment Insurance Appeals Board ruled that, because a close-family-member IHSS service provider under the Direct Payment Mode is employed by the recipient, the provider is subject to the exclusion of Unemployment Insurance Code 631 (Caldera). Skidgel, an IHSS provider for her daughter, challenged the validity of Caldera, arguing government entities were joint employers with the recipient, thereby qualifying providers for unemployment insurance coverage despite the close-family-member exclusion. The court of appeal rejected the challenge, concluding that the Legislature, in enacting Unemployment Insurance Code section 683, intended to designate the recipient as the IHSS provider’s sole employer for purposes of unemployment insurance coverage. View "Skidgel v. California Unemployment Insurance Appeals Board" on Justia Law

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A policy exclusion for personal liability “under any contract or agreement” does not apply to relieve an insurer of its duty to defend its insured, an alleged builder-vendor, against a claim for negligent excavation brought by the home buyer because the negligence claim arose from the common law duty to construct the home as a reasonable builder would. After rockslides damaged his property, the home buyer sued the alleged builder-vendor, asserting breach of contract, negligence, and fraud-based claims and alleging that the rockslides were the result of improper excavation during construction. The builder-vendor’s insurer declined the tender of defense on grounds that there was no coverage under the relevant insurance policies. The builder-vendor sought damages and declaratory relief. The superior court granted summary judgment in favor of the insurer. The court of appeals reversed, concluding that the policy’s “contractual liability” exclusion did not apply. The Supreme Court affirmed, holding that the contractual liability exclusion did not relieve the insurer of its duty to defend the builder-vendor against the home buyer’s negligence claim. View "Teufel v. American Family Mutual Insurance Co." on Justia Law

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A three-year “risk corridors” program described in the Patient Protection and Affordable Care Act, 42 U.S.C. 18001, implemented by the Department of Health and Human Services (HHS), was intended to promote participation in insurance exchanges. Participating insurers, whose costs of providing coverage exceeded the premiums received (using a statutory formula) were to be paid a share of their excess costs while participating plans whose premiums exceeded their costs would pay in a share of their profits. The program “permit[ted] issuers to lower [premiums] by not adding a risk premium" for uncertainties in the 2014-2016 markets. The actual total "payments in"were less than requested "payments out" and Congress prohibited HHS from using its appropriations for the program. Prorated payments were issued. The insurer filed suit. The Federal Circuit affirmed summary judgment in favor of the government. The statute created an obligation of the government to pay exchange participants the amount indicated by the statutory formula but riders in the FY 2015 and 2016 appropriations bills repealed or suspended the obligation to make payments out in an aggregate amount exceeding payments in. Congress made the policy choice to cap payments. No statement or action by the government evinced an intention to form a contract; the risk corridors program was simply an incentive program. Because there was no contract, the insurer’s “takings” claim also failed. View "Land of Lincoln Mutual Health Insurance Co. v. United States" on Justia Law

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A three-year “risk corridors” program described in the Patient Protection and Affordable Care Act, 42 U.S.C. 18001, implemented by the Department of Health and Human Services (HHS), was intended to promote participation in insurance exchanges. Participating insurers, whose costs of providing coverage exceeded the premiums received (using a statutory formula) were to be paid a share of their excess costs while participating plans whose premiums exceeded their costs would pay in a share of their profits. The program “permit[ted] issuers to lower [premiums] by not adding a risk premium" for uncertainties in the 2014-2016 markets. The actual total "payments in"were less than requested "payments out" and Congress prohibited HHS from using its appropriations for the program. Prorated payments were issued. Moda filed suit. The Claims Court granted Moda partial summary judgment as to liability, stipulated to be $209,830,445.79. Dozens of other insurers filed actions, with mixed results. The Federal Circuit reversed. The statute created an obligation of the government to pay exchange participants the amount indicated by the statutory formula but riders in the FY 2015 and 2016 appropriations bills repealed or suspended the obligation to make payments out in an aggregate amount exceeding payments in. Congress made the policy choice to cap payments. No statement by the government evinced an intention to form a contract; the statute, its regulations, and HHS’s conduct simply created an incentive program. View "Moda Health Plan, Inc. v. United States" on Justia Law

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The Fifth Circuit reversed the district court's judgment in favor of LINA, the insurer and plan administrator of a life insurance policy. Plaintiff, the beneficiary of the policy, was denied benefits because LINA determined that the insured's death was caused in part by intoxication or drug abuse. The court took into account LINA's conflict of interest, its procedural unreasonableness, its denial of a full and fair review, and the counter-balanced nature of the evidence, and held that LINA abused its discretion in denying benefits. The court remanded with instructions to enter judgment for plaintiff and for any further proceedings. View "White v. Cigna Group Insurance Co." on Justia Law

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Minnesota law provides that “the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse,” Minn. Stat. 524.2–804. If an insurance policyholder does not want that result, he may rename the ex-spouse as beneficiary. Sveen and Melin were married in 1997. Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his children from a prior marriage as contingent beneficiaries. The marriage ended in 2007. The divorce decree did not mention the insurance policy. Sveen did not revise his beneficiary designations. After Sveen died in 2011, Melin and the Sveen children claimed the insurance proceeds. Melin argued that because the law did not exist when the policy was purchased, applying the later-enacted law violated the Contracts Clause. The Supreme Court reversed the Eighth Circuit, holding that the retroactive application of Minnesota’s law does not violate the Contracts Clause. The test for determining when a law crosses the constitutional line first asks whether the state law has “operated as a substantial impairment of a contractual relationship,” considering the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in a “reasonable” way to advance “a significant and legitimate public purpose.” Three aspects of Minnesota’s law, taken together, show that the law does not substantially impair pre-existing contractual arrangements. The law is designed to reflect a policyholder’s intent and to support, rather than impair, the contractual scheme. The law is unlikely to disturb any policyholder’s expectations at the time of contracting, because an insured cannot reasonably rely on a beneficiary designation staying in place after a divorce. Divorce courts have wide discretion to divide property upon dissolution of a marriage. The law supplies a mere default rule, which the policyholder can easily undo. View "Sveen v. Melin" on Justia Law

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Minnesota law provides that “the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse,” Minn. Stat. 524.2–804. If an insurance policyholder does not want that result, he may rename the ex-spouse as beneficiary. Sveen and Melin were married in 1997. Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his children from a prior marriage as contingent beneficiaries. The marriage ended in 2007. The divorce decree did not mention the insurance policy. Sveen did not revise his beneficiary designations. After Sveen died in 2011, Melin and the Sveen children claimed the insurance proceeds. Melin argued that because the law did not exist when the policy was purchased, applying the later-enacted law violated the Contracts Clause. The Supreme Court reversed the Eighth Circuit, holding that the retroactive application of Minnesota’s law does not violate the Contracts Clause. The test for determining when a law crosses the constitutional line first asks whether the state law has “operated as a substantial impairment of a contractual relationship,” considering the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in a “reasonable” way to advance “a significant and legitimate public purpose.” Three aspects of Minnesota’s law, taken together, show that the law does not substantially impair pre-existing contractual arrangements. The law is designed to reflect a policyholder’s intent and to support, rather than impair, the contractual scheme. The law is unlikely to disturb any policyholder’s expectations at the time of contracting, because an insured cannot reasonably rely on a beneficiary designation staying in place after a divorce. Divorce courts have wide discretion to divide property upon dissolution of a marriage. The law supplies a mere default rule, which the policyholder can easily undo. View "Sveen v. Melin" on Justia Law

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Exercising jurisdiction over Defendant-insurer under the circumstances of this case was permitted by Connectictut’s corporate long arm statute, Conn. Gen. Stat. 33-929(f)(1), and comported with the due process clause of the Fourteenth Amendment. Defendant issued an automobile insurance policy covering a vehicle driven by Insured. The policy was written in New York at Defendant’s principal place of business, and Defendant did not direct or participate in any business transactions in Connecticut at the time. The coverage territory of the policy included Connecticut. Insured’s vehicle later collided with a vehicle occupied by Plaintiffs. A judgment was rendered against Insured in favor of Plaintiffs. Defendant failed to defend Insured or to indemnify him for the judgment rendered against him. Plaintiffs then brought this action against Defendant. Defendant moved to dismiss the action for lack of personal jurisdiction. The trial court granted the motion to dismiss. The Supreme Court reversed, holding that Defendant’s agreement to defend and indemnify Insured established personal jurisdiction under the long arm statute and that subjecting Defendant to the jurisdiction of this state comported with the due process clause of the Fourteenth Amendment. View "Samelko v. Kingstone Insurance Co." on Justia Law

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Exercising jurisdiction over Defendant-insurer under the circumstances of this case was permitted by Connectictut’s corporate long arm statute, Conn. Gen. Stat. 33-929(f)(1), and comported with the due process clause of the Fourteenth Amendment. Defendant issued an automobile insurance policy covering a vehicle driven by Insured. The policy was written in New York at Defendant’s principal place of business, and Defendant did not direct or participate in any business transactions in Connecticut at the time. The coverage territory of the policy included Connecticut. Insured’s vehicle later collided with a vehicle occupied by Plaintiffs. A judgment was rendered against Insured in favor of Plaintiffs. Defendant failed to defend Insured or to indemnify him for the judgment rendered against him. Plaintiffs then brought this action against Defendant. Defendant moved to dismiss the action for lack of personal jurisdiction. The trial court granted the motion to dismiss. The Supreme Court reversed, holding that Defendant’s agreement to defend and indemnify Insured established personal jurisdiction under the long arm statute and that subjecting Defendant to the jurisdiction of this state comported with the due process clause of the Fourteenth Amendment. View "Samelko v. Kingstone Insurance Co." on Justia Law