Justia Insurance Law Opinion Summaries

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The Supreme Court reversed the order of the circuit court disqualifying Stephen Goldman from further participation as the counsel of The Travelers Indemnity Company in a suit filed by the Board of Trustees of the University of Arkansas, holding that the circuit court abused its discretion.The Board, acting on behalf of the University of Arkansas for Arkansas System, brought this complaint against Travelers for breach of contract, declaratory judgment, and bad faith, alleging that it was entitled to benefits under its all-risk commercial insurance policy for damages it suffered during the coronavirus pandemic. After the circuit court entered its ruling disqualifying Goldman, a nonresident attorney, from further representing Travelers in this case Goldman and Travelers (together, Appellants) appealed, arguing that the circuit court erred by revoking Goldman's motion for admission pro hac vice. The Supreme Court agreed and reversed in part, holding that the circuit court's revocation of Goldman's pro hac vice status without prior notice or a reasonable opportunity to be heard violated due process requirements. View "Travelers Indemnity Co. v. Board of trustees of University of Ark." on Justia Law

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Appellant Marie Yammine, as former wife and primary beneficiary of a two million dollar life insurance policy issued by Respondent ReliaStar Life Insurance Company to her former husband, Dr. Jean Bernard, appealed a declaratory judgment finding the contingent beneficiary, Appellee Roland Ghoussoub, was entitled to the policy's death benefit. Dr. Bernard died after the trial court granted the parties' divorce but prior to final judgment on all issues. The trial court declared Yammine and Bernard were divorced and that 15 O.S.2011 § 178(A) operated to revoke her beneficiary designation to the death benefits. Whether Oklahoma's revocation-upon-divorce statute, 15 O.S.2011 § 178(A), applied when one party dies after the granting of the divorce but prior to final judgment on all issues, was a matter of first impression for the Oklahoma Supreme Court. The Court concluded Section 178(A) required a final judgment on all issues, and that the trial court erred by interpreting 15 O.S.2011 § 178(A) to revoke Yammine's beneficiary designation in Bernard's life insurance policy based on an order granting divorce when the final judgment on all issues remained pending at husband's death. The trial court's declaratory judgment was reversed, and this case was remanded for further proceedings. View "Ghoussoub v. Yammine" on Justia Law

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St. Paul Fire and Marine Insurance Company (St. Paul Fire & Marine) and multiple other appellants (collectively, the St. Paul Insurers or sometimes St. Paul) appealed a California trial court’s order staying their declaratory judgment insurance coverage action. The trial court issued the stay in recognition of a "bellwether case of national importance" that was ongoing in West Virginia (WV coverage action), which, like this, arose from the opioid prescription abuse and addiction crisis. The WV coverage action commenced in March 2017, nearly four years before plaintiffs filed their complaint here. At the time the trial court issued its stay, proceedings had progressed significantly in West Virginia. The trial court found that in this action and in the WV coverage action “some of the same insurance policies are at issue in both cases, and the West Virginia court will be interpreting at least one of St. Paul’s policies to determine whether they cover opioid litigation, an answer that presumably will be the same whether the underlying litigation is in West Virginia or some other state.” St. Paul challenged the trial court’s stay order, arguing it constituted an abuse of discretion. The California Court of Appeal concluded St. Paul failed to meet its burden to demonstrate an abuse of discretion, and affirmed the order. View "St. Paul Fire & Marine Ins. Co. v. AmerisourceBergen Corp." on Justia Law

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AFM ran 52 mattress stores in Indiana and Illinois. Motorists insured AFM with a policy covering loss of Business Income, Extra Expense, and loss due to actions of a Civil Authority. An exclusion applicable to all coverage stated: We will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease. During the COVID-19 pandemic, the governors of Illinois and Indiana ordered the closure of businesses. AFM was forced to cease business activities at all of its stores. AFM submitted a claim for coverage. Motorists denied it.AFM sought a declaratory judgment in Illinois state court. The judge dismissed the case with prejudice, based on the Virus Exclusion, rejecting a claim of “regulatory estoppel.” AFM claimed that Motorists misrepresented the Virus Exclusion to the Illinois Department of Insurance so that the regulators would approve it. The Seventh Circuit affirmed. Illinois does not recognize regulatory estoppel. The Virus Exclusion unambiguously precludes “civil authority” coverage. View "AFM Mattress Company, LLC v. Motorists Commercial Mutual Insurance Co." on Justia Law

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BDC lent $800,000 to a company owned by the Suggs, who personally guaranteed the loan and secured it with a $200,000 mortgage on their Shaker Heights home. Bank of America and MidFirst Bank held more senior mortgages on the home. The Suggs’ home suffered serious water damage from a burst pipe in 2014. State Farm insured the home for up to $352,130. State Farm denied their claim on the ground that the Suggs had failed to heat their home at a temperature required by their policy.The Suggs sued State Farm in an Ohio state court and sued all three lenders with mortgages on their home, explaining that these lenders “have an interest in the policy proceeds” because the policy entitled them to payment even if State Farm had a valid defense against the Suggs. BDC did not appear. After the case settled, the state court found that BDC had no right to the proceeds. BDC did not seek relief in the state court but filed a federal suit alleging that State Farm, its lawyers, and the Suggs’ lawyers colluded to defraud it. The district court dismissed the suit under Ohio’s claim-preclusion law. The SIxth Circuit affirmed. BDC cannot meet the demanding test required to attack the state court’s judgment in this collateral fashion. View "Business Development Corporation of South Carolina v. Rutter & Russin, LLC" on Justia Law

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The Supreme Court affirmed the judgment of the trial court granting summary judgment for Illinois Casualty Company in this declaratory judgment action, holding that a liquor liability exclusion in the relevant policy absolved Illinois Casualty of a duty to defend or indemnify its insured under its general business owners' policy.Illinois Casualty insured Big Daddy's Show Club. Third-parties filed a lawsuit against Big Daddy's and related entities (collectively, Parks defendants) claiming that Big Daddy's violated Indiana's Dram Shop Act, Ind. Code 7.1-5-10-15.5. Illinois Casualty field a separate declaratory judgment action seeking a declaration that it did not owe a duty to defend or indemnify the Parks defendants in the underlying lawsuit. The trial court granted summary judgment for Illinois Casualty. The Supreme Court affirmed, holding that Illinois Casualty did not owe a duty to defend or indemnify the Parks defendants under the relevant policies. View "Parks v. Illinois Casualty Co." on Justia Law

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The Supreme Court held that the circuit court did not err when it granted Nationwide's motion for summary judgment on its complaint seeking a declaratory judgment regarding its duty to indemnify and defend Defendants against a personal injury lawsuit stemming from an accident on their farm.Nationwide issued a farm liability insurance policy for Defendants' farm and cattle ranch operation. After an accident resulted in permanent injuries to a relative, the relative filed a personal injury action against Defendants and their business entities. Nationwide then commenced this declaratory judgment action to determine the extent of its obligation to defend or indemnify Defendants. The circuit court granted summary judgment for Nationwide, concluding that a "Recreational Vehicle Liability Coverage Endorsement" in the policy operated to exclude coverage for the accident. The Supreme Court affirmed, holding that the circuit court properly granted summary judgment based on the language in the Recreational Vehicle Endorsement. View "Nationwide Agribusiness v. Fitch" on Justia Law

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The Supreme Court vacated the decision of the court of appeals affirming the summary judgment and fees ordered by the trial court in favor of Defendants' right to direct payment of basic reparation benefits within an element of loss under Kentucky's Motor Vehicle Reparations Act, holding that this Court lacked subject matter jurisdiction over this appeal.Defendants were involved in a collision while in a vehicle insured by Erie Insurance Exchange. Erie filed a declaratory judgment action to determine whether it was required to pay bills within an element of loss in an order directed by secured persons. Defendants filed a counterclaim seeking attorney's fees and excess interest for the unreasonable delay of the payment of their bills caused by Erie. The trial court granted Defendants' motion for an attorney's fee and denied Erie's second summary judgment motion, but did not indicate in its order that it granted Defendants' motion for summary judgment. The court of appeals affirmed. The Supreme Court vacated the order below, holding that no final and appealable orders were before the Court, and therefore, this Court lacked jurisdiction over the appeal. View "Erie Insurance Exchange v. Johnson" on Justia Law

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Great Lakes Insurance SE (“Great Lakes”) and Wave Cruiser LLC (“Wave Cruiser”) were involved in an insurance dispute. Wave Cruiser purchased an “all risks” insurance policy from Great Lakes covering a vessel that Wave Cruiser had recently acquired. The policy did not cover engine damage unless an accidental external event caused the damage. After Wave Cruiser purchased the policy, the vessel suffered catastrophic engine failure. Wave Cruiser submitted a claim on its policy. Great Lakes denied the claim, explaining that Wave Cruiser had not shown that an external event caused the engine damage.   Great Lakes filed suit for a declaratory judgment that Wave Cruiser’s policy did not afford coverage for the loss. Wave Cruiser filed counterclaims for breach of contract and breach of the duty of good faith and fair dealing. The district court granted summary judgment to Great Lakes. The district court concluded that Wave Cruiser failed to come forward with evidence that an external event caused the engine damage.   The Eleventh Circuit agreed with the district court that Wave Cruiser had the burden to come forward with evidence that an external event caused the engine failure. The court held that (1) the district court did not err by placing the burden on Wave Cruiser to provide evidence that an external event caused the vessel’s port engine to fail, and (2) the district court committed harmless error by considering inadmissible expert opinion testimony. View "Great Lakes Insurance SE v. Wave Cruiser LLC" on Justia Law

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Meemic Insurance Company filed a subrogation claim against Angela Jones, seeking to recover from Jones money it had paid to CitiMortgage, Inc., the mortgagee of a residential house owned by Jones and insured by Meemic, after fire damaged the property. In September 2015, Jones was living at the house when it was damaged by a fire. Meemic paid her $2,500 in partial payment of the claim for insurance benefits. During Meemic’s ensuing investigation, Jones admitted that at the time she secured the policy in 2014, she did not reside at the house but, instead, rented it to a third party. Meemic claimed that Jones’s failure to disclose in the initial policy that her home was being rented to others constituted a material misrepresentation. On the basis of the misrepresentation, Meemic rescinded and voided the insurance policy from its inception and returned Jones’s policy payments. After rescinding the policy, Meemic paid $53,356.49 to CitiMortgage under the lienholder contract of the policy. Jones filed an action against Meemic, claiming breach of contract and sought to recover under the insurance policy. Meemic moved for summary judgment, arguing that it had properly rescinded the policy given Jones’s misrepresentation in the initial policy. The motion was ultimately granted, and Jones' complaint was dismissed with prejudice. In 2018, Meemic filed the underlying action against Jones seeking to recover the $2,500 advance payment made to Jones and the $53,356.49 it had paid to CitiMortgage under the lienholder contract. Jones moved for summary judgment, arguing that she was relieved from any obligations under the insurance policy because Meemic had rescinded the insurance policy; Meemic opposed the motion and filed a countermotion for summary judgment. The Court of Appeal reversed the trial court's grant of summary judgment in favor of Meemic, and Meemic appealed. The Michigan Supreme Court held: an insurer who rescinds a homeowner’s insurance policy that contains a mortgage clause may seek subrogation from the insured under its rescinded policy for the amount paid to the mortgagee under the lienholder contract. The Court of Appeals judgment was reversed because it erred by concluding that Meemic’s rescission of the risk contract precluded it from denying payment to Jones and then asserting rights under the subrogation provision of the lienholder contract. View "Meemic Insurance Co. v. Jones" on Justia Law