Justia Insurance Law Opinion Summaries

In 1994, Investors Equity Life Insurance Company of Hawaii, Ltd. (IEL) was liquidated. The State Insurance Commission was appointed as IEL’s liquidator (Liquidator). In 1996, Investors Equity Life Holding Company (IELHC), the former parent company and sole shareholder of IEL, surrendered all of its shares in IEL to the Commissioner as part of a settlement agreement to resolve claims relating to IEL’s insolvency. The Liquidator proceeded to administer IEL’s estate. In 2008, IELHC wrote to the Liquidator claiming that it held legal or equitable title to all of IEL’s stock and demanding that the Liquidator turn over to IELHC all shares and assets remaining in IEL’s estate. The Liquidator denied the claim. The circuit court affirmed. The Supreme Court affirmed, holding (1) the circuit court did not err in concluding that IELHC asserted a claim against IEL’s estate and that the claim was time barred; (2) the circuit court had subject matter jurisdiction over IELHC’s claim and personal jurisdiction over IELHC; (3) there were no grounds for abating the adjudication of IELHC’s claim; and (4) the circuit court’s procedures met due process requirements. View "Ito v. Investors Equity Life Holding Co." on Justia Law

The Tenth Circuit Court of Appeals certified a question of Colorado law to the Colorado Supreme Court. An insurer issued a policy that provided directors and officers of a company liability coverage. The policy required the insured to give prompt notice of a claim, specifically, notice "as soon as practicable" after learning of the claim. The policy also required the insured to give notice of the claim by a date certain (not later than 60 days after the expiration of the policy). Near the end of the one-year policy, a company officer was sued for alleged misrepresentations he made during a merger. Unaware of the insurance policy, the officer defended himself against the suit. When he learned of the policy, approximately sixteen months after the policy had expired, he contacted the insurer. The underlying suit was settled. The officer then sued the insurer for denying coverage under the policy. The insurer removed the case to the federal district court, and then moved to dismiss on grounds that the officer's claim was untimely. The issue of Colorado law before the Tenth Circuit centered on the "notice-prejudice" rule to claims-made insurance policies: (1) whether the notice-prejudice rule applied to claims-made liability policies in general; and (2) if so, whether the rule applied to both types of notice requirements in those policies. The Colorado Court answered the certified questions more narrowly than originally presented because the parties agreed that the prompt notice requirement of the claims-made policy in this case was not at issue. The Colorado Court's analysis was restricted to the date-certain notice requirement. The Court held that the notice-prejudice rule did not apply to date-certain notice requirement in a claims-made insurance policy. In a claims-made policy, the date-certain notice defines the scope of coverage ("to excuse late notice in violation of such a requirement would rewrite a fundamental term of the insurance contract.") The Court reframed the certified questions as a single question: whether the notice-prejudice rule applies to the date-certain notice requirement of claims-made policies, to which the Colorado Court answered in the negative. View "Craft v. Phila. Indem. Ins. Co." on Justia Law

Footstar operated the footwear departments in various Kmart stores as though they were islands. Footstar employees could only work in those departments unless they had written permission from Kmart. In 2005, a Footstar employee tried to help a customer get an infant carrier off a shelf outside the footwear department and the customer was injured. She sued. Kmart sought indemnification from Footstar and its insurer, Liberty Mutual. A magistrate judge found that Footstar and Liberty Mutual both had a duty to defend beginning the day Kmart formally requested coverage since the injury was potentially coverable under the agreement between Kmart and Footstar and the insurance policy. The Seventh Circuit reversed, holding that neither Liberty Mutual nor Footstar had a duty to indemnify Kmart because the injury did not occur “pursuant to” or “under” the agreement between Kmart and Footstar. That agreement specifically precluded Footstar employees from working outside of the footwear department, where the injury occurred, and actions taken in contravention of the agreement were not “pursuant to” or “under” it. Liberty Mutual did not deny coverage in bad faith and that Kmart did not breach the relevant notice provisions such that Liberty Mutual and Footstar could withhold defense costs. View "Kmart Corp. v. Footstar, Inc." on Justia Law

Cross-defendant Michael Tope appealed the grant of summary judgment in favor of First American Title Insurance Company in a cross-action to recover money under a title insurance policy after default on a real estate loan to purchase and rehabilitate a home. The property was subject to a notice of abatement action issued by San Joaquin County requiring repair of defects in the rehabilitation of the residence. The subject of the suit was that First American allegedly breached the title insurance policy by failing to provide coverage for the notice of abatement action. Plaintiffs, investors in a real estate loan, sued defendants and cross-complainants Stockton Mortgage Real Estate Loan Servicing Corporation (SMRELS), Stockton Mortgage, Inc., Stockton Management & Development, Inc., and Ross Cardinalli Jr. (collectively cross-complainants) for damages arising from cross-complainants' alleged failure to follow up on the status of the release of a notice of abatement action. Cross-complainants, in turn, initiated this suit against First American, Alliance Title Company, and two of Alliance's employees for damages, indemnity, and declaratory relief arising out of First American's refusal to provide coverage under the title insurance policy, and Alliance's alleged representation, on behalf of First American, that it would obtain a release of the notice of abatement action prior to the close of escrow. First American moved for summary judgment mainly on grounds that the notice of abatement action was not covered under the title insurance policy, cross-complainants were not insured under the title insurance policy, and the preliminary title report relied on by cross-complainants was not a contract. The trial court granted First American's motion and entered summary judgment in its favor. Cross-complainants appealed. Finding no reversible error, the Court of Appeal affirmed the judgment. View "Stockton Mortgage, Inc. v. Tope" on Justia Law

PIC sought a declaratory judgment to determine whether PIC was required to defend and indemnify its insured, LSi, a computer and technology company with respect to a lawsuit filed by Hodell, concerning business software developed and sold by LS. The district court found LSi did not have coverage under either of its consecutive policies with PIC because it did not provide notice of Hodell’s claims or potential claims to PIC as required. There were regular email references to possible legal action as early as March, 2007. On November 21, 2008, Hodell filed suit against LSi. On December 8, 2008, LSi first notified PIC of Hodell’s claims. The Eighth Circuit affirmed judgment in favor of PIC, reasoning that a claim was made while the 2007 policy was in place, but LSi did not properly give notice under that policy. View "Philadelphia Cons. Holding Corp. v. Hodell-Natco Indus., Inc." on Justia Law

Seneca Insurance Company paid $1 million to settle a lawsuit in which its insured alleged Seneca had mishandled insurance claims for hail damage to the insured’s property. Seeking to recoup the costs of defending and settling the lawsuit, Seneca brought this action for implied equitable indemnity and negligence against its insurance adjuster, Western Claims, Inc., and Western Claims’ agent Lou Barbaro. The district court allowed Western Claims to discover and admit as evidence at trial correspondence containing advice from Seneca’s lawyers regarding the underlying hail damage claim and litigation. It concluded Seneca put the advice at issue in this lawsuit, thereby waiving any attorney-client privilege or work-product protection. The jury ultimately found in Western Claims’ favor. On appeal, Seneca sought a new trial, arguing the district court erred in concluding Seneca put the legal advice at issue. Western Claims cross appealed, arguing that even if the district court erred, Western Claims was nevertheless entitled to judgment as a matter of law on both of Seneca’s claims. After review, the Tenth Circuit concluded that because Seneca cited “advice of counsel” to justify settling with its insured in the underlying action, Seneca could not shield that advice from Western Claims. Accordingly, the Court affirmed the district court's decision that Seneca waived any attorney-client privilege or work-product protection. The Court did not reach Western Claims’ cross appeal. View "Seneca Insurance Co. v. Western Claims" on Justia Law

In this matter, Appellants John and Kathy St. John challenged the Superior Court’s decision to affirm a declaratory judgment order finding Pennsylvania National Mutual Casualty Insurance Company (“Penn National”) liable for a judgment against its insured LPH Plumbing and Heating under a commercial general liability (CGL) insurance policy in effect from July 1, 2003 to July 1, 2004. The Supreme Court granted review to determine whether, under the facts of this case and the policy language at issue, Penn National was instead liable for the judgment against its insured under a separate policy of CGL insurance as well as a companion umbrella policy in effect from July 1, 2005 to July 1, 2006. Furthermore, the Court also considered whether the multiple trigger theory of liability insurance coverage (adopted by the Supreme Court in "J.H. France Refractories Co. v. Allstate Ins. Co.," 626 A.2d 502 (Pa. 1993)), within the context of asbestos bodily injury claims applied in this case, where property damage was continuous and progressive, to trigger coverage under all policies in effect from exposure to the harmful condition to manifestation of the injury. After review, the Supreme Court affirmed all aspects of the lower court’s decision finding that coverage was triggered under the policy in effect from July 1, 2003 to July 1, 2004, when property damage became reasonably apparent, and declining to apply the multiple trigger theory of liability insurance coverage. View "PA Natl Mut Casualty v. St. John" on Justia Law

WTS Acquisition Corporation purchased Ameritemps, Inc. and then transferred the assets to its wholly owned subsidiary, RFFG, LLC. RFFG continued operating the business under the Ameritemps name. The Ohio Bureau of Workers’ Compensation notified RFFG that it had determined that RFFG was a successor employer for workers’ compensation purposes and that it intended to calculate RFFG’s workers’ compensation premium rate based on Ameritemps’ experience rating. RFFG filed a complaint for a writ of mandamus alleging that the Bureau had abused its discretion when it determined RFFG to be the successor in interest to Ameritemps. The court of appeals denied the writ. The Supreme Court affirmed, holding that the court of appeals did not err in concluding that the decision of the Bureau was supported by the evidence and was not an abuse of discretion. View "State ex rel. RFFG, LLC v. Ohio Bureau of Workers' Comp." on Justia Law

Plaintiffs DISH Network Corporation and DISH Network LLC sought a declaratory judgment that their commercial general liability and excess liability insurers (collectively the Insurers), Arch Specialty Insurance Company, Arrowood Indemnity Company, Travelers Indemnity Company of Illinois, XL Insurance America, Inc., and National Union Fire Insurance Company of Pittsburgh, Pa., had a duty to defend and indemnify plaintiffs in an underlying patent infringement action. The district court granted summary judgment in favor of the Insurers, plaintiffs appealed, and the Tenth Circuit reversed and remanded for further proceedings. On remand, the Insurers moved again for summary judgment, but on different grounds. The district court granted the Insurers’ motions, and plaintiffs appealed. Finding no reversible error this time, the Tenth Circuit affirmed the district court's judgment. View "Dish Network v. Arch Specialty Insurance" on Justia Law

The Circuit Court granted summary judgment in favor of Columbia Casualty Company and Continental Casualty Company, finding there was no wrongdoing in denying coverage to four former insureds (Ex-Agents) and Minnesota Mutual Life Insurance Company. The trial court also denied the Ex-Agents’ and Minnesota Life’s motion to strike certain affidavits and exhibits submitted by Columbia in support of its motions for summary judgment and in defense of the Ex-Agents’ and Minnesota Life’s summary judgment motions. The dispute arose over the Agents' purchase of Errors & Omissions insurance coverage. The Agents sold Minnesota Life insurance products, and found that one of their colleagues was embezzling funds from their agency. The Mississippi Secretary of State’s office began investigating the records of the Agency and, from that investigation, determined that an agent had misappropriated client funds. Cases were filed against the agent, the Agency, Minnesota Life, and the Ex-Agents. Each complaint alleged that the wrongful acts occurred while the Ex-Agents were employed by Minnesota Life. Each complaint alleged causes of action for breach of fiduciary duty, misrepresentation and concealment, breach of implied covenant of good faith, continuing breach of contract, negligence, negligent infliction of mental and emotional distress, misrepresentation, and malpractice. As to Minnesota Life, each complaint specifically alleged that Minnesota Life participated in and/or had knowledge of the intentional taking of monies. As to the Ex-Agents, the complaints specifically alleged that they should have known that Minnesota Life and/or the colleague were misappropriating funds. The agents and Minnesota Life made a claim on their E&O insurance policy to defend the suit. Upon review, the Supreme Court found that the trial court properly denied the motion to strike and properly granted summary judgment in favor of Columbia as to Minnesota Life’s claim but erred in granting summary judgment as to the Ex-Agents’ claims. Therefore, the Court affirmed in part and reversed in part and remanded. View "Minnesota Life Insurance Company v. Columbia Casualty Company" on Justia Law