Justia Insurance Law Opinion Summaries

Plaintiff Yvette Bouffard appealed a trial court's denial of her request for a declaratory judgment that she was entitled to uninsured motorist (UM) insurance coverage under her umbrella insurance policy issued by Defendant State Farm Fire & Casualty Company. Plaintiff was injured in 2006 from a car accident. She recovered $250,000 from the other party's insurer and her UM coverage under her personal automobile policy. Because her damages exceeded this sum, Plaintiff sought UM coverage under her umbrella policy. State Farm denied the claim because UM coverage was rejected on her original insurance application. The trial court found that Plaintiff authorized her husband to go to the insurance agency to purchase insurance for both of them, and that because the husband did not elect UM coverage, Plaintiff ratified his decision when she failed to object after reviewing the application in the car or after the policy arrived in the mail. Upon review, the Supreme Court found that the record supported the trial court's conclusion that the husband acted as Plaintiff's agent in rejecting UM coverage and affirmed the court's decision to deny Plaintiff declaratory relief.

This criminal appeal arose from a "finite reinsurance" transaction between American International Group, Inc. (AIG) and General Reinsurance Corporation (Gen Re). Defendants, four executives of Gen Re and one of AIG, appealed from judgments convicting them of conspiracy, mail fraud, securities fraud, and making false statements to the Securities and Exchange Commission. Defendants appealed on a variety of grounds, some in common and others specific to each defendant, ranging from evidentiary challenges to serious allegations of widespread prosecutorial misconduct. Most of the arguments were without merit, but defendants' convictions must be vacated because the district court abused its discretion by admitting the stock-price data and issued a jury instruction that directed the verdict on causation.

This case stems from a fire that destroyed a Michigan apartment building. The owner, Rapid Funding, LLC (a Colorado company), submitted a claim to its insurer James River Insurance Company (an Ohio company). James River denied the claim because it determined that the building's pre-fire value was less than zero. Rapid Funding sued in Colorado federal district court for breach of contract and insurance bad faith and received the full $3 million amount of the policy plus $2.35 million in punitive damages. James River argued on appeal that the damages verdict was based on valuation testimony that should have been excluded at trial. Upon review of the applicable legal authority and briefs submitted by the parties, the Tenth Circuit held that the valuation testimony was erroneously admitted, and the error was not harmless. The Court reversed and remanded the case for a new trial limited to the damages issue.

In one of Plaintiff Leprino Foods Company's warehouses, flavoring compounds derived from nearby-stored fruit products contaminated a large quantity of cheese. Leprino's "all-risk" insurance policy with Defendant Factory Mutual Insurance Company excluded contamination unless with was caused by "other physical damage." When Factory Mutual refused coverage on the basis of the contamination exclusion, Leprino sued. A jury determined that the contamination was caused by other physical damage and therefore was covered by the Factory Mutual insurance policy. On appeal, Factory Mutual contended the verdict was not supported by the evidence presented at trial. Specifically, Factory mutual argued that: (1) expert testimony was not presented to prove causation; (2) the jury instructions pertaining to Leprino's cold-storage guidelines were given in error; and (3) Leprino's damages should have been reduced by its settlement with the warehouse. Upon review of the trial record and applicable legal authority, the Tenth Circuit found that Leprino presented sufficient evidence with regard to expert testimony to prove causation. The Court did not find jury instructions to be erroneous. The Court did agree that Leprino's damages should be reduced by the amount of the settlement received from the warehouse. The Court therefore affirmed part and reversed part of the lower court's decisions and remanded the case for recalculation of damages.

This case arose out of an accident that occurred when a truck collided with the Casper family's minivan. The Caspers brought suit against several defendants, including the truck driver, his two employers, an employer CEO, and an employer's excess insurer. The Supreme Court granted review, affirming in part and reversing in part the decision of the court of appeals. The Court (1) affirmed the decision of the appellate court in finding the circuit court did not erroneously exercise its discretion in (a) finding excusable neglect and granting the insurer's motion to enlarge time by seven days to answer the amended complaint, and (b) denying the Caspers' motion for default judgment; (2) reversed the decision of the appellate court affirming the lower court's ruling that a liability insurance policy needs to be delivered or issued for delivery in Wisconsin in order to subject the insurer to a direct action under Wis. Stat. 632.24 and 803.04(2); and (3) affirmed that a corporate officer may be liable for non-intentional torts committed in the scope of his employment but reversed the decision of the appellate court because in this instance, the CEO's actions were too remote to provide a basis for personal liability.

This insurance coverage dispute raised issues arising out of financial regulators' investigations in alleged accounting misstatements by MBIA, Inc. (MBIA) and related litigation. Based on these events, MBIA made claims under two $15 million director and officer (D&O) insurance policies it had purchased from Federal Insurance Co. (Federal) and ACE American Insurance Co. (ACE), seeking coverage for costs associated with these claims as losses under the policies. The district court granted summary judgment in favor of MBIA on two of its three coverage claims but granted summary judgment in favor of Federal and ACE on one of MBIA's coverage claims. The parties subsequently appealed the district court's judgments. The court affirmed the district court with respect to coverage for all costs except those related to the independent consultant where the independent consultant's investigation was a covered cost under the policies. Therefore, the judgment of the district court was affirmed in part and reversed in part. The court remanded the case to the district court for entry of judgment in favor of MBIA on its claim for coverage of the independent consultant's costs.

This case stemmed from a dispute between MBIA Insurance Corporation (MBIA) and certain of its policyholders who hold financial guarantee insurance policies. The principal question presented was whether the 2009 restructuring of MBIA and its related subsidiaries and affiliates authorized by the Superintendent of the New York State Insurance Department precluded these policyholders from asserting claims against MBIA under the Debtor and Creditor Law and the common law. The court held that the Superintendent's approval of such restructuring pursuant to its authority under the Insurance Law did not bar the policyholders from bringing such claims. Accordingly, the court held that the order of the Appellate Division should be modified, without costs, in accordance with the opinion.

BancInsure, Inc. appealed a declaratory judgment in favor of Columbian Financial Corporation and a former director, Carl McCaffree (collectively the Insureds). The insurance policy at issue here was a "claims-made" policy covered any claim made to BancInsure against any Columbian officer or director for a "Wrongful Act" as defined by the policy. A disputed provision of the policy pertained to the scope of coverage if Columbian was placed in receivership or otherwise ceased to engage in active banking business. The parties interpreted the provision differently. The Insureds contended that if Columbian went into receivership, the policy covered all claims made through the end of the original policy period, although only for Wrongful Acts committed before the receivership. BancInsure contended that the policy covered only claims made before the receivership. The operation of the disputed provision became relevant in August 2008 when the Kansas State Bank Commissioner declared Columbian insolvent and appointed the FDIC as its receiver. Soon thereafter, Columbianâs management sent BancInsure a letter to notify it of potential claims by the FDIC and others. The parties disputed many of the claims against Columbian which led to Columbian filing suit to the district court to determine which claims were covered under the policy. The sole issue on appeal to the Tenth Circuit was whether the district court had jurisdiction. Though no party disputed jurisdiction, the Tenth Circuit found that there was no actual controversy between the parties when the district court below rendered its judgment. The court therefore lacked jurisdiction. The Tenth Circuit reversed the lower courtâs decision and remanded to case with instructions to the court to vacate its judgment.

Nationwide Mutual Insurance Company (Nationwide) appealed a trial courtâs order that denied its "renewed motion for a judgment as a matter of law" in its case against J-Mar Machine & Pump. J-Mar is a repair shop that held a commercial liability and property insurance policy with Nationwide. In 2004, in anticipation of its policy renewal, Nationwide sent an inspector to the shop. In his report, the inspector noted several safety hazards and a messy shop. The insurance policy was renewed in March but several months later Nationwide cancelled the policy. Nationwide cited the inspectorâs report as reason for the cancellation. J-Mar management was not aware of the cancellation until late that year when shop property was stolen. When it tried to file a claim, Nationwide declined J-Marâs claim. A jury trial was held on the disputed policy cancellation and coverage. At the close of J-Marâs case, Nationwide moved the court for a "judgment as a matter of law" which was denied. Nationwide unsuccessfully motioned again at the close of all evidence. Upon review of the trial court record, the Supreme Court found that the evidence J-Mar presented at trial was insufficient to support the jury verdict in its favor. Accordingly, the Court reversed the trial courtâs judgment denying Nationwideâs motion and rendered a judgment in Nationwideâs favor.

Appellant Walnut Street Associates (WSA) provides insurance brokerage services and helps employers obtain health insurance for their employees. Appellee Brokerage Concepts, Inc. (BCI) is a third party administrator of employee benefit plans. Procacci retained BCI as administrator of its insurance plans, and BCI paid commissions to WSA based on premiums paid by Procacci. In 2005, Procacci requested BCI reduce its costs, but BCI would not meet Procacciâs proposal. Procacci then notified BCI that it would take its business elsewhere. BCI asked Procacci to reconsider, and in the process, disclosed to Procacci how much it paid to WSA as its broker. The amount was higher than Procacci believed WSA had been earning, but there was no dispute that BCIâs statements about WSAâs compensation were true. As a result of BCIâs letter, Procacci terminated its contract with WSA. WSA sued BCI alleging that BCI tortiously interfered with the WSA/Procacci contract by disclosing the amount of WSAâs compensation. BCI argued that it could not be liable for tortious interference because what it said was true, or otherwise justified and privileged. At trial, the jury found that BCI did interfere in the WSA/Procacci contract. BCI appealed, and the appellate court reversed the trial courtâs judgment. The appellate court adopted a section of the Restatement of Torts, which said that truth is a defense to a claim of tortious interference. WSA maintained that the Restatement was not applicable according to Pennsylvania law. The Supreme Court reviewed the case and adopted the Restatement defense that truth is a defense to claims of tortious interference with contractual relations. The Court affirmed the decision of the appellate court.