Justia Insurance Law Opinion Summaries

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.

This appeal challenged the small employer group health coverage act (Act), which establishes requirements for insurance carriers to offer health insurance benefit plans to small employers in Michigan. Priority Health sought a declaratory judgment from the Office of Financial and Insurance Services (OFIS) so that it could allocate a small portion of insurance premiumsâ costs to employers, lessening the financial burden on employees. Priority Health would not renew contracts with employers who did not agree to pay a portion of the premiums. Both the Court of Appeals and the Commissioner of the Office of Financial and Insurance Services (OFIS) concluded that âminimum employer contribution provisionsâ are inconsistent with the Act. They reasoned that an employerâs failure to pay a minimum percentage of its employeesâ premiums is not among the reasons in the Act that a carrier can use to refuse to renew an insurance plan. The Supreme Court disagreed with the appellate court and OFISâ interpretation of the Act. The Court found that just because the Michigan Legislature did not include an employerâs refusal to pay according to a minimum contribution provision as among the reasons for not renewing a contract for benefits, the [Priority Health] provision was unreasonable or inconsistent with the Act. In general, âunless a provision directly conflicts with the enumerated reasons [of the Act], it may be included in a plan so long as it is reasonable and not inconsistent.â The Court remanded the case to the OFIS for further proceedings.