Justia Insurance Law Opinion Summaries

Trustees of the Western Asbestos Settlement Trust, charged with paying bodily injury claims against companies that distributed asbestos-containing building materials, sought coverage under the companies’ insurance policies. In 2004, after the insurer was declared insolvent, the trust sought declaratory relief against the California Insurance Guarantee Association (CIGA). CIGA filed an answer denying any obligation to pay claims against the insolvent insurer. The proceedings remained dormant for six years. In 2011, the Western Trust dismissed its complaint without prejudice. The present declaratory relief action by the Western Trust against CIGA was filed in 2013. The trial court dismissed, citing the three-year statute of limitations. Western Trust argued that the limitations period does not begin to run until CIGA denies a specific claim for payment and that no such claim has yet been submitted. The appeals court reversed, holding that a cause of action against CIGA for breach of statutory duties does not accrue until all of the events necessary to create a covered claim have occurred, giving rise to the insured’s right to demand payment from CIGA. The complaint alleged no facts indicating that all those events occurred more than three years before the complaint was filed, if they have occurred. View "Snyder v. CA Ins. Guar. Ass'n" on Justia Law

In June 2011, fourteen-year-old Jean-ah Leon was seriously injured while operating a Bad Boy Buggy ( an off-road vehicle used for outdoor recreation). A year later, Jean-ah’s parents, Vincent and Mandi Leon, filed a products liability and personal injury lawsuit in Louisiana against the owner of the Bad Boy Buggy, a Louisiana resident. They also named the owner’s insurer, the Textron Parties, and several other entities and individuals. Within a few days, the Leons dismissed all parties except the vehicle owner and his insurer from the Louisiana case. The Leons filed suit in Adams County, Mississippi, against the Textron Parties and the others previously named in the Louisiana suit, seeking damages of “an amount not yet determined” but greater than $10,000,000. The Leons served that complaint and summonses on the Textron Parties through their registered agents in Mississippi. They amended their complaint, adding claims for gross negligence and punitive damages. The Leons did not issue new summonses to the Textron Parties with the amended complaint; instead, they sent copies to the Textron Parties’ headquarters by certified mail with accompanying letters addressed “To Whom it May Concern.” The Textron Parties’ attorney in the Louisiana case also requested and received a copy of the amended complaint by email. The Textron Parties’ answer was due thirty days after they were served with the original complaint. They did not file an answer to the original complaint or the amended complaint. The Leons then sought a default judgment against the Textron Parties based on the amended complaint. An entry of default and default judgment were entered the same day. The issue this case presented for the Mississippi Supreme Court's review arose from that default judgment: the Textron Parties claimed that the default judgment was void and should have been set aside because they did not receive proper service of the amended complaint, they were not given notice of the default judgment, and the plaintiffs failed to state a claim against them. Additionally, the Textron Parties asserted that a three-pronged balancing test for relief from default judgments required that it be set aside because they had a colorable defense and the plaintiffs would not be prejudiced. The Supreme Court held that the default judgment was not void, but it should have been set aside under the three-pronged test. View "BB Buggies, Inc. v. Leon" on Justia Law

Expedia (and several other hotel booking websites, collectively, "Petitioners") has been subject to approximately 80 underlying lawsuits by states, counties, and municipalities (collectively, taxing authorities) for purportedly failing to collect the right amount of local occupancy taxes from its hotel customers. Expedia tendered most of the suits to its insurer, Zurich, although some were tendered late. Zurich refused to defend Expedia on a number of grounds, including late tender and that the underlying suits may be excluded from the policies' coverage. The trial court declined to make a determination of Zurich's duty to defend Expedia, instead ordering discovery that Expedia claimed was prejudicial to the underlying actions. Petitioners sought adjudication of their summary judgment motion concerning their respective insurers' duty to defend them in cases brought by local taxing authorities. They further requested a stay of discovery in the coverage action that could prejudice them in the underlying litigation. Upon review of the matter, the Washington Supreme Court held that the trial court erred by delaying adjudication of Zurich's duty to defend Expedia. Accordingly, the Court vacated the trial court's order. The case was remanded to the trial court to determine Zurich's duty to defend Expedia in each of the 54 underlying cases subject to Expedia's motion. The trial court was furthermore ordered to stay discovery in the coverage action until it could make a factual determination as to which parts of discovery are potentially prejudicial to Expedia in the underlying actions. View "Expedia, Inc. v. Steadfast Ins. Co." on Justia Law

Claimant Andres Carbajal alleged he was injured when scaffolding he was on was blown over and he fell while working on a construction project in Okmulgee. He filed a claim in the Workers' Compensation Court and alleged that he was an employee of Precision Builders, Inc., and/or Mark Dickerson (Precision) when he fell. The tribunal denied the claim upon determining that claimant was an independent contractor and not an employee. The three-judge panel affirmed the trial tribunal and the panel's order was affirmed by the Court of Civil Appeals. The issue this case presented to the Oklahoma Supreme Court on certiorari was whether petitioner was an employee or independent contractor. "Considering each of the factors on which the evidence was presented leads us to the conclusion that claimant met his burden to show that he was an employee of Precision." The Court of Appeals' decision was vacated and the case remanded for further proceedings. View "Carbajal v. Precision Builders, Inc." on Justia Law

Bridgeview Health Care Center filed a class action complaint against Clark, an Illinois resident who operates Affordable Digital Hearing, a sole proprietorship out of Terre Haute, Indiana. Bridgeview alleged that Clark sent Bridgeview and others unsolicited faxes and claimed violation of the Telephone Consumer Protection Act of 1991, 47 U.S.C. 227; common law conversion of its fax paper and toner; and violation of the Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2. Clark had a comprehensive general liability policy issued by State Farm, an Illinois corporation. The policy was purchased through an Indiana agent and issued to Clark’s Indiana business address. State Farm sought declaratory judgment that it had no duty to defend in Indiana state court. The action was dismissed for lack of personal jurisdiction over Bridgeview. Bridgeview sought a declaration, in Illinois state court that State Farm had a duty to defend and indemnify Clark under the advertising injury and property damage provisions of the policy. State Farm argued that Illinois law conflicts with Indiana law on coverage issues and that Indiana law should apply. The circuit court found that there was no conflict and no need to conduct a choice-of-law analysis. The appellate court reversed, finding that decisions cited by State Farm were sufficient to raise the possibility of a conflict, requiring a choice-of-law analysis The Illinois Supreme Court reversed, finding that State Farm failed to meet its burden of demonstrating that an actual conflict exists between Illinois and Indiana law.View "Bridgeview Health Care Ctr., Ltd. v. State Farm Fire & Cas. Co." on Justia Law