Justia Insurance Law Opinion Summaries

Venequip, a Venezuelan heavy-equipment supplier, sold and serviced products made by Illinois-based Caterpillar. Venequip’s dealership was governed by sales and service agreements with CAT Sàrl, Caterpillar’s Swiss subsidiary. In 2019 CAT Sàrl terminated the dealership. The contracts contain clauses that direct all disputes to Swiss courts for resolution under Swiss law. In 2021 Venequip brought contract claims against CAT Sàrl in Geneva, Switzerland. Venequip filed applications across the United States seeking discovery from Caterpillar and its employees, dealers, and customers under 28 U.S.C. 1782(a), which authorizes (but does not require) district courts to order any person who resides or is found in the district to give testimony or produce documents “for use in a proceeding in a foreign or international tribunal.” Venequip’s Northern District of Illinois application sought wide-ranging discovery from Caterpillar.Ruling on Venequip’s application, the district judge addressed four factors identified by the Supreme Court (Intel) that generally concern the applicant’s need for discovery, the intrusiveness of the request, and comity considerations, and added the parties’ contractual choice of forum and law and Caterpillar’s agreement to provide discovery in the Swiss court, then denied the application. The Seventh Circuit affirmed. The appeal was not mooted by intervening developments in the Swiss court. The judge appropriately weighed the Intel factors and other permissible considerations. View "Venequip, S.A. v. Caterpillar Inc." on Justia Law

Defendants United Services Automobile Association and USAA General Indemnity Company (“USAA”) contract with insureds to pay “Actual Cash Value” (“ACV”) for totaled vehicles. USAA calculates ACV using the CCC One Market Valuation Report (“CCC”) rather than, e.g., the National Automobile Dealers Association guidebook (“NADA”) or Kelley Blue Book (“KBB”). Plaintiffs are USAA-insureds whose vehicles were totaled and who received ACV as determined by CCC. Plaintiffs alleged that CCC violates Louisiana statutory law, that they would have been paid more if USAA used NADA, and that they are owed the difference. Plaintiffs sought certification for a class of USAA-insureds who were paid less under CCC, and the district court granted it. USAA appealed class certification. On appeal, the parties dispute, among other things, whether common questions across the class involving damages and liability predominate over individual differences between class members, as required for class certification under Rule 23(b)(3).   The Fifth Circuit vacated and remanded. The court held that Plaintiffs failed to show injury and therefore failed to establish USAA’s liability on a class-wide basis because they failed to demonstrate entitlement to the NADA values for their totaled vehicles. The court held that with respect to Plaintiffs’ breach of contract claim, the district court’s choice of NADA is not simply an arbitrary choice among imperfect damages models. It is an arbitrary choice of a liability model, and a district court’s wide discretion to choose an imperfect estimative-damages model at the certification stage does not carry over from the context of damages to the context of liability. View "United Svcs Automobile v. Sampson" on Justia Law

CSX Transportation, Inc. is a freight railroad company. General Mills, Inc. operates a cereal processing plant in Georgia near one of CSX’s rail lines. A small connecting railroad connects CSX’s main rail line to General Mills’s plant. A contract between CSX and General Mills governs the use of the sidetrack.A General Mills employee suffered severe injuries while working on the sidetrack and then sued CSX for negligence. A jury found CSX liable, and CSX sought indemnification from General Mills, citing a contractual provision providing General Mills was required to indemnify CSX—regardless of whether CSX alone was responsible. The district court dismissed one of CSX’s breach-of-contract claims and granted General Mills summary judgment on the other.The Eleventh Circuit found that, under the parties’ agreement, General Mills was not required to indemnify CSX if CSX was solely negligent. However, the court disagreed with the district court that Georgia's vouchment doctrine barred CSX from litigating the issue of General Mills’s negligence. Thus, the Eleventh Circuit remanded for the district court to determine if General Mills was at least partially at fault for the injury. If so, then General Mills must indemnify CSX for at least a portion of the settlement and related expenses. View "CSX Transportation, Inc. v. General Mills, Inc." on Justia Law

Current and former policyholders filed a class action lawsuit in Illinois against Country Mutual and 46 of its current and former officers and directors. Every member of the proposed class is an Illinois citizen under the Class Action Fairness Act, CAFA, 28 U.S.C. 1332(d)(2), as are Country Mutual and 45 of the individuals. The 46th defendant, Bateman, is a citizen of Massachusetts. The plaintiffs alleged that the firm accumulated and retained excess surplus of over $3.5 billion from premium revenues exceeding the cost of claims and thereby failed to supply those policies at cost. They claimed breach of contract, violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, unjust enrichment, and breach of fiduciary duty.Based on putative class size, the amount in controversy, and the minimal diversity created by Bateman, Country Mutual removed this case to federal district court, 28 U.S.C. 1332(d); 1453(b). The Seventh Circuit remanded to state court. Under CAFA’s internal affairs exception, each claim sounds in allegations of corporate mismanagement that cannot be adjudicated without immersion into the boundaries of the discretion afforded by Illinois law to officers and directors of a mutual insurance company to set capital levels and make related decisions about surplus distributions to policyholder members. The case is also within CAFA’s home-state controversy exception, 28 U.S.C. 1332(d)(4)(B), as Bateman, who creates minimal diversity, is not a “primary defendant.” View "Sudholt v. Country Mutual Insurance Co." on Justia Law

In this case, the parties consented to have their commercial dispute tried before a United States magistrate judge. But, allegedly unbeknownst to Defendant, the judge was longtime family friends with the lead trial lawyer for the plaintiff. Specifically, the lawyer had been a groomsman in the judge’s own wedding, and the judge officiated the wedding of the lawyer’s daughter three months before this lawsuit was filed. None of this information was disclosed to Defendant. After a twenty-day bench trial, the magistrate judge rendered judgment for the Plaintiff, awarding $124.5 million, including over $100 million in trebled damages. After the issuance of the judgment and award, Defendant learned about the undisclosed longstanding friendship and sought to have the magistrate-judge referral vacated. The district judge denied the request and denied discovery on the issue. Defendant appealed.   The Fifth Circuit vacated. The court concluded that the facts asserted here, if true, raise serious doubts about the validity of Defendant’s constitutionally essential consent to have its case tried by this magistrate judge. Further, the court explained remand was necessary because the facts were not sufficiently developed for the court to decide whether Defendant’s consent was validly given or whether vacatur of the referral was otherwise warranted. Accordingly, the court remanded for an evidentiary inquiry. View "I F G Port Hold v. Lake Charles Harbor" on Justia Law

After suffering personal injuries and property damage in a multi-car collision with an underinsured motorist, Kelly Lynn Christmann filed suit against her insurer, State Farm Mutual Automobile Insurance Company (“State Farm”). Christmann was seeking to obtain the underinsured motorist benefits provided under her contract of insurance, which she claimed State Farm failed to pay in an amount justly due under her policy. She also alleged that certain terms of her insurance agreement violate public policy. State Farm argued that Christmann waived her rights to additional benefits by failing to comply with the contractual obligations of her insurance policy, thereby prejudicing State Farm’s right to subrogation against the underinsured motorist. The district court awarded summary judgment to State Farm in determining it had been prejudiced by Christmann’s conduct and that the terms of the insurance policy were valid. The court also denied Christmann’s motion for reconsideration and her Rule 60(b) motion for relief. Christmann appealed. Because the record showed State Farm fully settled its claims against the underinsured motorist and waived its subrogation rights, the Idaho Supreme Court concluded it suffered no actual prejudice from Christmann’s actions. Accordingly, the judgment was reversed. View "Christmann v. State Farm Mutual Automobile Insurance Co." on Justia Law

After Plaintiff’s home sustained water damage in a hailstorm, he asked his insurer Allstate to cover the loss; consequently, Steamatic was hired to perform water abatement and mold remediation services. Plaintiff claimed that the mold was not remediated properly and that he developed a severe and permanent lung condition as a result. New Mexico does not permit a civil plaintiff to recover duplicate compensatory damages for the same injuries. The collateral source rule presents an exception to the prohibition of double recovery, permitting a plaintiff to recover the same damages from both a defendant and a collateral source. The New Mexico Supreme Court has held that the payor of the prejudgment settlement of a claim qualifies as a collateral source and that the payment does not reduce the same damages the plaintiff may recover from an adjudicated wrongdoer. The issue this case presented for review centered on whether a payment in postjudgment settlement of a claim by an adjudicated wrongdoer qualified as a collateral source. The Court clarified that the collateral source rule had no application to a postjudgment payment made by an adjudicated wrongdoer. Here, the Court held that the payment, which Plaintiff received in a postjudgment settlement with Allstate satisfied a portion of Plaintiff’s damages and extinguished Plaintiff’s right to recover the same damages from Steamatic. The Court explained that the share of damages fully satisfied by Allstate must offset the damages Plaintiff may recover from Steamatic. View "Gonzagowski v. Steamatic of Albuquerque" on Justia Law

In a previous action between these parties, the Delaware Supreme Court addressed whether the exclusive-remedies provision in the workers’ compensation act precluded an injured employee from pursuing recovery from an uninsured motorist policy. After the Court held that the exclusive-remedies provision did not apply, the employer and its workers’ compensation carrier sought a declaratory judgment that they were permitted to assert a lien against any recovery the employee might obtain for injuries already compensated under the workers’ compensation act. The employee and the uninsured motorist insurer contended that any such lien was barred by statute, relying on the Court’s decision in Simendinger v. National Union Fire Insurance Co., 74 A.3d 609 (Del. 2013). The superior court followed that binding precedent as it was required to do and dismissed the declaratory judgment claim. After review however, the Delaware Supreme Court concluded Simendinger was decided in error. The Court therefore reversed the superior court’s decision and held that the workers’ compensation act expressly allowed the employer and its workers’ compensation carrier to assert a subrogation lien against benefits paid to the employee under the employer’s uninsured motorist policy. View "Horizon Services, Inc. v. Henry" on Justia Law

Defendant Alex Herrgott, was driving a four-seat Polaris all-terrain vehicle at night down a gravel road when he “overcorrected” trying to avoid a pothole. The ATV overturned, and Joseph MacNabb, a passenger, was severely injured. Since MacNabb was a state employee in the course and scope of his employment, he received workers’ compensation benefits from the Mississippi State Agencies Self-Insured Workers’ Compensation Trust. The Trust later initiated this litigation in an attempt to recover more than $300,000 in benefits paid for MacNabb’s injury. The circuit court ultimately granted summary judgment to Herrgott because the Trust’s Mississippi Rule of Civil Procedure 30(b)(6) representative could not articulate a legal theory entitling it to recover. The Mississippi Supreme Court found there was sufficient evidence of Herrgott’s negligence for the case to go to trial, and the deposition testimony of a lay witness should not have bound the Trust as to which legal theories it could pursue. The Supreme Court therefore reversed the summary judgment and remanded the case for trial. View "Mississippi State Agencies Self-Insured Workers' Compensation Trust v. Herrgott" on Justia Law

Husband Steven McAnulty was married twice: once to Plaintiff Elizabeth McAnulty, and once to Defendant Melanie McAnulty. Husband's first marriage ended in divorce; the second ended with his death. Husband’s only life-insurance policy (the Policy) named Defendant as the beneficiary. But the Missouri divorce decree between Plaintiff and Husband required Husband to procure and maintain a $100,000 life-insurance policy with Plaintiff listed as sole beneficiary until his maintenance obligation to her was lawfully terminated (which never happened). Plaintiff sued Defendant and the issuer of the Policy, Standard Insurance Company (Standard), claiming unjust enrichment and seeking the imposition on her behalf of a constructive trust on $100,000 of the insurance proceeds. The district court dismissed the complaint for failure to state a claim. Plaintiff appealed. By stipulation of the parties, Standard was dismissed with respect to this appeal. The only question to be resolved was whether Plaintiff stated a claim. Resolving that issue required the Tenth Circuit Court of Appeals to predict whether the Colorado Supreme Court would endorse Illustration 26 in Comment g to § 48 of the Restatement (Third) of Restitution and Unjust Enrichment (Am. L. Inst. 2011) (the Restatement (Third)), which would recognize a cause of action in essentially the same circumstances. Because the Tenth Circuit predicted the Colorado Supreme Court would endorse Illustration 26, the Court held Plaintiff has stated a claim of unjust enrichment, and accordingly reversed the previous dismissal of her case. View "McAnulty v. McAnulty, et al." on Justia Law