Justia Insurance Law Opinion Summaries

Articles Posted in Civil Procedure
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The First Circuit affirmed the judgment of the district court granting summary judgment in favor of Triple-S Management Corporation and Triple-S Vida, Inc. (collectively, Triple-S) and dismissing this case brought by Dora Bonner, holding that the district court did not abuse its discretion in denying Bonner's discovery-related motions and did not err in considering the evidence at the summary judgment stage.Bonner brought several claims alleging that Triple-S denied her millions of dollars of proceeds from certain certificates and devised a scheme to defraud her. After denying Bonner's motion to compel discovery and extend the discovery deadline, the district court concluded that Triple-S had established as a matter of law that the persons behind the fraudulent scheme were not related to Triple-S. The First Circuit affirmed, holding that the district court (1) did not abuse its discretion in denying the motion to compel and motion for consideration; and (2) properly granted summary judgment for Triple-S. View "Bonner v. Triple-S Vida, Inc." on Justia Law

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Amanda Bryant filed suit against State Farm Automobile Insurance Company (State Farm) and its attorneys, Henley, Lotterhos & Henley, PLLC (HLH), claiming negligence, malicious prosecution, abuse of process, and intentional infliction of emotional distress based on HLH’s actions in a prior subrogation claim. HLH argued in a Motion to Dismiss or, In the Alternative, Motion for Summary Judgment that it was not a proper party to this lawsuit because it was the legal representative of the adverse party in the prior subrogation matter. For this reason, HLH argued it did not owe a duty to Bryant that could give rise to tort liability. The trial court disagreed with HLH and denied its motion. The Mississippi Supreme Court granted HLH’s petition for interlocutory appeal. Based on caselaw, the Supreme Court reversed the trial court’s order and rendered judgment in favor of HLH. Because State Farm was still party to the action, the case was remanded to the trial court for continuation of the proceedings. View "Henley, Lotterhos & Henley, PLLC v. Bryant" on Justia Law

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The federal district court in Washington State certified a question of law to the Washington Supreme Court. Washington law required group life insurance policies to have an incontestability clause providing that “the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue.” The certified question in this case asked whether an insurer could invalidate a life insurance policy after this two-year period on grounds that the policies were void ab initio or never “in force.” New York Life Insurance (NY Life) issued two life insurance policies to Lorenzo Mitchell, naming his nephew, Simon Mitchell, as the sole beneficiary. Lorenzo died more than two years after the policies were issued, and Simon sought to collect on the policies. NY Life became aware that Lorenzo had Down syndrome and lived with significant intellectual disabilities. These facts raised questions about the circumstances under which the policies were issued. NY Life sued Simon in federal district court seeking declaratory relief that the policies were void ab initio under three possible theories: imposter fraud, incapacity, and lack of an insurable interest. The Washington Supreme Court concluded NY Life’s first and third claims were not barred by that provision. “In contrast, lack of capacity does not, on its own, render an insurance contract void; it renders it at most voidable. Because a voidable contract is not void ab initio, we hold the incontestability provision bars NY Life’s second claim.” View "New York Life Ins. Co. v. Mitchell" on Justia Law

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Allied World Specialty Insurance Company issued a WaterPlus Package Insurance Policy to the Windermere Oaks Water Supply Corporation. That policy includes coverage for Public Officials and Management Liability. But it also includes various exclusions from coverage. At issue in this appeal is the exclusion of contractual liability.   The Fifth Circuit affirmed the district court’s judgment granting summary judgment in favor of the insured. The court held that a claim for breach of fiduciary duty is not a claim for breach of contract and is, therefore, not subject to exclusion from coverage under a contractual liability exclusion. The court explained that under the Texas Prompt Payment of Claims Act, Tex. Ins. Code Section 542.060, an insurer’s breach of the duty to defend constitutes a per se violation View "Windermere Oaks v. Allied World" on Justia Law

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Farm Family Casualty Insurance Company (“Farm Family”) appealed after the district court granted summary judgment to Nodak Insurance Company (“Nodak”) and denied, in part, summary judgment to Farm Family. This case arose from an April 6, 2019 motor vehicle accident. Samuel Hamilton was the son of Bruce and Diana Hamilton. At the time of the April 2019 accident at issue, Samuel was a resident of North Dakota, and his parents were residents of Montana. Before the accident, Farm Family issued an automobile insurance policy to Bruce and Diana with an effective policy period of October 19, 2018 to April 19, 2019. The policy insured a 2011 pickup truck. After moving to Montana, the Hamiltons obtained an insurance policy from Mountain West Farm Bureau Mutual Insurance Company (“Mountain West”) that also insured the 2011 pickup truck with a term running from December 2, 2018 to June 2, 2019. In April 2019, Samuel was driving the insured 2011 pickup truck in Williams County, North Dakota. Samuel reportedly ran a stop sign while intoxicated and struck another vehicle; H.W. was seriously injured and A.M. was killed. Nodak insured the vehicle H.W. and A M. occupied at the time of the accident. Nodak filed suit seeking a declaration Farm Family’s automobile policy was in effect at the time of the April 2019 accident, Farm Family’s policy could not be retroactively cancelled, and the vehicle driven by the insureds’ son was not an “underinsured motor vehicle” under North Dakota law. The North Dakota Supreme Court concluded the automobile policy Farm Family issued to its insureds had not “ceased” under the policy language and remained in effect at the time of the April 2019 motor vehicle accident. View "Nodak Ins. Co. v. Farm Family Casualty Ins. Co., et al." on Justia Law

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Plaintiff Noble House, L.L.C. (“Noble House”) appealed a judgment of dismissal, without prejudice, based on forum non conveniens, granted in favor of Defendant Certain Underwriters at Lloyd’s, London (“Underwriters”). The district court ruled that the parties’ insurance policy contained an enforceable forum-selection clause requiring litigation in the courts of England and Wales and that a return-jurisdiction clause was not required.   The Fifth Circuit affirmed. The court held that although there are arguably two forum-selection clauses at play, one foreign and one domestic, the district court concluded that the forum-election clause selecting the courts of England and Wales controls. Noble House does not dispute this conclusion in its opening brief. Nor does Noble House dispute that the foreign forum-selection clause is mandatory. Only the foreign forum-selection clause’s enforceability is contested, which is addressed under the “unreasonable under the circumstances” framework – not the usual “available and adequate” framework. Further, the court held that Noble House does not carry its “heavy burden of proof” to show that the clause selecting the courts of England and Wales is unreasonable under the circumstances. Moreover, Noble House offers no compelling reason justifying its filing in Texas or why its action could not be filed timely in the foreign fora. Accordingly, the court held that the district court did not err when it: (1) concluded that the foreign forum-selection clause is enforceable, or (2) failed to include a return-jurisdiction clause and total waiver of any statute-of-limitations defenses. View "Noble House v. Certain Underwriters" on Justia Law

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This case involves a rare procedural maneuver called snap removal. Federated Mutual Insurance Company removed an insurance dispute to federal court before Plaintiff, M & B Oil, Inc., “properly joined and served” one of the Defendants, the City of St. Louis. The question is whether this maneuver eliminates the requirement of complete diversity.   The Eighth Circuit answered no, and vacated the order denying remand and sent the case back for a second look. The court explained that from the beginning, M & B sued two Defendants: St. Louis and Federated. One of them is a fellow Missourian, so there has never been complete diversity. And without complete diversity, there is no “original jurisdiction. Further, the court wrote that snap removal cannot cure a lack of complete diversity. Moreover, the court explained that there is reason to doubt that any fraudulent-joinder argument will succeed now that M & B has amended its complaint to include an inverse condemnation claim against St. Louis. View "M & B Oil, Inc. v. Federated Mutual Insurance Co" on Justia Law

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Glassman prevailed in an uninsured motorist (UIM) arbitration against Safeco. The arbitration agreement was contained in a Safeco umbrella policy that provided excess UIM benefits, above those afforded by Glassman’s concurrent Safeco auto-liability policy. Glassman had sustained bystander emotional distress damages after witnessing her mother’s fatal injuries when an underinsured driver hit them both while they were in a crosswalk. The arbitrator’s award determined that Glassman’s compensable damages exceeded the required threshold to entitle her to the umbrella-policy excess UIM limits of $1 million.Before the arbitration, Glassman had issued to Safeco a Code of Civil Procedure section 998 offer of $999,999.99. Safeco did not accept the offer. Glassman sought prejudgment interest under section 3287(a) from the date of her section 998 offer. Under section 3287(a), a liquidated damage claim triggers entitlement to prejudgment interest as a form of additional compensatory damages if the defendant knew or was able to calculate from reasonably available information the amount of the plaintiff’s liquidated claim owed as of a particular day. The trial court denied Glassman’s request, concluding that the amount of her claim was not certain or capable of being made certain.The court of appeal affirmed. An insured’s prevailing section 998 offer in a UIM proceeding does not effectively liquidate the insured’s claim in the amount and as of the date of the offer under section 3287(a). The court noted the lack of evidence of Safeco’s knowledge that Glassman’s economic losses or special damages resulting from the accident already exceeded the umbrella-policy limits when her section 998 offer was made. View "Glassman v. Safeco Insurance Co. of America" on Justia Law

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Appellants Robert and Kelly Franks sought automobile insurance from Appellee, State Farm Mutual Automobile Insurance Company in 2013 for their two vehicles. Appellants included underinsured motorist coverage (“UIM”) in their policy but completed a form rejecting stacked UIM coverage in compliance with Section 1738(d)(2) of the Motor Vehicle Financial Responsibility Law (“MVFRL”). Absent such waiver, stacked coverage would be the default. Appellants removed one of the original vehicles and added a third vehicle to the policy effective 2014, and again rejected stacked UIM coverage. They made another change to the policy in 2015, removing the other of the original insured vehicles with a different car. No additional form rejecting stacked UIM coverage was offered or sought to be completed on the occasion of the removal of the last vehicle, and the ongoing premiums paid by Appellants reflected the lower rate for non-stacked UIM overage on two vehicles. Robert was injured in an accident caused by the negligence of a third party. That party had insufficient liability coverage to cover Robert's injuries. Appellants initiated a claim for UIM benefits under their policy with State Farm, but the parties disagreed on the limit to their benefits. Appellants contended with the last change to the policy, there was no valid waiver of stacked UIM coverage, resulting in a default stacked coverage mandated by statute. The issue presented for the Pennsylvania Supreme Court's review in this matter was whether the Superior Court erred as a matter of law by holding that removal of a vehicle from a multiple motor vehicle insurance policy, in which stacked coverage had previously been waived, did not require a renewed express waiver of stacked coverage pursuant to Section 1738(c). The Supreme Court concluded the Superior Court did not err and affirmed its judgment. View "Franks, et al. v. State Farm Mutual" on Justia Law

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Plaintiffs own a large ten-thousand-square-foot house in Austin, Texas. They insured their home with Crestbrook Insurance Company. Their policy included “Biological Deterioration or Damage Clean Up and Removal” coverage (“mold coverage”). In April 2019, Plaintiffs discovered a widespread mold infestation in their home. Although Crestbrook covered many of their losses, it denied a generalized claim for mold growing in Plaintiffs’ walls and heating, ventilation, and air conditioning system. On cross-motions for summary judgment, a magistrate judge issued a report and recommendation in favor of Crestbrook, and the district court adopted the magistrate judge’s conclusions. At issue on appeal is whether the optional mold coverage Plaintiffs purchased in their Crestbrook policy, which provided $1.6 million in mold damage insurance in exchange for $4,554.53 in additional premiums, covers a generalized mold loss.   The Fifth Circuit affirmed. The court held that the district court incorrectly applied the Texas insurance coverage burden-shifting framework. However, Crestbrook is entitled to summary judgment regardless. The court wrote that the insurance company has demonstrated that a generalized mold claim is excluded under the policy. Plaintiffs have not met their burden of showing that an exception to the exclusion in their insurance contract brings their claim back within coverage View "Buchholz v. Crestbrook" on Justia Law