Justia Insurance Law Opinion Summaries

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

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

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

Zurich American Insurance Company (“Defendant”) insured St. Joe Minerals Corporation (“St. Joe”) and its sole shareholder Fluor Corporation (“Plaintiff”) from 1981 to 1985. St. Joe operated a lead smelting plant in Herculaneum, Missouri. Residents of the town sued Fluor and St. Joe in the early 2000s, claiming that they had been injured by the plant’s release of lead and other toxins.Defendant agreed to defend the companies and paid out $9.87 million. Defendant also contributed more than $25 million to a settlement between St. Joe and the remaining plaintiffs. Plaintiff went to trial, lost in a jury trial, and then settled the claims for $300 million.Defendant filed for declaratory judgment against Plaintiff, who filed a counterclaim alleging bad faith failure to settle. The district court granted summary judgment to Defendant, concluding that the policy limited Defendant’s liability on a per-occurrence basis and that the $3.5 million per-occurrence limit had been exhausted by Defendant’s initial payments. The court also concluded that Defendant did not act in bad faith when it elected not to settle the claims against Plaintiff.The Eighth Circuit reversed the district court’s policy-limits determination and remanded for further proceedings. The court found that an endorsement modified the limits of liability for comprehensive general liability, including bodily injury liability, to be on a per-claim basis. View "Fluor Corporation v. Zurich American Insurance Co." on Justia Law

Coast Restaurant Group appealed the dismissal of its case. The trial court sustained respondent AmGUARD Insurance Company’s demurrer to the operative complaint without leave to amend. Appellant contended the court erred in sustaining the demurrer because it showed business income losses resulting from governmental orders prohibiting on-site dining at its restaurant due to the COVID-19 virus were covered under the relevant insurance policy. The Court of Appeal concluded appellant did show there was potential coverage under the policy, but respondent showed that an exclusion in the policy applied to preclude coverage as a matter of law. View "Coast Restaurant Group, Inc. v. AmGUARD Insurance Company" on Justia Law

Following a vehicular accident, Martin Peteet entered into a release and settlement agreement with the driver of the other vehicle and her insurer. Peteet did not seek a waiver of subrogation or consent from his own automobile insurer, Mississippi Farm Bureau Casualty Insurance Company (Farm Bureau), prior to executing the release and settlement agreement. After the release and settlement agreement was executed, Peteet filed a complaint against Farm Bureau, seeking damages under the uninsured motorist (UM) provision in his auto policy with Farm Bureau. Farm Bureau moved to dismiss the complaint, and the county court denied the motion. Farm Bureau sought an interlocutory appeal, which the Mississippi Supreme Court granted. After a careful review of the law, the Supreme Court reversed the denial of the motion to dismiss and rendered judgment in favor of Farm Bureau. View "Mississippi Farm Bureau Casualty Insurance Company v. Peteet" on Justia Law

Appellant Southern Orthopaedic Specialists, L.L.C. (“Southern Orthopaedic”) sued its insurer, State Farm Fire & Casualty Company (“State Farm”), to recover business interruption losses caused by covid-related shutdowns. It also claims that State Farm negligently misrepresented the scope of the policy’s coverage. The district court dismissed these claims as foreclosed by the policy and Louisiana law.   The Fifth Circuit affirmed. The court held that Southern Orthopaedic’s pleadings fall short. They do not allege that covid caused “tangible or corporeal” property damage. Nor do they allege that the presence of covid particles required physically repairing or replacing any part of Southern Orthopaedics’s property. Nor do they claim that the presence of covid necessitated lasting alterations to the property. Without allegations of this nature, Southern Orthopaedic cannot meet the requirement of pleading an “accidental direct physical loss” under the policy. View "S Orthopaedic Spclt v. State Farm Fire" on Justia Law

Plaintiffs sought class certification to pursue various claims against the Hilton Hotels Retirement Plan (“Hilton Plan”) for what they say are unlawfully denied vested retirement benefits. The district court ultimately denied certification on the ground that Plaintiffs had proposed an “impermissibly ‘fail-safe’” class—that is, a class definition for which membership can only be ascertained through “a determination of the merits of the case.”   The DC Circuit reversed and remanded the district court’s decision, finding that the district court, in this case, bypassed Rule 23’s requirements and based its denial of class certification entirely on the class’s “fail-safe” character. The court explained that the textual requirements of Rule 23 are fully capable of guarding against unwise uses of the class action mechanism. So the court rejected a rule against “fail-safe” classes as a freestanding bar to class certification ungrounded in Rule 23’s prescribed criteria. Instead, district courts should rely on the carefully calibrated requirements in Rule 23 to guide their class certification decisions and the authority the Rule gives them to deal with curable misarticulations of a proposed class definition. View "In re: Valerie White" on Justia Law

Douglas Ghee, as the personal representative of the estate of Billy Fleming, appealed a circuit court judgment dismissing Ghee's wrongful-death claim against USAble Mutual Insurance Company d/b/a Blue Cross Blue Shield of Arkansas and Blue Advantage Administrators of Arkansas ("Blue Advantage"). The circuit court correctly dismissed the aspect of Ghee's claim that, on the face of the complaint, was based on an insurance-benefits decision by Blue Advantage. The Alabama Supreme Court found the circuit court erred, however, by dismissing the aspect of Ghee's claim that was based on Blue Advantage's alleged provision of medical advice, because it was not clear from the complaint that that aspect was based on an insurance-benefits decision. Accordingly, the Supreme Court affirmed the judgment in part and reversed it in part. View "Ghee v. USAble Mutual Insurance Company d/b/a Blue Cross Blue Shield of Arkansas, et al." on Justia Law

Santa Clara Valley Water District was insured by Century. In 2000, the District notified Century that it had been advised by the federal government of potential claims for natural resource damages resulting from mercury contamination in the Guadalupe River Watershed (NRD Claim). Century requested additional information, including the status of negotiations. Century made several similar requests to the District between 2000-2002. In 2001, Century indicated that it had no duties under the primary policies because there was no lawsuit pending, had no duty to indemnify the District under the excess policies until the underlying limits of the policies had been exhausted, and was reserving its rights under the policies. The District subsequently signed a tolling agreement, was sued in federal court, and entered a Consent Decree without notifying Century.In 2008, the District notified Century of the existence of the lawsuit and the Consent Decree and stated that it had incurred $4 million in costs to comply with the Consent Decree. Century cited a No Voluntary Payment (NVP) provision. The District did not contact Century until 2014, when it completed its required Consent Decree work. In 2015, the District sued Century.The court of appeal affirmed summary judgment for Century. The NVP provisions barred the District from seeking indemnification for the expenses it incurred under the Consent Decree, without notifying Century or obtaining its consent. Those provisions apply to the settlement even though it was achieved through a consent decree rather than a traditional settlement agreement. Because the NRD Claim was disposed of by that settlement, there was no “adjudication” that gave rise to an “ultimate net loss” that gave the District the right to pay and seek indemnification. View "Santa Clara Valley Water District v. Century Indemnity Co." on Justia Law