Justia Insurance Law Opinion Summaries

After being hit by an under-insured motorist, Plaintiff experienced worsening symptoms from his Parkinson’s disease. His condition eventually deteriorated to the point that he could no longer work as a doctor. Plaintiff sued Encompass Insurance for $500,000, the maximum available under his automobile policy. The state trial court granted summary judgment to Plaintiff, concluding that Encompass failed to refute that Plaintiff lost at least $500,000 in earning capacity because of the accident. On removal, a federal district court held that it was unable to vacate that judgment.   The Eighth Circuit reversed and remanded. The court interpreted Encompass’s notice of appeal as challenging the Arkansas court’s ruling, as merged into the final judgment of the district court, and held that it constituted an appeal of a “final decision of a district court of the United States” under 28 U.S.C. Section 1291.   The court also rejected the district court’s conclusion that a federal court lacks jurisdiction to vacate the state court’s summary judgment order. The court explained that the Rooker-Feldman doctrine has no application to a properly removed case where, as here, there is no attack on a separate and final state-court judgment. Finally, the court held that the Arkansas court erred by granting summary judgment. The conflict between expert witnesses created a genuine dispute of material fact, so summary judgment was improper. View "Paul Wills v. Encompass Insurance Company" on Justia Law

After receiving reminder notices by mail, the insureds failed to pay a renewal premium for a rented home by the due date. Fourteen days after payment was due, the insureds mailed a check to the insurance company for the late renewal premium. Six days later, but before the insurance company reviewed the late payment, a fire occurred at the home. Two days after the fire, the insurance company returned the late payment, denied coverage for the loss, and denied reinstatement of the policy. The insurance company subsequently brought a declaratory judgment action against the insureds. The district court granted summary judgment in favor of the insurance company. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "United Heritage v. Zech" on Justia Law

A yacht owned by Raiders ran aground. Raiders had insured the vessel with GLI, which denied coverage stating the yacht’s fire-extinguishing equipment had not been timely recertified or inspected notwithstanding that the vessel’s damage was not caused by fire. GLI sought a declaratory judgment that Raiders’ alleged failure to recertify or inspect its fire-suppression equipment rendered the policy void from its inception. Raiders responded with five counterclaims, including three extra-contractual counterclaims arising under Pennsylvania law for breach of fiduciary duty, insurance bad faith, and breach of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.Concluding the policy’s choice-of-law provision mandated the application of New York law and precluded Raiders’ Pennsylvania law-based counterclaims, the district court dismissed those claims. The court rejected Raiders’ argument that applying New York law would contravene Pennsylvania public policy, thereby making the choice-of-law provision unenforceable under Supreme Court precedent (Bremen (1972)), which held that under federal admiralty law a forum-selection provision is unenforceable “if enforcement would contravene a strong public policy of the forum in which suit is brought.” The Third Circuit vacated. Bremen’s framework extends to the choice-of-law provision at issue; the district court needed to consider whether Pennsylvania has a strong public policy that would be thwarted by applying New York law. View "Great Lakes Insurance SE v. Raiders Retreat Realty Co LLC" on Justia Law

In July 2017, Jeremy Thornhill said that he had injured his back while working. He sought workers’ compensation benefits from his employer, Walker-Hill and its insurance carrier, Zurich American Insurance Company of Illinois (collectively, Employer/Carrier), but the Employer/Carrier denied that Thornhill had sustained a compensable injury. Ultimately, the parties agreed to compromise and settled pursuant to Mississippi Code Section 71-3-29 (Rev. 2021). Thornhill submitted the settlement to the Mississippi Workers’ Compensation Commission for approval. After examining the application, the Commission approved the settlement and dismissed Thornhill’s case with prejudice. Pursuant to the settlement, Thornhill signed a general release,” which reserved his right to pursue a bad faith claim. Believing he had exhausted his administrative remedies, Thornhill filed a bad faith suit against the Employer/Carrier. The Employer/Carrier moved to dismiss, arguing that Thornhill had not exhausted administrative remedies—and that the circuit court lacked jurisdiction—because the Commission never made a factual finding that he was entitled to workers’ compensation benefits. The trial court granted the motion on that basis. The Court of Appeals reversed and remanded, finding that Thornhill indeed exhausted his administrative remedies and that the circuit court had jurisdiction to hear his bad faith claim. Finding no reversible error in the appellate court’s decision, the Mississippi Supreme Court affirmed. View "Thornhill v. Walker-Hill Environmental, et al." on Justia Law

The issue this appeal presented for the Delaware Supreme Court’s review asked for a determination of whether premiums paid on insurance policies declared void ab initio for lack of an insurable interest should be returned. Geronta Funding argued Delaware law required the automatic return of all premiums paid on the void policy. Brighthouse Life Insurance Company argued a party must prove entitlement to restitution. The trial court agreed with Brighthouse and relied on the Restatement (Second) of Contracts to determine whether Geronta was entitled to restitution. Specifically, the court held that Geronta could obtain restitution if it could prove excusable ignorance or that it was not equally at fault. Applying this test, the court ruled that Geronta was only entitled to the return of the premiums it paid after alerting Brighthouse to the void nature of the policy at issue. Geronta appealed this ruling, arguing that the court erred when it adopted the Restatement instead of automatically returning the premiums, erred in its actual application of the Restatement, even assuming that is the proper test, and erred by precluding certain testimony from Geronta witnesses. Because this was a matter of first impression, the Supreme Court adopted restitution under a fault-based analysis as framed by the Restatement as the test to determine whether premiums should be returned when a party presents a viable legal theory, such as unjust enrichment, and seeks the return of paid premiums as a remedy. The Court held, however, that despite applying the Restatement, the Superior Court’s application of the Restatement failed to account for the relevant questions encompassed by that approach. The Supreme Court reversed the trial court’s holdings regarding entitlement to premiums and remanded for further consideration, but found no fault in the Superior Court preclusion of certain testimony from Geronta’s witnesses. View "Geronta Funding v. Brighthouse Life Insurance Company" on Justia Law

The relevant consolidated appeals constitute the latest chapter of a long-running legal battle over attempts to satisfy a 2010 default judgment of $318 million under the Anti-Terrorism Act, 18 U.S.C. Section 2333, against the Revolutionary Armed Forces of Colombia (the Fuerzas Armadas Revolucionarias de Colombia or FARC) for murder and kidnapping.   In the first appeal (Case No. 20-11736), Appellant appealed the district court’s orders directing certain garnishees to liquidate and/or distribute their assets to Plaintiffs who obtained the $318 million judgment. In the second appeal(Case No. 20-12467) Appellant appealed the denial of their motion for a preliminary injunction to stop the sale of real property located at 325 Leucadendra Drive in Coral Gables, Florida. In the third appeal(Case No. 20-12545) Appellant’s wife appealed the district court’s denial of her motion to intervene in the proceedings concerning the sale of real property located at 325 Leucadendra Drive (and owned by Leucadendra 325, one of the Appellants in Case Nos. 20-11736 and 20-12467).   In Case No. 20-11736, the Eleventh Circuit concluded that a jury must decide whether Appellant and his companies qualify as agencies or instrumentalities of the FARC such that their assets can be garnished by Plaintiffs to satisfy their $318 million judgment. The court, therefore, reversed and remanded that appeal. In Case No. 20-12467, the court dismissed the appeal as moot because 325 Leucadendra has been sold and the court lacks the ability to grant the requested relief. In Case No. 20- 12545, the court affirmed the district court’s order denying Appellant’s wife’s motion to intervene as untimely and therefore dismiss the appeal. View "Keith Stansell, et al v. UBS Financial Services, Inc., et al" on Justia Law

The United States Federal District Court for the Western District of Washington certified a question of law to the Washington Supreme Court. Cox Construction was the general contractor of a remodeling project. Cox hired Baker & Son Construction, Inc. as a subcontractor. A Baker employee allegedly caused a two-by-four to fall from a railing and strike Ronnie Cox, owner of Cox Construction, who later died from his injury. Baker allegedly called an insurance agent to alert them of the incident. The agent told Baker that no action needed to be taken because at that time, no claim existed. A few months later, Baker received a wrongful death claim from an attorney representing Cox’s widow. Baker notified its insurer, Preferred Contractors Insurance Company (PCIC) of the claim. PCIC denied coverage, but agreed to defend Baker under a reservation of rights. The certified question to the Washington Supreme Court related to the “claims-made” nature of the policy and the timing of Baker’s tender of Ms. Cox’s claim. The Supreme Court replied to the certified question that in light of RCW 18.27, a contractor’s commercial general liability insurance policy that requires the loss to occur and be reported within the same policy year, and provides neither neither prospective nor retroactive coverage violates Washington’s public policy. View "Preferred Contractors Ins. Co. v. Baker & Son Constr., Inc." on Justia Law

The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Sullivan Management, LLC operated restaurants in South Carolina and filed suit to recover for business interruption losses during COVID-19 under a commercial property insurance policy issued by Fireman's Fund and Allianz Global Risks US Insurance Company (Fireman's). Specifically, the questions was whether the presence of COVID-19 in or near Sullivan's properties, and/or related governmental orders, which allegedly hinder or destroy the fitness, habitability or functionality of property, constituted "direct physical loss or damage" or did "direct physical loss or damage" require some permanent dispossession of the property or physical alteration to the property. The Supreme Court held that the presence of COVID-19 and the corresponding government orders prohibiting indoor dining did not fall within the policy’s trigger language of “direct physical loss or damage.” View "Sullivan Mgmt v. Fireman's Fund" on Justia Law

Liberty Insurance Corporation (“Liberty”) sought to rely on a general coverage exclusion, it was aware that its policy also contained an exception to the general exclusion if the Defendant homeowners, could show that the all-terrain vehicle (ATV) was not subject to motor vehicle registration and was used to “service” their cabin. One of Defendant homeowners was the only witness who testified during a bench trial.   After the trial concluded, the district court (at Liberty’s request) imposed Rule 37(c)(1) sanctions on Defendants for failing to disclose a witness. The district court also excluded one of the homeowner’s testimony about whether the ATV was registered and used to service the cabin, based on the theory that he had not been properly disclosed as a witness. The district court ruled that ATV was used to service the cabin at any time,” and thus found that the Defendants were not entitled to coverage.   The Ninth Circuit reversed the district court’s order imposing sanctions and remanded for a new trial. The court held that because Defendants complied with Rule 26(a)(1)(A)(i)’s requirement to disclose “individuals likely to have discoverable information—along with the subjects of that information” for the purpose of identifying potential fact witnesses, sanctions under Rule 37(c)(1) were not justified. But even Defendants had not complied with Rule 26, the district court abused its discretion by imposing Rule 37(c)(1) sanctions without analyzing (1) whether the alleged defects in the disclosures were harmless and (2) whether the defects involved willfulness, fault, or bad faith. View "LIBERTY INSURANCE CORPORATION V. YVONNE BRODEUR" on Justia Law

Affirming the district court’s summary judgment in favor of National Railroad Passenger Corporation and other railroad companies, the Ninth Circuit held that, as to railroad employees, the federal Railroad Unemployment Insurance Act preempts California’s Healthy Workplaces, Healthy Families Act, which requires employers to provide employees with paid sick leave that they may use for specified purposes.   RUIA provides unemployment and sickness benefits to railroad employees, and it contains an express preemption provision disallowing railroad employees from having any right to “sickness benefits under a sickness law of any State.” Looking at the plain meaning of the statutory text, the court concluded that the preemption provision broadly refers to compensation or other assistance provided to employees in connection with physical or mental well-being. The court concluded that RUIA’s statutory framework and stated purposes confirm the breadth of its preemptive effect.   The court found unpersuasive an argument by the California Labor Commissioner and union-intervenors that RUIA does not preempt the California Act as to railroad employees because the benefits the Act offers are different in kind than RUIA’s benefits. The court also found unpersuasive (1) an argument that RUIA should be interpreted as preempting only the kinds of state laws that existed at the time RUIA was amended to provide for sickness benefits; and (2) various textual arguments in support of a narrower interpretation of the preemption provision. View "NAT'L RAILROAD PASSENGER CORP. V. JULIE SU" on Justia Law