Justia Insurance Law Opinion Summaries

Former students sued Kamehameha Schools, alleging sexual abuse by a doctor who had practiced on SFMC’s campus. Kamehameha filed crossclaims against SFMC, which sent these crossclaims to its insurer, Argonaut. Argonaut ultimately represented SFMC subject to a reservation of rights. Neither party could determine the terms of the relevant policies from decades earlier. Argonaut sought declaratory relief in federal court under 28 U.S.C. 2201, as to what policies Argonaut had issued to SFMC during the relevant period and the terms of those policies. SFMC asked the district court to decline jurisdiction and, alternatively counterclaimed for declaratory and monetary relief.The Ninth Circuit affirmed the district court’s order, declining to exercise jurisdiction. Generally, a district court has the discretion to decline jurisdiction over a 28 U.S.C. 2201 declaratory-relief claim, after considering the relevant factors but when a declaratory claim is joined with an independent monetary one, the court usually must retain jurisdiction over the entire action. That mandatory jurisdiction rule did not apply; parties can plead a conditional counterclaim and still preserve objections to jurisdiction. SFMC’s counterclaims were conditional. Because SFMC did not waive its threshold defense, the district court still had discretionary jurisdiction. The district court thoroughly considered and correctly concluded that each relevant factor favored declining jurisdiction, noting that the declaratory claims could be filed in state court and that deciding them would not settle all aspects of the controversy or clarify the parties’ legal relationships. View "Argonaut Insurance Co. v. St. Francis Medical Center" on Justia Law

The Supreme Court held in this case that the circuit court had the power to enter an order precluding a party to a West Virginia lawsuit from instituting or prosecuting collateral litigation in a sister state.This lawsuit was brought by a pharmaceutical distributor against the insurance companies that provided it with liability insurance. At issue on appeal was the West Virginia circuit court's "anti-suit injunction" prohibiting the insurance companies from pursuing parallel litigation against the distributor in California. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court clearly had the authority to enter an anti-suit injunction; but (2) an anti-suit injunction was not narrowly tailored to protect the court's authority while respecting the sister state court, necessitating remand. View "St. Paul Fire & Marine Insurance Co. v. AmerisourceBergen Drug Corp." on Justia Law

This appeal arose from an application by State Farm General Insurance Company (SFG) to increase its homeowners’ insurance rates, under the prior approval system implemented by Proposition 103. Nonprofit Consumer Watchdog (CW) intervened in the proceeding, and challenged SFG’s proposed rates. The Commissioner relied on regulation section 2644.20, addressing projected yield, to use the combined annual statement of SFG’s parent company, State Farm Mutual Automobile Insurance Company (State Farm Mutual) and its property-casualty affiliates. The Commissioner ordered SFG to decrease its rate retroactively and issue refunds (Rate Order). SFG filed a petition for writ of mandate. The superior court determined Insurance Code section 1861.05(a) required the rate to mathematically reflect the applicant insurer’s income, and the Commissioner’s interpretation and application of regulation Insurance Code section 2644.20 to use the income of SFG’s affiliates conflicted with the statute. The court entered judgment for SFG, issued a peremptory writ of mandate requiring the Rate Order be set aside, and remanded remaining issues to the Commissioner, including the propriety of the retroactive rate and refund. The Commissioner and CW (Appellants) appealed the judgment and writ of mandate, contending the Commissioner properly interpreted the statute and regulation and had authority to set an earlier effective date and require refunds. SFG cross-appealed the order directing remand to the Commissioner, which it argued was unnecessary in light of the impropriety of the retroactive rate and refund as well as a subsequent rate change for SFG. The Court of Appeal concluded the superior court correctly determined section 1861.05(a) required use of the applicant insurer’s income, and the Commissioner erred in interpreting and applying Regulation 2644.20 here. Furthermore, the Court concluded the retroactive rate and refund were impermissible, and remand was not warranted under the circumstances. The superior court was directed to modify the writ of mandate to require the Rate Order be vacated in its entirety, and affirmed the judgment and writ of mandate in all other respects. View "State Farm General Insurance Company v. Lara" on Justia Law

After a fire at James and Suzanne Skinner's house, their insurer sought a judgment declaring that it did not owe either of them coverage. The circuit court entered summary judgment for Suzanne while the claim against James remained pending. A year later, with the claim against James still pending, the circuit court certified the judgment in Suzanne's favor as final and thus immediately appealable under Rule 54(b), Ala. R. Civ. P. Because the circuit court exceeded its discretion in doing so, the Alabama Supreme Court set aside the Rule 54(b) certification and dismissed this appeal. View "Alabama Insurance Underwriting Association v. Skinner" on Justia Law

Peggy Baltar’s home was destroyed by wildfire in 2014. She had a new house built on the same property. Her insurer, CSAA Insurance Exchange (CSAA), paid the full amount charged by her contractor for construction of the new house. Altar sued for breach of contract and breach of the implied covenant of good faith and fair dealing. According to Baltar, CSAA breached the policy by, among other things, failing to provide her with a complete and accurate estimate for replacing the original house, which would have provided her with a budget for the construction of the new house. Without such a budget, she claimed she was forced to build a cheaper house than the one destroyed by the fire. She claimed this, and other asserted breaches of the policy, amounted to bad faith and entitled her to punitive damages. The trial court granted CSAA’s motion for summary judgment and entered judgment in favor of the company. Baltar appealed, but finding no reversible error, the Court of Appeal affirmed. View "Janney v. CSAA Insurance Exchange" on Justia Law

The Travelers Indemnity Company of Connecticut (Travelers) appealed an order sustaining demurrers filed by Navigators Specialty Insurance Company (Navigators) and Mt. Hawley Insurance Company (Mt. Hawley) to the third amended complaint. Travelers sought to recover from other insurance carriers some or all of the amounts it paid to defend TF McGuckin, Inc. in an underlying construction defect litigation. Travelers contended the trial court incorrectly concluded that the causes of action for equitable contribution and equitable indemnity failed to state a claim. Travelers also argued that, in the event the Court of Appeal contends the trial court properly sustained the demurrers, the appellate court should order that Travelers be given leave to amend its complaint to plead a claim for equitable subrogation. The Court of Appeal concluded the trial court erred in sustaining the demurrers to both the equitable contribution and equitable indemnity causes of action. Accordingly, judgment was reversed and the matter remanded for further proceedings. View "The Travelers Indemnity Co. v. Navigators Specialty Ins. Co." on Justia Law

Following a preliminary hearing, petitioner Dr. Sanjoy Banerjee was charged in an information with two counts of presenting a false or fraudulent health care claim to an insurer (a form of insurance fraud, counts 1-2), and three counts of perjury (counts 3-5). The superior court denied Banerjee’s motion to dismiss the information as unsupported by reasonable or probable cause. Banerjee petitioned for a writ of prohibition to direct the superior court to vacate its order denying his Penal Code section 995 motion and to issue an order setting aside the information. The Court of Appeal issued an order to show cause and an order staying further proceedings on the information, pending the Court's resolution of the merits of Banerjee’s petition. The State filed a return, and Banerjee filed a traverse. The State argued the evidence supported a strong suspicion that Banerjee committed two counts of insurance fraud and three counts of perjury, based on his violations of Labor Code section 139.3(a) between 2014 and 2016. During that period, Banerjee billed a workers’ compensation insurer for services he rendered to patients through his professional corporation and through two other legal entities he owned and controlled. The insurance fraud charges are based on Banerjee’s 2014-2016 billings to the insurer through the two other entities. The perjury charges were based on three instances in which Banerjee signed doctor’s reports, certifying under penalty of perjury that he had not violated “section 139.3.” Banerjee argued: (1) the evidence showed he did not violate the statute's referral prohibition; (2) even if he did not comply with section 139.3(e), the “physician’s office” exception to the referral prohibition applied to all of his referrals to his two other legal entities; and (3) the patient disclosure requirement of section 139.3(e), the referral prohibition of section 139.3(a), and the physician’s office exception to the referral prohibition were unconstitutionally vague. The Court of Appeal concluded: (1) Banerjee did not violate section 139.3(a) by referring his patients to his two other legal entities; and (2) the evidence supported a strong suspicion that Banerjee specifically intended to present false and fraudulent claims for health care benefits, in violation of Penal Code section 550(a)(6), by billing the workers’ compensation insurer substantially higher amounts through his two other legal entities than he previously and customarily billed the insurer for the same services he formerly rendered through his professional corporation and his former group practice. Thus, the Court granted the writ as to the perjury charges but denied it as to the insurance fraud charges. View "Banerjee v. Super. Ct." on Justia Law

The issue on appeal in this case stemmed from an insurance claim filed by Bonbeck Parker, LLC and BonBeck HL, LC (collectively, BonBeck) for hail damage. The Travelers Indemnity Company of America (Travelers) acknowledged that some of the claimed damage to BonBeck’s property was caused by a covered hailstorm, but argued the remaining damage was caused by uncovered events such as wear and tear. BonBeck requested an appraisal to determine how much damage occurred, but Travelers refused this request unless BonBeck agreed the appraisers would not decide whether the hailstorm in fact caused the disputed damage. When BonBeck rejected this condition, Travelers filed suit, seeking a declaration that the appraisal procedure in BonBeck’s policy did not allow appraisers to decide the causation issue. The district court disagreed, ruling that the relevant policy language allowed appraisers to decide causation. After the appraisal occurred, the district court granted summary judgment to BonBeck on its breach of contract counterclaim, concluding that Travelers breached the policy’s appraisal provision. Travelers appealed. Applying Colorado law, the Tenth Circuit Court of Appeals affirmed: the disputed policy provision allowed either party to request an appraisal on “the amount of loss,” a phrase with an ordinary meaning in the insurance context that unambiguously encompassed causation disputes like the one here. "And contrary to Travelers’ view, giving effect to this meaning aligns both with other related policy language and with the appraisal provision’s purpose of avoiding costly litigation. For these reasons, the district court appropriately allowed the appraisers to resolve the parties’ causation dispute and granted summary judgment for BonBeck on its breach of contract claim." View "BonBeck Parker, et al. v. Travelers Indemnity" on Justia Law

Ben E. Keith Company, Inc. ("BEK"), appealed a circuit court order entering summary judgment in favor of Lyndon Southern Insurance Company ("Lyndon") on Lyndon's complaint for a declaratory judgment. On December 14, 2018, Felicia Edwards and Robert Allen Marak were involved in a motor-vehicle accident in Dadeville. Felicia was driving a 2009 Toyota Camry automobile that was owned by Annette Edwards and insured by Lyndon. Marak was driving a tractor-trailer that was owned by BEK. As a result of the accident, BEK incurred damage to its tractor-trailer. BEK sued Felicia and Annette claiming negligence and wantonness against both Felicia and Annette and a claim of negligent entrustment against Annette. BEK later amended the complaint to add a negligent-maintenance claim against Annette. Lyndon filed a complaint for a declaratory judgment against Felicia, Annette, and BEK, asserting the policy it issued to Annette excluded coverage for "[a]ny operator of a vehicle who is not listed as a driver on the Policy Applications, Declarations, and/or added by Endorsement who is under the age of twenty-five and is either a Family Member or resides in the same household as the Named Insured" and for "[a]n operator of a vehicle who is an unlicensed driver or whose driving privileges have been terminated or suspended." BEK argued the trial court erroneously granted Lyndon's motion for a summary judgment because Lyndon did not produce substantial admissible evidence to establish that Felicia was a noncovered person under the policy that insured Annette's vehicle at the time of the accident. Specifically, it contended Lyndon did not produce substantial admissible evidence to establish that Felicia did not have a valid driver's license at the time of the accident or to establish Felicia's age and residence at the time of the accident. After review, the Alabama Supreme Court concurred Lyndon did not produce substantial evidence to establish that Felicia did not have a valid driver's license at the time of the accident and did not produce substantial evidence to establish that Felicia was under the age of 25 and resided in Annette's household at the time of the accident. Therefore, Lyndon did not shift the burden of proof to BEK. Accordingly, the trial court erred in granting Lyndon's motion for a summary judgment. Judgment was therefore reversed. View "Ben E. Keith Company, Inc. v. Lyndon Southern Insurance Company" on Justia Law

Consolidated cases presented a certified question from the United States District Court for the District of Oregon. The Oregon Supreme Court was asked to determine whether Oregon law precluded an insurer from limiting its liability for uninsured/underinsured motorist (UM/UIM) benefits on the basis that another policy also covered the insured’s losses. Each plaintiff suffered injuries caused by an uninsured or underinsured motorist, and each plaintiff incurred resulting damages that qualify as covered losses under multiple motor vehicle insurance policies issued by defendant State Farm Mutual Automobile Insurance Company (State Farm). Each plaintiff alleged a loss that exceeded the declared liability limits of any single applicable policy and sought to recover the excess under additional applicable policies, up to the combined total of the limits of liability. In each case, however, State Farm refused to cover the excess loss, citing a term in the policies that allowed State Farm to limit its liability to the amount that it agreed to pay under the single policy with the highest applicable limit of liability. The Oregon Supreme Court concluded that that term made State Farm’s uninsured motorist coverage less favorable to its insureds than the model coverage that the legislature has required and, thus, was unenforceable. View "Batten v. State Farm Mutual Automobile Ins. Co." on Justia Law