Justia Insurance Law Opinion Summaries

Plaintiff-Appellant Jeffrey Allen was injured in a car accident in May 2013. His automobile insurance policy included coverage for medical expenses arising from car accidents, but this coverage contained a one-year limitation period such that he could not obtain reimbursement for medical expenses that accrued a year or more after an accident. Allen sought reimbursement for medical expenses accruing more than a year after his accident, arguing this limitation period was invalid on two grounds: (1) a 2012 disclosure form that his insurer sent him stated that his policy covers reasonable medical expenses arising from a car accident, Colorado’s reasonable-expectations doctrine rendered the one-year limitations period unenforceable; and (2) Colorado’s MedPay statute, which required car insurance companies to offer at least $5,000 of coverage for medical expenses, prohibited placing a one-year time limit on this coverage. The district court granted summary judgment in favor of the insurer. After review, the Tenth Circuit rejected both of Allen’s arguments and affirmed the district court order. View "Allen v. USAA" on Justia Law

Thee Sombrero, Inc. (Sombrero) owned commercial property. Pursuant to a conditional use permit (CUP), Sombrero’s lessees operated the property as a nightclub called El Sombrero. Crime Enforcement Services (CES) provided security guard services at the club. In 2007, after a fatal shooting, the CUP was revoked and replaced with a modified CUP, which provided that the property could be operated only as a banquet hall. In a previous action, Sombrero sued CES, alleging that CES’s negligence caused the shooting, which in turn caused the revocation of the CUP, which in turn caused a diminution in value of the property. It won a default judgment against CES. Sombrero then filed this direct action against Scottsdale Insurance Company (Scottsdale), CES’s liability insurer. The trial court granted summary judgment in favor of Scottsdale, ruling that Sombrero’s claim against CES was for an economic loss, rather than for “property damage” as defined in and covered under the policy. The Court of Appeal held Sombrero’s loss of the ability to use the property as a nightclub constituted property damage, which was defined in the policy as including a loss of use of tangible property. View "Thee Sombrero, Inc. v. Scottsdale Ins. Co." on Justia Law

The Affordable Care Act’s three premium‐stabilization programs were designed to redistribute money among insurance companies and mitigate each company’s exposure to market risks, 42 U.S.C. 18061–18063. The Department of Health and Human Service (HHS) intended to implement these programs in a budget‐neutral way paying out only the funds that each program had taken in from other insurance companies. Land of Lincoln participated in these premium‐stabilization programs and incurred a debt of roughly $32 million but HHS owed Land of Lincoln over $70 million. HHS was not able to pay what it owed because it was taking in far less money than expected, and it refused to dip into its discretionary funds. Like other insurance companies, Land of Lincoln sought the overdue payments in an unsuccessful suit. Land of Lincoln became insolvent and began liquidation. Despite an Illinois court order, HHS began to offset its overdue payments against Land of Lincoln’s debt, as its own regulations permitted. The Director of the Illinois Department of Insurance, Land of Lincoln’s appointed liquidator, asked the state court for a declaration that HHS violated the order, but HHS removed the motion to federal district court arguing that the federal government was not subject to state court jurisdiction. The district court remanded the case back to state court relying on a narrow reading of 28 U.S.C. 1442, and principles of abstention. The Seventh Circuit reversed on both grounds and remanded to the district court. View "Hammer v. United States Department of Health and Human Services" on Justia Law

A taxi driver injured in an accident while working filed a report with the Alaska Workers' Compensation Board. The nature of the relationship between the taxi company and the driver was disputed. The driver retained an attorney for a lawsuit against the other driver, and settled that claim with the other driver's insurance company without his taxi company's approval. Because the taxi company did not have workers' compensation insurance, the Alaska Workers' Compensation Benefits Guaranty Fund assumed responsibility for adjusting the workers' compensation claim. The Fund asked the Board to dismiss the taxi driver's claim because of the unapproved settlement. The Board dismissed the claim, and the Workers' Compensation Appeals Commission ultimately affirmed the Board's decision. The taxi driver appealed, but finding no reversible error, the Alaska Supreme Court affirmed the Commission's decision. View "Atkins v. Inlet Transportation & Taxi Service, Inc." on Justia Law

Dave Jones, in his capacity as Insurance Commissioner of the State of California (the Commissioner), appealed an order enjoining him from enforcing three regulations, adopted in 1992, to implement the unfair claims settlement practices provision of the Unfair Insurance Practices Act (UIPA). The injunction was issued at the conclusion of the first phase of a trial in which PacifiCare Life and Health Insurance Company challenged the Commissioner’s finding that it had committed over 900,000 acts and practices in violation of the Insurance Code. The Court of Appeal reversed the order imposing the injunction in its entirety. The trial court determined the first regulation was inconsistent with the language of section 790.03(h), which it concluded had been interpreted by the California Supreme Court in Moradi-Shalal v. Fireman’s Fund Ins. Companies 46 Cal.3d 287 (1988), and in Zhang v. Superior Court, 57 Cal.4th 364 (2013), to apply only to insurers engaged in a pattern of misconduct. The appellate court determined the Supreme Court’s only binding interpretation of that statutory language was found in Royal Globe Ins. Co. v. Superior Court, 23 Cal.3d. 880 (1979), which held that section 790.03(h) could be violated by an insurer’s single knowing act. Consequently, the Court was bound by that precedent. View "PacifiCare Life & Health Ins. Co. v. Jones" on Justia Law

At issue before the Colorado Supreme Court in this matter was the issue of whether an insured was entitled to collect prejudgment interest when he settles an uninsured motorist claim (“UM claim”) with his insurer in lieu of filing a lawsuit and proceeding to judgment. The Court held that under the plain language of the prejudgment interest statute, 13-21-101, C.R.S (2017), an insured is entitled to prejudgment interest only after: (1) an action is brought; (2) the plaintiff claims damages and interest in the complaint; (3) there is a finding of damages by a jury or court; and (4) judgment is entered. Because the plaintiff in this case did not meet all of these conditions, he was not entitled to prejudgment interest. View "Munoz v. Am. Fam. Ins. Co." on Justia Law

Belsen Getty, LLC, a registered investment adviser owned by Terry Deru, obtained a claims-made financial-services-liability policy (the Policy) from XL Specialty Insurance Company covering Belsen Getty and its advisers for the period for one year. Under the policy, XL had no duty to defend. During the policy period James, Jenalyn, and Wade Morden brought claims against Belsen Getty and Deru alleging improper and misleading investment advice. XL denied coverage, asserting the Mordens’ claims and claims brought by the Securities and Exchange Commission (SEC) before the policy period concerned “Interrelated Wrongful Acts,” as defined by the Policy, and that the Policy therefore required treating the two claims as one claim made before the policy period. Belsen Getty and Deru then settled with the Mordens, assigning their rights against XL; and the Mordens sued XL in federal district court, raising the assigned claims that XL breached its covenant of good faith and fair dealing and its fiduciary duties to Belsen Getty and Deru in denying coverage under the Policy. XL counterclaimed that the Policy’s Interrelated Wrongful Acts provision precluded coverage. The Mordens moved for partial summary judgment on the counterclaim and on several of XL's affirmative defenses. XL moved for summary judgment based on the policy and for failure to prove bad faith or breach of fiduciary duty. The district court denied XL's counterclaim, but granted summary judgment on the bad-faith and fiduciary-duty claims. The Mordens appealed summary judgment against them on their bad-faith and fiduciary-duty claims and on the denial of their motion to amend their complaint to add a breach-of-contract claim. XL cross-appealed the summary judgment against it on its counterclaim that the Policy’s Interrelated Wrongful Acts provision barred all the Mordens’ claims. The Tenth Circuit reversed the denial of XL’s motion for summary judgment on its counterclaim: this reversal undermined the Mordens’ challenges to the summary judgment against them and the denial of their motion to amend. The Court therefore affirmed summary judgment against the Mordens on their claims and the denial of their motion to amend. View "Morden v. XL Specialty Insurance" on Justia Law

Villanueva and the class (Plaintiffs) alleged that Fidelity, an underwritten title company that handled Plaintiffs’ escrow accounts, engaged in unlawful conduct under the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200) in charging overnight mail delivery fees, courier fees, and document preparation or “draw deed” fees that were not listed in its schedule of rates filed with the Department of Insurance in violation of Insurance Code 12401–12410.10, 12414.27. Fidelity argued that the lawsuit was barred by the statutory immunity in section 12414.26 for matters related to rate-making. The trial court rejected Fidelity’s immunity claim and granted Plaintiffs injunctive relief under the UCL, but denied their restitution claims. The court of appeal reversed. Fidelity’s immunity defense is not subject to the forfeiture doctrine because it implicates the court’s subject matter jurisdiction; this claim is subject to the exclusive original jurisdiction of the Insurance Commissioner because it challenges Fidelity’s activity related to rate-making. The court directed the trial court to enter a new order awarding costs to Fidelity. View "Villanueva v. Fidelity National Title Co." on Justia Law

In 2014, Michael Messier and Kay Bushman were involved in an auto accident. Both were the drivers of their respective vehicles and were then-alleged to be Vermont residents. In 2017, shortly before the statute of limitations was to expire, Messier filed suit against Bushman and her auto insurer, Travelers, for damages he claimed to have sustained in the accident. The claim against Bushman sounded in negligence, the claim against Travelers asserted breach of the Vermont Consumer Protection Act (CPA). The trial court granted a motion for judgment on the pleadings filed by Bushman and a motion to dismiss filed by Travelers. Messier appeals both decisions. The Vermont Supreme Court determined the motion filed by Bushman was one that challenged the sufficiency of service of process: the trial court, without holding an evidentiary hearing, found that Messier did not send a copy of the return of service on the Commissioner to Bushman as required by 12 V.S.A. 892(a). The Supreme Court reversed as to Bushman's motion because the issues concerning what was included in the mailing and whether the affidavit contained sufficient specificity to comply with section 892(a) were contested and needed to be resolved through factual determination by the trial court. Regarding Messier's claim against Travelers, the Supreme Court found his claim was brought under the CPA, but references unfair claims settlement practices which were part of Vermont Insurance Trade Practices Acts (ITPA). The Court found Messier did not purchase anything from Travelers- his only connection was that Bushman was insured by Travelers. Thus, Messier was not a consumer with respect to Bushman's Travelers insurance policy, and therefore had to CPA claim against them. The case was remanded for further proceedings with respect to the claim against Bushman; dismissal of the claim against Travelers was affirmed. View "Messier v. Bushman" on Justia Law

One night in February 2014 Carlile Transportation Systems, Inc. driver Bart Neal was driving a tractor-trailer southbound on the Dalton Highway. Neal could not steer properly at speeds above 35 miles per hour and decided to stop to put chains on his tires, partially blocking both traffic lanes, and, by his account, activated his flashers. Neal did not deploy reflective triangles. Eggor Enterprises, Inc. driver Joe Seurer was hauling a load of fuel northbound. By his account, Seurer saw lights in the distance but could not determine what they were. Seurer slowed his tractor-trailer from 50 to 35 miles per hour. About three-quarters of a mile from Neal, Seurer again saw lights and thought they might be from a pipeline maintenance truck stopped off the side of the road. He did not see reflective triangles or flashers. The road had an S-curve between Seurer and Neal. Until Seurer rounded the final curve, he did not realize Neal’s rig was blocking the road. Seurer applied his brakes about 300 feet from Neal, avoiding a serious collision but causing Seurer’s trailer to fall onto the side of the highway. The trailer’s fuel load spilled alongside the road. Eggor Enterprises’s insurer, HDI-Gerling American Insurance Company (HDI), paid over $3.5 million in cleanup costs to remediate the spill. HDI-Gerling, as subrogee of its trucking company client, sued Carlile for negligence. After a trial the jury determined that Carlile company’s driver was not negligent and returned a defense verdict. The insurance company appealed some of the superior court’s trial rulings. Seeing no reversible error, the Alaska Supreme Court affirmed the superior court’s entry of final judgment. View "HDI-Gerling America Insurance Company v. Carlile Transportation Systems, Inc." on Justia Law