Justia Insurance Law Opinion Summaries

Steve Forster, Daniel Krebs, and Debra Krebs (collectively "Forster/Krebs") appealed the dismissal of their claims against B&B Hot Oil Service, Inc., and JB's Welding. Forster/Krebs argued the district court erred in construing language in a lease agreement with B&B Hot Oil as a waiver of their claims against B&B Hot Oil for damages to their building and property and to preclude a subrogation claim by their insurer, Acuity, against B&B Hot Oil. Forster/Krebs also argued the district court improperly granted summary judgment dismissing their claims against JB's Welding for concerted action and a joint venture. B&B Hot Oil leased one-half of a building owned by Forster/Krebs and used the leased property to store two hot oil trucks. An explosion in January 2010, destroyed the building and its contents and damaged surrounding property. The alleged cause of the explosion was a propane leak from one of the hot oil trucks, which has been referred to by the parties as a "knock off" truck built through "reverse engineering" by B&B Hot Oil with assistance from JB's Welding. The North Dakota Supreme Court concluded a stipulation to dismiss Forster/Krebs' other remaining claims against JB's Welding without prejudice did not make the judgment final for purposes of appellate jurisdiction, the Court dismissed the appeal. View "James Vault & Precast Co. v. B&B Hot Oil Service, Inc." on Justia Law

Victaulic, a manufacturer, sued its insurers in connection with product liability claims that resulted in litigation. Following summary adjudication for Victaulic (duty to defend) and a declaratory ruling (duty to indemnify), the case proceeded to a jury trial on Victaulic’s bad faith claim. Numerous witnesses testified and over 100 exhibits were introduced. Reversing an in limine ruling, the court allowed Victaulic to interrogate Finberg, the examiner on most of the claims, who had verified the insurers’ responses to Victaulic’s requests for admissions (RFAs). The court concluded Finberg “made an admission that she perjured herself” and stopped Finberg’s testimony. When she resumed the stand the next day, represented by personal counsel, the court ruled that she could, on a blanket basis, claim the Fifth Amendment privilege against self-incrimination— in front of jury. Victaulic’s closing arguments focused on “Finberg,” “RFAs,” “lies,” and “penalty of perjury.” The jury awarded damages for breach of contract totaling $1,073,868.80, with attorney fee damages for bad faith of $8,259,712.31. The punitive damages trial resulted in an award of $46 million. The court of appeal reversed, finding prejudicial errors, beginning with the court’s allowance of the use of the RFA responses, compounded by the court’s intensive questioning of Finberg, and by several errors in handling Finberg’s invocation of the Fifth Amendment. View "Victaulic Co. v. American Home Assurance Co." on Justia Law

This case arose out of a dispute between insureds, Nancy Vigil and her stepson Martin Vigil, and their insurance company, Progressive Casualty Insurance Company, as to whether the Vigils’ policy was in effect at the time of a November 4, 2002, car accident. The parties’ dispute has been the subject of two jury trials and two appeals to the Court of Appeals. The New Mexico Supreme Court limited its review to the propriety of two evidentiary rulings that the district court made prior to the second trial. The Court of Appeals held that the district court erred by excluding evidence at the second trial of: (1) a previous judge’s summary judgment ruling that the Vigils lacked coverage on the date of the accident, a ruling that had been reversed in “Progressive I;” and (2) Progressive’s payment of $200,000 under the Vigils’ policy to settle third-party claims while this litigation was pending. The Supreme Court reversed the Court of Appeals and held the district court acted within its discretion to exclude the evidence under Rule 11-403 19 NMRA, which permitted the district court to “exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” The case was remanded back to the Court of Appeals to address the remaining issues that Progressive raised on appeal. View "Progressive Cas. Co. v. Vigil" on Justia Law

This case arose out of a dispute between insureds, Nancy Vigil and her stepson Martin Vigil, and their insurance company, Progressive Casualty Insurance Company, as to whether the Vigils’ policy was in effect at the time of a November 4, 2002, car accident. The parties’ dispute has been the subject of two jury trials and two appeals to the Court of Appeals. The New Mexico Supreme Court limited its review to the propriety of two evidentiary rulings that the district court made prior to the second trial. The Court of Appeals held that the district court erred by excluding evidence at the second trial of: (1) a previous judge’s summary judgment ruling that the Vigils lacked coverage on the date of the accident, a ruling that had been reversed in “Progressive I;” and (2) Progressive’s payment of $200,000 under the Vigils’ policy to settle third-party claims while this litigation was pending. The Supreme Court reversed the Court of Appeals and held the district court acted within its discretion to exclude the evidence under Rule 11-403 19 NMRA, which permitted the district court to “exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” The case was remanded back to the Court of Appeals to address the remaining issues that Progressive raised on appeal. View "Progressive Cas. Co. v. Vigil" on Justia Law

Caroline Burton and Brenda Olivar submitted claims for long-term disability benefits to insurance companies under employee-benefits plans set up by their employers (“the Plans”). The insurance companies denied Burton’s and Olivar’s claims. Burton and Olivar sued the Plans under the Employee Retirement Income Security Act (“ERISA”) for benefits due to them under the insurance policies. But neither served the Plans. Rather, they each served complaints on the United States Department of Labor Secretary, relying on an ERISA provision allowing such service when a plan hasn’t designated “an individual” as an agent for service of process. In both cases, the Labor Secretary never forwarded the complaint to the Plans’ designated agents for service of process, the Plans failed to answer, and Burton and Olivar obtained default judgments in their favor. Eventually, the Plans moved to set aside the default judgments for improper service, which the trial courts granted in both cases. Later, the Plans moved for summary judgment, arguing the insurers, which were obligated to make all eligibility determinations and payments under the Plans’ terms, were the only proper party defendants. The trial courts agreed, granting the Plans summary judgment. A division of the court of appeals affirmed. The issue presented to the Colorado Supreme Court for resolution centered on whether ERISA’s use of the term “individual” provided that service on the Labor Secretary was sufficient when a plan designates a corporation (instead of a natural person) as its administrator and agent for service of process. Finding no reversible error in the district court’s judgment, the Supreme Court affirmed. View "Burton v. Colorado Access & No." on Justia Law

Caroline Burton and Brenda Olivar submitted claims for long-term disability benefits to insurance companies under employee-benefits plans set up by their employers (“the Plans”). The insurance companies denied Burton’s and Olivar’s claims. Burton and Olivar sued the Plans under the Employee Retirement Income Security Act (“ERISA”) for benefits due to them under the insurance policies. But neither served the Plans. Rather, they each served complaints on the United States Department of Labor Secretary, relying on an ERISA provision allowing such service when a plan hasn’t designated “an individual” as an agent for service of process. In both cases, the Labor Secretary never forwarded the complaint to the Plans’ designated agents for service of process, the Plans failed to answer, and Burton and Olivar obtained default judgments in their favor. Eventually, the Plans moved to set aside the default judgments for improper service, which the trial courts granted in both cases. Later, the Plans moved for summary judgment, arguing the insurers, which were obligated to make all eligibility determinations and payments under the Plans’ terms, were the only proper party defendants. The trial courts agreed, granting the Plans summary judgment. A division of the court of appeals affirmed. The issue presented to the Colorado Supreme Court for resolution centered on whether ERISA’s use of the term “individual” provided that service on the Labor Secretary was sufficient when a plan designates a corporation (instead of a natural person) as its administrator and agent for service of process. Finding no reversible error in the district court’s judgment, the Supreme Court affirmed. View "Burton v. Colorado Access & No." on Justia Law

A facsimile transmission is not a “delivery” under Minn. R. Civ. P. 3.01(c), which requires that a summons be “delivered” to the sheriff before an action is commenced, because Rule 3.01(c) contemplates personal delivery to the office of the sheriff.In this case, Plaintiff faxed a summons and complaint to the sheriffs in two counties. Deputy sheriffs from both counties personally served Defendants. Defendants moved to dismiss the action, arguing that facsimile transmission did not constitute “delivery” of the summons under Rule 3.01(c). The district court denied the motion. The court of appeals reversed. The Supreme Court reversed, holding that the sheriffs completed service of process on each of the defendants, thus commencing Plaintiff’s action under Rule 3.01(a). View "Cox v. Mid-Minnesota Mutual Insurance Co." on Justia Law

The underlying action was initiated by homeowners from two residential developments in Rocklin against appellants Centex Homes and Centex Real Estate Corporation (Centex) for alleged defects to their homes. Centex and cross-defendant and respondent St. Paul Fire and Marine Insurance Company (St. Paul) have a history of insurance coverage disputes. St. Paul was an insurer for subcontractor Ad Land Venture (Ad Land), and agreed to defend Centex as an additional insured subject to a reservation of rights. Centex filed a cross-complaint against its subcontractors and St. Paul that sought, as the seventh cause of action, a declaration that Centex was entitled to independent counsel under Civil Code section 28601 because St. Paul’s reservation of rights created significant conflicts of interest. Centex appealed after the trial court granted St. Paul’s motion for summary adjudication of Centex’s seventh cause of action. Centex argued any possible or potential conflict was legally sufficient to require St. Paul to provide independent counsel. The Court of Appeal disagreed. Alternatively, Centex contended independent counsel was required because counsel appointed by St. Paul could influence the outcome of the coverage dispute and St. Paul controlled both sides of the litigation. The Court of Appeal concluded that because Centex failed to establish a triable issue of material fact regarding these assertions, the Court affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

The underlying action was initiated by homeowners from two residential developments in Rocklin against appellants Centex Homes and Centex Real Estate Corporation (Centex) for alleged defects to their homes. Centex and cross-defendant and respondent St. Paul Fire and Marine Insurance Company (St. Paul) have a history of insurance coverage disputes. St. Paul was an insurer for subcontractor Ad Land Venture (Ad Land), and agreed to defend Centex as an additional insured subject to a reservation of rights. Centex filed a cross-complaint against its subcontractors and St. Paul that sought, as the seventh cause of action, a declaration that Centex was entitled to independent counsel under Civil Code section 28601 because St. Paul’s reservation of rights created significant conflicts of interest. Centex appealed after the trial court granted St. Paul’s motion for summary adjudication of Centex’s seventh cause of action. Centex argued any possible or potential conflict was legally sufficient to require St. Paul to provide independent counsel. The Court of Appeal disagreed. Alternatively, Centex contended independent counsel was required because counsel appointed by St. Paul could influence the outcome of the coverage dispute and St. Paul controlled both sides of the litigation. The Court of Appeal concluded that because Centex failed to establish a triable issue of material fact regarding these assertions, the Court affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

The United States Court of Appeals for the Ninth Circuit certified a certified question of Oregon law to the Oregon Supreme Court. The question related to claims under ORS 124.110 for financial abuse of “vulnerable persons” (here, elderly persons) who purchased long-term care insurance from defendant Bankers Life & Casualty Co. (Bankers) and sought to receive insurance benefits under their policies. Specifically, the Ninth Circuit asked whether a plaintiff states a claim under ORS 124.110(1)(b) for wrongful withholding of money or property where it is alleged that an insurance company has in bad faith delayed the processing of claims and refused to pay benefits owed under an insurance contract. Plaintiffs were elderly Oregonians or their successors who purchased long-term healthcare insurance policies sold by Bankers and its parent company. Plaintiffs alleged Bankers developed onerous procedures to delay and deny insurance claims: failing to answer phone calls, losing documents, denying claims without notifying policyholders, denying claims for reasons that did not comport with Oregon law, and paying policyholders less than what they were owed under their policies. Bankers allegedly collected premium payments and, without good cause, delayed and denied insurance benefits to which Plaintiffs were entitled. The Oregon Supreme Court answered in the negative: allegations that an insurance company, in bad faith, delayed the processing of claims and refused to pay benefits owed to vulnerable persons under an insurance contract do not state a claim under ORS 124.110(1)(b) for wrongful withholding of “money or property.” View "Bates v. Bankers Life and Casualty Co." on Justia Law