Justia Insurance Law Opinion Summaries

The case involves George and Sheila Byers, who filed a lawsuit against their homeowners' insurance provider, USAA General Indemnity Company (USAA), and other defendants. The Byerses alleged that USAA breached their contract and the covenant of good faith and fair dealing in relation to the installation of hardwood flooring at their home. They sought attorneys' fees as damages under the Brandt v. Superior Court (1985) principle, which allows for the recovery of attorney fees when an insurer's tortious conduct compels the insured to hire an attorney to obtain policy benefits.USAA sought to compel the Byerses to produce documents related to their attorney fees, arguing that by seeking Brandt fees, the Byerses had waived their attorney-client privilege regarding these documents. The Byerses objected, arguing that the requests were ambiguous, overbroad, and violated attorney-client privilege. The trial court granted USAA's motion to compel, allowing the Byerses to redact any references they believed reflected attorney work product.The Byerses then petitioned the Court of Appeal of the State of California, First Appellate District, Division Five, challenging the trial court's order. They argued that the trial court had forced them to waive their attorney-client privilege and had abused its discretion by ordering the production of all invoices, fee agreements, and payment history.The appellate court denied the Byerses' petition. It found that by seeking Brandt fees, the Byerses had impliedly waived their attorney-client privilege regarding the attorney fees documents. The court also found no abuse of discretion in the trial court's order allowing the Byerses to redact references they believed reflected attorney work product. The court concluded that USAA had a right to learn about the attorney fees aspect of the Byerses' alleged damages during discovery. View "Byers v. Super. Ct." on Justia Law

The case involves the Government Employees Insurance Company (GEICO) and its affiliates, who sued several medical practices in separate actions in the District of New Jersey. GEICO alleged that the practices defrauded them of more than $10 million by abusing the personal injury protection (PIP) benefits offered by its auto policies. The practices allegedly filed exaggerated claims for medical services, billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO's suits against the practices each included a claim under the New Jersey’s Insurance Fraud Prevention Act (IFPA).The practices sought arbitration of GEICO’s IFPA claim, arguing that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. However, each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated. The practices appealed to the United States Court of Appeals for the Third Circuit.The Third Circuit Court of Appeals reversed the lower courts' decisions, holding that claims under the IFPA are arbitrable. The court found that GEICO's argument that the IFPA implicitly prohibits arbitration was not persuasive. The court also concluded that GEICO’s IFPA claims must be compelled to arbitration under the Federal Arbitration Act (FAA), as the claims fell under the scope of the arbitration agreement in GEICO's Precertification and Decision Point Review Plan. The court remanded the case with instructions to compel arbitration of GEICO’s IFPA claims against the practices. View "GEICO v. Caring Pain Management PC" on Justia Law

The case involves Maria and Jose Jimenez, who were involved in an auto accident with Stephen Kiefer. After the accident, the Jimenezes requested $100,000 from Kiefer's auto insurer, Travelers Commercial Insurance Company, to settle their claim against Kiefer. Travelers refused the offer, leading the Jimenezes to sue Kiefer in Illinois court. The Jimenezes and Kiefer entered into an agreement where Kiefer stipulated to a judgment against himself and assigned his rights and claims against Travelers to the Jimenezes. In exchange, the Jimenezes agreed not to execute the judgment against Kiefer personally. The Jimenezes then initiated a citation proceeding against Travelers, seeking to discover whether it held any of Kiefer’s assets.Travelers removed the action to federal court and filed for summary judgment. The district court granted summary judgment for Travelers, finding that Kiefer and the Jimenezes (as his assignees) were entitled to nothing under the insurance policy and had no claim for breach of any duties Travelers owed Kiefer. The Jimenezes appealed this decision.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court found that the citation proceeding was an independent, removable action. It also agreed with the district court that the Jimenezes, as Kiefer’s assignees, could not recover under the policy in light of the legally responsible provision. The court concluded that Travelers could hold Kiefer to the terms of the policy, and under a strict construction of those terms, Kiefer was not legally responsible for the judgment because the covenant not to execute precluded its enforcement. Therefore, the legally responsible provision bars the Jimenezes’ recovery as Kiefer’s assignees. View "Jimenez v. Travelers Commercial Insurance Company" on Justia Law

The case involves an insurance claim filed by Christine and Roy Cosme after their insurer, Erie Insurance Exchange, cancelled their automobile insurance policy. The policy listed their son, Broyce Cosme, as a driver. The cancellation was due to a misunderstanding between Broyce and the Indiana Bureau of Motor Vehicles, which led to the suspension of Broyce's license. The Cosmes were informed that their policy would be cancelled unless they submitted a coverage-exclusion form removing Broyce from the policy. However, due to conflicting advice from their insurance agent at Churilla Insurance, the Cosmes did not submit the form before the deadline. The policy was cancelled, and shortly after, the Cosmes were involved in an accident with an uninsured motorist. Erie denied their claim, stating that their policy was no longer in effect at the time of the accident.The trial court granted a directed verdict in favor of Erie and Churilla, reasoning that the Cosmes brought about their own lack-of-coverage injuries when they failed to sign the exclusion form before the deadline. The court of appeals affirmed this decision, holding that the Cosmes failed to present sufficient evidence to support their claims against Erie and Churilla.The Indiana Supreme Court reversed the trial court's directed verdict for Erie, affirming as to Churilla, and remanded for further proceedings. The court held that at the directed-verdict stage, the court can review whether inferences from the evidence are reasonable, but it cannot weigh conflicting evidence or assess witness credibility. Applying this standard, the court found that the trial court erred in directing the verdict for Erie as the Cosmes’ case-in-chief presented sufficient (though conflicting) evidence to prove Erie breached its contract and violated its duty of good faith. However, the court correctly granted judgment to Churilla because the evidence showed Churilla owed no special duty to the Cosmes to procure insurance or advise on the insurance policy. View "Cosme v. Warfield" on Justia Law

The case involves Karen Frohn, who applied for and received a life insurance policy from Globe Life and Accident Insurance Company on behalf of her husband, Greg Frohn. After Greg's death, Karen submitted a claim for death benefits, which Globe denied. Karen then sued Globe, both individually and on behalf of a putative class of beneficiaries, challenging the denial of her claim.Globe moved for summary judgment, arguing that it was entitled to rescind the life insurance policy because Karen was not truthful in her application for insurance. The district court granted Globe’s motion, barring Karen from recovery on her claims against Globe. Karen also asked the court to redact certain portions of that order, but the district court published it without any redactions. Karen appealed these decisions.The United States Court of Appeals for the Sixth Circuit affirmed the district court's decision. The court found that Karen had voluntarily waived her husband's physician-patient privilege by signing an Authorization for Release, allowing Globe to access Greg's medical records. The court also found that Globe was entitled to rescind the policy under Ohio law because Karen had made material misrepresentations in the insurance application. The court concluded that Globe's defense barred Karen's breach-of-contract and bad-faith claims. View "Frohn v. Globe Life and Accident Ins Co" on Justia Law

The case involves Earl John and Christine Dwyer, who sued Ameriprise Financial, Inc. for negligent and fraudulent misrepresentation. In 1985, Ameriprise fraudulently and negligently induced the Dwyers to purchase a universal whole life insurance policy by misrepresenting that their quarterly premium payments would remain the same for the life of the policy. The Dwyers surrendered life insurance policies they had purchased from other companies to facilitate this purchase. In reality, if the Dwyers’ premium payment had remained the same, the policy would have lapsed for insufficient funds in 2020.The trial court found Ameriprise guilty of violating Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (CPL) and awarded the Dwyers compensatory damages. However, the court declined to award treble damages under the CPL, reasoning that they would be duplicative of the punitive damages awarded by the jury on the common-law claims. The Superior Court affirmed this decision.The Supreme Court of Pennsylvania disagreed with the lower courts' decisions. The court held that treble damages under the CPL are a separate remedy available to the Dwyers and must be considered by the trial court without regard to a punitive damages award on related common-law claims. The court concluded that nullifying the availability of a statutory award because of a common-law award is not a permissible exercise of discretion. Therefore, the court reversed the order of the Superior Court and remanded the case for reconsideration of damages under the CPL. View "Dwyer v. Ameriprise Financial" on Justia Law

The plaintiffs, Saint James Apartment Partners, LLC, Central States Development, LLC, and John C. Foley, filed a civil action against Universal Surety Company, alleging that a notary public covered under Universal's bond engaged in negligent conduct. The plaintiffs did not include the notary public as a party to the action. Universal filed a motion to dismiss, arguing that the plaintiffs failed to join the notary public as a necessary party and that the complaint failed to state a claim upon which relief could be granted. The district court granted the motion to dismiss without prejudice, concluding that Nebraska law required the plaintiffs to join the notary public in the action.The Nebraska Supreme Court reversed the district court's decision. The court held that an involuntary dismissal for a lack of a necessary party, which leaves nothing remaining for the trial court to do, is a final order over which an appellate court may exercise jurisdiction. The court also held that Nebraska law does not require a person suing under the official bond of a notary public to join the notary as a necessary party to the action. The case was remanded for further proceedings consistent with the court's opinion. View "Saint James Apt. Partners v. Univeral Surety Co." on Justia Law

The case revolves around a patient, Tommy Harris, who contracted bacterial sepsis due to repeated infections from his dialysis treatment at a clinic in Belleville, Illinois. Harris filed a malpractice lawsuit against the operators of the clinic and later included a claim against Durham Enterprises, Inc., the janitorial company responsible for cleaning the facility. The case primarily concerns Durham’s insurance coverage. Durham submitted the lawsuit to Ohio Security Insurance Company, its insurer, which denied coverage based on the insurance policy’s exclusion for injuries caused by fungi or bacteria. Harris and Durham then negotiated an agreement in which Durham promised not to mount a defense and Harris promised to seek recovery only from the insurer. The state trial judge granted a motion to sever Harris's claim against Durham and set it for a bench trial. The judge held a short, uncontested bench trial and entered judgment against Durham for more than $2 million.Ohio Security was not a party to the state court proceedings and the insurance policy was not in the record. However, the consent judgment includes findings on insurance issues, notably, that the insurer breached its duty to defend and is estopped from asserting any policy defenses. After the judgment became final, Harris filed an amended complaint purporting to add Ohio Security as a defendant. Ohio Security removed the action to federal court and sought a declaration of its coverage obligations. The district court held that the bacteria exclusion precludes coverage.In the United States Court of Appeals for the Seventh Circuit, Harris and Durham jointly appealed, challenging the no-coverage ruling but also raising a belated challenge to subject-matter jurisdiction under the Rooker–Feldman doctrine. The court found the jurisdictional argument meritless, as the Rooker–Feldman doctrine does not block federal jurisdiction over claims by nonparties to state-court judgments. The court also affirmed the district court's ruling that the policy’s bacteria exclusion precludes coverage for this loss. View "Mitchell v. Durham Enterprises, Inc." on Justia Law

The case involves an insurance dispute between Travelers Casualty Insurance Company of America and A-Quality Auto Sales, Inc., along with its owners, Felicia and Shawn Richesin. The Richesins purchased a Subaru for resale through their dealership, A-Quality Auto Sales. After having the car inspected and repaired by RNS Auto Services, they experienced mechanical issues while driving it. Ms. Richesin was severely injured when she exited the vehicle on the side of the highway and was struck by another car. RNS had a garage insurance policy with Travelers, which provided commercial general liability coverage with a per-occurrence limit of $500,000 and a general aggregate limit of $1,000,000. The Richesins sought additional compensation from RNS and Travelers for Ms. Richesin's injuries.In the lower courts, the Richesins filed a suit against Travelers and other parties in New Mexico state court. The state court dismissed all claims against Travelers, citing a lack of privity between the injured party and the insurer. Later, the Richesins and RNS entered into agreements that led to Travelers paying the Richesins $500,000, which Travelers believed to be the policy limit. The Richesins, however, argued that there were multiple occurrences and therefore the policy's aggregate limit of $1,000,000 was available. Travelers then filed a complaint in federal district court seeking a judicial declaration that the accident was a single occurrence and the policy coverage limit for the accident was $500,000.The United States Court of Appeals for the Tenth Circuit affirmed the district court's entry of declaratory judgment. The court held that the dispute was ripe for resolution under Article III of the Constitution. It also ruled that the district court did not err by declining to abstain under the Brillhart and Younger abstention doctrines. The court further held that the district court did not err by denying the Richesins' Rule 56(d) motion, thereby denying them discovery needed to meaningfully oppose Travelers' motion for summary judgment. The court concluded that the accident was a single occurrence and the policy coverage limit for the accident was $500,000. View "Travelers Casualty Insurance Co. of America v. A-Quality Auto Sales" on Justia Law

The case involves Sherry and David Lewis, who sued their auto insurer, GEICO, for allegedly breaching their insurance contract when their car was totaled. The Lewises claimed that GEICO undercompensated them by applying a "condition adjustment" that artificially reduced its valuation of their car and by failing to reimburse them for taxes and fees necessary to replace the car. They sought to certify a class of similarly underpaid insureds for each instance of underpayment.The District Court certified both classes under Federal Rule of Civil Procedure 23. GEICO appealed the decision, challenging the certification of the classes.The United States Court of Appeals for the Third Circuit affirmed the order certifying the class for the taxes-and-fees claim. However, the court found that the Lewises lacked standing to bring the condition-adjustment claim as they failed to show that GEICO caused them concrete harm when it applied the condition adjustment. Therefore, the court vacated the District Court’s order in part and remanded with instructions to dismiss the condition-adjustment claim.Regarding the taxes-and-fees claim, the court found that the Lewises met the requirements for standing as they alleged financial harm stemming from GEICO's pre-2020 practice of declining to pay taxes and fees to lessee insureds. The court also found that the class was ascertainable, meeting the requirements for class certification. View "Lewis v. GEICO" on Justia Law