Justia Insurance Law Opinion Summaries

Plaintiff filed suit against Stonebridge, challenging the insurer’s partial denial of his claim for hospitalization benefits. The trial court ruled that a policy provision was unenforceable, entitling plaintiff to $31,500 in additional benefits under the policy. A jury then found that Stonebridge acted with fraud and fixed the punitive damage award at $19 million. At issue is the trial court's remittitur of that award from $19 million to $350,000 based on a ratio of punitive to compensatory damages of 10:1. The Supreme Court held on review that the Brandt v. Superior Court fees should be included as compensatory damages in the ratio calculation irrespective of whether such fees were awarded by the trial court or the jury. On remand from the Supreme Court, the court held that the Brandt fees should be included in the compensatory damages, modified the judgment and, as modified, affirmed it. View "Nickerson v. Stonebridge Life Insurance Co." on Justia Law

An employee of a nonprofit serving disabled adult clients used her position to embezzle more than half a million dollars held by the nonprofit for its clients. After the embezzlement was discovered, Travelers Casualty & Surety Company, the nonprofit's insurance company, made the nonprofit whole. Travelers then sought contribution from the bank in federal court. By submitting certified questions of Washington law, that court has asked the Washington Supreme Court to decide, among other things, whether a nonpayee's signature on the back of a check was an indorsement. Furthermore, the Court was also asked whether claims based on unauthorized indorsements that are not discovered and reported to a bank within one year of being made available to the customer are time barred. The Supreme Court answered yes to both questions. View "Travelers Cas. & Sur. Co. v. Wash. Trust Bank" on Justia Law

Plaintiff-Appellee Century Surety Company (“Century”) issued a commercial lines policy to Defendant-Appellant Shayona Investment, LLC covering commercial property and business income coverage. Shayona submitted claims, Century paid them, and then Century sought a declaratory judgment in the district court as to whether the claims were fraudulent. At trial, the jury found in favor of Century, awarding it both the amount the company paid Shayona under the policy and the sum it spent investigating the claims. Shayona appealed, arguing that the standard of proof the court instructed the jury to use was wrong. Finding no reversible error, the Tenth Circuit affirmed the district court's entry of judgment on the verdict. View "Century Surety Co. v. Shayona Investment" on Justia Law

Plaintiffs, who owned insurance policies with National Lloyds Insurance Company, filed independent lawsuits against National Lloyds, claiming they were underpaid on claims following two hail storms in Hidalgo County. The Multidistrict Litigation Panel of Texas (MDL Panel) granted the motions of other insurance carriers seeking to transfer cases arising from the hail storms to a pretrial court and subsequently transferred Plaintiffs’ claims to the same pretrial court. At issue in this case was National Lloyd’s failure to produce certain information requested by Plaintiffs. The pretrial court entered an order compelling National Lloyds to produce six categories of documents, including “management reports and emails,” and assessed sanctions for attorney’s fees. National Lloyds sought mandamus relief, asserting that the compelled discovery was overbroad. The Supreme Court conditionally granted mandamus relief, holding (1) the pretrial court abused its discretion in compelling production of the management reports and emails; and (2) because the pretrial court’s order was overboard as the management reports and emails, but because National Lloyds failed to produce five other categories of discovery, the sanctions award must be reevaluated. View "In re National Lloyds Insurance Co." on Justia Law

A person who pays for a trip to the emergency room out-of-pocket can be charged significantly more for care than a person who has insurance. This case centered on whether a person could maintain an action challenging this variable pricing practice under the Unfair Competition Law, the Consumer Legal Remedies Act or and action for declaratory relief. The Court of Appeals concluded after review of this case that most of the claims asserted by plaintiff Gene Moran lacked merit. However, he sufficiently alleged facts supporting a conclusion that he had standing to claim the amount of the charges defendants' hospital bills self-pay patients was unconscionable. Therefore, the Court reversed the trial court's dismissal of Moran's case, and remanded for further proceedings. View "Moran v. Prime Healthcare" on Justia Law

Sharel Kenney appealed the trial court’s grant of summary judgment in favor of USAA Casualty Insurance Company (USAA-CIC) and Foremost Insurance Company (Foremost). Kenney purchased a motorcycle in Slidell, Louisiana. Kenney, a Louisiana resident, completed a Louisiana Motorcycle Insurance Application with Foremost, which included an Uninsured/Underinsured Motorist Bodily Injury Coverage Form (“UMBI Form”). Pursuant to the Form, Kenney elected not to purchase UMBI coverage. Following receipt of the application and the UMBI Form, Foremost issued a policy to Kenney. Daniel Steilberg, Kenney’s fiancé, was listed as an operator on the insurance policy. While riding the motorcycle, Kenney and Steilberg were involved in an accident with an uninsured motorist on Highway I-90 in Bay St. Louis, Mississippi. After the accident, Kenney made claims for uninsured-motorist coverage under three separate policies. Kenney did receive payments from Foremost representing the actual cash value for property damage to the motorcycle. Kenney also filed a claim with USAA-CIC, the insurer for Kenney’s Dodge Charger, but she was denied payment for medical expenses and uninsured/underinsured-motorist coverage. After the denials of coverage, Kenney filed suit against the uninsured motorise, Foremost, USAA-CIC and Steilberg, Finding that the trial court erred in granting summary judgment as to Foremost but not as to USAA-CIC, the Supreme Court affirmed the trial court in part and reversed and remanded in part. View "Kenney v. Foremost Insurance Co." on Justia Law

Allstate filed a qui tam action on behalf of itself and the State against defendants under the California Insurance Frauds Prevention Act, Insurance Code 1871.7. Following entry of the qui tam judgment, Allstate began efforts to collect it. During its investigation, Allstate learned of a series of real estate transactions conducted by defendants designed to transfer away their assets. Allstate, on behalf of the State, filed an action to set aside the fraudulent transfers of real and personal property. Allstate subsequently obtained a stay of the fraudulent conveyance action and returned to the qui tam court where it filed a motion for an order allocating the qui tam judgment proceeds. The motion was based on a stipulation entered into between the People and Allstate allocating to Allstate 50 percent of the civil penalties and assessments, plus reasonable attorney fees and costs. The trial court granted Allstate's allocation motion and entered the stipulation as judgment. Defendants appealed. The court held that judgment-debtor defendants in qui tam insurance fraud actions are not aggrieved by such allocation orders under section 1871.7, subdivision (g)(2)(A), with the result that they do not have standing to appeal. Accordingly, the court dismissed the appeal. View "People ex rel. Allstate Ins. Co. v. Dahan" on Justia Law

John Boman appealed the grant of summary judgment in favor of the City of Gadsden. Boman worked as a Gadsden police officer from 1965 until he retired in 1991. Following his retirement, Boman elected to pay for retiree health coverage through a group plan offered by Gadsden to retired employees. This retired-employee-benefit plan was also administered by Blue Cross and provided substantially similar benefits to those Boman received as an active employee. In 2000, however, Gadsden elected to join an employee-health-insurance-benefit plan ("the plan") administered by the State Employees' Insurance Board ("the SEIB"). When Boman turned 65 in 2011, he was receiving medical care for congestive heart failure and severe osteoarthritis of the spine. After his 65th birthday, Blue Cross began denying his claims for medical treatment based on the failure to provide Blue Cross with a "record of the Medicare payment." However, Boman had no Medicare credits. Boman was hired before March 31, 1986, and, although Gadsden did begin participation in the Medicare program in 2006, Boman's employee group had not opted to obtain Medicare coverage before Boman retired. Consequently, Boman never paid Medicare taxes and did not claim to have Medicare coverage. The SEIB ultimately determined that the plan was the secondary payer to Medicare. Boman sued Gadsden, asserting that it had broken an agreement, made upon his employment, to provide him with lifetime health benefits upon his retirement. Boman also sued the members of the SEIB charged with administering the plan, challenging the SEIB's interpretation of the plan. Finding no reversible error in the grant of summary judgment to Gadsden, the Supreme Court affirmed. View "Boman v. City of Gadsden" on Justia Law

A mudslide destroyed a commercial building in Boulder, Colorado, owned by Paros Properties LLC and insured under a policy issued by Colorado Casualty Insurance Company. Paros filed an insurance claim but the Insurer denied payment because damage from mudslides was excluded from policy coverage. Paros then filed a state-court suit seeking payment under the Policy and damages for bad-faith breach of the insurance contract. It argued that the mudslide caused the building to explode, bringing the incident within the scope of an explosion exception to the Policy’s mudslide exclusion. The Insurer removed the action to federal court, which granted summary judgment to the Insurer. On appeal Paros argued: (1) that the district court lacked subject-matter jurisdiction because the Insurer’s removal from state court was untimely; and (2) that the district court erred on the merits in holding that there was no coverage. After its review, the Tenth Circuit held that the notice of removal was too late. But because the district court correctly ruled on the merits and the jurisdictional requirements were satisfied at that time, the Court affirmed the judgment below rather than burden the state court and the parties by requiring relitigation. View "Paros Properties v. Colorado Casualty Ins Co" on Justia Law

At issue in this case was the apportionment of damages between two insurance companies who provided underinsured motorist (UM) coverave to a passenger injured in an automobile accident in Bowling Green. The Circuit Court ordered the companies to share the damages pro rata in proportion to their respective policy limits. Countryway Insurance appealed that decision to the Court of Appeals, contending that the damages should not have been divided at all, but should have been apportioned entirely to United Financial, the insurer of the accident vehicle. To Countryway's dismay, the Court of Appeals panel decided that that argument was "half right:" the Court agreed that the damages should not have been divided, but in its view Countryway, the insurer of the injured passenger, bore full responsibility for the passenger's UM claim. The Supreme Court concluded the Court of Appeals erred in its analysis of the controlling case-law applicable to this matter, reversed and remanded to the Circuit Court for entry of an appropriate order in favor of Countryway. View "Countryway Ins. Co. v. United Financial Casualty Ins. Co." on Justia Law