Justia Insurance Law Opinion Summaries

In December 2007, a driver rear-ended Donald Etherton’s vehicle. He injured his back in the accident. Etherton filed a claim with his insurer, Owners Insurance Company (“Owners”), seeking uninsured or underinsured motorist coverage up to his policy limit. After months of back and forth, Owners offered to pay an amount significantly lower than the policy limit. Etherton sued, alleging claims for (1) breach of contract and (2) unreasonable delay or denial of a claim for benefits. A jury found in Etherton’s favor on both claims. The district court entered judgment for Etherton, awarding $2,250,000 in damages. Owners appealed, arguing the trial court erred: (1) by denying Owners' motion for a new trial based on the allegedly erroneous admission of expert testimony; (2) by denying its motion for judgment as a matter of law based on Owners' purported reasonableness; and (3) in granting Etherton's motion to amend the judgment. Finding no reversible error, the Tenth Circuit affirmed in all respects. View "Etherton v. Owners Insurance Company" on Justia Law

In June 2012, a hailstorm damaged Plaintiff KCOM’s motel. Soon a dispute arose between KCOM and its insurer, defendant Employers Mutual Casualty (EMC), over the extent of the damage. In October 2012, following receipt of an inspection report, KCOM submitted a proof of loss of $631,726.87. EMC admitted coverage but not the amount of loss. Dissatisfied, KCOM invoked the insurance contract’s appraisal provision. KCOM claimed there were issues with the appraisal process, prompting it to ultimately file suit against EMC, alleging breach of contract, unreasonable delay and denial of benefits, and bad faith breach of the insurance contract. The threshold question presented for the Tenth Circuit's review in this state law diversity action was whether the Court had appellate jurisdiction over the district court’s non-final order denying confirmation of a property loss appraisal. The Court concluded it did not, and dismissed the appeal. View "KCOM, Inc. v. Employers Mutual Casualty Co." on Justia Law

Appellant-plaintiff Robert Leritz was a Kansas resident whose motorcycle and two other vehicles were garaged in Kansas under an insurance policy issued by Appellee, Farmers Insurance Company (Farmers) in Kansas. Plaintiff was injured in a motorcycle accident in Oklahoma when Defendant Larry Yates made a left hand turn and collided with Plaintiff causing serious bodily injuries. Plaintiff brought this action alleging that he had incurred medical expenses and suffered damages exceeding Yates's liability coverage. There was a question as to whether he could stack his uninsured motorist (UM) coverage based on his ownership of policies on each of his three vehicles. Oklahoma allowed the practice, until the Oklahoma Legislature amended the UM provision in 2014. Kansas did not allow stacking. The trial court granted summary judgment to the insurer and the Court of Civil Appeals affirmed, applying the insurer's proposed solution to a perceived conflict of laws issue. The Oklahoma Supreme Court found no conflict of laws issue on these facts because the policy specified which law would apply to an issue of stacking of policies. Giving the policy provisions effect made a choice of law analysis unnecessary; the Court vacated the Court of Civil Appeals, reversed the district court and remanded for further proceedings. View "Leritz v. Farmers Insurance Company, Inc." on Justia Law

Defendants, Markel Corporation, Markel Services, Inc. (Markel Services), and Essex Insurance Company (Essex), appealed a superior court order denying their motions for summary judgment and granting summary judgment to plaintiff Michael Newell, in this insurance coverage action. Newell was allegedly injured in a slip and fall accident at a property owned by Brames, Inc. (Brames) in Laconia. Brames was insured under an Amusement Park General Liability Policy issued by Essex. Essex was a subsidiary of Markel Corporation and Markel Services was Markel Corporation’s claims handling branch. Newell filed two personal injury actions arising from his slip and fall. The first action against Brames' co-owner and treasurer, was settled out-of-court. In the second lawsuit, Newell sued Ivy Banks, the person who allegedly cleaned the floor upon which Newell slipped and injured himself. Defendants received notice of the Banks action, but declined to defend Banks or intervene. Banks, although properly served, filed neither an appearance nor an answer and was defaulted. A default judgment was entered against Banks for $300,000, the full amount of damages sought by Newell. Newell brought suit against defendants to recover the amount of the default judgment, arguing he was a third party beneficiary under the insurance contract between Brames and Markel/Essex. On appeal, defendants argued the trial court erred in determining that the language of the Policy was ambiguous and that Banks was a “volunteer worker” under the Policy. Finding no reversible error, the Supreme Court affirmed denial of defendants' motion for summary judgment. View "Newell v. Markel Corporation" on Justia Law

Respondent Jennifer Hansen was injured in a motor vehicle accident in late 2007. Four months later, she presented an underinsured motorist (“UIM”) claim to petitioner American Family Mutual Insurance Company (“American Family”), insurer of her vehicle. As proof of insurance, Hansen offered lienholder statements issued to her by American Family’s local agent that identified her as the named insured at the time of the accident. American Family’s own records, however, indicated that the named insureds on the policy at the time of the accident were Hansen’s stepfather and mother, William and Joyce Davis (the “Davises”). In reliance upon the policy as reflected in its own records, American Family determined that Hansen was not insured under the policy and denied coverage. Hansen filed an action against American Family asserting claims for breach of contract, common law bad faith, and statutory bad faith for unreasonable delay or denial of benefits under sections 10-3-1115 and -1116, C.R.S. (2015). Prior to trial, American Family reformed the contract to name Hansen as the insured, and the parties settled the breach of contract claim, leaving only the common law and statutory bad faith claims for trial. The trial court ruled that the deviation in the records issued by American Family’s agent and those produced by its own underwriting department created an ambiguity in the insurance policy as to the identity of the named insured, and instructed the jury that an ambiguous contract must be construed against the insurer. The jury found in favor of Hansen on the statutory bad faith claim, indicating on a special verdict form that American Family had delayed or denied payment without a reasonable basis for its action. The trial court awarded Hansen attorney fees, court costs, and a statutory penalty. American Family appealed the judgment and award of statutory damages, arguing, among other things, that the trial court erred in finding that the lienholder statements created an ambiguity in the insurance contract as to the identity of the insured and that, at the very least, the contract was arguably unambiguous such that the company had a reasonable basis to deny coverage and could not be liable for statutory bad faith. The court of appeals affirmed, finding that the lienholder statements created an ambiguity and that, even assuming American Family’s legal position was a reasonable one, American Family could still be held liable for statutory bad faith. After its reverse, the Supreme Court reversed. Because the insurance contract unambiguously named William and Joyce Davis as the insureds at the time of the accident, the trial court and court of appeals erred in relying on extrinsic evidence to find an ambiguity in the insurance contract, "[a]n ambiguity must appear in the four corners of the document before extrinsic evidence can be considered." Accordingly, American Family’s denial of Hansen’s claim in reliance on the unambiguous insurance contract was reasonable, and American Family could not be held liable under sections 10-3-1115 and -1116 for statutory bad faith. View "Am. Family Mut. Ins. Co. v. Hansen" on Justia Law

Defendant Alfa Mutual Insurance Company petitioned for mandamus relief when a circuit court denied its motion to strike an amended complaint filed by plaintiffs Ronald and Mary Land on a dispute between the parties on a dispute arising out of a farm-owner's policy insurance issued to the Langs by Alfa. The matter was set for trial and was continued on at least four occasions. Thereafter, in connection with further discovery efforts by the Langs, Alfa asked whether the Langs intended to amend their original complaint and allegedly received no response from the Langs' attorney. Almost exactly two years from the filing date of their original complaint, the Langs filed an amended complaint, which added a fictitiously named defendant identified as the party "whose responsibility it was to inspect the property of the Langs, to insure their farm policy provide[d] adequate coverage and/or that the Langs were not paying for insurance to property which they did not own." The Langs' complaint, as amended, added new counts asserting negligence and fraudulent/reckless misrepresentation and an additional breach-of-contract claim. Alfa moved to strike the amended complaint on numerous grounds. The Supreme Court granted Alfa's application and issued the writ, finding that the Langs failed to demonstrate good cause ("or, in fact, any cause") for the excessive delay in amending their complaint when they knew or should have known of the claims before or at the time they filed their original complaint. "Further, the claims were actually suggested by Alfa's counsel." At the time the Langs filed their amendment, the case had been set for trial on several occasions, and the amendment would unduly prejudice Alfa, who, as a result of the Langs' excessive delay, could not fully and fairly defend against the claims added by the amendment because a key witness had died.The trial court exceeded its discretion in allowing the Langs to amend their complaint so near the trial date in order to add claims based on facts that were or ought to have been known to the Langs well prior to that date. View "Ex parte Alfa Mutual Insurance Company." on Justia Law

Linda Hodge filed suit against State Farm Mutual Automobile Insurance Company for first-party no-fault benefits related to injuries she sustained when she was struck by a car insured by State Farm. Hodge’s complaint indicated that the amount in controversy was $25,000, which was within the district court’s jurisdiction. During discovery, State Farm came to believe that Hodge would present at trial proof of damages in excess of the district court’s $25,000 jurisdictional limit. The trial court denied State Farm’s motion in limine to prevent Hodge from presenting evidence of claims exceeding $25,000, and to prevent the jury from awarding damages in excess of $25,000. At trial, Hodge did present proof of injuries exceeding $25,000, and the jury returned a verdict of $85,957. The district court reduced the verdict to the jurisdictional limit of $25,000, and it awarded $1,769 in no-fault interest. State Farm appealed, claiming that the amount in controversy exceeded the district court’s jurisdictional limit and that capping Hodge’s damages at $25,000 could not cure the defect. The circuit court agreed and reversed the district court’s order of judgment. The Court of Appeals affirmed the circuit court’s decision that the district court was divested of jurisdiction when pretrial discovery, counsel’s arguments, and the evidence presented at trial pointed to damages in excess of $25,000. The Supreme Court held "what the jurisprudence of this state has long established:" in its subject-matter jurisdiction inquiry, a district court determines the amount in controversy using the prayer for relief set forth in the plaintiff’s pleadings, calculated exclusive of fees, costs, and interest. Hodge’s complaint prayed for money damages “not in excess of $25,000,” the jurisdictional limit of the district court. Even though her proofs exceeded that amount, the prayer for relief controlled when determining the amount in controversy, and the limit of awardable damages. Because there were no allegations, and therefore no findings, of bad faith in the pleadings, the district court had subject-matter jurisdiction over the plaintiff’s claim. View "Hodge v. State Farm Mutual Automobile Ins. Co." on Justia Law

In 1993, Willie Barnes suffered an amputation of his left leg below the knee in an industrial accident at the Georgia-Pacific (GP) wood processing plant where he worked. GP, its insurer Georgia Conversion Primary Ins. Co. and its workers’ compensation servicing agent CCMSI, accepted the claim as catastrophic and began paying temporary total disability (TTD) benefits. Barnes was fitted with a prosthetic leg and returned to lighter duty work in January 1994. On January 30, 1994, GP stopped paying TTD benefits to Barnes, and the TTD benefits were replaced with permanent partial disability (PPD) benefits. The PPD benefits continued until May 1998. In 2006, the GP plant was sold to Roseburg Forest Products Company (Roseburg). Barnes continued working for Roseburg, but was laid off on September 11, 2009. On November 13, 2009, Barnes consulted a doctor regarding chronic knee pain. Two years later, he was fitted for a new prosthetic leg, which was paid for by CCMSI, the company that continued as the workers’ compensation servicing agent for Roseburg and Roseburg’s insurer, ACE American Insurance Co. (ACE American). On August 30, 2012, Barnes filed a claim to resume TTD benefits, asserting the date of his original workplace accident August 13, 1993 as the date of injury. On November 30, 2012, Barnes filed a separate notice of claim, alleging a fictional new injury based on the date that he was terminated from his employment, September 11, 2009. The Administrative Law Judge denied the claims as barred by the applicable statutes of limitation set out in OCGA 34-9-104 (b) and 34-9-82. The State Board of Workers’ Compensation (Board) affirmed, as did the trial court. However, the Court of Appeals reversed, finding that both of Barnes’ claims were not barred by the applicable statutes of limitation. The Supreme Court concluded the appellate court erred in its interpretation of the applicable statutes of limitations in these cases, and reversed. View "Roseburg Forest Products Co. v. Barnes" on Justia Law

After a foreclosure case, Davis filed various claims against an entity that he calls “Wells Fargo U.S. Bank National Association as Trustee for the Structured Asset Investment Loan Trust, 2005-11” as the purported holder of Davis’s mortgage. Davis also sued Assurant, believing it to be the provider of insurance on his home. His claims arise from damage that occurred to his house after Wells Fargo locked him out of it, which went unrepaired and worsened into severe structural problems. The district court dismissed Davis’s claims against Wells Fargo, on the grounds that claim preclusion and a statute of limitations barred recovery, and claims against Assurant for lack of subject matter jurisdiction. The Court reasoned that Davis lacked standing to bring those claims because he sued the wrong corporate entity, namely Assurant, when he should have sued Assurant’s wholly-owned subsidiary, ASIC. The Third Circuit affirmed dismissal of Wells Fargo, but vacated as to Assurant. Standing is a jurisdictional predicate, but generally focuses on whether the plaintiff is the right party to bring particular claims, not on whether the plaintiff has sued the right party. View "Davis v. Wells Fargo" on Justia Law

Federated Mutual, the insurer, filed an interpleader suit to determine the rights of Moody Station and the Big Store to insurance proceeds. The district court found Moody Station was not entitled to the full amount and awarded attorney fees to Federated. The court concluded that Moody Station is correct that there is no jurisdiction under 28 U.S.C. 1335’s interpleader because the two adverse claimants are both citizens of Missouri. The court determined that diversity jurisdiction exists in this case because there is diversity of citizenship and the amount in controversy is met. Although the district court did not explicitly find a partial loss, the district court implicitly rejected that a total loss occurred. In this case, the district court did not clearly err in determining the actual cash value of the destroyed property. The court concluded, however, that the district court clearly abused its discretion in ordering Moody Station to pay attorney fees to Federated where Federated has consistently opposed Moody Station’s attempts to collect on its policy and is not a disinterested stakeholder deserving attorney fees. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Federated Mutual Ins. Co. v. Moody Station and Grocery" on Justia Law