Justia Insurance Law Opinion Summaries

Floyd Cornelison injured his back at work in 1996 while shoveling dirt. He had back surgery later that year, but it did little to improve his condition. The Board found he was permanently and totally disabled (PTD) in 2001 under the "odd-lot doctrine." TIG Insurance, the workers’ compensation insurer for Floyd’s employer, did not contest that he was PTD; it reclassified his workers’ compensation benefits as PTD in 2000. Floyd also received Social Security disability payments, and the employer received an offset for those payments. The employer and TIG challenged Cornelison's continuing eligibility for workers’ compensation, relying on surreptitious video surveillance and a doctor’s report issued after the doctor viewed an edited surveillance video. Cornelison and his wife sued TIG and a number of others involved in the attempt to terminate benefits; they alleged several causes of action, contending that the video had been purposely edited to provide a false picture of the employee’s physical abilities and that the defendants had participated to varying degrees in a scheme to defraud the Alaska Workers’ Compensation Board. The trial court granted summary judgment or dismissal as to all of the defendants on all counts. After review of the matter, the Supreme Court affirmed in part, and reversed in part. The Court concluded the Cornelisons provided enough evidence to show that a material factual dispute existed about the accuracy of the edited videos and the manner in which the videos were created. They also presented more than generalized claims of emotional distress. Because the superior court failed to address the issues in dispute in the IIED claim against certain persons involved with the making of the videos, we reverse the grant of summary judgment on this claim and remand to the superior court. The case was remanded for further proceedings. View "Cornelison v. TIG Insurance" on Justia Law

Rizvi and his company, Prime Builders, performed repair work for Alikhan, whose house was damaged in a fire. When the work was completed in 2009, Alikhan paid Rizvi only part of what he owed. Rizvi sued for breach of contract in federal court, invoking diversity jurisdiction under 28 U.S.C. 1332. (Rizvi and Prime are Illinois citizens. Alikhan is a citizen of Texas.) When Alikhan failed to appear, plaintiffs obtained a default judgment, then served a citation to discover assets on Allstate under an Illinois statute that governs supplementary proceedings to assist in collecting on a judgment. Allstate responded that Alikhan had no accounts of any sort with Allstate, had no claims pending with Allstate, and was not owed any insurance payments by Allstate. Plaintiffs then asked the court to order Allstate to remit “outstanding insurance proceeds of $110,926.58” and to impose sanctions, arguing that Allstate had participated in negotiating the repair contract and had made a partial payment to Alikhan in 2008. The court ultimately dismissed the supplemental action. The Seventh Circuit affirmed. Allstate is a citizen of Illinois, the supplemental proceeding against Allstate was sufficiently independent of the underlying case as to require its own basis for subject matter jurisdiction. View "Rizvi v. Allstate Corp." on Justia Law

Gay St. Mary Williams and her husband, Larry Williams, filed a complaint against William Tucker and two insurance companies. The Williamses alleged that Mrs. Williams had been severely injured in a motor vehicle accident caused by Tucker. When Tucker failed to answer, the circuit clerk entered a default. The trial court denied Tucker’s motion to set aside the entry of default and his motion for reconsideration. After a hearing, the trial court awarded damages in the amount of $2,962,984.60, plus $300,000 to Larry Williams for loss of consortium, and entered a default judgment in favor of the Williamses. Tucker appealed, arguing that the trial court’s refusal to set aside the entry of default was an abuse of discretion. Alternatively, he challenged portions of the damages award. The Supreme Court found that under a liberal standard applicable to setting aside default judgments, the trial court abused its discretion by refusing to set aside the entry of default in this case. Therefore, the Court reversed the judgment of the trial court and remanded this case for further proceedings. View "Tucker v. Williams" on Justia Law

Darrell Jent suffered serious injuries while working on an oil rig. The rig’s owner, Precision Drilling Company, L.P., paid him a settlement, then made a claim on its insurance. The insurance company, Lexington Insurance Company, denied the claim. Precision sued, contending that Lexington should have reimbursed the money it paid Jent. Lexington issued two insurance policies covering Precision for accidents exactly like Jent's. However, Lexington argued that under Wyoming state law, the policies were a nullity, so any coverage here was more illusory than real and that Precision was solely responsible. "There can be no doubt that Wyoming law usually prohibits those engaged in the oil and gas industry from contractually shifting to others liability for their own negligence." The district court agreed with Lexington and granted its motion for summary judgment. After review, the Tenth Circuit reversed, finding that the district court misinterpreted the statute that was grounds for Lexington's motion. The case was then remanded for further proceedings. View "Lexington Insurance v. Precision Drilling" on Justia Law

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