Justia Insurance Law Opinion Summaries

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

In 2007, the Sonoma County project’s owner sued Hearn, the general contractor, Second Generation, the roofer, and other subcontractors for design and construction defects. Hearn cross-complained against Second Generation and others. In 2009, Hearn assigned its interests under its subcontracts to two insurers, North American and RSUI. Hearn then settled with the owner and all but two subcontractors, one of which was Second Generation. Hearn filed an amended cross-complaint, purportedly in the name of the insurers, against those subcontractors, adding breach of a contractual obligation to obtain insurance and seeking equitable contribution for Hearn’s defense costs premised on a breach of that duty. In 2013, the court dismissed the cross-complaint against Second Generation on procedural grounds, awarded $30,256.79 in costs and granted prevailing party attorney fees of $179,119. Second Generation moved to amend the orders to name North American as a judgment debtor owing the amounts awarded against Hearn. The trial court denied the motion, stating: Hearn remains the only proper party and that the subcontractor’s exclusive remedy was to pursue a separate action against Hearn’s insurers. The court of appeal reversed, finding that, after the assignment, Hearn was “out of this case.” View "Hearn Pac. Corp. v. Second Generation Roofing, Inc." on Justia Law

Cummins installed asbestos containing products in California and had received hundreds of asbestos bodily injury claims, including many lawsuits, based on exposure to its asbestos containing materials. Cummins purchased 19 U.S. Fidelity insurance policies 1969-1987, and purchased four U.S. Fire policies, 1988-1992, for “primary, umbrella, and or excess insurance policies,” some of which “may be missing or only partially documented.” Cummins and its parent company (Holding, formed in 2014) sought a “declaratory judgment that defendants are obligated to defend and/or indemnify Cummins [Corp.], in full, including, without limitation, payment of the cost of investigation, defense, settlement and judgment . . . , for past, present and future Asbestos Suits under each of the Policies triggered by the Asbestos Suits.” The trial court dismissed without leave to amend, finding that Holding lacked standing. The court of appeal affirmed. Holding, the controlling shareholder of Cummins, does not have a contractual relationship with the insurers and is not otherwise interested in the insurance contracts. View "D. Cummins Corp. v. U.S. Fid. & Guar. Co." on Justia Law

Sheldon Hathaway became embroiled in a stranger-originated-life-insurance (STOLI) scheme at the involving his neighbor, Jay Sullivan. Here, Intervenor Defendant-Appellant Windsor Securities, LLC (Windsor) loaned Defendant-Appellant the Sheldon Hathaway Family Trust (the Trust) $200,000 to finance the initial premium on a life insurance policy (the policy) for Hathaway. In exchange, Windsor “receive[d] a moderate return on [its] investment” if a trust repaid the loan. Alternatively, Windsor “foreclose[s] on the life insurance policy that was pledged as collateral” when a trust fails to do so. That’s what happened here. But before Windsor could profit from its investment, Plaintiff-Appellee PHL Variable Insurance Company (PHL) sought to rescind the policy based on alleged misrepresentations in Hathaway’s insurance application. The district court ultimately granted PHL’s motion for summary judgment on its rescission claim, and allowed And it allowed PHL to retain the premiums Windsor already paid. On appeal, Windsor and the Trust (collectively, the defendants) argued the district court erred in granting PHL’s motion for summary judgment because there was at least a genuine dispute of material fact as to whether PHL waived its right to rescind the policy. Alternatively, they argued the district court erred in granting summary judgment because, at a minimum, a genuine dispute of material fact existed as to: (1) whether the application contained a misrepresentation; and (2) whether PHL relied on that misrepresentation in issuing the policy. Finally, even assuming summary judgment was appropriate, defendants argued the district court lacked authority to allow PHL to retain the paid premiums. The Tenth Circuit affirmed, concluding no genuine dispute of material fact existed as to whether PHL waived its right to rescind the policy. Nor was there any genuine dispute of material fact as to whether the application contained a misrepresentation or whether PHL relied on that misrepresentation in issuing the policy. Lastly, the Court held the district court had authority to allow PHL to retain the paid premiums. View "PHL Variable Insurance v. Sheldon Hathaway Family Trust" on Justia Law

In an interlocutory appeal, Pekin Insurance Company challenged the denial of its motion to dismiss for lack of personal jurisdiction. Pekin was an Illinois company not licensed to sell insurance in Mississippi. Pekin asserted it had not entered into a contract with a Mississippi Resident, had not committed a tort in Mississippi and had not done any business in Mississippi-- making in ineligible to be subject to the jurisdiction of Mississippi courts under the Mississippi long-arm statute. The Mississippi Supreme Court, after review of the facts of this case, found that Pekin voluntarily submitted itself to Mississippi's jurisdiction in federal court when it asked that court to resolve the same coverage dispute over which it claimed here that Mississippi courts had no jurisdiction. The Court accordingly affirmed the trial court here in denying Pekin's motion to dismiss, and remanded the case for further proceedings. View "Pekin Insurance Company v. Hinton" on Justia Law

A group of New York-based third party payor health insurers (“TPPs”) that provided prescription drug benefits to union members appealed a Superior Court judgment dismissing with prejudice their second amended complaint. At issue were claims brought by the TPPs under various state consumer fraud laws against AstraZeneca Pharmaceuticals LP, and Zeneca Inc. (collectively “AstraZeneca”). The TPPs alleged that AstraZeneca falsely advertised its more expensive patented prescription drug "Nexium" as superior to the less expensive generic drug "Prilosec," causing the TPPs to overpay for Nexium when generic Prilosec would have sufficed. After conducting an extensive choice of law analysis, the Superior Court determined that New York law controlled the TPPs’ claims. The court then held that the TPPs failed to state a claim under New York’s consumer fraud statute for failure to allege legally sufficient causation. The TPPs appealed, arguing the Superior Court's choice of law analysis was flawed, and that the Superior Court's causation analysis was equally flawed. After a careful review of the record on appeal, the Delaware Supreme Court affirmed the ultimate judgment of the Superior Court, finding it not necessary to discuss whether the Superior Court correctly analyzed the choice of law issue, because under either state consumer fraud statute the TPPs could not recover damages as a matter of law. View "Teamsters Local 237 Welfare Fund, et al. v. AstraZeneca Pharmaceuticals LP" on Justia Law

Stacey and Mark Bent sued USAA for breach of their homeowners’ policy and violations of the Texas Insurance Code. The Bents subsequently stopped making mortgage payments, and their lender foreclosed on their home. The Bents’ case against USAA, however, proceeded to trial. The jury concluded that USAA had not breached the homeowner’s policy but did violate chapter 541 of the Insurance Code. The trial court entered judgment on the jury’s verdict but later granted the Bents’ motion for new trial. The court of appeals conditionally granted a writ of mandamus directing the trial court to vacate its order and render judgment on the jury’s verdict, concluding that the trial court abused its discretion on each of its bases for ordering a new trial. The Bents sought relief in mandamus from the Supreme Court. The Supreme Court denied the Bents’ mandamus petition, holding (1) three of the trial court’s bases for ordering a new trial failed to satisfy the facial requirements set forth in In re Columbia Med. Ctr. of Las Colinas, Subsidiary, L.P. and In re United Scaffolding, Inc.; and (2) on the remaining basis at issue on appeal, the court of appeals correctly found that the record did not support the trial court’s stated rationale. View "In re Bent" on Justia Law