Justia Insurance Law Opinion Summaries

In 2009, CE filed a class action suit under the Telephone Consumer Protection Act, 47 U.S.C. 227, against King. King had commercial general liability and umbrella policies from three insurance companies, but all three disclaimed any obligation to defend or indemnify, based on provisions in the policies that appeared to exempt liability under the Telephone Consumer Protection Act from coverage. The district court certified the class. On remand, CE and King agreed to settle the case for $20 million, the limit of the insurance policies. Their agreement, approved by the district court, provided that only one percent of the judgment ($200,000) could be executed against King. Upon learning of the proposed settlement, the insurers sought a state court declaratory judgment. A state court ruled that the insurance policies do not cover liability under the Act, but CE is appealing that decision. After the settlement agreement in the federal case, but before its approval, the insurers moved to intervene under Fed.R.Civ.P. 24(a), (b), hoping to delay approval of the settlement until there was a state-court determination. The Seventh Circuit affirmed denial of the motion to intervene as untimely. View "Valley Forge Ins. Co. v. King Supply Co., LLC" on Justia Law

Manuel’s home burned down while he and his family were vacationing in Las Vegas. Manuel had insured his home through MDOW with a policy providing $150,000 for the house, $75,000 for personal property, and $45,000 for added costs. Manuel filed a claim for the fire, but MDOW denied it. MDOW told Manuel that it believed he or someone acting on his behalf had intentionally set the fire and that Manuel’s claim form contained fraudulent information. Manuel sued. A jury found that MDOW proved by a preponderance of the evidence that Manuel “either burned his home or caused it to be burned.” The jury did not decide whether Manuel had intentionally misrepresented information during the fire investigation. The Eighth Circuit affirmed, agreeing even under an “implied bias” test of juror impartiality, there was insufficient potential bias alleged to warrant a new trial. The court rejected an argument that the court erred by allowing the testimony of MDOW’s expert witness, who disagreed with parts of the National Fire Protection Association 921 Guide for Fire and Explosion Investigations. View "Manuel v. MDOW Ins. Co." on Justia Law

Alfa Mutual General Insurance Company ("Alfa") petitioned for a writ of mandamus to direct the Mobile Circuit Court to grant its motion seeking to realign the parties to the underlying litigation so that Alfa may "opt out" of participation in the trial. In October 2012, respondent Mark Trotter was injured when a "road sweeper" he was operating was struck by a vehicle being operated by Daniel Elijah Davis, an uninsured motorist. In October 2014, Trotter sued Alfa seeking to recover uninsured/underinsured motorist ("UIM") benefits pursuant to a policy of insurance issued by Alfa to Trotter, which was in place at the time of the 2012 accident. Trotter did not include Davis as a codefendant in his action against Alfa. Alfa subsequently filed a third-party complaint adding Davis as a third-party defendant. Specifically, Alfa's third-party complaint alleged that, to the extent it was determined to be liable to Trotter for UIM benefits, then Alfa was subrogated to and entitled to recover the amount of that liability from Davis. Thereafter, Alfa filed a "Motion to Realign Parties" in which it asked to "opt out" of the litigation. Without explaining the findings on which its decision was based, the trial court denied Alfa's motion. The Alabama Supreme Court concluded after a review of the record, that Alfa has demonstrated a clear legal right to have its motion to realign the parties granted and to allow it to opt out of the underlying litigation. No authority is cited requiring that, in order to make the permitted election, Alfa must first release the right of subrogation to which it was also clearly entitled. View "Ex parte Alfa Mutual General Insurance Company." on Justia Law

Charles and Deborah Bate were both seriously injured in a head-on vehicle collision. After obtaining a judgment against the driver of the opposing vehicle the Bates sued Greenwich Insurance Company seeking underinsured motorist coverage under a policy allegedly issued to Charles Bate’s employer by Greenwich. Greenwich did not answer the petition, and the Bates obtained a default judgment in the amount of $3 million. More than two years later, Greenwich filed an amended motion to set aside the default judgment as void, arguing that service of process was invalid. The trial court set aside the default judgment as void, stating that there was no valid service of process. The Supreme Court reversed, holding that the Bates properly effected service of process under Mo. Rev. Stat. 375.906 and complied with all service requirements of that statute. View "Bate v. Greenwich Ins. Co." on Justia Law

In this insurance matter, the district court entered a final judgment and a post-judgment order. The Supreme Court affirmed the judgments of the district court. After the time for filing a petition for rehearing expired and no petition for rehearing was filed, the remittitur issued. Three days later, Appellants’ counsel filed a motion to recall the remittitur, claiming that he did not become aware of the order of affirmance due to technical difficulties created by a virus on counsel’s servers “as well as switching to a new case management system.” However, the court’s electronic record reflected that an official notice of the order of affirmance was sent to Appellants’ counsel’s electronic filing account, and an email was sent to two separate email addresses at Appellants’ counsel’s law firm. The Supreme Court denied the motion, holding that because Appellants’ counsel could have learned of the disposition in time to timely file a petition for rehearing, Appellants failed to demonstrate a basis on which the remittitur should be recalled. View "Fulbrook v. Allstate Ins. Co." on Justia Law

The issue this case presented for the Supreme Court's review centered on recovery under an uninsured motorist (UM) insurance policy. Specifically, the issue was whether the burden of proof on summary judgment between the insured and the UM carrier was misallocated. The UM carrier denied coverage based on a claim that the at-fault driver was not "uninsured" as defined in the UM policy at issue here because the drive's liability carrier had not "legally denied" coverage. After review, the Supreme Court concluded the Court of Appeals erred in placing the burden of proof on the UM carrier in this instance, and therefore reversed. View "Travelers Home & Marine Ins. Co. v. Castellanos" on Justia Law

More than three years after learning his insurance policy had expired and his agent had not procured a replacement, Joe Tally sued his insurance agent, Ronald McMorris, claiming he “breached a standard of care recognized in the State of Mississippi to the insured for not notifying [him] of the cancellation of [his insurance] policy.” Because Tally failed to bring his claims within the three-year statute of limitations, his claims were time-barred. The Supreme Court therefore reversed the circuit court’s denial of McMorris’s motion for summary judgment and rendered judgment in his favor. View "McMorris v. Tally" on Justia Law

In 2010, Debra Hackett was seriously injured in an accident in Sacramento County in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine McDonold jackknifed and collided with the vehicle being driven by Hackett. In 2012, the Hacketts filed a personal injury action in Sacramento County against Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages. Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC), who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking had an excess liability insurance policy with Lexington Insurance Company (LIC), who retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as counsel. In 2014, Silva Trucking and McDonold brought suit in Sacramento County against LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged legal malpractice. The gravamen of the complaint was that the insurers unreasonably refused to accept the policy limit demand when the insured’s liability was clear and damages were known to be in excess of the policy limit. The attorneys failed to advise their insurer clients to accept the demand and the consequences of failing to do so, and failed to advise Silva Trucking and McDonold of their need for personal counsel. LIC and CCIC responded with demurrers. Lewis Brisbois answered with a general denial and asserted 22 affirmative defenses. Under Code of Civil Procedure section 396b, subdivision (a), where an action has been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider opposition to the motion to transfer and may retain the action in the county where filed to promote the convenience of witnesses or the ends of justice. The question this case presented for the Court of Appeal's review was whether, in a multi-defendant case, an answer must be filed by all defendants before the court may consider opposition to the motion to transfer venue. The Court concluded the answer was yes. In this case, the trial court considered opposition to the motion before all defendants had answered the complaint. Accordingly, the Court issued a preemptory writ of mandate directing the trial court to vacate its order denying the motion to transfer and to issue a new order granting the motion. View "Cholakian & Assoc. v. Super. Ct." on Justia Law

Nova is the trustee and fiduciary of the Charter Oak Benefit Plan. A participating employer took out insurance policies on its employee’s (Spencer) life, totaling $30 million, and placed them into the Plan. Spencer named Universitas as the sole, irrevocable beneficiary. After Spencer’s death, the insurer paid $30 million to the Plan. Nova denied Universitas’s claim for the proceeds. In binding arbitration, an arbitrator held Nova liable for $26,558,308. Nova declined to pay, filing suit to vacate the arbitration award. The court confirmed the award. Nova moved for reconsideration and for a stay of post‐judgment discovery, then moved to dismiss for lack of subject matter jurisdiction. All were rejected. The district court granted Nova’s application to reinstate the motion to dismiss, but warned of potential penalties. Nova’s then‐counsel withdrew the motion; new counsel filed an amended motion, arguing complete diversity was lacking because Charter Oak was a citizen of New York, as was Universitas. Charter Oak was not a party; Nova argued that it was “a real and substantial party to the controversy.” The district court dismissed the motion. Nova refused to pay or to cooperate in discovery of its assets. The Second Circuit affirmed, awarding costs. The district court then sanctioned Nova by requiring it to deposit $30,181,880, the amount of the outstanding judgment, with the court. The Second Circuit vacated, holding that the court may not collect damages owed to a party by imposition of a sanction. View "Universitas Educ. LLC v. Nova Group Inc." on Justia Law

The Patient Protection and Affordable Care Act (ACA) creates “navigators,” to assist consumers in purchasing health insurance from exchanges, 42 U.S.C. 18031(i), and authorizes the Department of Health and Human Services to establish standards for navigators and exchanges. HHS regulations recognize: federal navigators, certified application counselors (CACs), and non-navigator assistance personnel. They conduct many of the same activities, but federal navigators have more extensive duties. Plaintiffs, federally-certified counselor designated organizations, employ CACs. The federal government established a Missouri Federally Facilitated Exchange. The Health Insurance Marketplace Innovation Act (HIMIA), Mo. Rev. Stat. 376.2000, regulates “person[s] that, for compensation, provide[] information or services in connection with eligibility, enrollment, or program specifications of any health benefit exchange.” Regulatory provisions dictate what state navigators and cannot do. Plaintiffs challenged: the definition of state navigators; three substantive provisions; and penalty provisions. The district court granted a preliminary injunction, finding that the ACA preempted HIMIA. The Eighth Circuit affirmed in part, finding likelihood of success in challenges to HIMIA requirements that: state navigators refrain from providing information about health insurance plans not offered by the exchange; that in some circumstances, the navigator must advise consultation with a licensed insurance producer regarding private coverage; and that CACs provide information about different health insurance plans and clarify the distinctions. The court vacated the preliminary injunction, holding that ACA does not entirely preempt HIMIA. View "St. Louis Effort For AIDS v. Huff" on Justia Law