Justia Insurance Law Opinion Summaries

Plaintiff was injured in an automobile accident and received medical treatment at Benefis Health System, Inc. Plaintiff had healthcare coverage as a TRICARE beneficiary and also had medical payments coverage through his insurance carrier, Kemper. Plaintiff's medical treatment costs totaled $2,073. Benefis accepted $662 from TRICARE as payment in full satisfaction of the bill pursuant to a preferred provider agreement (PPA) between Blue Cross Blue Shield and Benefis. Benefis subsequently received $1,866 from Kemper, upon which Benefis reimbursed TRICARE's payment in full. Plaintiff filed an individual and class action complaint, claiming that he was entitled to the additional $1,204 that Benefis received from Kemper over and above the TRICARE reimbursement rate. Plaintiff filed a motion for judgment on the pleadings, asking the district court to find Benefis breached its contract with TRICARE and that Benefis was liable for Plaintiff's damages. The district court converted the motion into a motion for summary judgment and granted summary judgment to Plaintiff. The Supreme Court reversed the grant of summary judgment, holding (1) Plaintiff was not entitled to pocket the difference between the TRICARE reimbursement rate and the amount Benefis accepted from Kemper; and (2) Plaintiff failed to establish any damages that resulted from the alleged breach. View "Conway v. Benefis Health Sys., Inc." on Justia Law

Plaintiff left his senior position in 1996, having participated in the Retirement Income Security Plan for Employees (RISPE), a tax-qualified defined benefits plan that guarantees specified retirement benefits, and in the Excess Benefit Plan, a defined unfunded benefits pension plan under which benefits are paid directly by the employer rather than by a trust funded by the employer. Both plans allowed him to choose between an annuity and an actuarial equivalent lump sum distribution. In 2009 he received his RISPE lump sum, $325,054.28 and his Excess Plan lump sum, $218,726.38. The discount rate used to calculate lump sum RISPE benefits was a “segment rate,” 26 U.S.C. 417(e)(3)(C), of 5.24 percent. The discount rate applied to the Excess Plan lump sum was 7.5 percent. The district court rejected his ERISA claim that the discount rate required by both plans was a rate computed by the Pension Benefit Guaranty Corporation on the basis of annuity premiums charged by insurance companies. The Seventh Circuit affirmed. With respect to the RISPE, the accrued benefit, which cannot be reduced retroactively, is the annuity; the lump sum is not the accrued benefit and can be reduced retroactively. The court rejected a conflict-of-interest argument concerning calculation of the Excess Benefit Plan discount rate. View "Dennison v. MONY Life Ret. Income Sec. Plan for Emps." on Justia Law

Plaintiffs purchased variable universal life insurance policies from defendant. Plaintiffs subsequently filed a class action suit against defendant under the Securities Litigation Uniform Standards Act (SLUSA), 15 U.S.C. 78bb(f)(1), for levying excessive cost of insurance charges. The court concluded that claims of breach of contract and breach of the duty of good faith and fair dealing were not precluded by SLUSA, even if such claims related to the purchase or sale of a covered security. The court reversed the district court's dismissal of the two contract claims, on the condition that plaintiffs amend their complaint to remove any reference to deliberate concealment or fraudulent omission. The court affirmed the dismissal of the class claim for unfair competition in violation of California law. View "Freeman Investments, L.P., et al v. Pacific Life Ins. Co." on Justia Law

Homeowners, who were represented by the Mostyn Law Firm, filed claims against State Farm in Texas state court after Hurricane Ike. State Farm removed several cases to federal court on diversity grounds. The Firm and State Farm then entered into an agreement whereby the Firm promised to abandon its clients' claims against individual adjusters and forgo suing them in the future in exchange for State Farm's promise not to remove any Hurricane Ike cases to federal court. At issue on appeal was whether the phrase "any Hurricane Ike cases," in a contract covering "all Hurricane Ike cases that either have been filed or will be filed in the future," encompassed class-action lawsuits. The court affirmed and agreed with the district court's conclusion that the negotiated contract covered all past, present, and future lawsuits filed by the Firm against State Farm on behalf of homeowners, as individuals or part of a class, whose properties were damaged during Hurricane Ike. View "Horn, et al v. State Farm Lloyds" on Justia Law

This case principally involved challenges to the application, in Missouri, of the provision of the Plan administered by BCBS-KC that required a Plan enrollee who received benefits in connection with any injury in addition to compensation from a third party must reimburse BCBS-KC the amount of benefits paid. Given the state's antisubrogration laws, plaintiff contended that BCBS-KC was unable to recover its reimbursement liens in Missouri. BCBS-KC removed the action to federal district court and plaintiff then moved to remand the matter to state court. BCBS-KC subsequently appealed the district court's remand based upon the local controversy exception to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d); its determination that federal common law was not contemplated in this action; and its decision that BCBS-KC could not remove this matter under the federal officer removal statute. Because the court determined that this matter was properly in federal court under the federal officer removal statute, the court need not address plaintiff's remaining claims. That said, the court did not delve into the CAFA claim, but rather reversed the district court's judgment and remanded this matter for further consideration, directing that this action remain in federal court. View "Jacks v. Meridian Resource Co., et al" on Justia Law

In 1992 Navistar attempted to reduce its costs for retired employee health and life insurance benefits. Navistar’s retirement benefit plan is a registered employee health benefit plan under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 and Navistar is both plan administrator and fiduciary. In 1993, the district court entered judgment in a class action challenging the change, adopting an agreement between the parties and retaining jurisdiction. The Agreement established the Retiree Health Benefit and Life Insurance Plan. The Plan established the Health Benefit Program Summary Plan Description, which contains a description of the health benefits and is furnished to all beneficiaries. The Agreement divides health benefits into two plans: Plan 2 for those eligible for Medicare and Plan 1 for those who are not eligible. A prescription drug benefit was provided under the Agreement, identical for both Plan 1 and Plan 2. When Navistar moved to substitute Medicare Part D into the Plan, class members claimed violation of the Agreement. The district court ordered Navistar to reinstate, retroactively, the prescription drug benefit that was in effect before Navistar made the unilateral substitution. The Sixth Circuit affirmed,View "Shy v. Navistar Int'l Corp." on Justia Law

Northwestern sold an annuity to approximately 36,000 persons: about 3,000 live in Wisconsin. In 1985 Northwestern changed its calculation of the annual dividend. In a 2001 suit by annuitants in Wisconsin state court, the judge declined to certify the class, ruling that a claim for damages creates individual issues that make class treatment imprudent, and a national class is not manageable given differences in applicable state laws. A second suit initially proposed a class limited to Wisconsin annuitants and sought only a declaratory judgment that the 1985 change is invalid. The suit was certified as a class action and the judge declared that Northwestern violated the contracts, breached fiduciary duties, and should pay substantial damages. The class then amended to seek damages for annuitants in every state. Contending that the amendment implicated the Class Action Fairness Act, 28 U.S.C. 1332(d), 1453, Northwestern filed notice of removal. The district court remanded the suit. The Seventh Circuit vacated and remanded, reasoning that the doctrine of law of the case does not apply on appeal and that it will review the state trial court decision on the merits as it would, had the identical decision been made initially by the federal district judge. View "Laplant v. NW Mut. Life Ins. Co." on Justia Law

The Supreme Court granted certiorari in these consolidated cases to resolve an issue of first impression: whether a member of a putative class was entitled to the suspension of prescription provided for in La. C.C.P. art. 596 when an independent, individual lawsuit is filed prior to a ruling on the class certification issue. The respective district courts in each of these cases sustained exceptions of prescription, dismissing plaintiffs' individual lawsuits filed prior to a resolution of the class certification issue in class action proceedings in which the plaintiffs were putative members. The court of appeal affirmed the dismissals, finding that the filing of an individual lawsuit by a member of a putative class prior to a ruling on the class certification issue operates as an "opt out" of the class action and a forfeiture of the suspension provisions of La. C.C.P. art. 596. After reviewing the relevant statutory provisions, the Supreme Court found that because plaintiffs were members of a class asserted in a class action petition, they were entitled to the benefits of the suspension of prescription provided under La. C.C.P. art. 596, notwithstanding that they also filed individual actions prior to a resolution of the class certification issue. As a result, the Court reversed the judgments of the lower courts sustaining exceptions of prescription to the petitions of the plaintiffs and remanded these matters to the respective district courts for further proceedings. View "Duckworth v. Louisiana Farm Bureau Mutual Ins. Co." on Justia Law

The Supreme Court granted certiorari in this case to consider two separate, but related issues: (1) whether the suspension of prescription provided for in La. C.C.P. art. 596 extended to a putative class member who filed an individual claim after a ruling on the class certification issue and, if so, (2) whether La. C.C.P. art. 596 suspended prescription when the putative class action is filed in another jurisdiction. After reviewing the relevant statutory provisions, the Court found that the filing of an individual lawsuit after a ruling on class certification does not operate as an "opt out" of a class action proceeding and a forfeiture of the benefits of suspension provided in La. C.C.P. art. 596, but that the provisions of La. C.C.P. art. 596 do not extend to suspend prescription on claims asserted in a putative class action filed in a federal court. As a result, the Court reversed the district court's judgment denying the defendant's exception of prescription, sustain the exception, and remanded this case to the district court to allow plaintiffs the opportunity to amend the petition, if they could, to allege facts to show their claims were not prescribed. View "Quinn v. Louisiana Citizens Property Insurance Corp." on Justia Law

This putative class action was one of a number of breach-of-contract suits being brought against financial institutions nationwide by mortgagors who claimed that they were improperly forced to increase flood insurance coverage on their properties. The plaintiff in this case asserted that Bank of America's demand that he increase his flood coverage by $46,000 breached both the terms of his mortgage contract and the contract's implied covenant of good faith and fair dealing. The district court concluded that the pertinent provision of the mortgage unambiguously permitted the lender to require the increased flood coverage and, hence, it granted the defendants' motion to dismiss the complaint. The First Circuit Court of Appeals vacated the judgment of dismissal in favor of the Bank, holding that the mortgage was reasonably susceptible to an understanding that supported the plaintiff's breach of contract and implied covenant claims. Remanded. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law