Justia Insurance Law Opinion Summaries

Donna Miller Bruenger, the ex-wife of the late Coleman Miller, filed a petition for declaratory judgment against Courtenay Ann Miller, Coleman’s daughter, seeking entitlement to Coleman’s Federal Employee’s Group Life Insurance (FEGLI) benefits. Coleman had failed to designate a beneficiary for his FEGLI benefits before his death, and MetLife distributed the benefits to Courtenay. Bruenger argued that Coleman’s legal obligation under a Qualified Domestic Relations Order (QDRO) to assign her the benefits should prevail.The Jefferson Circuit Court ruled against Bruenger, concluding that federal law precluded her claim because Coleman’s employer did not receive the QDRO before his death. Bruenger’s subsequent appeal was dismissed by the Court of Appeals as untimely, and the court also imposed sanctions for filing a frivolous appeal. Bruenger then sought relief under CR 60.02, which the trial court granted, allowing her to refile the appeal. The Court of Appeals dismissed the refiled appeal as frivolous and awarded attorney’s fees to Courtenay.The Supreme Court of Kentucky reviewed the case and determined that the Court of Appeals had jurisdiction to consider the merits of the CR 60.02 relief. The Supreme Court held that RAP 11(B) authorizes the award of attorney’s fees as a sanction for frivolous appeals but found that the imposition of sanctions in this case violated due process because Bruenger was not given notice or an opportunity to be heard. The Supreme Court affirmed the dismissal of the appeal for lack of jurisdiction but reversed the sanctions imposed by the Court of Appeals. View "BRUENGER V. MILLER" on Justia Law

The case involves the Pennsylvania Professional Liability Joint Underwriting Association (JUA), which was established by the General Assembly of the Commonwealth of Pennsylvania nearly fifty years ago to address a medical malpractice insurance crisis. The JUA acts as a professional liability insurer of last resort for high-risk medical providers and is funded solely by premiums paid by its policyholders. Over the years, the JUA has accumulated a surplus of about $300 million through investments. From 2016 to 2019, the Commonwealth attempted to transfer the JUA’s surplus to the General Fund or assume control of the JUA through legislative actions.The United States District Court for the Middle District of Pennsylvania reviewed the case multiple times. In 2017, the JUA sued the Governor after the enactment of Act 44, which mandated the transfer of $200 million from the JUA to the General Fund. The District Court granted a preliminary injunction and later summary judgment in favor of the JUA, holding that the JUA was a private entity and that the Act violated the Takings Clause. In 2018, after the enactment of Act 41, which placed the JUA under the control of the Insurance Department and mandated the transfer of all its assets, the JUA again sued. The District Court ruled in favor of the JUA, reiterating its earlier decision. In 2019, the JUA challenged Act 15, which required the JUA to be funded by the Commonwealth and categorized it as a Commonwealth agency. The District Court granted partial summary judgment for the JUA, holding that certain provisions of Act 15 constituted a regulatory taking and violated the First Amendment.The United States Court of Appeals for the Third Circuit reviewed the case and applied the principles from Trustees of Dartmouth College v. Woodward to determine whether the JUA is a public or private entity. The Court concluded that the JUA is a public entity because it was created to serve a public purpose, exercises the Commonwealth’s coercive power, and only the Commonwealth has a legally protectable interest in the JUA. Consequently, the JUA cannot assert constitutional claims against the Commonwealth. The Court reversed the District Court’s rulings in part, affirmed in part, and remanded for further proceedings. View "Pennsylvania Professional Liability Joint Underwriting Association v. Governor of Pennsylvania" on Justia Law

A roofing contractor in Texas, Stonewater Roofing, Ltd. Co., filed a lawsuit against the Texas Department of Insurance and its Commissioner, Cassie Brown, seeking to invalidate Texas’s licensing and dual-capacity regulations for public insurance adjusters. Stonewater, which is not a licensed public insurance adjuster, argued that these laws violated free speech and due process rights under the First and Fourteenth Amendments of the U.S. Constitution. The trial court dismissed the case, siding with the state regulator, who argued that the laws regulated professional conduct, not speech, and that Stonewater failed to state valid void-for-vagueness claims under the Fourteenth Amendment’s Due Process Clause.The Court of Appeals for the Seventh District of Texas reversed the trial court's decision, holding that the regulations triggered First Amendment scrutiny because the business of public insurance adjusting necessarily involves speech. The court also held that Stonewater’s vagueness challenges survived because the Public Insurance Adjusters Act did not clearly proscribe Stonewater’s alleged conduct.The Supreme Court of Texas reversed the court of appeals' judgment. The court held that the challenged statutes do not regulate or restrict speech but, rather, representative capacity with a nonexpressive objective: employment to act on behalf of an insured in negotiating for or effecting the settlement of a claim. The court also held that the statutes are clear enough in proscribing Stonewater’s alleged conduct to preclude both its as-applied and facial vagueness challenges. The court concluded that Stonewater failed to state cognizable First and Fourteenth Amendment speech and vagueness claims, and therefore, the trial court properly granted the state regulator's dismissal motion. View "TEXAS DEPARTMENT OF INSURANCE v. STONEWATER ROOFING, LTD. CO" on Justia Law

The case involves an insurance dispute between Travelers Casualty Insurance Company of America and A-Quality Auto Sales, Inc., along with its owners, Felicia and Shawn Richesin. The Richesins purchased a Subaru for resale through their dealership, A-Quality Auto Sales. After having the car inspected and repaired by RNS Auto Services, they experienced mechanical issues while driving it. Ms. Richesin was severely injured when she exited the vehicle on the side of the highway and was struck by another car. RNS had a garage insurance policy with Travelers, which provided commercial general liability coverage with a per-occurrence limit of $500,000 and a general aggregate limit of $1,000,000. The Richesins sought additional compensation from RNS and Travelers for Ms. Richesin's injuries.In the lower courts, the Richesins filed a suit against Travelers and other parties in New Mexico state court. The state court dismissed all claims against Travelers, citing a lack of privity between the injured party and the insurer. Later, the Richesins and RNS entered into agreements that led to Travelers paying the Richesins $500,000, which Travelers believed to be the policy limit. The Richesins, however, argued that there were multiple occurrences and therefore the policy's aggregate limit of $1,000,000 was available. Travelers then filed a complaint in federal district court seeking a judicial declaration that the accident was a single occurrence and the policy coverage limit for the accident was $500,000.The United States Court of Appeals for the Tenth Circuit affirmed the district court's entry of declaratory judgment. The court held that the dispute was ripe for resolution under Article III of the Constitution. It also ruled that the district court did not err by declining to abstain under the Brillhart and Younger abstention doctrines. The court further held that the district court did not err by denying the Richesins' Rule 56(d) motion, thereby denying them discovery needed to meaningfully oppose Travelers' motion for summary judgment. The court concluded that the accident was a single occurrence and the policy coverage limit for the accident was $500,000. View "Travelers Casualty Insurance Co. of America v. A-Quality Auto Sales" on Justia Law

In a case concerning the Senior Health Insurance Company of Pennsylvania ("SHIP"), the Supreme Court of Pennsylvania upheld a rehabilitation plan devised by the Pennsylvania Insurance Commissioner. SHIP, which sold long-term care policies in multiple states, became insolvent due to the high cost of care against inadequate premiums. The rehabilitation plan was designed to correct the company’s financial condition by adjusting the premiums and benefits of the existing policies. However, insurance regulators from Maine, Massachusetts, and Washington ("Regulators") objected to the plan, arguing that it exceeded the Insurance Commissioner's statutory authority and violated their states' regulatory authority over rates. The court rejected these claims, finding that the plan did not exhibit a "policy of hostility" to the public acts of other states and thus did not violate the Full Faith and Credit Clause of the U.S. Constitution. The court concluded that the Commonwealth Court, holding exclusive jurisdiction over the distribution of SHIP's assets, did not abuse its discretion by approving the plan. View "In Re: Senior Health Ins. Co. of PA" on Justia Law

In this case, the parties consented to have their commercial dispute tried before a United States magistrate judge. But, allegedly unbeknownst to Defendant, the judge was longtime family friends with the lead trial lawyer for the plaintiff. Specifically, the lawyer had been a groomsman in the judge’s own wedding, and the judge officiated the wedding of the lawyer’s daughter three months before this lawsuit was filed. None of this information was disclosed to Defendant. After a twenty-day bench trial, the magistrate judge rendered judgment for the Plaintiff, awarding $124.5 million, including over $100 million in trebled damages. After the issuance of the judgment and award, Defendant learned about the undisclosed longstanding friendship and sought to have the magistrate-judge referral vacated. The district judge denied the request and denied discovery on the issue. Defendant appealed.   The Fifth Circuit vacated. The court concluded that the facts asserted here, if true, raise serious doubts about the validity of Defendant’s constitutionally essential consent to have its case tried by this magistrate judge. Further, the court explained remand was necessary because the facts were not sufficiently developed for the court to decide whether Defendant’s consent was validly given or whether vacatur of the referral was otherwise warranted. Accordingly, the court remanded for an evidentiary inquiry. View "I F G Port Hold v. Lake Charles Harbor" on Justia Law

The assignees of two Medicare Advantage Organizations seek reimbursements from insurance companies that they allege qualify as primary payers of beneficiaries’ medical expenses. The insurance companies argued, and the district courts agreed, that the assignees’ claims are barred because both assignees failed to satisfy a procedural requirement: a contractual claims-filing deadline in one case and a statutory requirement of a pre-suit demand in the other. The assignees contend that the procedural requirements are preempted by the Medicare Secondary Payer Act.   The Eleventh Circuit affirmed. The court reasoned that Florida’s pre-suit demand requirement does not meet this relatively high bar. The statutory notice requirement and corresponding 30-day cure period are procedural requirements that may result in a brief delay. But the Florida law does not prevent or meaningfully impede the reimbursement of Medicare Advantage Organizations that Congress sought to facilitate. So, the provision does not create an unconstitutional obstacle to the purposes or operation of the Medicare Secondary Payer Act. View "MSP Recovery Claims, Series LLC v. United Automobile Insurance Company" on Justia Law

Plaintiff appealed the district court’s order affirming the Social Security Administration’s (“SSA”) denial of her application for Social Security Disability Insurance (“SSDI”). In her application, she alleged major depressive disorder (“MDD”), anxiety disorder, and attention deficit disorder (“ADHD”). Following a formal hearing, the Administrative Law Judge (“ALJ”) determined that Plaintiff suffered from severe depression with suicidal ideations, anxiety features and ADHD, but he nonetheless denied her claim based on his finding that she could perform other simple, routine jobs and was, therefore, not disabled. Plaintiff contends that the ALJ erred by (1) according to only little weight to the opinion of her long-time treating psychiatrist (“Dr. B”) and (2) disregarding her subjective complaints based on their alleged inconsistency with the objective medical evidence in the record.   The Fourth Circuit reversed and remanded with instructions to grant disability benefits. The court agreed with Plaintiff that the ALJ failed to sufficiently consider the requisite factors and record evidence by extending little weight to Dr. B’s opinion. The ALJ also erred by improperly disregarding Plaintiff’s subjective statements. Finally, the court found that the ALJ’s analysis did not account for the unique nature of the relevant mental health impairments, specifically chronic depression. The court explained that because substantial evidence in the record clearly establishes Plaintiff’s disability, remanding for a rehearing would only “delay justice.” View "Shelley C. v. Commissioner of Social Security Administration" on Justia Law

The Supreme Court affirmed the judgment of the district court enjoining a regulation to the extent it required insurers to give retroactive premium refunds but otherwise rejecting the lawsuit brought by National Association of Mutual Insurance Companies (NAMIC), holding that the Nevada Division of Insurance (Division) had the statutory and constitutional authority to promulgate R087-20.While the Nevada Insurance Code permits insurers to use customer credit information when underwriting and rating personal property and casualty insurance, the Division promulgated a regulation, R087-20, after the governor's COVID-19 declaration of emergency led to mass unemployment across the state. R087-20 prohibited insurers from adversely using consumer credit information changes that occurred during the emergency declaration, plus two years. On behalf of itself and its members, NAMIC sued to invalidate the regulation. The district court largely rejected NAMIC's claims. The Supreme Court affirmed, holding that the Division did not exceed its authority in promulgating R087-20. View "Nat'l Ass'n of Mutual Insurance Cos." on Justia Law

When the ACA’s mandate and SRP were still in effect, a husband and wife (“Taxpayers”) did not maintain the minimum insurance coverage required by the ACA. The taxpayers did not include their $2409 SRP when they filed their 2018 federal tax return. The Taxpayers filed for Chapter 13 bankruptcy protection in the Eastern District of North Carolina. The IRS filed a proof of claim for the unpaid SRP and asserted that its claim was entitled to priority as an income or excise tax under Section 507 of the Bankruptcy Code. The Taxpayers objected to the government’s claim of priority. The bankruptcy court granted the objection, concluding that, for purposes of the Bankruptcy Code, the SRP is a penalty, not a tax, and therefore is not entitled to priority under Section 507(a)(8). The government appealed to the district court, which affirmed the bankruptcy court’s decision. The district court held that even if the SRP was generally a tax, it did not qualify as a tax measured by income or an excise tax and thus was not entitled to priority. The government thereafter appealed.   The Fourth Circuit reversed and remanded. The court concluded that that the SRP qualifies as a tax under the functional approach that has consistently been applied in bankruptcy cases and that nothing in the Supreme Court’s decision in NFIB requires the court to abandon that functional approach. Because the SRP is a tax that is measured by income, the government’s claim is entitled to priority under 11 U.S.C. Section 507(a)(8)(A). View "US v. Fabio Alicea" on Justia Law