Justia Insurance Law Opinion Summaries

Two property insurers issued policies to a Harris Teeter grocery store. The insurers together paid claims for property damage resulting from the malfunctioning of a county sewer line. Exercising their subrogation rights, the insurers sued Arlington County alleging an inverse condemnation claim under Va. Const. art. I, section 11. The circuit court dismissed the case with prejudice. The Supreme Court affirmed in part, reversed in part, and remanded for further proceedings, holding (1) the circuit court did not err in concluding that the original complaint failed to state a viable legal claim for inverse condemnation; but (2) the court erred in denying the insurers leave to amend their complaint because the allegations in the proffered amended complaint, combined with the reasonable inferences arising from them, asserted a legally viable claim for inverse condemnation. Remanded. View "AGCS Marine Insurance Co. v. Arlington County" on Justia Law

In 2014, the City Council of South Portland enacted an ordinance prohibiting the bulk loading of cure oil on marine tank vessels in South Portland. In 2015, the Portland Pipeline Corporation and American Waterways Operators (PPLC) sued the City of South Portland and its Code Enforcement Officer in federal court, arguing that the ordinance was unconstitutional. The complaint requested only nonmonetary relief. The City notified the Maine Municipal Association Property & Casualty Pool (Pool), which provides liability coverage to the City and its public officials, of the lawsuit and requested a defense, which the Pool declined to provide. The City then brought this action alleging breach of the duty to defend. The superior court granted summary judgment for the Pool, concluding that the Pool had no duty to defend because the complaint requested only declaratory and injunctive relief, not damages, and therefore, there was no potential that the City could be liable for damages within the scope of coverage. The Supreme Judicial Court affirmed on different grounds, holding that the Pool had no duty to defend because any potential damages would be excluded from coverage. View "City of South Portland v. Maine Municipal Association Property & Casualty Pool" on Justia Law

Plaintiffs brought a lawsuit against their insurance carrier (Defendant), claiming that Defendant had incorrectly denied coverage. The case proceeded to a jury trial. The jury’s unanimous verdict was for Defendant. Thereafter, Plaintiffs filed a motion for a new trial after learning that the jury foreperson had a prior felony conviction, arguing that the juror was not qualified to serve on the jury under 28 U.S.C. 1865(b)(5). The district court denied the motion for a new trial, concluding that Plaintiffs had not shown that the juror’s service deprived them of a fundamentally fair trial. The First Circuit affirmed, holding that the juror’s inclusion was not fatal to the jury’s verdict, and therefore, the district court properly denied Plaintiffs’ new-trial motion. View "Faria v. Harleysville Worcester Insurance Co." on Justia Law

Allstate filed a qui tam action on behalf of itself and the State against defendants under the California Insurance Frauds Prevention Act, Insurance Code 1871.7. Following entry of the qui tam judgment, Allstate began efforts to collect it. During its investigation, Allstate learned of a series of real estate transactions conducted by defendants designed to transfer away their assets. Allstate, on behalf of the State, filed an action to set aside the fraudulent transfers of real and personal property. Allstate subsequently obtained a stay of the fraudulent conveyance action and returned to the qui tam court where it filed a motion for an order allocating the qui tam judgment proceeds. The motion was based on a stipulation entered into between the People and Allstate allocating to Allstate 50 percent of the civil penalties and assessments, plus reasonable attorney fees and costs. The trial court granted Allstate's allocation motion and entered the stipulation as judgment. Defendants appealed. The court held that judgment-debtor defendants in qui tam insurance fraud actions are not aggrieved by such allocation orders under section 1871.7, subdivision (g)(2)(A), with the result that they do not have standing to appeal. Accordingly, the court dismissed the appeal. View "People ex rel. Allstate Ins. Co. v. Dahan" on Justia Law

American Family and Liberty Mutual (Appellants) filed suit against the City after a water-main break in the City flooded the basement condominiums and street-level window wells in the the nearby Sexton building. On appeal, Appellants challenge the district court’s decision on their Equal Protection Clause claim, federal takings claim, and state takings claim. The court concluded that the insurance companies are not similarly situated to the uninsured property owners for purposes of an Equal Protection Clause claim. Even if Appellants could demonstrate that they are similarly situated to the uninsured claimants, the court is satisfied that the reasons proffered by the City, including protecting the welfare of its citizens by minimizing the time claimants were without housing and suffering uncompensated damages, as well as minimizing its own costs and litigation risks, demonstrate that its settlement decisions were rationally related to legitimate, government interests. The court also concluded that because Appellants failed to pursue the available mandamus action in state court, both the state and federal takings claims are not ripe for review by the federal district court. Accordingly, the court affirmed the judgment. View "American Family Ins. v. City of Minneapolis" on Justia Law

A pretrial detainee asserted claims under 42 U.S.C. 1983 against guards and nurses at a regional jail. The jail authority had purchased a general liability insurance policy (the VaCorp Policy) from the Virginia Association of Counties Group Self Insurance Risk Pool (Risk Pool Association) and also elected to participate in a government-sponsored insurance program (the VaRISK Plan) managed by the Division of Risk Management (DRM). While the federal suit was pending, the detainee filed a declaratory judgment action against DRM and the Risk Pool Association seeking a determination of their respective liabilities for insuring the jail defendants. The Risk Pool Association and the DRM filed opposing third-party claims for declaratory relief. The detainee later settled with the jail defendants. The circuit court concluded (1) the VaRISK Plan was the sole primary coverage and that the DRM had the exclusive duty to defend the jail defendants, and (2) the Risk Pool Association had no duty to contribute toward the defense costs incurred by the jail defendants in the federal suit. The Supreme Court affirmed in part and reversed in part, holding (1) the VaCorp Policy and VaRISK Plan provided co-primary liability coverage to the jail defendants; and (2) VaRISK Plan’s $2 million coverage extension applicable to medical malpractice claims did not apply to the section 1983 civil rights claim alleging violations of federal constitutional law. Remanded. View "Commonwealth, Div. of Risk Mgmt. v. Va. Ass'n of Counties Group Self Ins. Risk Pool" on Justia Law

Employers must cover certain contraceptives as part of their health plans unless the employer submits a form to their insurer or to the federal government, stating that they object on religious grounds to providing contraceptive coverage. The plaintiff-employers alleged that submitting this notice substantially burdened the exercise of their religion, in violation of the Religious Freedom Restoration Act of 1993,, 42 U.S.C. 2000bb. In supplemental briefing, the parties acknowledged that contraceptive coverage could be provided to employees, through insurance companies, without such notice. Plaintiffs “need to do nothing more than contract for a plan that does not include coverage for some or all forms of contraception,” and employees could receive cost-free contraceptive coverage from the same insurance company, seamlessly, with the rest of their coverage. Based on these stipulations, the Supreme Court vacated the judgments below and remanded to determine an approach that will accommodate the employers’ religious exercise while ensuring that women covered by their health plans “receive full and equal health coverage, including contraceptive coverage.” The Court did not decide whether the employers’ religious exercise has been substantially burdened, whether the government has a compelling interest, or whether the current regulations are the least restrictive means of serving that interest. View "Zubik v. Burwell" on Justia Law

Plaintiffs, two individual psychiatrists and three professional associations of psychiatrists, filed suit against defendants, four health‐insurance companies, alleging that the health insurers’ reimbursement practices discriminate against patients with mental health and substance use disorders in violation of the Mental Health Parity and Addition Equity Act of 2008 (MHPAEA), 29 U.S.C. 1185(a), and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. The court concluded that, because the psychiatrists are not among those expressly authorized to sue, they lack a cause of action under ERISA. The court also concluded that the association plaintiffs lack constitutional standing to pursue their respective ERISA and MHPAEA claims because their members lack standing. Accordingly, the court affirmed the judgment. View "Am. Psychiatric Ass’n v. Anthem Health Plans, Inc." 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

This dispute arose from injuries sustained by a platform worker employed by Vertex. Continental appealed the district court's final judgment in favor of Tetra and Maritech, requiring Continental and its codefendant insured, Vertex, to indemnify them. The court concluded that the summary judgment record is inadequate to determine whether the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1333(a)(1), (a)(2)(A), requires the adoption of Louisiana law as surrogate federal law where the court cannot determine whether there is an OCSLA situs, the court cannot determine whether federal maritime law applies, and the Louisiana Oilfield Indemnity Act (LOIA), La. Rev. Stat. Ann. 9:2780, is consistent with federal law. Accordingly, the court concluded that neither party is entitled to summary judgment as to whether LOIA must be adopted as surrogate federal law under OCSLA. The court remanded to the district court to determine the dispositive issue of whether Louisiana law must be adopted as surrogate federal law. View "Tetra Tech. v. Vertex Servs." on Justia Law