Justia Insurance Law Opinion Summaries

The class certification issue presented in this case arose from a dispute concerning the payment of medical bills under the Colorado Automobile Accident Reparations Act (No-Fault Act). Plaintiffs Pauline Reyher and Dr. Wallace Brucker filed suit against State Farm Mutual Automobile Insurance Company (State Farm) alleging that it failed to pay full, reasonable amounts in medical expenses in violation of the No-Fault Act and its own contracts. Plaintiffs subsequently moved to certify two classes that included all insureds and providers, respectively, who submitted medical bills to State Farm and were reimbursed for less than the full amounts. The trial court denied the motion for certification on grounds that Plaintiffs failed (among other things) to establish the "predominance" requirement. The appellate court reversed and remanded the case to enter an order certifying the class. State Farm appealed, arguing that the appellate court's finding of "predominance" was made in error. Upon review, the Supreme Court affirmed the trial court's decision and reversed the appellate court.

Plaintiff, sued by a competitor and by consumers for unfair trade practices, false and misleading advertising, and deceptive labeling, among other claims, sought indemnity and defense costs from its insurer. The insurer claimed that the suit fell within an exclusion for "antitrust violations, price fixing, price discriminations, unfair competition, deceptive trade practices and/or monopolies." The district court ruled in favor of the insurer. The First Circuit affirmed, finding that the policy headings were not determinative and that the paragraph at issue clearly excluded coverage.

Liberty Mutual sued Pella in the district court for declaratory judgment where the suit was sought to determine the scope of Liberty Mutual's obligation, under general commercial liability (GCL) policies issued to Pella, to reimburse Pella's defense costs in two underlying lawsuits. Both parties appealed the judgment of the district court. The court held that the district court did not err in concluding that Liberty Mutual's duty to reimburse Pella's defense costs should be determined by looking at the allegations in the complaint to determine if they stated a covered claim where Liberty Mutual would still have no duty to defend even if it had to reimburse defense costs in a suit where an "occurrence" was alleged but not yet an established fact. The court also held that because the underlying suits did not allege an "occurrence," Liberty Mutual did not owe Pella a duty to reimburse its costs in defending either action. Therefore, the court need not address Liberty Mutual's alternative argument. The court further held that the district court did not commit reversible error in granting summary judgment to Liberty Mutual. The court finally held that, in light of its conclusion that Liberty Mutual had no duty to reimburse Pella's defense costs in the underlying suits, the court need not address the issue of defense costs. Accordingly, the court affirmed the district court's grant of summary judgment to Liberty Mutual on Pella's bad-faith counterclaim. The court reversed the district court's order granting summary judgment to Pella on Liberty Mutual's claim for declaratory judgment and remanded with instructions to enter declaratory judgment in favor of Liberty Mutual.

LCI Equipments, Inc. (LLC) was a Texas corporation that imported and sold the tractor that killed Rudy Slater in a roll-over accident. Wanda Slater, an Arkansas resident and Rudy's wife, commenced a wrongful death action in state court, asserting negligence and strict product liability claims against LCI, and others, focusing primarily on the tractor's lack of a roll-over protection system (ROPS). LCI's insurer, also a Texas corporation, denied coverage and refused to defend LCI under its Commercial General Liability policy. With the wrongful death suit pending, LCI assigned its rights in the policy to Slater who then commenced this action against the insurer in Arkansas state court. On appeal, Slater asserted for the first time the absence of diversity jurisdiction and further argued that the district court erred in construing the policy exclusion. The court held that, as here, where Slater structured the case, naming LCI as a nominal plaintiff, the district court had, and properly exercised, diversity jurisdiction. The court also noted that the partial assignment of the $100 interest retained by LCI did not defeat jurisdiction. The court held that Slater's argument that the insurer had a duty to defend because of LCI's failure to install ROPS safety equipment was not properly preserved in the district court and therefore, the court declined to consider it further. The court also agreed with the district court's conclusion that LaBatt Co. v. Hartford Lloyd's Ins. Co., reflected Texas law. Moreover, the definition of "Your product" in the insurer's policy expressly excluded the "providing of or failure to provide warnings or instructions," unlike the exclusion at issue in LaBatt. Therefore, the insurer's contention was more consistent with the plain language of the policy and Slater had failed to show plain error. Accordingly, the judgment of the district court was affirmed.

3M Company sued Inspired Technologies, Inc. (ITI) for allegedly unfair and false advertising, in violation of the Lanham Act, 15 U.S.C. 1051, et seq., and the Minnesota Uniform Deceptive Trade Practices Act (MDPTA), Minnesota Statutes 325D.43-325D.48, alleging that ITI engaged in an advertising campaign for its Frog Tape product that depicted 3M Tape as performing poorly in certain respects. ITI tendered a defense of the lawsuit to its liability-insurance carrier, AMCO Insurance Company (AMCO), and the lawsuit ultimately settled. Following the settlement, AMCO filed the instant declaratory judgment action against ITI, seeking a declaration that it did not owe ITI any duty to defend or indemnify because the insurance policy's knowledge-of-false exclusion excluded the 3M suit from coverage. The court found that the two interrogatory answers upon which the district court relied did not reflect that 3M alleged ITI's knowledge of falsity as to all the purportedly unfair advertising. Consequently, the court held that AMCO failed to satisfy its burden of demonstrating, as a matter of law, that every claim in 3M's complaint fell clearly outside the policy's coverage. Accordingly, because 3M alleged at least one arguably coverable claim, AMCO owed ITI a duty under Minnesota law to defend the entire suit and therefore, the district court's grant of summary judgment was reversed and remanded.

This case arose when plaintiffs filed a nationwide consumer class action against Life of the South Insurance Company (Life of the South). At issue was whether Life of the South had a right to enforce against plaintiffs the arbitration clause in the loan agreement, between plaintiffs and the car dealership where they purchased their vehicle, where the loan agreement lead plaintiffs to enter into a separate credit life insurance contract with Life of the South. The court held that the loan agreement did not show, on its face or elsewhere, an intent to allow anyone other than plaintiffs, the car dealership, and Chase Manhattan, and the assignees of the dealership of Chase Manhattan, to compel arbitration of a dispute and Life of the South was none of those. The court also held that because the only claims plaintiffs asserted were based on the terms of their credit life insurance policy with Life of the South, which did not contain an arbitration clause, equitable estoppel did not allow Life of the South to compel plaintiffs to arbitrate. Accordingly, the court affirmed the district court's denial of Life of the South's motion to compel arbitration.

As part of the requirements of refinancing his home loan, Maurice Carter purchased lender's coverage title insurance from Huntington Title & Escrow. On behalf of a putative class of similarly situated persons, Carter alleged in a complaint filed in the circuit court that he was entitled to a reduced policy reissue rate, as mandated by the Maryland Insurance Administration (MIA), rather than the original issue rate actually charged. Huntington filed a motion to dismiss, arguing that the MIA was invested with primary jurisdiction over Carter's claim, such that Carter must pursue his claim initially in an administrative, rather than judicial, forum. The circuit court granted Huntington's motion and dismissed the case. The Court of Appeals issued a writ of certiorari and vacated the judgment of the circuit court, concluding that (1) the MIA possessed primary jurisdiction over Carter's claim, and, consequently, Carter must seek relief initially through the administrative process; and (2) the circuit court should stay the case pending the outcome of any administrative proceeding rather than relinquishing jurisdiction by dismissing Carter's case.

Anthony Smith was involved in an accident that caused extensive damage to his vehicle, which was insured by State Farm. The vehicle was taken to Lewis Auto Body for repairs, after which State Farm determined that the car was a total loss. State Farm requested that Lewis release the vehicle. In response, Lewis requested payment from State Farm amounting to $30,816 for labor and storage. Lewis then asserted a lien against the vehicle in the amount of $30,816, conducted a lien sale, and obtained title to the vehicle. Smith filed a complaint for replevin and conversion. The district court granted summary judgment to Smith, finding Lewis did not file a valid lien and did not provide proper notice of the sale. Lewis then filed a complaint for money judgment against Smith. In response, Smith filed an emergency petition to prohibit the sale or other disposition of the vehicle. The district court consolidated the actions and awarded damages to Lewis in the amount of $20,516, including $15,240 in storage fees. On appeal, the Supreme Court reversed, holding that Lewis was not entitled to accumulate storage charges after the date that a demand was made for the return of the automobile. Remanded.

This lawsuit arose from the dispute between the parties about how much appellant was obligated to pay appellee for auto-glass goods and services rendered on behalf of appellant's insureds. Appellants appealed from the district court's orders dismissing its counterclaim that appellee violated Minnesota's anti-incentive statute, Minn. Stat. 325F.783, granting summary judgment in favor of appellee on appellant's counterclaim for breach of contract, and denying appellant's motion to vacate the arbitration award. The court held that, given the plain language of the statute and the ordinary meaning of the terms of rebate and credit, appellee's practice did not violate the anti-incentive statute. The court also held that even if the blast faxes at issue constituted offers to enter into unilateral contracts, appellee rejected the offers when its actions failed to conform to the terms of the offer. The court further held that the arbitration award did not require reversal or new proceedings because the award was based on the finding that appellant failed to pay the competitive price standard set forth in the applicable endorsement and Minnesota law.

Plaintiffs brought an enforcement suit against defendants under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1001-1461. At issue was whether the district court properly granted summary judgment in favor of defendants, concluding that defendants' practice of offering discounted telephone services to employees and retirees ("Concession") was not a pension plan in whole or in part. The court affirmed summary judgment and held that the district court did not err in holding that Concession was one plan, at least as it regarded to all retirees; in refusing to examine the out-of-region retiree Concession in isolation; in concluding that although Concession did provide income to some retirees, such income was incidental to the benefit, and was not designed for the purpose of paying retirement income; and in holding that Concession did not result in a deferral of income.