Justia Insurance Law Opinion Summaries

In 2007, Dennis Collins, Suzanne Collins, David Butler, and Lucia Bott purchased long-term care insurance policies from Metropolitan Life Insurance Company (MetLife). They also bought an Inflation Protection Rider, which promised automatic annual benefit increases without corresponding premium hikes, though MetLife reserved the right to adjust premiums on a class basis. In 2015, 2018, and 2019, MetLife informed the plaintiffs of significant premium increases. The plaintiffs filed a class action in 2022, alleging fraud, fraudulent concealment, violations of state consumer protection statutes, and breach of the implied covenant of good faith and fair dealing under Illinois and Missouri law.The United States District Court for the Eastern District of Missouri dismissed the case, ruling that the filed rate doctrine under Missouri and Illinois law barred the plaintiffs' claims. Additionally, the court found that the plaintiffs bringing claims under Missouri law failed to exhaust administrative remedies. The plaintiffs appealed, arguing that the filed rate doctrine did not apply, they were not required to exhaust administrative remedies, and their complaint adequately alleged a breach of the implied covenant.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court's dismissal. The appellate court held that the plaintiffs' complaint failed to state a claim upon which relief could be granted. The court found that MetLife's statements about premium expectations were not materially false and that the plaintiffs did not sufficiently allege intentional fraud or fraudulent concealment. The court also concluded that the statutory claims under the Missouri Merchandising Practices Act and the Illinois Consumer Fraud and Deceptive Business Practices Act were barred by regulatory exemptions. Lastly, the court determined that the implied covenant of good faith and fair dealing was not breached, as MetLife's actions were expressly permitted by the policy terms. View "Collins v. Metropolitan Life Insurance Co." on Justia Law

A joint state and federal criminal investigation, "Operation Back Cracker," uncovered a scheme where Minnesota healthcare providers, primarily chiropractors, recruited car accident victims and fraudulently billed auto insurers for their treatment. In related civil settlements, some providers agreed not to bill certain insurance companies, including Illinois Farmers Insurance Company, for any treatment provided to their insureds. Plaintiffs, representing a class of insured individuals, sued Farmers, alleging that these no-bill agreements violated the Minnesota No-Fault Automobile Insurance Act.The United States District Court for the District of Minnesota granted summary judgment to the plaintiffs' injunctive class, enjoining Farmers from entering into or enforcing the no-bill agreements. The court found that these agreements effectively provided managed care services and set preestablished limitations on medical expense benefits, both of which are prohibited under the No-Fault Act. Farmers appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and vacated the injunction. The court held that the no-bill agreements did not constitute managed care services as defined by the No-Fault Act because they excluded, rather than used, the providers under contract with Farmers. Additionally, the court found that the agreements did not place preestablished limitations on medical expense benefits since they did not limit reimbursement for reasonable expenses incurred by insureds. The court concluded that an insurer does not violate the No-Fault Act by enforcing a no-bill agreement against a provider, as long as it does not refuse to reimburse an insured who has incurred a qualifying expense. The case was remanded for further proceedings consistent with this opinion. View "Taqueria El Primo LLC v. IL Farmers Insurance Co." on Justia Law

Plaintiff Katherine Rosenberg-Wohl procured a homeowners insurance policy from State Farm Fire and Casualty Company, which covered various risks including fire. After her neighbor fell on her staircase, she discovered the stairs needed replacement and filed a claim with State Farm. The insurer denied her claim, citing policy exclusions. Rosenberg-Wohl then filed two lawsuits: one for breach of contract and another under the Unfair Competition Law (UCL), seeking declaratory and injunctive relief regarding State Farm’s general claims-handling practices.The San Francisco City and County Superior Court sustained State Farm’s demurrer, concluding that the one-year limitations period in the insurance policy applied to all of Rosenberg-Wohl’s claims, including her UCL claim. The court reasoned that her claims were essentially “on the policy” because they were grounded in the denial of her insurance claim. The Court of Appeal affirmed this decision, with a majority agreeing that the one-year limitations period applied, while a dissenting justice argued that the UCL’s four-year limitations period should govern.The Supreme Court of California reviewed the case and concluded that the one-year limitations period in section 2071 of the Insurance Code and the insurance policy did not apply to Rosenberg-Wohl’s UCL cause of action. The court determined that her lawsuit was not a “suit or action on [the] policy for the recovery of any claim” because she sought only declaratory and injunctive relief, not a financial recovery under the policy. The court emphasized that the UCL’s four-year statute of limitations governed her claim. Consequently, the Supreme Court reversed the judgment of the Court of Appeal and remanded the matter for further proceedings consistent with its opinion. View "Rosenberg-Wohl v. State Farm Fire & Casualty Co." on Justia Law

The case involves Earl John and Christine Dwyer, who sued Ameriprise Financial, Inc. for negligent and fraudulent misrepresentation. In 1985, Ameriprise fraudulently and negligently induced the Dwyers to purchase a universal whole life insurance policy by misrepresenting that their quarterly premium payments would remain the same for the life of the policy. The Dwyers surrendered life insurance policies they had purchased from other companies to facilitate this purchase. In reality, if the Dwyers’ premium payment had remained the same, the policy would have lapsed for insufficient funds in 2020.The trial court found Ameriprise guilty of violating Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (CPL) and awarded the Dwyers compensatory damages. However, the court declined to award treble damages under the CPL, reasoning that they would be duplicative of the punitive damages awarded by the jury on the common-law claims. The Superior Court affirmed this decision.The Supreme Court of Pennsylvania disagreed with the lower courts' decisions. The court held that treble damages under the CPL are a separate remedy available to the Dwyers and must be considered by the trial court without regard to a punitive damages award on related common-law claims. The court concluded that nullifying the availability of a statutory award because of a common-law award is not a permissible exercise of discretion. Therefore, the court reversed the order of the Superior Court and remanded the case for reconsideration of damages under the CPL. View "Dwyer v. Ameriprise Financial" on Justia Law

Yasmin Varela filed a class action lawsuit against State Farm Mutual Automobile Insurance Company (State Farm) after a car accident. Varela's insurance policy with State Farm entitled her to the "actual cash value" of her totaled car. However, she alleged that State Farm improperly adjusted the value of her car based on a "typical negotiation" deduction, which was not defined or mentioned in the policy. Varela claimed this deduction was arbitrary, did not reflect market realities, and was not authorized by Minnesota law. She sued State Farm for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of the Minnesota Consumer Fraud Act (MCFA).State Farm moved to dismiss the complaint, arguing that Varela's claims were subject to mandatory, binding arbitration under the Minnesota No-Fault Automobile Insurance Act (No-Fault Act). The district court granted State Farm's motion in part, agreeing that Varela's claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment fell within the No-Fault Act's mandatory arbitration provision. However, the court found that Varela's MCFA claim did not seek the type of relief addressed by the No-Fault Act and was neither time-barred nor improperly pleaded, and thus denied State Farm's motion to dismiss this claim.State Farm appealed, arguing that Varela's MCFA claim was subject to mandatory arbitration and should have been dismissed. However, the United States Court of Appeals for the Eighth Circuit dismissed the appeal for lack of jurisdiction. The court found that State Farm did not invoke the Federal Arbitration Act (FAA) in its motion to dismiss and did not file a motion to compel arbitration. The court concluded that the district court's order turned entirely on a question of state law, and the policy contained no arbitration provision for the district court to "compel." Therefore, State Farm failed to establish the court's jurisdiction over the interlocutory appeal. View "Varela v. State Farm Mutual Automobile Insurance Co." on Justia Law

The case involves a dispute between Dr. Stan Schiff and Liberty Mutual Insurance Companies. Dr. Schiff, on behalf of himself and a class of similarly situated providers, claimed that Liberty Mutual's practice of reducing provider bills to an 80th percentile cap based on a computer-generated calculation violated Washington's Consumer Protection Act (CPA). Liberty Mutual argued that the statutory requirement to conduct a reasonable investigation into medical expenses is satisfied by determining the 80th percentile of charges for a treatment in the geographic area, and this practice is not an unfair practice under the CPA.The Supreme Court of the State of Washington ruled that Liberty Mutual's practice of using the FAIR Health database to determine the 80th percentile of charges for a treatment in the geographic area is not unfair or unreasonable and does not violate the CPA or the personal injury protection (PIP) requirements to establish standards under which reasonable charges for medical procedures are determined. The court reasoned that comparing charges for the same treatment in the same geographic area is relevant to the determination of reasonableness. The court reversed the Court of Appeals' decision and remanded the case to the trial court to enter a summary judgment order in favor of Liberty Mutual. View "Schiff v. Liberty Mutual Fire Insurance Co." on Justia Law

In this case, the plaintiffs, a minor and her parents, sued their health insurer, Premera Blue Cross, for denying coverage for the minor’s stay in a wilderness therapy program, claiming that the denial violates mental health parity laws. The plaintiffs also alleged breach of contract, insurance bad faith, and violation of the Consumer Protection Act.The Supreme Court of the State of Washington held that the plaintiffs’ breach of contract claim based on alleged violation of federal parity laws does not form a viable common law action. The Court found that the plaintiffs failed to show that a violation of federal parity law would give rise to a viable common law action for breach of contract.Furthermore, the Court held that the breach of contract action based on Premera's alleged violation of state parity laws could not succeed based on the statutory language that was in place at the time.However, the Court did affirm the lower court’s finding that the plaintiffs were not required to produce evidence of objective symptomatology to support their insurance bad faith claim for emotional distress damages. Consequently, the case was remanded to the trial court for further proceedings on the bad faith and Consumer Protection Act claims. View "P.E.L. v. Premera Blue Cross" on Justia Law

Plaintiff Gene Moran, who was a patient at Huntington Beach Hospital (the Hospital) three times in 2013, sued defendants Prime Healthcare Management, Inc., Prime Healthcare Huntington Beach, LLC, Prime Healthcare Services, Inc., and Prime Healthcare Foundation, Inc. (collectively defendants) under various theories in 2013. In a prior opinion, the Court of Appeal found that while most of Moran’s claims lacked merit, he had sufficiently alleged facts supporting standing to claim the amount that self-pay patients were charged was unconscionable, and reversed the trial court’s dismissal of the case. Moran’s sixth amended complaint included both the allegations regarding unconscionability and a new theory of the case: defendants had violated the Unfair Competition Law (UCL), and the Consumer Legal Remedies Act (CLRA) by failing to disclose Evaluation and Management (EMS) fees charged in the emergency room through signage or other methods. The complaint sought relief under both the old and new theories for violations of the UCL, CLRA, and for declaratory relief. Defendants moved to strike the allegations regarding EMS fees, arguing their disclosure obligations were defined by statute. The trial court agreed and struck the allegations from the sixth amended complaint. Finding no reversible error in that decision, the Court of Appeal affirmed. View "Moran v. Prime Healthcare Management, Inc." on Justia Law

Rosenberg-Wohl had a State Farm homeowners insurance policy, covering her San Francisco home. The policy required lawsuits to be “started within one year after the date of loss or damage.” In late 2018 or early 2019, Rosenberg-Wohl noticed that an elderly neighbor twice stumbled on Rosenberg-Wohl’s outside staircase and learned that the pitch of the stairs had changed. The staircase needed to be replaced. In April 2019, Rosenberg-Wohl authorized the work and contacted State Farm. On August 9, she submitted a claim for the money she had spent. On August 26, State Farm denied the claim. Rosenberg-Wohl’s husband, an attorney, later contacted State Farm “to see if anything could be done.” In August 2020 a State Farm adjuster said it had reopened the claim. Days later, it was denied.In October 2020, Rosenberg-Wohl filed suit, alleging breach of the policy and bad faith. That lawsuit was removed to federal court and was dismissed based on the one-year limitation provision. It is currently on appeal. Another action alleges a violation of California’s unfair competition law. The California court of appeal affirmed the dismissal of that suit, rejecting arguments that the one-year limitation provision does not apply to the unfair competition claim, and that State Farm waived the limitation provision. View "Rosenberg-Wohl v. State Farm Fire and Casualty Co." on Justia Law

In 2018, Appellant Nationwide Affinity Insurance Company of America (Nationwide) issued a personal automobile insurance policy to Shameika Clark, Respondent Andrew Green's mother. The policy included $25,000 in UIM property damage coverage for Clark and her family members. The general definition section broadly defined "property damage" as "physical injury to, destruction of[,] or loss of use of tangible property." The UIM endorsement, however, more narrowly defined "property damage" as "injury to or destruction of 'your covered auto.'" In October 2018, Green was hit by a vehicle while walking home from school. Green pursued a claim against Nationwide for UIM bodily injury, but Nationwide refused to pay because the accident did not result in “damage to a “covered auto.” Nationwide filed this declaratory judgment action and requested a declaration that Green was not entitled to UIM property damage. The circuit court reformed Nationwide’s policy rider issued to Clark, finding that under South Carolina case law, insurers could not limit that coverage to vehicles defined in policy as “covered autos.” The South Carolina Supreme Court affirmed the circuit court’s judgment. View "Nationwide v. Green" on Justia Law