Justia Insurance Law Opinion Summaries

The Supreme Court accepted certified questions from the United States Court of Appeals for the Ninth Circuit in this arbitration dispute, holding that direct benefits estoppel cannot be invoked in a garnishment action to bind the judgment creditor to the terms of the contract because applying the doctrine in this context would contravene Arizona's statutory garnishment scheme.Specifically, the Court answered that in a garnishment action by a judgment creditor against the judgment debtor's insurer claiming that coverage is owed under an insurance policy where the judgment creditor is not proceeding on an assignment of rights, the insurer cannot invoke the doctrine of direct benefits estoppel to bind the judgment creditor to the terms of the insurance contract. View "Benson v. Casa De Capri Enterprises, LLC" on Justia Law

The United States Court of Appeals for the Tenth Circuit certified a question of law to the Oklahoma Supreme Court on whether Progressive Northern Insurance Company's Underinsured Motorist (UM) Exclusion--which operated to deny uninsured motorist coverage to insureds who recover at least the statutorily mandated minimum in the form of liability coverage--contravened Oklahoma's Uninsured Motorist Statute, codified at 36 O.S. section 3636. The Supreme Court responded "yes:" Because of the sweeping nature of the UM Exclusion contained in the insurance policy at issue, Progressive found a way to entirely avoid providing the promised coverage. "[A]n insurer in Oklahoma cannot deprive its policyholder of uninsured-motorist coverage for which a premium has been paid through an exclusion that effectively erases its policyholder's choice to purchase that coverage in the first place. We conclude that Progressive's UM Exclusion contravenes section 3636 and is therefore void as against public policy." View "Lane v. Progressive Northern Ins. Co." on Justia Law

National Western Life Insurance Company (NWL) appealed a jury verdict holding the company liable for negligence and elder abuse arising from an NWL annuity sold to Barney Williams by Victor Pantaleoni, an independent agent. In 2016, Pantaleoni sold a $100,000 NWL annuity to Williams, who had contacted Pantaleoni to revise a living trust after the death of Williams’ wife. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages, totaling almost $3 million. NWL moved for judgment notwithstanding the verdict, which was denied. The Court of Appeal reversed: “Assuming NWL had monitored Pantaleoni as Williams suggested, there was no evidence showing that NWL knew or should have known of Pantaleoni’s fraud. … That Williams wrote the note cancelling the first annuity and Pantaleoni apparently wrote the letter requesting that it be reissued for Williams’ signature did not suggest to NWL that the letter was forged.” View "Williams v. National Western Life Insurance Co." on Justia Law

Sekura purchased a membership from Krishna that gave her access to L.A. Tan’s salons. Her membership required Sekura to provide Krishna with her fingerprints. Sekura filed a class-action lawsuit against Krishna, alleging that Krishna violated the Biometric Information Privacy Act: because it “systematically and automatically collected, used, stored, and disclosed their [customers’] biometric identifiers or biometric information without first obtaining the written release required by 740 ILCS 14/15(b)(3) … systematically disclosed ... biometric identifiers and biometric information to SunLync, an out-of-state … vendor and … does not provide a publicly available retention schedule or guidelines for permanently destroying its customers’ biometric identifiers and biometric information as specified by the [Act].” The complaint also alleged negligence and unjust enrichment. Krishna tendered Sekura’s lawsuit to West Bend, its insurer.West Bend sought a declaratory judgment that it did not owe a duty to defend Krishna against Sekura’s lawsuit. The trial court entered a judgment for Krishna. The appellate court and Illinois Supreme Court affirmed after construing the policy terms “personal injury or advertising injury,” “publication” of material, and violation of Sekura’s “right of privacy” to conclude that the allegations in Sekura’s complaint fall within or potentially within West Bend’s policies’ coverage for personal injury or advertising injury. A “violation of statutes” exclusion in the policies does not apply to the Act. View "West Bend Mutual Insurance Co. v. Krishna Schaumburg Tan, Inc." on Justia Law

Mesa sent faxes promoting its services. Some recipients had not consented to receive such faxes, and the faxed materials did not include an opt‐out notice as required by the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C). Orrington filed a class‐action lawsuit under the TCPA and the Illinois Consumer Fraud and Deceptive Business Practices Act and alleged that Mesa’s conduct constituted common‐law conversion, nuisance, and trespass to chattels for Mesa’s appropriation of the recipients’ fax equipment, paper, ink, and toner. Mesa notified its insurer, Federal, of the Orrington action. Federal declined to provide a defense. After Mesa and Orrington reached a settlement, Mesa sued Federal, alleging breach of contract, bad faith, and improper delay and denial of claims under Colorado statutes.The Seventh Circuit affirmed summary judgment in favor of Federal. The policy’s “Information Laws Exclusion” provides that the policy “does not apply to any damages, loss, cost or expense arising out of any actual or alleged or threatened violation of “ TCPA “or any similar regulatory or statutory law in any other jurisdiction.” The exclusion barred all of the claims because the common-law claims arose out of the same conduct underlying the statutory claims. View "Mesa Laboratories, Inc. v. Federal Insurance Co." on Justia Law

The Seventh Circuit affirmed the district court's judgment declaring that Zurich had no duty to defend Ocwen in the underlying litigation brought by a consumer. In the underlying case, the consumer's complaint relied on the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA), as well as common law claims of defamation and invasion of privacy. Zurich insured Ocwen under a series of commercial general liability policies, but two provisions in the policies expressly excluded injuries resulting from conduct that violates certain laws.Setting aside the live-operator calls to the consumer's home and the manually dialed calls to her cell phone, and assuming that neither violated the TCPA, the court concluded that it remains true that if Ocwen caused "a telephone to ring … repeatedly or continuously with the intent to annoy, abuse, or harass any person at that called number," which the district court concluded Ocwen did, then it violated the FDCPA. Because the policy exclusion's catch-all clause swept in the FDCPA as an "other statute" that regulates the communication of information, Zurich had not duty to defend based on the factual allegations of the consumer's complaint. View "Zurich American Insurance Co. v. Ocwen Financial Corp." on Justia Law

In a matter of first impression, the Pennsylvania Supreme Court granted review in this case to consider whether Section 310.74(a) of the Insurance Department Act of 1921 prohibited a licensed insurance producer from charging fees in addition to commissions in non-commercial, i.e. personal, insurance transactions. During its investigation, the Department discovered that, between March 2011 and October 2015, appellants charged a non-refundable $60- $70 fee to customers seeking to purchase personal insurance products. These fees were collected from the customers before appellants prepared the insurance policy applications. One consumer complaint indicated appellants kept an “un- refundable broker application fee” when the consumer declined to buy a policy. The Department’s investigation also revealed appellants paid a “one-time” $50 referral fee to car dealership sales personnel when they referred their customers in need of insurance. The Department concluded appellants’ fee practices included improper fees charged to consumers “for the completion of an application for a contract of insurance” and prohibited referral payments to the car dealerships. The Supreme Court held lower tribunals did not err when they determined Section 310.74(a) of the Act did not authorize appellants to charge the $60-$70 non-refundable fee to their customers seeking to purchase personal motor vehicle insurance. The Commonwealth Court’s decision upholding the Commissioner’s Adjudication and Order was affirmed. View "Woodford v. PA Insurance Dept." on Justia Law

David Murray purchased used computer equipment worth nearly $40,000, which was damaged by the United Postal Service (UPS) while it was being transported from California to Texas. Murray believed he purchased appropriate insurance to cover this loss, but the insurance company denied his claim. Murray sued his insurance broker, UPS Capital Insurance Agency (UPS Capital), for breach of contract and negligence, claiming UPS Capital owed him a special duty to make the insurance policy language understandable to an ordinary person and to explain the scope of coverage. The court granted UPS Capital’s motion for summary judgment after concluding there was no heightened duty of care and dismissed Murray’s lawsuit. On appeal, Murray asked the Court of Appeal to create a new rule that brokers/agents, specializing in a specific field of insurance, hold themselves out as experts, and are subject to a heightened duty of care towards clients seeking that particular kind of insurance. While the Court declined the invitation to create a per se rule, it concluded Murray raised triable issues of fact as to whether UPS Capital undertook a special duty by holding itself out as having expertise in inland marine insurance, and Murray reasonably relied on its expertise. Therefore, the Court reversed the judgment of dismissal and remanded the matter for further proceedings. View "Murray v. UPS Capital Ins. Agency, Inc." on Justia Law

The Oklahoma Supreme Court granted certiorari to address first impression questions of: (1) whether a home warranty plan met the definition of an insurance contract; (2) and if it was insurance, whether a forced arbitration clause in such a contract was unenforceable under the Oklahoma Uniform Arbitration Act; (3) whether 12 O.S. 2011 section 1855 of the Oklahoma Uniform Arbitration Act was a state law enacted for the purpose of regulating insurance under the McCarran-Ferguson Act; and (4) whether pursuant to the McCarran-Ferguson Act, did section 1855 preempted the application of the Federal Arbitration Act. The Supreme Court answered all questions in the affirmative. View "Sparks v. Old Republic Home Protection Co., Inc." on Justia Law

In this insurance dispute, the First Circuit affirmed the judgment of the district court ruling for Plaintiff on her action brought under Mass. Gen. Laws ch. 93A and ch. 176D and awarding trebled damages in the amount of $5.4 million but reversed and remanded for calculation of prejudgment interest based on actual damages and not the treble damages figure of $5.4 million, holding that Plaintiff's measure of damages was her "actual damages" because there was no "judgment" in her case.Plaintiff, who was injured in a car accident at age twenty after drinking at a nightclub, sued the nightclub's insurer (Defendant), alleging that Defendant violated chapters 93A and 176D. The federal district court ruled for Plaintiff and assessed actual damages of $1.8 million against Defendant. The court then trebled the award after concluding that Defendant's violations were willful. The First Circuit affirmed on the whole but reversed as to the calculation of prejudgment interest, holding that the district court did not err in finding Defendant's violation of chapter 93A and 176D but erred when it calculated prejudgment interest on the trebled damages award instead of the single damages award. View "Capitol Specialty Insurance Corp. v. Higgins" on Justia Law