Justia Insurance Law Opinion Summaries

Liberty National Life Insurance Company and Marcus Rich sought mandamus relief to direct the Montgomery Circuit Court ("the trial court") to vacate its order denying their motions to transfer an action filed against them by Kenny and Margie Girdner to Elmore County and to enter an order transferring the action. According to the allegations in the Girdners' complaint, starting in 2017 Liberty National agent Rich came to their house in Wetumpka and offered to restructure their existing Liberty National life-insurance policies; Rich said the restructuring could save the Girdners money. The Girdners alleged that the policies were restructured under the assurances that their premiums would not increase substantially. In late March 2018, three different Liberty National agents met with the Girdners at their house to discuss fixing the "mess" Rich created with their policies. The Girdners alleged that they were given information at that meeting that indicated either that Rich did not know what he was doing or that Rich had intentionally allowed their policies to lapse in order to gain additional commission when new policies were issued. The Girdners again agreed to restructure the policies as the three agents recommended to have their policies reinstated. By September 2018, after Liberty National had failed to reinstate their insurance policies, the Girdners sued Liberty National and Rich alleging misrepresentation, suppression, deceit, unjust enrichment, negligent and/or wanton hiring, supervision, and training, breach of contract, conversion, and "negligent/wanton service." The Girdners asserted that venue was proper in Montgomery County under section 6-3-7(a)(1) and (3), Ala. Code 1975. The Girdners also stated Liberty National had a registered agent in Wetumpka, Elmore County, and that Rich was a resident of Butler County. The Alabama Supreme Court concluded Liberty National and Rich demonstrated venue was improper in Montgomery County and was proper in Elmore County under sections 6-3-7(a)(1) and 6-3-2(a)(3), they demonstrated a clear legal right to have the underlying action transferred to Elmore County. View "Ex parte Liberty National Life Insurance Company and Marcus Rich." on Justia Law

Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA. View "Peoples v. United Servs. Auto. Ass'n" on Justia Law

While driving his truck, Moun Keodalah and an uninsured motorcyclist collided. After Keodalah stopped at a stop sign and began to cross the street, the motorcyclist struck Keodalah's truck. The collision killed the motorcyclist and injured Keodalah. Keodalah's insurance policy with Allstate Insurance Company included underinsured motorist (UIM) coverage. Keodalah requested Allstate pay him his UIM policy limit of $25,000. Allstate refused, offering $1,600 based on its assessment Keodalah was 70% at fault for the accident. After Keodalah asked Allstate to explain its evaluation, Allstate increased its offer to $5,000. Keodalah sued Allstate asserting a UIM claim. The ultimate issue before the Washington Supreme Court in this case was whether RCW 48.01.030 provided a basis for an insured's bad faith and Consumer Protection Act claims against an insurance company's claims adjuster. The Supreme Court held that such claims were not available, and reversed the Court of Appeals. View "Keodalah v. Allstate Ins. Co." on Justia Law

Plaintiffs Malik Hasan, M.D. and Seeme Hasan appealed the entry of summary judgment against them and the denial of their motion for leave to amend their complaint. Plaintiffs sought to recover under an insurance policy with Defendant AIG Property Casualty Co. for the alleged loss of wine bottles that were not delivered to them by a retailer whom they had paid for the wine. The retailer had declared bankruptcy and its principal had pleaded guilty to conducting a Ponzi scheme. The district court held that Plaintiffs were not entitled to recover because they had not shown any physical loss or damage to the wine they had ordered. The Tenth Circuit affirmed summary judgment, although on a different ground: plaintiffs’ loss was not insured because they failed to present adequate evidence that they were the owners of any wine bottles not delivered to them. View "Hasan v. AIG Property" on Justia Law

In 2013, Rachel Dixon was driving a car owned by her boyfriend, Rene Oriental-Guillermo (“Policyholder”), when she was involved in an accident with a vehicle in which Priscila Jimenez was a passenger, and which was owned by Iris Velazquez, and operated by Alli Licona-Avila. At the time of the accident, Dixon resided with Policyholder, who had purchased a personal automobile insurance policy (“Policy”) for his vehicle through Safe Auto Insurance Company (“Safe Auto”). The Policy contained an unlisted resident driver exclusion (“URDE”), which excluded from coverage any individuals who lived with, but were not related to, the policyholder, and whom the policyholder did not specifically list as an additional driver on the insurance policy. Jimenez and her husband Luis (collectively, “Appellants”) filed a personal injury lawsuit against Dixon, Policyholder, and Licona-Avila. On May 13, 2015, Safe Auto filed a complaint against Dixon, Policyholder, and Appellants, seeking a declaratory judgment regarding the enforceability of the URDE with respect to Dixon. The trial court granted summary judgment in favor of Safe Auto, finding the URDE unambiguous, valid, and enforceable, and concluding that Safe Auto had no duty under the Policy to defend or indemnify Dixon in the underlying personal injury lawsuit. Appellants timely appealed to the Superior Court, arguing: (1) the trial court erred in holding the URDE was valid and enforceable; (2) that the URDE violated the provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”); and (3) that the URDE violated public policy. The Superior Court affirmed the order of the trial court in a divided, published opinion. The Pennsylvania Supreme Court concurred the URDE at issue in this case was enforceable, and affirmed the Superior Court. View "Safe Auto v. Oriental-Guillermo" on Justia Law

At issue in this case was whether a first-party insurer, after obtaining a partial recovery in a subrogation action, had to reimburse its fault-free insureds for the full amount of their deductibles before any portion of the subrogation proceeds could be allocated to the insurer. Lazuri Daniels brought claims, and sought class action status, in a lawsuit against State Farm Mutual Automobile Insurance Company arguing that by failing to fully reimburse its insureds for their deductibles, State Farm violated both Washington law and the terms of its own insurance policy. The trial court dismissed the claims, and the Court of Appeals affirmed. In addressing conflicts between subrogated insurers and injured insureds, Washington law generally establishes priority for the interests of the insured through the "made whole doctrine." "Out of the recovery from the third party the insured is to be reimbursed first, for the loss not covered by insurance ,and the insurer is entitled to any remaining balance, up to a sum sufficient to reimburse the insurer fully, the insured being entitled to anything beyond that." If the insured still has uncompensated injuries, both the insurer and insured will generally be looking to recover from the same third party, and that party's own insurance and assets are not always sufficient to cover both claims. In such circumstances, there is a high potential for conflict between insureds who wish to be compensated for the full extent of the damages they have suffered, and first-party insurers who expect to be reimbursed for amounts they have advanced to the insured. Daniels argued that insureds' right to be fully compensated for their losses, including full reimbursement for deductibles, takes priority over an insurer's interest in recouping its payments through a direct subrogation action. The Washington Supreme Court concluded Daniels' complaint asserted valid claims for relief under the common law, under Washington insurance regulations, and under State Farm's own policy language. As such, dismissal was improper. The matter was remanded to the trial court for further proceedings. View "Daniels v. State Farm Mut. Auto. Ins. Co." on Justia Law

This appeal required the Pennsylvania Supreme Court to determine whether a “household vehicle exclusion” contained in a motor vehicle insurance policy violated Section 1738 of the Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa.C.S. 1738, because the exclusion impermissibly acted as a de facto waiver of stacked uninsured and underinsured motorist (“UM” and “UIM,” respectively) coverages. In 2012, Appellant Brian Gallagher was riding his motorcycle when William Stouffer ran a stop sign in his pickup truck, colliding with Gallagher’s motorcycle, causing Gallagher to suffer severe injuries. At the time of the accident, Gallagher had two insurance policies with GEICO; one included $50,000 of UIM coverage, insured only Gallagher’s motorcycle; the second insured Gallagher’s two automobiles and provided for $100,000 of UIM coverage for each vehicle. Gallagher opted and paid for stacked UM and UIM coverage when purchasing both policies. Stouffer’s insurance coverage was insufficient to compensate Gallagher in full. Consequently, Gallagher filed claims with GEICO seeking stacked UIM benefits under both of his GEICO policies. GEICO paid Gallagher the $50,000 policy limits of UIM coverage available under the Motorcycle Policy, it denied his claim for stacked UIM benefits under the Automobile Policy. GEICO based its decision on a household vehicle exclusion found in an amendment to the Automobile Policy. The exclusion states as follows: “This coverage does not apply to bodily injury while occupying or from being struck by a vehicle owned or leased by you or a relative that is not insured for Underinsured Motorists Coverage under this policy.” According to Gallagher, by denying him stacked UIM coverage based upon the household vehicle exclusion, GEICO was depriving him of the stacked UIM coverage for which he paid. The Pennsylvania Supreme Court held the household vehicle exclusion violated the MVFRL, and vacated the Superior Court’s judgment, reversed the trial court’s order granting summary judgment in favor of GEICO, and remanded to the trial court for further proceedings. View "Gallagher v. GEICO" on Justia Law

Favero’s car struck Alpizar-Fallas's car, causing Alpizar-Fallas serious injuries. Both drivers were insured by Progressive. The next day, Barbosa, a Progressive claims adjuster, went to Alpizar-Fallas's home to inspect her car and have her sign “paperwork” that would “expedite the processing of the property damage claim.” Alpizar-Fallas alleges that he stated that her signature was “necessary” for Progressive to advance her payment. Alpizar-Fallas signed the document. The document was actually a broadly written comprehensive general release of all claims. Barbosa failed to advise Alpizar-Fallas to seek legal counsel and did not communicate with her in Spanish, her native language. Alpizar-Fallas sought damages for the personal injuries she sustained in the accident and amended her complaint to include a class action claim against Progressive and Barbosa under the New Jersey Unfair Claims Settlement Practices Regulations (UCSPR) and the Consumer Fraud Act (CFA). The district court dismissed Alpizar-Fallas’s class action claim to the extent it alleged a violation of the UCSPR because those regulations do not provide a private right of action, then dismissed Alpizar-Fallas’s CFA claim, as a claim for denial of insurance benefits, and construing the CFA to only apply to the “sale or marketing” of insurance policies. The Third Circuit vacated, finding that Alpizar-Fallas’s complaint alleged deception that would be covered by the CFA. View "Alpizar-Fallas v. Favero" on Justia Law

Villanueva and the class (Plaintiffs) alleged that Fidelity, an underwritten title company that handled Plaintiffs’ escrow accounts, engaged in unlawful conduct under the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200) in charging overnight mail delivery fees, courier fees, and document preparation or “draw deed” fees that were not listed in its schedule of rates filed with the Department of Insurance in violation of Insurance Code 12401–12410.10, 12414.27. Fidelity argued that the lawsuit was barred by the statutory immunity in section 12414.26 for matters related to rate-making. The trial court rejected Fidelity’s immunity claim and granted Plaintiffs injunctive relief under the UCL, but denied their restitution claims. The court of appeal reversed. Fidelity’s immunity defense is not subject to the forfeiture doctrine because it implicates the court’s subject matter jurisdiction; this claim is subject to the exclusive original jurisdiction of the Insurance Commissioner because it challenges Fidelity’s activity related to rate-making. The court directed the trial court to enter a new order awarding costs to Fidelity. View "Villanueva v. Fidelity National Title Co." on Justia Law

This appeal concerned the guardianship of a ten-year-old child, Jane Doe II (“Jane”), whose parents passed away in 2017. A family friend petitioned for guardianship; Jane's aunt (twin sister of her mother) also petitioned for guardianship. A guardian ad litem recommended the friend be awarded temporary guardianship for Jane to finish the school year, then the aunt be permanent guardian. The friend appealed. The final decree appointing Aunt as Jane’s permanent guardian was vacated by the Idaho Supreme Court, which remanded the case for the magistrate court to conduct a hearing to determine whether Jane possessed sufficient maturity to direct her own attorney prior to a new trial. View "Western Community Ins v. Burks Tractor" on Justia Law