Justia Insurance Law Opinion Summaries

The Eighth Circuit affirmed the district court's grant of summary judgment to American Family in an action alleging breach of contract, negligent misrepresentation, and violation of Minnesota's consumer fraud statutes. The court held that American Family did not breach the contract because nothing in the policy imposed on American Family a contractual obligation to make objectively reasonable or accurate replacement cost estimates; American Family did not negligently misrepresent the replacement cost of plaintiffs home where, regardless of any breach of duty, no genuine dispute existed as to justifiable reliance upon the estimates; and plaintiffs could point to any promise, misrepresentation, or false statement made by American Family, let alone one that they relied upon, justifiably or unjustifiably, in deciding to purchase or renew the policy. View "Nelson v. American Family Mutual Insurance Co." on Justia Law

At age 56, Newman purchased a long-term-care insurance plan MetLife, opting for one of MetLife’s non-standard options for paying her insurance premiums, “Reduced-Pay-at 65.” From the outset, Newman paid the elevated premium associated with her Reduced-Pay option. When she reached age 65, her premium was cut in half. When Newman was 67 years old, she was startled to discover that MetLife that year more than doubled her insurance premium. The Seventh Circuit reversed the dismissal of Newman’s proposed class action, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The allegations raised in the complaint were enough to entitle Newman to prevail on the liability phase of her contract claim and to go forward on her remaining claims. The policy language is at least ambiguous, because it can be read reasonably to fix a person’s premium, if she had opted for the Reduced-Pay option. Illinois construes ambiguous contracts against the insurer. Newman’s complaint also alleged facts that plausibly show that MetLife’s policy was both deceptive and unfair under the Illinois Consumer Fraud Act and adequately alleged fraudulent concealment and reasonable reliance. View "Newman v. Metropolitan Life Insurance Co" on Justia Law

At age 56, Newman purchased a long-term-care insurance plan MetLife, opting for one of MetLife’s non-standard options for paying her insurance premiums, “Reduced-Pay-at 65.” From the outset, Newman paid the elevated premium associated with her Reduced-Pay option. When she reached age 65, her premium was cut in half. When Newman was 67 years old, she was startled to discover that MetLife that year more than doubled her insurance premium. The Seventh Circuit reversed the dismissal of Newman’s proposed class action, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The allegations raised in the complaint were enough to entitle Newman to prevail on the liability phase of her contract claim and to go forward on her remaining claims. The policy language is at least ambiguous, because it can be read reasonably to fix a person’s premium, if she had opted for the Reduced-Pay option. Illinois construes ambiguous contracts against the insurer. Newman’s complaint also alleged facts that plausibly show that MetLife’s policy was both deceptive and unfair under the Illinois Consumer Fraud Act and adequately alleged fraudulent concealment and reasonable reliance. View "Newman v. Metropolitan Life Insurance Co" on Justia Law

A wine dealer sold millions of dollars’ worth of counterfeit wine to an unsuspecting wine collector. When the collector discovered the fraud, he filed an insurance claim based on his “Valuable Possessions” property insurance policy. The insurance company denied the claim. The collector sued for breach of contract. The trial court ruled in favor of the insurance company, sustaining its demurrer. The Court of Appeal concurred with the trial court: the collector suffered a financial loss, but there was no loss to property that was covered by the property insurance policy. View "Doyle v. Fireman's Fund Insurance Co." on Justia Law

A wine dealer sold millions of dollars’ worth of counterfeit wine to an unsuspecting wine collector. When the collector discovered the fraud, he filed an insurance claim based on his “Valuable Possessions” property insurance policy. The insurance company denied the claim. The collector sued for breach of contract. The trial court ruled in favor of the insurance company, sustaining its demurrer. The Court of Appeal concurred with the trial court: the collector suffered a financial loss, but there was no loss to property that was covered by the property insurance policy. View "Doyle v. Fireman's Fund Insurance Co." on Justia Law

In this action challenging an insurance company’s doubling of Plaintiff’s insurance premium, the Seventh Circuit reversed the district court’s dismissal of Plaintiff’s complaint for failure to state a claim, holding that Plaintiff was entitled to relief on her contract claim and that the allegations Plaintiff raised were enough to permit her to go forward on her other theories.When Plaintiff was sixty-seven years old, she discovered that Metropolitan Life Insurance Company (MetLife) more than doubled her insurance premium. Plaintiff brought this lawsuit against MetLife on behalf of herself and a proposed class, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The district court granted MetLife’s motion to dismiss for failure to state a claim, concluding that the insurance policy unambiguously permitted MetLife to raise Plaintiff’s premium. The First Circuit disagreed, holding that the allegations raised in the complaint were enough to entitle Plaintiff to prevail on the liability phase of her contract claim and to go forward on her remaining claims. View "Newman v. Metropolitan Life Insurance Co." on Justia Law

Palmer’s vacant Detroit apartment complex was covered by a Scottsdale fire insurance policy until November 2012. The property was vandalized in February 2012. Palmer reported the loss in October 2013. Scottsdale replied that it was investigating. In November, Palmer sent Scottsdale an itemized Proof of Loss. Scottsdale paid Palmer $150,000 in June 2014. Michigan law provides that losses under any fire insurance policy shall be paid within 30 days after receipt of proof of loss. Palmer requested an appraisal. Scottsdale agreed, noting the claim remained under investigation. Appraisers concluded that Palmer’s actual-cash-value loss was $1,642,796.76. The policy limit was $1,000,000. Scottsdale tendered checks over a period of several months that paid the balance. Palmer requested penalty interest for late payment. Michigan law states that if benefits are not paid on a timely basis, they bear simple interest from a date 60 days after satisfactory proof of loss was received by the insurer at the rate of 12% per annum. The Sixth Circuit reversed the district court’s conclusion that the penalty-interest claim arose “under the policy” and was barred by the policy’s two-year limitations provision. Palmer did not allege that Scottsdale breached the policy agreement. Scottsdale paid the insured loss and the policy had no time limit for paying a loss, Palmer has no unvindicated rights and no claim “under the policy” to assert. His claim is under the statute. View "Palmer Park Square, LLC v. Scottsdale Ins. Co." on Justia Law

In 2002, Toulon applied for Continental’s long-term care insurance policy. Continental provided a Long-Term Care Insurance Personal Worksheet to help Toulon determine whether the policy would work for her, given her financial circumstances. The Worksheet discussed Continental’s right to increase premiums and how such increases had previously been applied. Toulon did not fill out the Worksheet but signed and submitted it with her application. Toulon’s Policy stated that although Continental could not cancel the Policy if each premium was paid on time, Continental could change the premium rates. There was a rider, stating that premiums would not be increased during the first 10 years after the coverage date. In September 2013, Continental raised Toulon’s premiums by 76.5%. Toulon sued, on behalf of herself and a purported class. The Seventh Circuit affirmed dismissal, agreeing that Toulon failed to state claims for fraudulent misrepresentation because she did not identify a false statement or for fraudulent omission because Continental did not owe Toulon a duty to disclose. The court also properly dismissed Toulon’s claim under the Illinois Consumer Fraud and Deceptive Practices Act (ICFA) because she did not identify a deceptive practice, a material omission, or an unfair practice. The unjust enrichment claim failed because claims of fraud and statutory violation, upon which Toulon's unjust enrichment claim was based, were legally insufficient and an express contract governed the parties’ relationship. View "Toulon v. Continental Casualty Co." on Justia Law

In this dispute concerning a liability insurance policy, the Supreme Court granted relief in prohibition to State Auto Property Insurance Companies, holding that State Auto was entitled to a dismissal of CMD Plus, Inc.’s third-party complaint as a matter of law.When Plaintiffs filed an action against CMD, a residential construction company, seeking recovery for damages to their house and property, CMD filed a third-party complaint against State Auto, its insurer, alleging that State Auto delayed investigating Plaintiffs’ claim, settling Plaintiffs’ lawsuit, and indemnifying CMD. In this petition for a writ of prohibition, State Auto challenged the circuit court’s denial of its motion for summary judgment. The Supreme Court held that relief in prohibition was warranted because the record showed that State Auto defended and indemnified CMD throughout the lawsuit as required by the commercial general liability policy, and the terms of the policy provided no coverage to CMD for damage to its own property. View "State ex rel. State Auto Property Insurance Cos. v. Honorable James C. Stucky" on Justia Law

In 2011, Roppo suffered serious injuries in an auto accident with Block, who was insured by Travelers. Travelers and the attorneys it retained for Block disclosed only the limits of Block’s automobile liability policy; they did not disclose the existence of his additional umbrella policy. Roppo eventually learned of the umbrella policy and then settled the case. She brought a proposed class action, challenging the company’s alleged practice of not disclosing the existence of umbrella policies. The case was removed to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d). The district court denied Roppo’s motion to remand to state court but allowed her to file a second amended complaint, which added Block’s defense attorneys as defendants. Her third amended complaint added a cause of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c). The Seventh Circuit affirmed dismissal with prejudice the complaint’s 11 counts, finding that the district court had jurisdiction and that her complaint did not sufficiently state claims of fraudulent misrepresentation, negligent misrepresentation, and negligence under Illinois law, or violations of the Illinois Insurance Code and the Illinois Consumer Fraud and Deceptive Business Practices Act. View "Roppo v. Travelers Commercial Insurance Co." on Justia Law