Justia Insurance Law Opinion Summaries

In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law

Gerardo Salvati died from injuries he sustained while doing maintenance work. Gerardo’s wife, Lucia (hereinafter referred to as Salvati) filed a lawsuit seeking damages for wrongful death and loss of consortium. The underlying defendants had a primary policy through Western World Insurance Company in the amount of $1 million and an excess policy through the American Insurance Company (AIC) in the amount of $9 million. AIC refused to provide coverage to the underlying defendants. Salvati and the underlying defendants eventually reached a $6 million settlement agreement. In exchange for tendering the full $1 million of the Western World primary insurance policy, the agreement released Western World and the underlying defendants from any further liability and assigned all rights held by the underlying defendants against AIC to Salvati. Thereafter, Salvati filed a complaint against AIC, alleging, inter alia, breach of contract and seeking a declaratory judgment that she was entitled to collect $5 million from AIC under the excess policy. The district court dismissed the complaint for failure to state a claim. The Supreme Court affirmed, holding (1) Salvati failed to show that the settlement agreement triggered AIC’s duty to indemnify; and (2) Salvati may not bring a claim under Mass. Gen. Laws ch. 176D, and therefore, none of her causes of action survived. View "Salvati v. American Insurance Co." on Justia Law

Plaintiff filed a complaint alleging that Zurich American Insurance Co. committed unfair claim settlement practices in violation of Mass. Gen. Laws ch. 176D, 3(9)(f) and Mass. Gen. Laws ch. 93A, 2. Specifically, Plaintiff claimed that Zurich violated these statutory provisions when it conditioned the payment of its primary insurance policy limit on a release of all claims against its insureds, notwithstanding the availability of excess insurance. The superior court judge concluded that Zurich was entitled to judgment as a matter of law because it did not engage in unfair claim settlement practices. The Supreme Judicial Court affirmed, holding that Zurich did not engage in unfair claim settlement practices in violation of Mass. Gen. Laws ch. 176D, 3(9)(f) and Mass. Gen. Laws ch. 93A, 2. View "Caira v. Zurich American Insurance Co." on Justia Law

Plaintiff had an Oregon auto insurance policy issued by defendant. In 2008, plaintiff was injured in a motor vehicle accident. Among other expenses, plaintiff incurred $430.67 in transportation costs to attend medical appointments and to obtain medication. She then applied for PIP medical benefits under her insurance policy. Defendant paid for plaintiff’s medical care, but it declined to pay for her transportation expenses to obtain her medical care. Plaintiff then filed a complaint for breach of contract, both for herself and on behalf of others similarly situated. She alleged that her claim for medical expenses under ORS 742.524(1)(a) included her transportation costs. Defendant moved for summary judgment, arguing ORS 742.524(1)(a) did not require it to pay for transportation costs. After a hearing, the trial court granted defendant’s motion and entered a judgment in defendant’s favor. The question on review was whether the PIP medical benefit in ORS 742.524(1)(a) included the insured plaintiff’s transportation costs to receive medical care. The Supreme Court held that PIP benefits for the “expenses of medical * * * services” do not include an insured’s transportation costs for traveling to receive medical care. Therefore, the Court affirmed the grant of summary judgment in favor of defendant. View "Dowell v. Oregon Mutual Ins. Co." on Justia Law

In 2007, the legislature passed, and the voters ratified, the Insurance Fair Conduct Act (IFCA), RCW 48.30.015. IFCA gave insureds a new cause of action against insurers who unreasonably deny coverage or benefits. IFCA also directed courts to grant attorney fees and authorizes courts to award triple damages if the insurer either acts unreasonably or violates certain insurance regulations. The issue this case presented for the Supreme Court's review was whether IFCA also created a new and independent private cause of action for violation of these regulations in the absence of any unreasonable denial of coverage or benefits. The Court concluded it did not and affirmed. View "Perez-Crisantos v. State Farm Fire & Cas. Co." on Justia Law

A person who pays for a trip to the emergency room out-of-pocket can be charged significantly more for care than a person who has insurance. This case centered on whether a person could maintain an action challenging this variable pricing practice under the Unfair Competition Law, the Consumer Legal Remedies Act or and action for declaratory relief. The Court of Appeals concluded after review of this case that most of the claims asserted by plaintiff Gene Moran lacked merit. However, he sufficiently alleged facts supporting a conclusion that he had standing to claim the amount of the charges defendants' hospital bills self-pay patients was unconscionable. Therefore, the Court reversed the trial court's dismissal of Moran's case, and remanded for further proceedings. View "Moran v. Prime Healthcare" on Justia Law

Samuel Heckart brought this action against A-1 Self Storage, Inc., Caster Properties, Inc., Caster Family Enterprises, Inc., Caster Group LP, and Deans & Homer (together, Defendants) for violations of the Unfair Competition Law, violations of the Consumers Legal Remedies Act, negligent misrepresentation, and civil conspiracy. Heckart alleged A-1's sale of a Customer Goods Protection Plan (the Protection Plan) in connection with its rental of storage space constituted unlicensed sale of insurance. The form Protection Plan required the tenant to either initial to accept or decline participation in the plan. Heckart declined participation by initialing that option, which provided: "No, I decline participation in the . . . Protection Plan. I am currently covered by an insurance plan that covers my belongings in the storage facility. I understand that I need to provide the policy information in writing to the facility Owner within 30 days or I will automatically be enrolled in the . . . Protection Plan until I do provide such information to the Owner." Heckart "inadvertently" purchased the Protection Plan and was enrolled in it, presumably because he failed to provide proof of insurance within 30 days. In April 2013, Heckart, on behalf of himself and other similarly situated California residents, sued A-1 and Caster Group. The trial court sustained Defendants' demurrer to Heckart's first amended complaint without leave to amend, concluding the Protection Plan was not insurance. Heckart appealed, contending his allegations were sufficient to state the asserted causes of action because the Protection Plan was insurance that must comply with the Insurance Code. The Court of Appeal found his arguments unavailing and affirmed. View "Heckart v. A-1 Self Storage" on Justia Law

Appellees damaged their vehicle when they collided with a deer in the roadway. Appellant insured the vehicle. Appellees had their vehicle repaired using aftermarket replacement parts that were not produced by the original equipment manufacturer (OEM). Appellant, however, refused to pay for OEM parts after providing an estimate that was based on the use of non-OEM parts. Appellees filed a complaint alleging eight causes of action related to Appellant’s estimate and its refusal to pay for OEM parts. The trial court granted summary judgment to Appellees on their claim that Appellant violated the Consumer Sales Practices Act by failing to obtain one of Appellees’ signatures on the bottom of the estimate, and Appellees voluntarily dismissed the remainder of their claims. The trial court awarded Appellees actual damages, statutory treble damages, attorney fees, and expenses. The court of appeals modified and affirmed the trial court’s award of damages. The Supreme Court vacated the judgment of the court of appeals and dismissed the cause, holding that Appellant’s provision of a repair estimate to Appellees was not in connection with a consumer transaction and, therefore, was not an “unfair or deceptive act or practice” pursuant to Ohio Rev. Code 1345.02. View "Dillon v. Farmers Ins. of Columbus, Inc." on Justia Law

Brown filed a class action complaint, alleging that she contacted Defender by telephone in response to its advertisement for a home security system; that, during several calls, she provided Defender with personal information; and that Defender recorded those calls without her permission and without notifying her of the recording. Brown claimed violations of California Penal Code 632, which prohibits the recording of confidential telephone communications without the consent of all parties. Defender owned a commercial general liability insurance policy issued by First Mercury, covering “personal injury” and “advertising injury.” In a separate definitions section, the policy defined both “advertising injuries” and “personal injuries” as those “arising out of … [o]ral or written publication of material that violates a person’s right of privacy.” The parties eventually reached a settlement. Defender provided First Mercury with timely notice of the Brown suit. First Mercury denied coverage and refused to defend. The Seventh Circuit affirmed dismissal of Defender’s suit against First Mercury. Defender’s Policy requires “publication,” which was neither alleged nor proven. View "Defender Sec. Co. v. First Mercury Ins. Co." on Justia Law

A few decades ago, an oil spill occurred on property in Salem, Massachusetts that was owned by Peabody Essex Museum. The pollution from the spill migrated to the land of a down gradient neighbor, Heritage Plaza. In 2003, Heritage Plaza discovered the subsurface contamination and notified the Museum. The Museum, in turn, gave prompt notice to state environmental authorities and to its insurer, United States Fire Insurance Company (U.S. Fire). The Museum filed a coverage suit against U.S. Fire and, in 2013, secured a judgment requiring U.S. Fire to pay the Museum over $1.5 million, including punitive damages under Mass. Gen. Laws ch. 93A. In this appeal, the parties challenged multiple district court rulings. The First Circuit affirmed the challenged rulings related to insurance coverage but reversed the finding of Chapter 93A liability and vacated the district court’s associated award of punitive damages, holding that U.S. Fire’s conduct under these circumstances was not the kind that the Massachusetts Supreme Judicial Court has condemned as egregious settlement misconduct that is actionable under Chapter 93A. View "Peabody Essex Museum, Inc. v. U.S. Fire Ins. Co." on Justia Law