Justia Insurance Law Opinion Summaries

After being injured in a car accident while riding in a vehicle insured by Progressive, the respondent received medical treatment from several providers. The total amount billed for her treatment was $27,786.17. However, as a Medicaid recipient, her providers agreed to accept $1,323.60—paid by Medicaid—as full satisfaction for her medical expenses. The respondent demanded payment of the full $10,000 policy limit under the "Medpay" provision of her Progressive auto insurance policy, but Progressive paid only the $1,323.60 Medicaid had paid, arguing that this was the only amount the respondent actually "incurred."The Circuit Court for Chester County denied Progressive’s motion to dismiss the breach of contract claim and, after a bench trial, found for the respondent. The court determined the term "incurred" was ambiguous and should be interpreted in favor of the insured, entitling the respondent to the full amount charged for her medical care. The South Carolina Court of Appeals affirmed, holding that the full amount billed constituted expenses "incurred," even though the providers accepted less due to Medicaid.The Supreme Court of South Carolina granted certiorari and reversed. It held that the term "expenses incurred" in the policy is unambiguous and means the amount for which the insured is legally obligated to pay. The Court determined the respondent incurred only the amount Medicaid paid, as she had no obligation to pay the providers more. Accordingly, Progressive was required to pay only $1,323.60, and not the higher amounts billed or the policy limit. The Court remanded for entry of judgment in favor of Progressive. View "Jones v. Progressive Northern Insurance Company" on Justia Law

A public entity contracted with a general contractor to construct a major rail line project. The general contractor, in turn, subcontracted a significant portion of the work to a subcontractor. As the project progressed, it experienced numerous delays and disruptions, which the subcontractor claimed increased its costs. After completing its performance, the subcontractor, relying on expert analysis of its additional costs, filed a verified statement of claim under the Colorado Public Works Act, asserting it was owed additional millions for labor, materials, and other costs, including those stemming from delay and disruption.Following the filing, the general contractor substituted a surety bond for the retained project funds and the subcontractor initiated litigation in Denver District Court. After a bench trial, the trial court found in favor of the subcontractor, concluding that its verified statement of claim was not excessive and that there was a reasonable possibility the claimed amount was due. The court awarded the subcontractor damages for delay, disruption, and unpaid funds. The general contractor appealed, contending the claim was excessive and should result in forfeiture of all rights to the claimed amount. The Colorado Court of Appeals reversed in relevant part, holding that the verified statement of claim was excessive as a matter of law and that the subcontractor forfeited all rights to the amount claimed. This disposition left certain issues raised by the subcontractor on cross-appeal unaddressed.The Supreme Court of Colorado granted review and held that, under the Public Works Act, disputed or unliquidated amounts—including delay and disruption damages—may be included in a verified statement of claim if they represent the specified categories of costs and the claim is not excessive under the statute. The court also held that filing an excessive claim results only in forfeiture of statutory remedies under the Act, not all legal remedies. The Supreme Court reversed the Court of Appeals’ judgment and remanded for further proceedings. View "Ralph L. Wadsworth Constr. Co. v. Reg'l Rail Partners" on Justia Law

Porch.com is the parent company of Homeowners of America Insurance Company (HOA), which entered into an agreement with Gallagher Reinsurance (Gallagher) to serve as its reinsurance broker. Gallagher brokered a reinsurance deal for HOA involving Whiterock as the insurer and Vesttoo as a financier, with the understanding that China Construction Bank (CCB) would provide a letter of credit as collateral. Instead, HOA was only given a letter from Yu Po Finance stating a letter of credit would be forthcoming, which was never issued. Gallagher continued to assure HOA that the collateral was valid, leading HOA to authorize a substantial withdrawal by Vesttoo. When it was later revealed that Vesttoo’s collateral was invalid and CCB had never issued the promised letter of credit, HOA suffered financial harm, including increased costs for replacement reinsurance and regulatory intervention.The United States District Court for the Northern District of Texas heard Porch’s breach-of-contract claims against Gallagher, alleging violations of several sections of their agreement. The district court dismissed all of Porch’s claims with prejudice, finding that Gallagher did not breach the contract and that amending the complaint would be futile.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the dismissal de novo. The Fifth Circuit affirmed the dismissal of Porch’s claims under Sections 5 and 11 of the contract, concluding Gallagher had no duty to procure collateral documents from CCB or to comply with Texas insurance laws under the economic sanctions provision. However, the Fifth Circuit reversed the dismissal of Porch’s claim under Section 13, finding that Porch plausibly alleged Gallagher failed to perform administrative services customarily expected of a reinsurance broker after contract placement. The case was remanded for further proceedings on the Section 13 claim. View "Porch.com v. Gallagher Re" on Justia Law

A woman was injured after slipping and falling in the parking lot of an automobile repair shop. She filed a claim with the shop’s insurance provider, which began covering some medical and wage expenses. After the insurance company’s representative informed her that liability for her claim was being accepted, the claimant ceased gathering evidence or seeking legal counsel, believing liability would not be contested. Over two years later, when settlement negotiations failed, she retained an attorney and sued both the repair shop and the insurer. After settling with the shop and dismissing it from the lawsuit, the claimant pursued multiple claims against the insurer, including breach of contract, promissory estoppel, spoliation, and equitable estoppel, contending that the insurer’s communications led her to detrimentally alter her conduct regarding evidence collection.The Fourth Judicial District Court initially indicated from the bench that the insurer was estopped from denying liability, but ultimately denied the claimant’s motion for partial summary judgment and granted summary judgment to the insurer on all claims. The District Court concluded that under Montana law as it existed before a 2023 statutory amendment, a third-party claimant could only bring statutory or common law bad faith claims against an insurer for mishandling a claim, and that the claimant had not sufficiently pled or could not prove the elements of her other asserted causes of action.The Supreme Court of the State of Montana held that, under the pre-2023 version of Montana law, third-party claimants are not restricted to statutory or common law bad faith claims and may assert other causes of action such as breach of contract or torts based on how an insurer handled a claim. The Court affirmed summary judgment for the insurer on promissory estoppel, breach of contract, and insufficiently pled claims, but reversed summary judgment on spoliation and equitable estoppel, remanding those claims for further proceedings. View "D'Hooge v. Cincinnati Insurance Co." on Justia Law

A pedestrian was fatally struck by a vehicle on a public roadway in Riverside, California. The decedent’s family sued the City of Riverside and others for wrongful death and dangerous condition of public property. In response, the City filed a cross-complaint against various contractors and their insurers, including Design Services, Inc. (DSI) and RLI Insurance Company (RLI). The City alleged that DSI had contracted to perform street lighting evaluations and upgrades, and that the contract required DSI to obtain insurance from RLI naming the City as an additional insured. The City contended RLI refused to defend and indemnify the City against the wrongful death lawsuit, despite its obligations under the policy.The Superior Court of Riverside County sustained RLI’s demurrer without leave to amend, finding that under Royal Globe Ins. Co. v. Superior Court, a plaintiff may not sue both the insurer and the insured in the same action. The court held that joining RLI in the same lawsuit as its insured, DSI, would risk prejudice by alerting the jury to the existence of insurance, in violation of California Evidence Code section 1155. The court dismissed the City’s cross-complaint as to RLI but allowed the City to pursue its claims in a separate action.The California Court of Appeal, Fourth Appellate District, Division One, reversed the judgment of dismissal. The appellate court held that the prohibition on joining an insurer and its insured in the same action does not apply when the City, as an additional insured, asserts its own contractual rights against RLI. The court found the City’s contractual privity with RLI distinguishable from the situation in Royal Globe and noted that any risk of prejudice could be addressed through severance or bifurcation. The case was remanded for further proceedings on the City’s claims against RLI. View "City of Riverside v. RLI Insurance Co." on Justia Law

An individual purchased a long-term care insurance policy that covered expenses incurred at nursing or assisted living facilities. During the COVID-19 pandemic, at age 94, the insured fractured her hip and, due to concerns about contracting COVID-19 in a communal setting, received post-surgical care at home as prescribed by her physician. When she submitted a claim for these home health care expenses, the insurance company denied coverage, stating that her policy did not include home care benefits. The insured had selected a policy that covered only institutional care, though an alternative plan of care provision allowed for non-institutional benefits if certain conditions were met, including mutual agreement between the insured, her provider, and the insurer.The insured, through her successor trustees, filed a breach of contract action in the United States District Court for the Northern District of Illinois, Eastern Division. Both parties moved for summary judgment. The district court found in favor of the insurer, holding that the policy did not provide home health care benefits, and that the denial of coverage under the alternative plan of care provision was not in bad faith because the insured had not met the necessary conditions to trigger that provision.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the grant of summary judgment de novo. The court held that the policy did not provide for home health care benefits, as required for the relevant Illinois insurance regulation to apply. The court also determined that the alternative plan of care provision was discretionary and did not guarantee coverage for home care. Additionally, the insurer did not breach the implied covenant of good faith and fair dealing by enforcing the explicit terms of the policy. The Seventh Circuit affirmed the district court’s judgment. View "Hartnett v Jackson National Life Insurance Company" on Justia Law

A group of workers was injured in a workplace accident at a South Texas refinery when a fire-suppression system, supplied and programmed by Scallon Controls, Inc., unexpectedly discharged after losing power. The workers sued S&B Engineers & Constructors, Ltd. and Sunoco Logistics Partners, the companies responsible for the project. S&B and Sunoco then brought third-party claims against Scallon, alleging breach of contract and seeking indemnification under their agreement, which included a proportional indemnity provision. Following four years of litigation, S&B and Sunoco settled with the injured workers, fully resolving the tort claims. S&B and its insurer, Zurich American Insurance Company, subsequently sought to recover from Scallon a proportional share of the settlement, corresponding to Scallon’s alleged share of fault.The trial court granted summary judgment for Scallon, and the Court of Appeals for the Ninth District of Texas affirmed, relying on prior Supreme Court of Texas decisions, notably Beech Aircraft Corp. v. Jinkins and Ethyl Corp. v. Daniel Construction Co. The appellate court held that S&B and Zurich could not maintain an indemnity claim after settling, and that Zurich’s claim was time-barred.The Supreme Court of Texas reversed, holding that neither Jinkins nor Ethyl precludes enforcement of a freely negotiated, proportional indemnification agreement after settlement. The Court clarified that such contracts are distinct from common law or statutory contribution rights and that parties may contract for comparative indemnity, so long as the contract does not require indemnification for the indemnitee’s own negligence unless stated with specific language. The Court also held that Zurich’s claim was timely, as the limitations period began to run at settlement. The case was remanded to the trial court to determine whether S&B and Zurich can establish Scallon’s proportional liability and the reasonableness of the settlement. View "S&B ENGINEERS & CONSTRUCTORS, LTD. v. SCALLON CONTROLS, INC." on Justia Law

A fire severely damaged a church building in southeastern Indiana. The church promptly notified its insurer, which had issued a policy covering actual cash value (subject to depreciation) and additional replacement-cost benefits if the property was repaired or replaced “as soon as reasonably possible.” The parties disputed the cost of rebuilding, but the insurer paid the church nearly $1.7 million—the undisputed actual cash value and additional agreed amounts—while the church continued to contest the estimates and did not begin repairs or replacement. About two years after the fire, the church sued the insurer for breach of contract and bad faith denial of replacement-cost benefits.The insurer removed the case to the United States District Court for the Southern District of Indiana and moved for summary judgment, arguing that the church had not complied with the policy’s requirement to repair or replace the property promptly. The church, represented by counsel, responded with arguments about factual disputes over estimates and the credibility of insurance adjusters, but did not address the legal basis concerning the contractual precondition for replacement-cost benefits. The district court granted summary judgment to the insurer, finding the church had failed to engage with the insurer’s core argument.On appeal, with new counsel, the church raised for the first time that ongoing disputes over replacement-cost estimates excused its failure to begin repairs, citing two Indiana Court of Appeals cases. The United States Court of Appeals for the Seventh Circuit held that this argument was waived because it was not presented to the district court. The Seventh Circuit further held that plain-error review in civil cases is available only in extraordinary circumstances not present here. The court affirmed the district court’s judgment in favor of the insurer. View "Crothersville Lighthouse Tabernacle Church v. Church Mutual Insurance Company" on Justia Law

The case concerns a life insurance policy that was issued by an insurer to Ewanda Ferguson. After the policy had lapsed for nonpayment, Ewanda applied for reinstatement by submitting an application in which she falsely denied having her driver’s license suspended or being convicted of DUI/DWI in the prior ten years. In reality, Ewanda had two operating-while-impaired convictions and a license revocation within that period. She died in an automobile accident a few months later. The insurer reinstated the policy posthumously and the beneficiary, Elizabeth Ferguson, submitted a claim for the death benefit.Following Ewanda’s death and the submission of the claim, the insurer discovered the misrepresentations in the reinstatement application. Because Ewanda died within the two-year contestability period, the insurer reviewed her application, determined that it would not have reinstated the policy had it known of her true driving history, and rescinded the policy. The insurer then refused to pay the death benefit. Elizabeth Ferguson filed suit in Michigan state court, alleging breach of contract. The insurer removed the case to the United States District Court for the Eastern District of Michigan and counterclaimed to confirm the propriety of rescission. The district court granted summary judgment to the insurer, holding that rescission was proper without balancing the equities, because Ferguson was not an “innocent third party” under Michigan law.On appeal, the United States Court of Appeals for the Sixth Circuit held that, under Michigan law, a life insurance beneficiary who is a third-party beneficiary stands in the shoes of the insured and has no greater rights than the insured would have had. Therefore, the insurer was entitled to rescind the policy based on material misrepresentations made by Ewanda, and the district court was not required to balance the equities before ordering rescission. The Sixth Circuit affirmed the district court’s judgment. View "Ferguson v. MetLife Investors USA Insurance Co." on Justia Law

A steel subcontractor was hired to perform work for a university construction project and entered into a subcontract with the general contractor. The general contractor began defaulting on payments, prompting the subcontractor to notify the surety insurance company, which had issued a payment bond guaranteeing payment for labor, materials, and equipment. The surety made partial payment but disputed the remaining amount. The subcontractor then demanded arbitration against the contractor, with the surety notified and invited to participate. The contractor filed for bankruptcy and did not defend in arbitration, nor did the surety participate. The arbitrator awarded the subcontractor damages, including attorneys’ fees and interest, and the award was confirmed in court. The subcontractor sought to enforce the arbitration award against the surety, including attorneys’ fees and prejudgment interest, and also brought a bad faith claim under Pennsylvania’s insurance statute.The Centre County Court of Common Pleas initially excluded evidence of the arbitration award against the surety at trial and ruled the surety was not liable for attorneys’ fees or bad faith damages. A jury found for the subcontractor on the underlying debt, and the court awarded prejudgment interest at the statutory rate. Both parties appealed. The Superior Court held the arbitration award was binding and conclusive against the surety, who had notice and opportunity to participate, and affirmed liability for attorneys’ fees related to pursuing the contractor in arbitration. The court rejected the bad faith claim, holding the statute did not apply to surety bonds, and confirmed the statutory interest rate.On appeal, the Supreme Court of Pennsylvania affirmed in all respects. It held that Pennsylvania’s insurance bad faith statute does not apply to surety bonds, based on statutory language. The court also held that the surety is bound by the arbitration award against its principal, and is liable for attorneys’ fees incurred in arbitration and prejudgment interest at the statutory rate. View "Eastern Steel v. Int Fidelity Ins. Co." on Justia Law