Justia Insurance Law Opinion Summaries

In 1997, Crum, a small company near insolvency, agreed to service Martin’s light-duty vehicles. Martin was a subsidiary of Massey Coal, a publicly-traded corporation. The agreement allowed Crum to enter Martin’s property to pick up vehicles; Martin required Crum to enter into an indemnification agreement and Crum agreed to Martin’s terms. Crum obtained insurance coverage required by the agreement from Universal. Philip, a Crum employee, rode with a Martin employee to pick up a truck from Martin property. A boulder rolled down hill, hit the vehicle, severely injuring Philip. The U.S. Mine Safety and Health Administration cited Martin for having loose rock above the roadway. Philip and Crum sued Martin; Martin counterclaimed based on the indemnification. Universal declined to defend on the counterclaim. After mediation, Martin agreed, without admitting liability, to pay $3,650,000. The parties also entered an “agreed judgment” against Crum for $3,650,000, on Martin’s counterclaim. Martin agreed not to pursue Crum for that judgment and sued Universal. The Sixth Circuit agreed with the district court that Universal had no duty to indemnify Martin because there was enough evidence to show that Crum was not actually liable to Martin. The indemnification was unenforceable as against public policy; it was the product of a significant disparity in bargaining power and attempted to shift liability for compliance with at least one mining-safety statute. View "Martin Cnty. Coal Corp. v. Universal Underwriters Ins. Co." on Justia Law

Plaintiffs filed a putative class action lawsuit against Black Hills Federal Credit Union and CUNA Mutual Insurance Society for changing their credit disability insurance policy. The complaint alleged that Defendants wrongfully switched the credit disability insurance policies of 4,461 borrowers. Plaintiffs filed a motion for class certification, but the trial court denied the motion, finding that Plaintiffs did not meet the adequacy requirement or the predominance and superiority requirements of the class certification statutes. The Supreme Court reversed, holding that the trial court erred in its application of the class certification statutes to the facts in this case. Remanded for certification of the class. View "Thurman v. CUNA Mut. Ins. Soc'y" on Justia Law

A class of Plaintiffs brought suit against Insured, a hotel proprietor, alleging that Insured violated the Telephone Consumer Protection Act (TCPA). The class and Insured subsequently reached a settlement. The class then filed a garnishment action against Insurer. Insurer sought a declaratory judgment that its policy with Insured did not provide coverage because the policy did not cover damages awarded related to the TCPA. The trial found (1) Insurer owed Insured a duty to defend in the class actions because the class's claims were covered under the policy; and (2) Insurer had a duty to indemnify Insured for the full settlement plus interest. The Supreme Court affirmed, holding (1) the trial court correctly determined that Insurer wrongly refused to defend Insured under its policy coverage; (2) Insurer was not entitled to a reassessment of the reasonableness of the settlement; and (3) policy limits did not bar Insurer's indemnification of the settlement. View "Columbia Cas. Co. v. HIAR Holding, LLC" on Justia Law

In 1996, Plaintiff was injured in an automobile accident with an underinsured driver. At the time of the accident, Plaintiff had an automobile insurance policy with Farmers Insurance Exchange (Farmers). In 2001, Plaintiff settled with the underinsured driver. In 2011, Plaintiff filed this action based on contract, alleging that her damages from the accident exceeded the coverage she received from the tortfeasor's insurer and that Farmers had failed to pay "sums available" for her benefit pursuant to her underinsured motorist coverage. Farmers responded by alleging that Plaintiff's action was barred by the statute of limitations or by laches. The district court entered summary judgment for Farmers, concluding that the limitations period commenced when Plaintiff settled with the tortfeasor in 2001 and that her claim was barred by the five-year contract statute of limitations. The Supreme Court reversed, holding (1) the district court erred when it determined that Plaintiff's action accrued upon her settlement with the tortfeasor; and (2) instead, the Court should have applied the Supreme Court's holder in Snyder v. EMCASCO that the action accrues upon the insurer's breach. Remanded. View "Shada v. Farmers Ins. Exch." on Justia Law

Insureds purchased a homeowner's insurance policy from Insurer with a personal liability limit of $500,000. The policy contained an animal liability endorsement (endorsement) which limited coverage to $25,000 for claims arising from animal bites. Both Insurer's agent and Insureds mistakenly believed the policy did not contain the limitation of liability but neither conveyed their mistaken belief to the other. After Plaintiff was bitten by Insured's dog, he and his wife successfully brought an action against Insureds. Insurer paid only $25,000 of this judgment. Plaintiffs and Insureds reached a settlement regarding the balance of the judgment and Plaintiffs became assignees of Insureds' claims against Insurer. Plaintiffs sued Insurer, alleging that Insureds and Insurer were mutually mistaken as to the application of the endorsement, and therefore, the policy should be reformed by striking the endorsement. The superior court concluded Plaintiffs were entitled to summary judgment on the reformation claim. The Supreme Court vacated the judgment, holding that, absent full, clear, and decisive proof of some prior agreement between the parties as to coverage for animal bites different than that contained in the policy, there was no mutual mistake warranting reformation of the policy. View "Caron v. Horace Mann Ins. Co." on Justia Law

Claimant sustained injuries in a car accident. The car was insured under a standard Massachusetts automobile insurance policy (auto policy) issued by Liberty Mutual that included optional "medical payments" coverage (MedPay). Claimant was also insured under a separate policy of health insurance issued by Blue Cross Blue Shield (Blue Cross). Liberty Mutual paid personal injury protection benefits to Claimant and Claimant's additional medical expenses. After Liberty Mutual declined to pay Claimant any MedPay benefits because Blue Cross had already submitted the expenses, Claimant commenced this action against Liberty Mutual on behalf of herself and a putative class of similarly situated individuals. On remand, the superior court granted Liberty Mutual's motion for judgment on the pleadings. The Supreme Court reversed, holding that Claimant was entitled to the MedPay benefits provided by her auto insurance policy, notwithstanding that her medical expenses were covered by and paid under a separate policy of health insurance. Remanded. View "Golchin v. Liberty Mut. Ins. Co." on Justia Law

The Knowles owned rental property in Clinton, Massachusetts that was mortgaged with Fidelity Co-operative Bank (Fidelity) and insured by Nova Casualty Company (Nova). In 2008, a tropical storm brought heavy rain that caused substantial damage to the interior of the Knowles' building. The Town of Clinton ordered the building to be closed. Because the Knowles could not afford to make repairs to the building, it remained vacant. The Knowles submitted a claim for reimbursement for the water damage with Nova, which denied the claim. The building was later vandalized, causing further damage. Nova also refused coverage on this damage. The Knowles subsequently defaulted on their mortgage. In 2010, Fidelity, individually and as assignee of the Knowles, filed a complaint against Nova seeking a declaration that the physical losses suffered by the property and the loss of business income to the Knowles was covered by their all-risk insurance policy. The district court granted summary judgment for Nova. The First Circuit Court of Appeals reversed, holding that the water damage was covered under the policy because the policy's coverage extended to both damage "caused by" or "resulting from" rain as well as damage resulting from the entry of "surface water." Remanded. View "Fidelity Coop. Bank v. Nova Cas. Co." on Justia Law

Whitney Schwan died in an automobile accident after Travis Turner, the driver, lost control of the vehicle. Whitney's parents sued Travis's estate and his parents (the Turners). The Turners had a homeowners policy with State Farm Fire and Casualty Company (State Farm). State Farm filed an action seeking a declaration that it owed no duty to defend or indemnify the Turners under the homeowners policy. Meanwhile, a mediation concluded with a settlement that included assignment of all of the Turners' rights and claims under the homeowners' policy to the Schwans, and the Schwans replaced the Turners in the declaratory action. The district court granted summary judgment to the Schwans on its counterclaim that State Farm had breached its duty to defend the Turners by not retaining separate counsel for the Turners in the underlying action. The Supreme Court reversed, holding that the district court erred by concluding that State Farm had breached its duty to defend under the policy, as State Farm did ensure a full defense was provided to the Turners even though its decisions regarding counsel did not include hiring additional counsel. View "State Farm Fire & Cas. Co. v. Schwan" on Justia Law

Plaintiff, who carried health insurance through New West Health Services (New West), was injured in an automobile accident resulting in medical expenses totaling approximately $120,000. The tortfeasor's insurer paid approximately $100,000 of Plaintiff's medical bills. Plaintiff later filed a complaint against New West alleging individual and class claims, asserting that New West failed to pay approximately $100,000 of her medical expenses because the third party liability carrier had paid the majority of the bills. The district court certified the class complaint. The Supreme Court affirmed, holding that the district court did not abuse its discretion by adopting the class definition proposed by Plaintiff and denying New West's motion to modify the class definition. View "Rolan v. New West Health Servs." on Justia Law

Leonard Landa was the sole managing member of a Montana limited liability corporation. Landa carried commercial general liability insurance through Assurance. After a former employee of Landa's filed a complaint alleging that Landa had committed various torts by inducing him to work for Landa under allegedly false pretenses, Landa tendered defense of the former employee's claim to Assurance. Assurance refused to defend Landa, stating that the complaint's allegations were not covered under Landa's policy. Landa filed a complaint seeking declaratory relief establishing that Assurance had a duty to defend and indemnify Landa and alleging violations of Montana's Unfair Trade Practices Act (UTPA), negligence, and other causes of action. The district court granted summary judgment for Assurance, finding that the complaint's allegations were not covered under Landa's policy and that Assurance was not liable under the UTPA because the denial of coverage was grounded on a legal conclusion. The Supreme Court affirmed, holding that Assurance correctly declined to provide a defense where the former employee's complaint did not allege an "occurrence" and, as a result, did not trigger a duty to defend under the policy. View "Landa v. Assurance Co. of Am." on Justia Law