Justia Insurance Law Opinion Summaries

The First Circuit vacated the judgment of the district court in favor of Philadelphia Indemnity Insurance Company in this action seeking a declaration that BAS Holding Corporation breached a condition of the parties' insurance contract, holding that the district court's findings providing grounds for summary judgment were insupportable.After an arsonist destroyed a building owned by BAS and purportedly insured against loss by Philadelphia, the insurer sought an examination under oath (EUO) of George Carney, BAS's president and owner. Philadelphia then denied coverage on the grounds that BAS refused to provide Carney for an EUO, in violation of its obligations under the relevant insurance policy. Philadelphia then brought this action. The district court granted summary judgment for Philadelphia on the ground that BAS failed to cooperate by refusing to submit to the EUO. The First Circuit vacated the judgment, holding that where the evidence unequivocally showed the BAS never willfully and inexcusably refused to provide Carney for the EUO, and therefore summary judgment was improper. View "Philadelphia Indemnity Insurance Co. v. BAS Holding Corp." on Justia Law

The First Circuit affirmed the judgment of the district court granting United States Liability Insurance Group's (USLI) motion to dismiss this lawsuit brought by Nahant Preservation Trust, Inc. to secure insurance coverage in connection with defense costs and indemnification arising from a state court action brought by Northeastern University, holding that there was no error.Northeastern sued Nahant in state court seeking a declaratory judgment regarding its rights concerning certain land. Nahant, which carried liability insurance through USLI, did not notify USLI of the suit until it wrote to USLI seeking coverage for defense costs. USLI refused to provide coverage on the grounds that Nahant had provided untimely notice of the claim. Thereafter Nahant sued USLI seeking, among other things, a declaratory judgment regarding USLI's duty to defend and indemnify. The First circuit granted USLI's motion to dismiss, concluding that the "exclusion agreement" signed by the parties excluded coverage. The First Circuit affirmed, holding that the district court properly accepted USLI's plausible reading of the exclusion amendment. View "Nahant Preservation Trust, Inc. v. Mount Vernon Fire Insurance Co." on Justia Law

Allstate Insurance Company and several of its affiliates (collectively, Allstate) brought qui tam actions on behalf of the State of California alleging insurance fraud under the California Insurance Frauds Prevention Act (IFPA) (and the Unfair Competition Law (UCL) against three medical corporations, a medical management company and its parent company, four physicians, and Sattar Mir, an individual. The trial court found the complaints failed to state causes of action under the IFPA and the UCL because they were not pled with requisite specificity, the business models alleged were lawful, and one of the actions was time-barred.   The Second Appellate District reversed the orders sustaining the demurrers and judgments of dismissal. The court explained that the trial court found the complaints failed to state causes of action under the IFPA and the UCL because they were not pled with requisite specificity, the business models alleged were lawful, and one of the actions was time-barred. The court concluded that the operative complaints adequately plead causes of action under both statutes. View "P. ex rel. Allstate Ins. Co. v. Discovery Radiology etc." on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of Laramie Investment Company and its owner and president, Brad Jackson (collectively, Defendants), and dismissing Plaintiffs' action for breach of contract, negligence, and "reasonable expectations," holding that there was no error in the proceedings below. Plaintiffs, who contracted with Defendants to obtain an insurance policy for their ranch and surrounding outbuildings, brought this suit two years after a tornado destroyed their home and an outbuilding. Plaintiffs discovered that the insurance policy did not cover the outbuilding or its contents but did not bring suit until the two-year anniversary of the tornado. The district court granted summary judgment for Defendants on statute of limitations grounds. The Supreme Court affirmed, holding (1) Jackson was a "professional" under Wyo. Stat. Ann. 1-3-107; (2) the statute of limitations began running when the insurance policy was issued; (3) the district court correctly granted Defendants' motion for summary judgment; and (4) the "continuous care doctrine" did not apply to the facts of this case. View "Falkenburg v. Laramie Investment Co." on Justia Law

The First Circuit affirmed the order of the district court granting summary judgment in favor of Insurer in this insurance dispute, holding that the failure to give notice according to the terms and conditions of an excess insurance policy forfeits any right to coverage.The President and Fellows of Harvard College purchased a one-year liability insurance policy from a member company of the American International Group, Inc. (AIG) requiring prompt notice of any claim filed against Harvard. Harvard purchased a secondary excess policy from Zurich American Insurance Co. providing that a policyholder give notice of any claims arising under the policy "in the same manner required by the terms and conditions of the [AIG] Policy." In 2014, a student organization sued Harvard for violating Title VI of the Civil Rights Act of 1964. Harvard timely notified AIG of the pending suit but neglected to notify Zurich until after the policy's notification window. Therefore, Zurich denied coverage. Harvard brought this action seeking declaratory relief and damages for breach of contract. The district court granted summary judgment for Zurich. The First Circuit affirmed, holding that there was no basis for overturning the district court's entry of summary judgment. View "President & Fellows of Harvard College v. Zurich American Insurance Co." on Justia Law

Schmutzler, the owner and president of Jadair, was a pilot with decades of experience. Schmutzler applied to American National for an insurance policy on its Cessna airplane in 2019. The application listed Schmutzler as the Cessna’s only authorized pilot; Schmutzler indicated that he was a licensed pilot with an FAA medical certificate. The application included “Minimum Pilot Requirements,” which stated that “there is no coverage in flight unless the aircraft is being operated by the pilot(s) designated on this document who has/have at least the certificates, ratings, and pilot experience indicated, and who … is/are properly qualified for the flight involved.” Schmutzler initialed this provision. The Cessna crashed in May 2020, killing Schmutzler, who was piloting the plane. The crash was caused by a mechanical failure.American National denied coverage because Schmutzler did not have a current and valid FAA medical certificate at the time of the accident; his previous certificate had expired. The district court granted American National summary and declaratory judgment. The Seventh Circuit affirmed. The policy unambiguously excludes coverage for any accident involving the Cessna where the pilot lacks a current FAA medical certificate. That requirement is an exclusion of coverage, not a failed condition of coverage. View "Jadair International, Inc. v. American National Property & Casualty Co." on Justia Law

Petitioners Infinity Select Insurance Company and Infinity Property and Casualty Corporation (collectively, Infinity) are named Defendants in a pending action (the instant lawsuit). The instant lawsuit stems from an earlier 2013 case (the prior action) in which plaintiffs sued Infinity’s insured for negligence and wrongful death in connection with a three-vehicle collision (the collision). In August 2022, the court issued its ruling. The primary effect of the ruling was to reform the Infinity policy to provide greater bodily injury policy limits of $750,000. Per its terms, the ruling “establishes the policy limits for the jury’s consideration in the upcoming jury trial on the remaining causes of action” including plaintiffs’ cause of action against Infinity for bad faith breach of the implied covenant of good faith and fair dealing due to Infinity’s rejection of plaintiffs’ Code of Civil Procedure section 998 demand of $750,000. Infinity filed a petition for a writ of mandate challenging the subject ruling.   The Fifth Appellate District concluded that the trial court erred in reforming the Infinity policy. The court held that the motor carrier of property—not the insurer—bears ultimate responsibility for meeting the requirements necessary to obtain a motor carrier permit. Moreover, even where an insurer intends to issue and certify a policy under section 34631.5, it is not obligated to issue the policy in the full amount of $750,000. Additionally, the court wrote evidence of insurance is not the only means of complying with the MCPPA financial responsibility requirements and infinity was under no duty to determine whether the insured had otherwise complied with MCPPA requirements. View "Infinity Select Ins. Co. v. Super. Ct." on Justia Law

Plaintiff is a thoracic surgeon. After the stock market crash now known as the “Great Recession” of 2008, Plaintiff’s sister recommended Gregory Acosta and Diamond Bar Executive Benefit Programs & Insurance Services, Inc. (the Acosta entities) as a potential financial planning service. In 2008, the Acosta entities and Securities America had contracts with Pacific Life Insurance Company (Pacific Life) that authorized them to act as a broker (or “producer”) for Pacific Life. Plaintiff later sued Acosta, the Acosta entities, Kestra, Securities America, and Pacific Life. Plaintiff asserted claims for fraud, negligent misrepresentation, breach of fiduciary duty, negligence, financial elder abuse, and violation of California’s Unfair Competition Law (UCL). He alleged his damages were $495,254.78. Plaintiff argued that the trial court inappropriately entered summary judgment for Pacific Life on his negligence and UCL claims because Pacific Life remains liable to Plaintiff.   The Second Appellate District affirmed the trial court’s decision granting summary judgment for Pacific Life. The court explained that the law and the undisputed evidence, in this case, indicate that it is the broker who typically conducts this suitability analysis. Variable life insurance policies are a “variable product,” and a different Insurance Commissioner regulation requires “brokers and agents selling variable products [to] comply with suitability standards.” The court further explained that section 2534.2(c) does not obligate an insurance company to conduct its own independent suitability analysis, regardless of whether the broker has also conducted one. Moreover, Pacific Life’s conduct—whether labeled “direct” or “vicarious” in the eyes of the law—falls completely within the terms of the release. View "Fischl v. Pacific Life Ins. Co." on Justia Law

Great Lakes Insurance, S.E. insured Hello Dolly VI, a boat owned by Gray Group Investments, L.L.C. The Hello Dolly sank in Pensacola, Florida, during a hurricane. Gray Group filed a claim under the insurance policy, Great Lakes denied coverage, and Great Lakes then sought a declaratory judgment that it properly did so. Specifically, Great Lakes faulted Gray Group for breaching the “hurricane protection plan” (the HPP) that Gray Group had submitted in response to Great Lakes’s “hurricane questionnaire” (the HQ). The issue on appeal is whether the HPP was incorporated by reference into the insurance policy and, if so, whether Gray Group breached the HPP.   The Fifth Circuit affirmed the district court’s ruling granting summary judgment for Great Lakes. The court explained that the HPP expressly identifies its contents, including the information in question, as warranties, providing that the insured “declare[s] that the particulars and answers in this form are correct and complete in every respect” and that “this declaration and warranty shall be incorporated in its entirety into any relevant policy of insurance.” Therefore, under the terms of the policy, as validly augmented by the HPP, Gray Group warranted that the Vessel would be “located” at the Orleans Marina during hurricane season. Gray Group’s breach of that warranty voided the policy ab initio, such that Great Lakes properly denied coverage. View "Great Lakes Ins v. Gray Group Invst" on Justia Law

Following a shooting at a bar in downtown St. Louis, Missouri, Plaintiff, who was injured as a bystander, obtained a $2.5 million judgment against the bar’s owner and operator, Steven Scaglione. Plaintiff thereafter filed this equitable-garnishment claim against Scaglione and his insurer, Acceptance Indemnity Insurance Company (Acceptance). Scaglione filed cross-claims against Acceptance, alleging that it had, in bad faith, failed to defend or indemnify him and breached its fiduciary duty. Acceptance filed motions to dismiss both Plaintiff’s and Scaglione’s claims, which the district court granted based on the applicability of an assault-and-battery exclusion in Scaglione’s policy. In this consolidated appeal, both Plaintiff and Scaglione assert that the district court erred in dismissing their claims. 
 The Eighth Circuit affirmed. The court explained that the district court did not suggest that the assault-and-battery exclusion did not apply solely because the purported victim was not the target. Accordingly, the court rejected this argument and concluded that the unambiguous policy language covers claims of injuries sustained by innocent bystanders arising out of an assault and battery. The court thus concluded that the policy exclusion applies. Further, the court concluded that Scaglione’s negligence was not independent and distinct from the excluded assault and battery. The court explained that the concurrent-proximate-cause rule thus does not apply, and, therefore, the exclusion bars coverage under the policy. Without coverage, Plaintiff and Scaglione cannot state a claim. The district court thus did not err in granting the motions to dismiss. View "Steven Scaglione v. Acceptance Indemnity Ins Co" on Justia Law