Justia Insurance Law Opinion Summaries

In 2006, appellantâs vehicle was stolen from respondent hotelâs valet parking lot. Appellantâs insurer issued a check to appellant for the cost of the vehicle but not including the cost of customizations. Appellant filed a lawsuit in district court against respondent, alleging negligence and breach of a bailment contract and seeking damages exceeding $10,000. The district court determined that Nev. Rev. Stat. 651.101(1) shielded respondent from liability and entered summary judgment in favor of respondent. Appellant appealed, and the Supreme Court reversed. The Court found as a threshold matter appellant to be a real party in interest with standing to sue because appellant was not fully compensated by his insurer for his losses and thus the principle of total subrogation did not apply. The Court also held that Nev. Rev. Stat. 651.101(1) did not protect respondent against liability arising out of the theft of appellantâs vehicle because the statute, which limits the liability of hotels for the theft or destruction of any property brought by a patron upon the premises or "left in a motor vehicle upon the premises," unambiguously places motor vehicles outside of its scope.

The decedent, killed in a motorcycle accident in 2008, was covered by a life insurance policy, subject to the Employee Retirement Income Security Act, 29 U.S.C. 1101. The insurance company denied a claim by the decedent's widow, claiming that the decedent's anti-coagulant medications contributed to his death so that it fell within an exclusion for medical conditions. The district court concluded that the policy gave the company discretionary authority to determine eligibility and entered summary judgment in the company's favor. The Third Circuit reversed in part and remanded. Deferential review was not appropriate, given the language of the policy. The words "proof of loss satisfactory to Us," surrounded by procedural requirements, do not notify participants that the company has the power to re-define the entire concept of a covered loss on a case-by-case basis. The district court's interpretation of the medical exclusion, in favor of the company, was correct; the clause was not ambiguous.

A jury in the district court concluded that plaintiff did not breach its homeowners insurance policy with defendants and that one defendant had committed fraud when applying for the policy. Defendants appealed a district court order denying their motion for summary judgment and motions in limine and granting plaintiff's motion that defendants order and pay for additional transcripts on appeal. The court held that defendants were not entitled to estopp plaintiff from defending itself because genuine issues of material fact existed regarding whether the one defendant applied for the policy in good faith. The court held that the district court appropriately permitted plaintiff's customer service representative to testify as to her recollection of the defendant's statements. The court further held that the district court acted within its discretion in permitting plaintiff to defend itself via section 33-15-403, MCA, by allowing the customer service representative to testify about the defendant's alleged fraudulent statements. Accordingly, the district court did not abuse its discretion in denying defendants' motion in limine. The court finally held that the district court did not abuse its discretion in ordering additional transcripts under Montana Rule of Appellate Procedure 8(3)(b).

Plaintiff John Stuart decided to build a new house on a small farm. He contacted his insurance agent of nineteen years, Defendant Ronald Pittman for "course-of-construction" insurance to cover any problems in the course of building his house. Mr. Pittman discussed the scope of coverage that the policy would provide. Relying on Mr. Pittman's oral assurance of what the policy would cover, Plaintiff agreed to it. Construction started in 2003. Plaintiff received a premium statement, but not a written copy of the policy. An ice storm struck Plaintiff's building project. Plaintiff contacted Mr. Pittman to initiate an insurance claim. Mr. Pittman told Plaintiff that damage should be covered by the policy. In 2004, Plaintiff received a declaration page from Country Mutual Insurance Company, and found that damage to his house was not covered. Plaintiff brought an action against both Mr. Pittman and the Insurance Company alleging breach of the oral "policy" that he and Mr. Pittman agreed to at the onset of the building project. At the conclusion of the trial's evidentiary phase, Defendant moved for a directed verdict, arguing that Plaintiff failed to prove that the oral insurance binder covered his project. The trial court denied the motion, and the jury would later rule in favor of Plaintiff. The verdict was overturned on appeal. The court held that there was no evidence from which a jury could have found in favor of Plaintiff. On appeal to the Supreme Court, Plaintiff argued that the appellate court misinterpreted the Oregon law that required him to prove that the oral binder superseded the "usual exclusions" of the written policy. The Supreme Court found that the written policy was, as a matter of law, deemed to include all terms of the oral binder. Accordingly, the Court reversed the appellate court's decision and affirmed the judgment of the trial court.

Plaintiff Denise Perrelli appealed a trial court decision in favor of Defendants Bridget and Paul Pastorelle. Plaintiff believed the last time she sent her car insurance company a check for coverage was in 2005. She believed she had coverage on August 4, 2006, the day she got into an accident with Defendants. Geovanni Velverde, a friend, was driving at the time of the accident. He died of his injuries, and Plaintiff suffered serious injuries. Plaintiff sued Defendants alleging that her injuries were caused by Defendants' negligence. Defendants moved for summary judgment, arguing that as an uninsured motorist, Plaintiff had no right to sue. Upon careful consideration of the arguments and the applicable legal authority, the Supreme Court affirmed the lower court's decision. The Court found that under the state's "No Fault Act," a person injured while a passenger in her on uninsured vehicle was barred from suing for her injuries.

New York Marine & General Insurance Company ("NYMAGIC") and Union Fire Insurance Company of Pittsburgh, Pennsylvania ("NUFIC-PA") were both insuring Bayou Steel Corporation ("Bayou") when an employee of Bayou's Illinois stevedoring contractor, Kindra Marine Terminal ("Kindra"), was injured during Kindra's unloading of Bayou's steel bundles from a vessel belonging to Memco Barge Lines ("Memco"). Memco had contracted with Bayou to haul the cargo for Bayou by barge from Louisiana to Illinois. At issue was whether Kindra was Bayou's contractor or subcontractor for purposes of the provision in NYMAGIC's policy that excluded coverage of Bayou's liability for bodily injury incurred by employees of Bayou's subcontractors but did not exclude coverage of such injuries incurred by Bayou's contractors. The court held that, because Bayou was the principal party, paying party, and not the prime contractor, performance party, under both its barge transportation agreement with Memco and its offloading agreement with Kindra, there was no way for Kindra to have been a subcontractor of Bayou within the intendment of NYMAGIC's policy's exclusion of coverage. Kindra contracted directly with Bayou, not with some contractor of Bayou, to offload Bayou's cargo, so Kindra was Bayou's contractor. Accordingly, NYMAGIC's coverage exclusion did not apply to the employee's injuries because he was the employee of a contractor of Bayou.

A $15,000 insurance policy covering the decedent named his brother as beneficiary. The brother was killed in the same accident that killed the decedent. Although the insurer received notice that the decedent's mother (estate administrator) had assigned the policy to pay for the funeral, the company obtained an order from the state court and paid the benefit to decedent's children, applying a "facility-of-payment" clause, which provided: "if the beneficiary he or she named is not alive at the Employeeâs death, the payment will be made at Our option, to any one or more of the following: Your spouse; Your children; Your parents; Your brothers and sisters; or Your estate." The assignee (finance company) filed suit. The federal district court entered judgment in favor of the insurer. The Seventh Circuit affirmed, exercising jurisdiction under the Employee Retirement Income Security Act, 29 U.S.C. 1132. Insurance companies have broad discretion under facility-of-payment clauses and the insurer's decision was not arbitrary. The court declined to award attorney fees.

Plaintiff Darlene Gray appealed an order of the Superior Court that dismissed her complaint against Defendant Commonwealth Land Title Insurance Company. In 2003, Plaintiff and her sister, in their capacity as trustees of the Ocean Estates Realty Trust, received a quitclaim deed from the Triple P Ranch Realty Trust. Ocean Estates paid $80,000 for the parcel and recorded the deed. Later that year, Ocean Estates conveyed a warranty deed for the land to Plaintiff. At the time she received the deed, Plaintiff obtained a construction loan, granted a mortgage, and purchased title insurance from Commonwealth. The title insurance provided $328,000 in coverage against a title defect. In 2006, Plaintiff learned that Triple P Ranch Realty Trust never acquired title to the property and that the State legally owned it. The land was appraised at $15,000, and the insurer paid the mortgage lender the amount of the appraisal. Plaintiff sued Commonwealth for breach of contract, arguing that Commonwealth's policy should reimburse her for all expenses she incurred prior to learning of the title defect. When the Superior Court denied Plaintiff's motion for reconsideration, she appealed to the Supreme Court. The Court found that trial court properly determined the measure of damages for Plaintiff's claim. Without finding errors in the trial court's findings of fact, the Supreme Court affirmed the trial court's decision dismissing Plaintiff's complaint.

Plaintiff purchased a credit disability insurance policy from defendant in connection with credit union financing of an automobile. Following an injury on the job, he received benefits in the form of credit union payments on the auto loan for about three years. The defendant then notified plaintiff that it would not continue to pay because he no longer met the definition of Total Disability under the policy. The district court certified a class action, found the definition of the term âTotal Disabilityâ ambiguous and construed it in favor the insured, entered an injunction that set up a claims review process for class members, then decertified the class. The Third Circuit affirmed with respect to the definition. The court vacated and remanded the rest of the judgment, holding that the court abused its discretion in issuing an injunction in which it retained jurisdiction over the class members' claims throughout the claims procedure process after the class was decertified.

Plaintiff Mark Strawn filed a class action suit against Defendants Farmers Insurance Company of Oregon, Mid-Century Insurance Company, and Truck Insurance Exchange (collectively, Farmers). Plaintiff alleged that Farmers had breached contractual duties and committed fraud by instituting a claims handling process that arbitrarily reduced payments for reasonable medical benefits owed under its automobile insurance policies. A jury returned a verdict in favor of Plaintiff, and awarded damages totaling approximately $8.9 million. Farmers appealed, and the appellate court concluded that the punitive damages awarded by the trial court exceeded constitutional limits, but otherwise affirmed the judgment. Both parties sought the Supreme Courtâs review. Farmers challenged the damages award, arguing that it should be lower. Plaintiff argued that the original award should be reinstated. The Supreme Court rejected Farmersâ arguments, and concluded that the appellate court should not have reached Farmersâ constitutional challenge to the amount of the punitive damages award. Consequently, the Court affirmed part, and reversed part of the appellate decision, and affirmed the judgment of the trial court.