Justia Insurance Law Opinion Summaries

Defendant, a reinsurer, appealed from a district court’s ruling granting summary judgment to Plaintiff, its reinsured. On appeal, Defendant argues that the district court erroneously held that its reinsurance obligations to Plaintiff are co-extensive with Appellee’s separate insurance obligations to a third party and that it presented no triable issue of fact on its late-notice defense.   The Second Circuit affirmed. The court wrote that the district court correctly determined that English law, which governs the relevant reinsurance policy, would interpret that policy to provide coverage that is coextensive with Plaintiff’s separate insurance obligations. The district court also correctly rejected Defendant’s late-notice defense because Defendant has not shown the extreme facts necessary under English law to support recognition of that defense where, as here, timely notice is not a condition precedent to coverage. View "The Insurance Company of the State of Pennsylvania v. Equitas Insurance" on Justia Law

The First Circuit affirmed the judgment of the district court granting summary judgment in favor of Triple-S Management Corporation and Triple-S Vida, Inc. (collectively, Triple-S) and dismissing this case brought by Dora Bonner, holding that the district court did not abuse its discretion in denying Bonner's discovery-related motions and did not err in considering the evidence at the summary judgment stage.Bonner brought several claims alleging that Triple-S denied her millions of dollars of proceeds from certain certificates and devised a scheme to defraud her. After denying Bonner's motion to compel discovery and extend the discovery deadline, the district court concluded that Triple-S had established as a matter of law that the persons behind the fraudulent scheme were not related to Triple-S. The First Circuit affirmed, holding that the district court (1) did not abuse its discretion in denying the motion to compel and motion for consideration; and (2) properly granted summary judgment for Triple-S. View "Bonner v. Triple-S Vida, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court granting a motion to compel arbitration in this insurance dispute, holding that the district court correctly granted the motion to compel arbitration brought by the underwriters of Green Enterprises, LLC's insurance policy, all syndicates at Lloyd's of London (Underwriters).After a fire destroyed one of its plants, Green, a Puerto Rican recycling company, filed an insurance claim. Underwriters denied the claim, after which Green brought this lawsuit. Underwriters filed a motion to compel arbitration under an arbitration clause in the parties' contract. The district court granted the motion and dismissed Green's claims without prejudice. The First Circuit affirmed, holding that the district court properly granted the motion to compel. View "Green Enterprises, LLC v. Hiscox Syndicates Limited at Lloyd's of London" on Justia Law

The law firm of Brown Goldstein Levy LLP (“BGL”) and one of its partners (collectively, “Appellants”) filed suit against their insurer, Federal Insurance Company (“Appellee”), when it refused to provide coverage for costs Appellants incurred after the Government investigated the partner, executed a search warrant at BGL’s office, and notified the partner that his representation of certain clients may present a conflict of interest. The district court dismissed Appellants’ complaint, holding that there was no “Claim,” as that term is defined in the insurance policy, and alternatively that any costs Appellants incurred were excluded from the policy’s definition of “loss.”   The Fourth Circuit affirmed, concluding that there is no “Claim.” Neither the search warrant application nor the resulting search warrant is “written demand[s] or written request[s] for . . . nonmonetary relief . . . against an Insured” as required by the Policy. Therefore, the Search Warrant Claim fails because Appellants cannot state a claim for relief. The Target Conflict Letter makes no demand or request for relief against an Insured. The Government’s request to be notified promptly as to how the partner intends to proceed is not a request for “the redress or benefit, esp. equitable in nature (such as an injunction or specific performance), that a party asks of a court.” The Conflict Letters are not “Claims.” The court explained that despite Appellants’ attempts to characterize them as “demands,” they are not. Therefore, Appellants cannot state a claim as to the Partner Claim. View "Brown Goldstein Levy LLP v. Federal Insurance Company" on Justia Law

The Plan is a nonprofit health care service plan subject to Health & Safety Code 1340, including the Parity Act, under which: “Every health care service plan contract . . . that provides hospital, medical, or surgical coverage shall provide coverage for the diagnosis and medically necessary treatment of severe mental illness of a person of any age, and of serious emotional disturbances of a child . . . under the same terms and conditions applied to other medical conditions.”Plaintiffs alleged that the Plan violates the Parity Act by “deterring members from obtaining one-on-one mental health therapy without making individualized determinations … encouraging ‘group’ therapy, without making individualized determinations" where similar practices are not followed in the treatment of physical health conditions. An Unruh Civil Rights Act claim alleged that the Plan intentionally discriminated against persons with mental disabilities or conditions. The court granted the Plan summary judgment.The court of appeal affirmed the rejection of one plaintiff’s individual claims; the Plan is not liable for the acts of its subsidiary by whom the plaintiff’s coverage was issued. The court otherwise reversed. On an Unfair Competition Law claim, the court failed to consider how the Plan’s conduct undermines its contractual promises of covered treatment in violation of the Parity Act. On the Unruh claim, triable issues of fact exist as to whether the plaintiffs were denied medically necessary treatment as a result of intentional discrimination. View "Futterman v. Kaiser Foundation Health Plan, Inc." on Justia Law

Plaintiffs sued Defendants GEICO Advantage Insurance Company and its related entities. Each Plaintiff possessed a vehicle that was subject to a private passenger auto insurance policy with a different Defendant (collectively, the “Policies”). Each Plaintiff’s vehicle was involved in an auto collision while insured under one of the Policies. Plaintiffs sought to represent a class of insureds claiming that GEICO failed to fully compensate them for the total loss of their vehicles under their respective insurance policies. The district court held that Plaintiffs had standing to sue on behalf of the proposed class and subsequently granted class certification. GEICO appealed both holdings.
The Fifth Circuit affirmed. The court wrote it is clear that each Plaintiff individually satisfies the less stringent class certification approach. Indeed, there is no dispute that each Plaintiff alleges that he or she has suffered some injury; the disagreement between the parties concerns how those injuries relate to those of the class. Further, the court wrote it disagreed with the contention that Plaintiffs have alleged three separate injuries. GEICO’s failure to remit any of the three Purchasing Fees amounts to the same harm—a breach of the Policies. The court also concluded that the strategic value of these claims’ waiver is considerably greater than their inherent worth. It was accordingly within the district court’s discretion to rule that Plaintiffs are adequate class representatives. Moreover, the court wrote that GEICO’s arguments against class certification for this claim largely track its arguments opposing certification of Plaintiffs’ other claims. The district court’s analysis meets the requisite rigor when read in the broader context of its decision. View "Angell v. GEICO Advantage Ins" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of Plaintiffs' insurer and its agent in this negligence action brought by Plaintiffs seeking to recover damages after their home was destroyed in a fire, holding that the district court did not err.Insureds purchased a homeowners insurance policy from Insurer through a licensed insurance producer (Agent). Insureds later filed a complaint alleging that Agent negligently advised them on the estimated replacement value of their home and negligently misrepresented the adequacy of their policy limits in the event of a total loss. Insureds also alleged that Insurer was liable under a theory of respondent superior. The district court granted summary judgment for Insurer and Agent. The Supreme Court affirmed, holding that Insureds' claims failed as a matter of law and that the district court did not err in granting summary judgment. View "Callahan v. Brant" on Justia Law

The federal district court in Washington State certified a question of law to the Washington Supreme Court. Washington law required group life insurance policies to have an incontestability clause providing that “the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue.” The certified question in this case asked whether an insurer could invalidate a life insurance policy after this two-year period on grounds that the policies were void ab initio or never “in force.” New York Life Insurance (NY Life) issued two life insurance policies to Lorenzo Mitchell, naming his nephew, Simon Mitchell, as the sole beneficiary. Lorenzo died more than two years after the policies were issued, and Simon sought to collect on the policies. NY Life became aware that Lorenzo had Down syndrome and lived with significant intellectual disabilities. These facts raised questions about the circumstances under which the policies were issued. NY Life sued Simon in federal district court seeking declaratory relief that the policies were void ab initio under three possible theories: imposter fraud, incapacity, and lack of an insurable interest. The Washington Supreme Court concluded NY Life’s first and third claims were not barred by that provision. “In contrast, lack of capacity does not, on its own, render an insurance contract void; it renders it at most voidable. Because a voidable contract is not void ab initio, we hold the incontestability provision bars NY Life’s second claim.” View "New York Life Ins. Co. v. Mitchell" on Justia Law

In an interlocutory appeal, multiple hotel operators challenged a superior court’s orders in a suit against defendants, multiple insurance underwriters, all relating to the denial of coverage during the COVID-19 world health pandemic. Plaintiffs owned and operated twenty-three hotels: four in New Hampshire, eighteen in Massachusetts, and one in New Jersey. Plaintiffs purchased $600 million of insurance coverage from defendants for the policy period from November 1, 2019 to November 1, 2020. With the exception of certain addenda, the relevant language of the policies was identical, stating in part that it “insures against risks of direct physical loss of or damage to property described herein . . . except as hereinafter excluded.” For periods of time, pursuant to governors’ orders, hotels in each of the three states were permitted to provide lodging only to vulnerable populations and to essential workers. These essential workers included healthcare workers, the COVID-19 essential workforce, and other workers responding to the COVID-19 public health emergency. Beginning in June 2020, plaintiffs’ hotels were permitted to reopen with a number of restrictions on their business operations. Plaintiffs, through their insurance broker, provided notice to defendants they were submitting claims in connection with losses stemming from COVID-19. Plaintiffs sued when these claims denied, arguing that the potential presence of the virus triggered business loss provisions in their respective policies. To this, the New Hampshire Supreme Court disagreed, finding that “[w]hile the presence of the virus might affect how people interact with one another, and interact with the property, it does not render the property useless or uninhabitable, nor distinctly and demonstrably altered.” View "Schleicher & Stebbins Hotels, LLC, et al. v. Starr Surplus Lines Insurance Co., et al." on Justia Law

Allied World Specialty Insurance Company issued a WaterPlus Package Insurance Policy to the Windermere Oaks Water Supply Corporation. That policy includes coverage for Public Officials and Management Liability. But it also includes various exclusions from coverage. At issue in this appeal is the exclusion of contractual liability.   The Fifth Circuit affirmed the district court’s judgment granting summary judgment in favor of the insured. The court held that a claim for breach of fiduciary duty is not a claim for breach of contract and is, therefore, not subject to exclusion from coverage under a contractual liability exclusion. The court explained that under the Texas Prompt Payment of Claims Act, Tex. Ins. Code Section 542.060, an insurer’s breach of the duty to defend constitutes a per se violation View "Windermere Oaks v. Allied World" on Justia Law