Justia Insurance Law Opinion Summaries

Life Insurance Company of North America (“LINA”) made multiple determinations that Plaintiff did not qualify for disability benefits under her long-term disability insurance policy and her life insurance policy. Plaintiff sued LINA for breach of contract and bad-faith failure to provide insurance benefits. The district court granted summary judgment for LINA on Plaintiff’s bad-faith claim based on the multiple medical opinions that supported LINA’s determinations. The district court held that, under Alabama law, Plaintiff could not recover mental anguish damages for her breach of contract claim and excluded evidence of such damages. Finally, following a jury verdict in Plaintiff’s favor on the breach of contract claim related to the long-term disability insurance policy, the district court determined that Plaintiff was entitled to simple pre-judgment interest at a rate of 1.5 percent under the policy and simple post-judgment interest at a rate of 0.08 percent pursuant to 28 U.S.C. Section 1961. In determining that the long-term disability insurance policy provided for simple rather than compound interest, the district court struck a document produced by Plaintiff because it was not properly authenticated. On appeal, Plaintiff argued that the district court erred at each of these steps.   The Eleventh Circuit affirmed. The court held that the evidence establishes that LINA had an arguable reason for determining that Plaintiff did not qualify for disability benefits under the disability policy. Further, the court wrote that the Supreme Court of Alabama has made clear that mental anguish damages are unavailable for breach of contract claims related to long-term disability insurance policies. View "Cherri Walker v. Life Insurance Company of North America" on Justia Law

Geico General Insurance Company (Geico) asserted eight claims against Glassco, Inc.: a declaratory judgment claim seeking a declaration that Glassco violated the Repair Act and that Geico had no duty to pay pending claims (count one); a federal racketeering claim (count two); a federal racketeering conspiracy claim (count three); a Florida Deceptive and Unfair Trade Practices Act claim (count four); a Florida racketeering claim (count five); a common law fraud claim (count six); an unjust enrichment claim (count seven); and a Repair Act claim (count eight). The district court denied summary judgment to the extent that Geico alleged that Glassco, Inc. made misrepresentations that amounted to fraud “independent of” Glassco’s violations of the Florida Motor Vehicle Repair Act. Geico tried to convert this nonfinal decision into a final decision by filing an amended complaint that removed the fraud allegations that were independent of the Repair Act violations.   The Eleventh Circuit dismissed the appeal explaining that because the district court denied summary judgment as to these fraud allegations, there is no final decision for Geico to appeal. The court held that it can’t exercise jurisdiction over this appeal simply because the alternative—sending this case back to the district court—may be inconvenient or inefficient. The court wrote that by dismissing this appeal today, it vindicates finality as the historic characteristic of federal appellate procedure, serves the important interests of judicial efficiency, and promotes the sensible policy of avoiding piecemeal appeals. View "Government Employees Insurance Company, et al. v. Jason Wilemon, et al." on Justia Law

The certified a question to the Supreme Court of California in a case where an insured who sued for declaratory judgment that its insurance policy provides coverage for its losses arising from the COVID-19 pandemic. At issue here is whether the policy’s virus exclusion is enforceable and precludes coverage.   The Ninth Circuit certified the following question to the Supreme Court of California: Is the virus exclusion in French Laundry’s insurance policy unenforceable because enforcing it would render illusory a limited virus coverage provision allowing for the possibility of coverage for business losses and extra expenses allegedly caused by the presence and impacts of COVID-19 at an insured’s properties, including the loss of business due to a civil authority closure order? View "FRENCH LAUNDRY PARTNERS, LP, ET AL V. HARTFORD FIRE INSURANCE CO., ET AL" on Justia Law

ResCap Liquidating Trust (“ResCap”) pursued indemnification claims against originator Primary Residential Mortgage, Inc. (“PRMI”), a Nevada corporation. ResCap asserted breach of contract and indemnification claims, seeking to recover a portion of the allowed bankruptcy claims for those holding units in the liquidating trust. The district court concluded that ResCap had established each element of its contractual indemnification claim. The district court awarded ResCap $10.6 million in attorney’s fees, $3.5 million in costs, $2 million in prejudgment interest, and $520,212 in what it termed “post-award prejudgment interest” for the period between entry of judgment and the order awarding attorney’s fees, costs, and prejudgment interest. Defendant appealed.   The Eighth Circuit remanded for a recalculation of postjudgment interest but otherwise affirmed. The court explained that the district court held that, as a matter of Minnesota law governed by Section 549.09, a final judgment was not “finally entered” until its Judgment in a Civil Case resolving attorney’s fees, costs, and interest was entered on April 28, 2021, and therefore Minnesota’s ten percent prejudgment rate applied in the interim period. But Section 1961(a) does not say “final judgment,” it says “money judgment.” The district court, on August 17, 2020, entered a “money judgment.” Thus, the district court erred in applying Minnesota law to calculate interest after August 17, 2020, rather than 28 U.S.C. Section 1961(a). View "ResCap Liquidating Trust v. Primary Residential Mortgage" on Justia Law

In this insurance dispute brought by Insured seeking declarations that the policies issued by Insurer covered the losses it had suffered from repairing and remediating its physical space to accommodate the health necessities brought about by the COVID-19 pandemic, holding that the allegations did not trigger the primary coverage provided by the relevant policies.Insured asserted that it suffered hundreds of millions of dollars for health and safety protocols and modifications to its stores due to the presence of COVID-19. After Insurer denied coverage Insured brought this lawsuit. Insurer moved to dismiss the complaint, after which Insured filed a motion to certify a question of law to the Court of Appeals. The Court of Appeals answered that when a first-party, all-risk property insurance policy covers "all risks of physical loss or damage" to insured property from any cause unless excluded, coverage is not triggered when a toxic, noxious, or hazardous substance such as COVID-19 is physical present in the indoor air of that property, is also present on and can later be dislodged from physical items on the property, and causes a loss of the functional use of the property. View "Tapestry, Inc. v. Factory Mutual Insurance" on Justia Law

PHI Group, Inc. (“PHI”), offers helicopter services for numerous global customers in the oil and gas, air medical, technical services, and healthcare industries. Zurich American Insurance Company (“Zurich”) sold an “all-risk” insurance policy covering PHI. PHI sued Zurich in a civil action in diversity to recover economic losses for the partial interruption of its business during the COVID pandemic. The district court dismissed PHI’s claims because its losses were not caused by a physical loss or damage to corporeal property, its claims were not novel in the post-pandemic legal environment, and the Fifth Circuit has resolved comparable cases similarly.   The Fifth Circuit affirmed. The court explained that PHI alleged a material difference in the insurance policies in Q Clothier and here. In Q Clothier, the policy covered “direct physical loss of or physical damage” to property, while here, the policy covers “direct physical loss or damage” to property. But the Fifth Circuit has found no ambiguity here, regardless of whether “physical” modifies only loss or both loss and damage. Further, PHI has not established any facts that indicate that coronavirus caused direct physical loss or damage, which remains at the crux of any recovery under its insurance policy. Regardless of the contamination exclusion, PHI does not have a plausible claim for coverage. An exclusion cannot create coverage that does not exist under the plain meaning of the policy. View "PHI Group v. Zurich American Insurance" on Justia Law

In this case involving a Pennsylvania-domiciled insurance company in rehabilitation under the jurisdiction of a Pennsylvania court and a management company that was a wholly-owned subsidiary of the Pennsylvania-domiciled insurance company that was not a part of the rehabilitation proceeding the Court of Chancery granted in part and denied in part Plaintiffs' motion to stay, holding that a stay was warranted in part.In In re Liquidation of Freestone Insurance Co., 143 A.3d 1234 (Del. Ch. 2016), the Court of Chancery was presiding over an insurance delinquency proceeding, and at issue was whether to lift a broad anti-suit injunction to permit litigation to proceed in another state against the delinquent insurer. The Court of Chancery held that the factors set forth in Freestone to consider in deciding whether to depart from the presumption against permitting collateral proceedings to go forward against the delinquent insurer supported a stay in the instant case as to the delinquent insurer but did not support a stay as to the management company. View "Principal Growth Strategies, LLC v. AGH Parent LLC" on Justia Law

The Supreme Judicial Court held that there is no common-law duty for insurers to cover costs incurred by an insured to prevent imminent covered loss when the plain, unambiguous terms of the insurance policy speak directly to the question of mitigation and reimbursement and do not provide coverage and the costs are otherwise excluded by other policy provisions.Insured sought recovery from Insurer for various costs it incurred after a wastewater treatment system at its manufacturing facility malfunctioned, claiming coverage under its pollution liability policy. In dispute were costs incurred that were not cleanup costs or costs necessary to avoid imminent endangerment to public health or welfare but necessary to avoid a business interruption. The district court held that the costs at issue were not recoverable and that there was no basis to impose a common-law duty that was inconsistent with the policy's coverages and exclusions. View "Ken's Foods, Inc. v. Steadfast Insurance Co." on Justia Law

In a case involving the denial of coverage for an automobile accident, the Fifth Circuit addressed whether uninsured motorist coverage can be denied simply because the driver, who was the son of the insured, was not listed on the policy? The court answered that question “no.” The other is whether the policy can be voided because the insured committed a material misrepresentation by failing in her application for insurance to name, as required, those of driving age who lived in her household? The court answered that question, “yes.”   The Fifth Circuit affirmed the district court’s ruling granting Viking Insurance’s motion for summary judgment in Plaintiffs’ suit seeking damages for a wrongful denial of benefits. The court concluded that if an insurer declines to exercise the greater power to void a policy, it still retains the lesser power to exercise a contractual right to deny coverage. The court explained that here, a knowing misstatement in the application about the drivers in the household was material if it would have caused Viking either not to issue the policy or to increase the premium. The court accepted that materiality is not affected by the relationship between the false statement and the specific coverage being sought in litigation. It is enough that the falsity was material to the decision of the company to issue the policy at the agreed price. Consequently, Viking could have voided the policy. By not voiding, Viking’s policy remained in effect. Accordingly, Viking had the right to deny Plaintiffs’ claim. View "Bradley v. Viking Insurance" on Justia Law

Admiral Insurance Co. (“Admiral”) sought a declaration that it need not defend or indemnify its historical insured, Niagara Transformer Corp. (“Niagara”), in potential litigation between Niagara and nonparties Monsanto Co., Pharmacia LLC, and Solutia Inc. (collectively, “Monsanto”) over harms caused by polychlorinated biphenyls that Monsanto had sold to Niagara in the 1960s and 1970s. Admiral appealed from the order of the district court dismissing its action for lack of a justiciable “case of actual controversy” within the meaning of the Declaratory Judgment Act (the “DJA”). The district court principally relied on (1) the fact that Monsanto has not commenced or explicitly threatened formal litigation against Niagara, and (2) its assessment that Monsanto would not be likely to prevail in such litigation.   The Second Circuit affirmed the district court’s order dismissing Admiral’s action to the extent that it sought a declaration of Admiral’s duty to indemnify Niagara, and remanded for the district court to determine whether there exists a practical likelihood that Monsanto will file suit against Niagara. The court explained that while the district court properly concluded that it lacked jurisdiction to declare Admiral’s duty to indemnify Niagara, it did not adequately distinguish between that duty and the insurer’s separate duty to defend its insured. Because a declaratory-judgment action concerning either duty becomes justiciable upon a “practical likelihood” that the duty will be triggered, the justiciability of Admiral’s duty-to-defend claim turns on the practical likelihood that Monsanto will file suit against Niagara – not on whether Monsanto has already in fact done so. View "Admiral Ins. Co. v. Niagara Transformer Corp." on Justia Law