Justia Insurance Law Opinion Summaries

Evanston Insurance Company appealed the judgment following a bench trial on an insurance-coverage dispute. After determining that Evanston failed to timely rescind the policy and that a policy exclusion did not apply, the district court required Evanston to continue defending Desert State Life Management against a class action arising from its former CEO’s embezzlement scheme. Though the Tenth Circuit agreed with the district court that rescission was untimely, it disagreed about the likely application of New Mexico law on applying policy exclusions. Judgment was thus affirmed in part and reversed in part. View "Evanston Insurance Company v. Desert State Life Management, et al." on Justia Law

Plaintiff brought a lawsuit against Allianz Life Insurance Company of North America (“Allianz”) in Plaintiff’s capacity as a trustee of the Zupnick Family Trust 2008A (“Trust”). Plaintiff sought a declaratory judgment that an Allianz life insurance policy (“Zupnick Policy”), which Plaintiff contends is owned by the Trust, remains in effect. The district court concluded that the Trust was not the actual owner of the Zupnick Policy under New York law because any assignment of the policy to the Trust failed to comply with the Zupnick Policy’s provision that assignment would be effective upon Allianz’s receipt of written notice of the assignment. The district court held that the Trust lacked contractual standing to sue on the Zupnick Policy, and granted Allianz’s motion to dismiss. On appeal, Plaintiff argued that failure to comply with the provisions of a life insurance policy requiring written notice of assignment cannot, under New York law, render an assignment ineffective.   The Second Circuit certified the question to the Court of Appeals because the argument turns on a question of state law for which no controlling decision of the New York Court of Appeals exists. The court certified the following question: Where a life insurance policy provides that “assignment will be effective upon Notice” in writing to the insurer, does the failure to provide such written notice void the assignment so that the purported assignee does not have contractual standing to bring a claim under the Policy? View "Brettler v. Allianz Life Insurance Company of North America" on Justia Law

The Supreme Court reversed the judgment of the court of appeals and reinstated the trial court's grant of summary judgment in favor of Owners Insurance Co. on EMOI Services, LLC's claim of breach of contract and bad-faith denial of insurance coverage after a ransomware attack on EMOI's computer-software systems, holding that Owners was not responsible for covering the loss at issue.At issue was whether the businessowners insurance policy issued by Appellant to EMOI covered losses suffered by EMOI when it became the target of a ransomware attack. The trial court granted summary judgment to Owners. The court of appeals reversed, concluding that genuine issues of material fact precluded summary judgment. The Supreme Court reversed, holding that Owners did not breach its contract with EMOI because the pertinent insurance policy did not cover the type of loss EMOI experienced. View "EMOI Services LLC v. Owners Insurance Co." on Justia Law

The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court granting a directed verdict on a bad faith claim, holding that Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1993), established the applicable legal standard for both common law and statutory bad-faith claims.Cincinnati Insurance Company (CIC) brought a declaratory judgment action disputing coverage under a commercial general liability policy insuring K-2 Catering, LLC for claims Haley Belt made stemming from an accident that occurred during an event hosted by K-2's member-managers at their residence. Ultimately, judgment was entered declaring coverage under the policy. While the action was pending, Belt brought a separate action against K-2 and CIC, alleging bad faith and negligence in the settlement of her claims under K-2's policy. The negligence claims were settled and, after a jury trial, the jury returned a verdict against CIC. The court of appeals reversed, concluding that the trial court erred when it failed to grant CIC a directed verdict on the bad faith claims. The Supreme Court affirmed, holding that the trial court erred when it failed to apply the Wittmer standard and grant a directed verdict for CIC. View "Belt v. Cincinnati Insurance Co." on Justia Law

North American issued two insurance policies for the life of J.C. On November 9, 2018, it issued a policy that named an irrevocable trust managed by the trustee as beneficiary. It issued a policy that named J.C.’s wife, as beneficiary. Each contained an essentially identical clause that excluded suicide from coverage under the policy. That clause read, “SUICIDE — If the Insured commits suicide, while sane or insane, within two years from the Policy Date, Our liability is limited to an amount equal to the total premiums paid.” In a motion for a judgment on the pleadings, the beneficiaries argued that “the entire lawsuit is predicated on [North American’s] erroneous position that the contract term ‘suicide’ is synonymous with the expression ‘suicide by cop,’ which is a term of art that actually refers to justifiable homicide.” The district court agreed that “[t]he plain meaning of the term ‘suicide’ encompasses the act of killing oneself—not the killing of a person by another” and granted the motion.   The Eleventh Circuit vacated and remanded finding that the ordinary meaning of “suicide” includes suicide-by-cop. The court explained that here, where the beneficiaries agree with the allegations in North American’s complaint due to the procedural posture of the case, no factual question exists. The ordinary meaning of “suicide” certainly covers J.C.’s specific behavior in pointing his gun at police officers to provoke them into shooting and killing him as part of his plan to end his own life. Thus, the district court erred in ruling to the contrary. View "North American Company for Life and Health Insurance v. Michelle Caldwell, et al" on Justia Law

Defendant argued that the district court erroneously held that a life insurance policy issued by Plaintiff Jackson National Life Insurance Company (“Jackson”) to third-party K.C., and subsequently sold by K.C. to Defendant, was void and unenforceable under Georgia law as an illegal human life wagering contract. K.C. acquired the policy, which listed “K.C.” as the insured and named K.C.’s estate as the beneficiary in 1999. At the time, K.C. was HIV positive, and he had a relatively short life expectancy. A few months after he purchased the policy, K.C., with the assistance of a viatical insurance broker, sold the policy to Defendant and named Defendant as its primary beneficiary.   When Defendant learned about K.C.s death, he made a claim for the death benefit under the policy. Jackson declined to pay the benefit and initiated this action seeking a declaration that the policy was void ab initio under Georgia law as an illegal human life wagering contract. The district court concluded that the policy was void and unenforceable under Georgia law, and it entered judgment in favor of Jackson. Defendant appealed, arguing that K.C.’s unilateral intent to sell the policy to a third party without an insurable interest in his life was insufficient to declare the policy void under Georgia law.   The Eleventh Circuit reversed and vacated the judgment entered by the district court and remanded the case for further proceedings, including a determination as to whether Defendant’s claim to benefits under the policy is barred by laches. View "Jackson National Life Insurance Company v. Sterling Crum" on Justia Law

Wells Fargo Bank made a loan to Talisker Finance, Inc. Under the loan agreement, Talisker gave Wells Fargo a security interest in three parcels of land owned by Talisker’s affiliates. To ensure that Talisker’s affiliates had good title to the parcels, Wells Fargo bought title insurance from Stewart Title Guaranty Company. Talisker defaulted, but it couldn’t deliver good title to part of the land promised as collateral. The default triggered Wells Fargo’s right to compensation under the title insurance policy. Under that policy, Stewart owed Wells Fargo for the diminution in the value of the collateral. But the amount of the diminution was complicated by the presence of multiple parcels. The district court concluded that the lost parcel didn’t affect the value of the other parcels. After review, the Tenth Circuit concurred: because their values remained constant, the district court properly found that the diminution was simply the value of the collateral that Talisker’s affiliates didn’t own. View "Wells Fargo Bank v. Stewart Title Guaranty Company" on Justia Law

The Supreme Court answered in the negative a certified question regarding whether a provision in a commercial insurance policy, governed by Ohio law, providing coverage for a "direct 'loss'" to certain property covers a claim based on business shutdowns caused by COVID-19 (Covid), holding that the term "direct loss" did not include Plaintiff's Covid-related loss of the use of its offices for business purposes.Plaintiff, which owned and operated an audiology practice in northeast Ohio, held an all-risk commercial-property insurance policy issued by Defendant. Plaintiff filed suit alleging that Defendant had breached the contract by refusing to provide coverage for its Covid-related claim on the ground that there was no "direct physical loss or damage" to covered property. The federal court granted Defendant's motion for certification. The Supreme Court answered (1) the term "direct 'loss'" requires that there be some loss or damage to covered property that is physical in nature, and any potential exception to this rule did not apply in this case; and (2) therefore, the term "direct 'loss'" did not include Plaintiff's Covid-related loss of the ability to use covered property for business purposes. View "Neuro-Communication Services v. Cincinnati Insurance Co." on Justia Law

Appellants, who were maimed in a hot air balloon accident in southeastern Pennsylvania in 2015, pursued appellate challenges to the District of Maryland’s rulings against them and in favor of T.H.E. Insurance Company (the “Insurer”) in an insurance coverage dispute. In federal court proceedings initiated in Maryland, Appellants sued certain of the Insurer’s named insureds, and a business called New Horizon Balloon Team (collectively, the “Insureds”) — for the gruesome injuries Appellants’ sustained in the balloon accident (the “damages lawsuit”). While the damages lawsuit was pending, the Insurer initiated these insurance coverage proceedings in the Eastern District of Pennsylvania, naming as defendants the three Insureds, plus Appellants. The district court awarded summary judgment in favor of the Insurer’s contention with respect to a $100,000 coverage limit for each balloon passenger. The Memorandum Opinion also rejected both of Appellants’ bad faith claims. Appellants appealed those rulings.   The Fourth Circuit affirmed. Applying Maryland principles of res judicata in this dispute, the court was satisfied that the coverage issue presented by the Insurer in these proceedings is not barred by the settlement agreement in the damages lawsuit. As such, the court agreed with the district court that Appellants are not entitled to a summary judgment award on the coverage issue on res judicata grounds. Further, the district court thus did not err in ruling Appellants were inside the balloon’s basket at the time of their injuries. As such, Appellants were “passengers” under the Policy and Coverage B’s limit of $100,000 per passenger applies. View "T.H.E. Insurance Company v. Melyndia Davis" on Justia Law

This dispute over UM coverage arose from a motor vehicle accident wherein an uninsured motorist struck and killed Macy Lee Alvey, III, who was in the course and scope of his employment with Rony’s Towing & Recovery, LLC (“Rony’s Towing”). The Louisiana Supreme Court granted this writ to determine whether the failure to include the insurer’s name on an uninsured/underinsured motorist (“UM”) coverage selection form rendered it invalid. Because inclusion of the insurer’s name was an express requirement on the face of the UM form itself, the Supreme Court agreed with the court of appeal that the failure to include such information resulted in an invalid waiver of coverage. View "Berkeley Assurance Co. v. Willis, et al." on Justia Law