Justia Insurance Law Opinion Summaries

The Supreme Court affirmed the judgment of the district court concluding that Bonner County, an Idaho political subdivision, had failed to demonstrate to Western Insurance Company's Liquidator that Pend Oreille Bonner Development LLC's failure to complete several municipal projects had cost it anything, holding that the court's finding were not against the clear weight of the evidence.Bonner County contracted with Pend Oreille to construct the projects at issue and required Pend Oreille to obtain multiple surety bonds, which Pend Oreille purchased through Western. Pend Oreille defaulted on the projects. Bonner County filed a claim with the Liquidator of Western, which had been placed in liquidation, to recover the surety bonds. The district court entered judgment against Bonner County. The Supreme Court affirmed across the Board, holding that the district court did not err when it (1) admitted extrinsic evidence to determine the parties' intent; (2) read the statute to provide that a liquidator can amend a determination of claims in response to charged circumstances; and (3) made its findings. View "Bonner County v. Western Insurance Co." on Justia Law

The Court of Appeals held that Plaintiffs' original complaint alleging that Defendant breached the parties' written insurance policy and that Plaintiffs had fully complied with the requirements contained in the policy failed to give Defendant the requisite notice of the "transactions, occurrences, or series of transactions or occurrences, to be proved" in support of Plaintiff's reformation claim, as required under N.Y. C.P.L.R. 203(f).Defendant, an insurance company, issued Plaintiffs, two limited liability companies, a multi-million dollar, written insurance policy covering many of Plaintiffs' vacant commercial properties. Plaintiffs later brought this action for breach of contract seeking damages based on Defendant's failure to cover damages incurred after a fire on the premises. A jury returned a verdict in favor of Plaintiffs on the reformation claim, and the appellate division affirmed. The Court of Appeals reversed, holding that Plaintiffs' complaint failed to give notice to Defendant of the transactions or occurrences on which Plaintiffs based their reformation claim. View "34-06 73, LLC v. Seneca Insurance Co." on Justia Law

Southern Farm Bureau Life Insurance Company (“Farm Bureau”) issued a term life insurance policy to S.M. S.M.’s husband, Plaintiff, who was the policy’s primary beneficiary. Farm Bureau received a notification from the Post Office indicating that S.M.’s address had changed. Farm Bureau sent its semiannual bill to S.M. at her South Carolina address, informing her that her payment was due on November 23, 2016. S.M. did not pay the bill. Plaintiff sued Farm Bureau in federal district court, seeking the policy’s coverage amount as well as excess damages for alleged unfair and deceptive trade practices on the part of Farm Bureau. He argued that Farm Bureau had not complied with a statutory notice requirement prior to canceling the insurance policy for nonpayment and he was therefore entitled to the policy’s benefits. The parties filed cross-motions for summary judgment, and the district court granted summary judgment to Farm Bureau.   The Fourth Circuit affirmed finding that Farm Bureau complied with the statute’s notice requirement. The court wrote that a literal interpretation of the statute’s language—referring to a notice being sent to the “last known post-office address in this State”—would not put S.M. on notice at all. Rather it would have Farm Bureau send “notice” to an address where it knows she no longer resides. Additionally, there is substance in Farm Bureau’s argument that a rigidly literal reading of the words “in this State” would require insurers to implement burdensome and nonsensical notice policies. View "Robert Whitmire v. Southern Farm Bureau Life Insurance Company" on Justia Law

The United States Court of Appeals for the Eleventh Circuit certified questions of Georgia law to the Georgia Supreme Court about life-insurance law. The basic question for the Supreme Court was whether a person could legally take out an insurance policy on his own life with the intent to turn around and sell that policy to a third party who had no “insurable interest” in the policyholder’s life. The person seeking to recover on the life-insurance policy in this case said that such a policy was legal if a third party was not involved in causing the policy to be procured. The insurance company says that with or without such third-party involvement, such a policy was an illegal wagering contract and therefore void, relying on some Georgia case law. But as it turned out, that case law was interpreting and applying old statutes. In 1960, the Georgia General Assembly repealed those statutes and replaced them with new statutory language that codified some, but not all, of the old decisional law, and the new language did not even hint at the unilateral-intent-based limitation that the insurance company advanced. So the Supreme Court answered the certified questions: under Georgia law, a life-insurance policy taken out by the insured on his own life with the intent to sell the policy to a third party with no insurable interest, but without a third party’s involvement when the policy was procured, was not void as an illegal wagering contract. View "Crum v. Jackson National Life Ins. Co." on Justia Law

In 2012, a competitor sued Creation for trademark violations. Creation requested that Selective Insurance provide coverage. Selective refused. Creation’s settlement with its competitor prevented Creation from selling one of its primary lines. Creation struggled financially. Selective sought a declaration in Illinois state court that it had no duty to defend. Creation countersued and also alleged breach of the insurance policy. The Illinois court entered partial summary judgment for Creation on its duty-to-defend claim, limited to fees Creation incurred before the original trademark litigation was settled.In 2014—in the middle of the state-court litigation—Creation sued Selective in federal court for breach of contract and under the Illinois Insurance Code. In 2016, Creation voluntarily dismissed its state-court breach-of-contract claim with leave to refile. The Illinois court expressly reserved Creation’s right to maintain its federal action on its contract claim. After the 2017 state court award, the federal district court awarded Creation nearly $3 million in damages on the Insurance Code claim. After remand, Creation unsuccessfully sought to amend its complaint to seek punitive damages. The district court then concluded that the doctrines of claim and issue preclusion barred Creation’s remaining contract claim.The Seventh Circuit reversed, noting that the case is an “anomaly.” The state court expressly reserved Creation’s right to file the claim in federal court, so the suit is not precluded by its earlier state-court litigation. View "Creation Supply, Inc. v. Selective Insurance Co. of the Southeast" on Justia Law

The Supreme Court affirmed in part and reversed in part the decision of the court of appeals reversing the judgment of the district court dismissing Millard Gutter Company's suit against Farm Bureau Property & Casualty Insurance Company without prejudice, holding that the district court correctly dismissed the first-party bad faith claims for lack of standing.After a storm, Millard Gutter obtained assignments of the right to insurance proceeds due under policies of Shelter. Thereafter, Millard filed suit against Shelter in its own name, as assignee, alleging breach of contract and first-party bad faith in failing to settle the claims. The district court granted Shelter's motion to dismiss, concluding that the complaint did not contain sufficient factual allegations to establish standing to assert first-party bad faith claims. The court of appeals reversed in part, concluding that Millard Gutter had stated a plausible claim for first-party bad faith. The Supreme Court reversed in part, holding that Millard Gutter lacked standing to prosecute the policyholders' tort actions for first-party bad faith against Shelter. View "Millard Gutter Co. v. Farm Bureau Property & Casualty Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the district court dismissing this action brought by Millard Gutter Company against Shelter Mutual Insurance Company seeking to recover damages for breach of insurance contracts and for first-party bad faith, holding that the district court did not err in concluding that Millard Gutter did not have standing to assert first-party bad faith claims against Shelter.After a storm, Millard Gutter obtained assignments from various policyholders of Shelter. Thereafter, Millard filed suit against Shelter in its own name, as assignee, alleging breach of contract and first-party bad faith in failing to settle the claims. The district court granted Shelter's motion to dismiss, concluding that the complaint did not contain sufficient factual allegations to establish standing to assert first-party bad faith claims. The Supreme Court affirmed, holding that Millard Gutter lacked standing to prosecute the policyholders' tort actions for first-party bad faith against Shelter. View "Millard Gutter Co. v. Shelter Mutual Insurance Co." on Justia Law

The United States District Court for the Southern District Court  concluded that Lincoln Life & Annuity Company of New York was not obligated under New York Insurance Law Section 3203(a)(2) to refund a payment that Plaintiff had deposited into a policy account associated with her life insurance policy five months before she died. Because no New York court has  analyzed this provision of New York insurance law, and because insurance policy implicates significant New York State interests, the Second Circuit deferred a decision on this appeal in order to certify the following question to the New York Court of Appeals: Whether a planned payment into an interest-bearing policy account, as part of a universal life insurance policy, constitutes a “premium actually paid for View "Nitkewicz v. Lincoln Life & Annuity Co. of N.Y." on Justia Law

Insured Huntington Ingalls Industries, Inc. and insurer Huntington Ingalls Industries Risk Management LLC seek a declaratory judgment stating there is coverage under a property insurance policy for certain losses incurred by Huntington Ingalls Industries due to the COVID-19 pandemic. The trial court concluded that the complaint did not allege facts that would trigger coverage under the policy and granted judgment on the pleadings in favor of reinsurers. After review, the Vermont Supreme Court disagreed, reversed the trial court. and remanded for further proceedings. View "Huntington Ingalls Industries, Inc. et al. v. Ace American Insurance Company et al." on Justia Law

During the covid-19 pandemic, state and local authorities in Louisiana ordered nonessential businesses to close for a time. This required Plaintiff to temporarily shut his jewelry stores and event spaces in New Orleans. To recoup income lost during the closure, Plaintiff claimed reimbursement under his insurance policy’s coverage for “direct physical loss of or damage to” his property. Plaintiff’s insurer, Axis, denied the claim.   Plaintiff sued Axis along with his insurance agent and broker. The district court dismissed Plaintiff’s claims, concluding that Plaintiff suffered no covered loss or damages and that his agent and broker violated no duty to advise Plaintiff about pandemic-related coverage.   The Fifth Circuit affirmed. The court explained that what denied Plaintiff use of his property was the government’s closure orders. Such losses do not involve a “tangible alteration to, injury to, or deprivation of property.” The district court therefore correctly dismissed Plaintiff’s claims against Axis. Further, contrary to Plaintiff’s arguments, what creates a Louisiana insurance agent’s duty to procure particular coverage is not a “close relationship” with the insured but an insured’s “specific” request for “the type of insurance coverage . . . needed.” Here, Plaintiff did not allege he specifically requested pandemic-related coverage from either the wholesale broker or insurance agent, therefore Plaintiff’s claims against those Defendants were properly dismissed. View "Adler & Sons v. Axis Surplus Ins Co" on Justia Law