Justia Insurance Law Opinion Summaries

The Supreme Court vacated the order of the superior court granting the motion for judgment on the pleadings filed by Defendant in this insurance dispute, holding that the grant of judgment on the pleadings for Defendant was erroneous.The roof at Plaintiffs' home collapsed due to accumulating ice and snow. The property was insured through a policy issued by Defendant. Plaintiffs invoked the appraisal provision of the policy and later brought a second amended complaint alleging that Defendant had breached the terms of the policy by not performing a complete investigation and had acted in bad faith in the handling of their claim. The motion justice granted Defendant's motion for judgment on the pleadings, concluding that Plaintiffs could not maintain an action for breach of contract against Defendant. The Supreme Court vacated the judgment below, holding that the allegations, as pled, could support a claim for breach of contract or breach of the implied covenant of good faith and fair dealing. View "Houle v. Liberty Insurance Corp." on Justia Law

The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court ruling that an umbrella insurance policy between Motorists Mutual Insurance Company (Motorists)and Owens-Brockway Glass container, Inc. (Owens) did not apply to claims made against Ironics, Inc. by Owens, holding that the court of appeals did not err.Owens asserted claims against Ironics for, among other claims, breach of contract. Ironics asked its insurer, Motorists, to defend and indemnify it against Owens's claims under a commercial general-liability policy and a commercial umbrella policy with Motorists. The trial court concluded that neither policy covered Owens's claims and granted summary judgment for Motorists. The court of appeals reversed in part, holding that Ironics was entitled to coverage under the umbrella policy. The Supreme Court affirmed, holding that Owens's claims arose out of an accident that resulted in "property damage" under Ironic's umbrella policy with Motorists and that none of the policy's exclusions applied. View "Motorists Mutual Insurance Co. v. Ironics, Inc." on Justia Law

Star, a mine staffing company, bought workers’ compensation insurance from Granite. Early in each policy year, Star gave Granite an estimate of its total payroll, which Granite used to calculate an estimated premium. Star paid the preliminary installment. After each year, Granite audited Star’s records to produce an exact payroll number, then charged additional premiums or made reconciliation payments. A 2018 audit revealed that Star had significantly underestimated its 2017 payroll, as it had for 2016. To avoid a similar situation with the 2018 policy, Granite adjusted its estimated premium for Star halfway through the year. In accordance with industry guidelines, Granite increased Star’s 2018 estimated premium to reflect 2017’s actual payroll numbers, giving Star four weeks to pay the difference. Star never paid. Granite canceled the policy three months early. Star closed its business. To determine Star’s final premium—and whether it owed a reconciliation payment—Granite needed to complete its year-end audit. Star would not comply. Granite’s final bill, including the updated estimated premium, prorated for early cancellation, was $1,485,323, including an “audit noncompliance charge” (double 2018’s total estimated premium).Granite sued for breach of contract. The Sixth Circuit affirmed summary judgment for Granite, rejecting Star’s argument that the noncompliance charge is an unenforceable penalty. Kentucky’s insurance regulator approved the rates that Kentucky insurance companies charge, barring their review. View "Granite State Insurance Co. v. Star Mine Services, Inc." on Justia Law

National Western Life Insurance Company (NWL) appealed after it was held liable for negligence and elder abuse arising from an NWL annuity sold to Barney Williams by Victor Pantaleoni. In 2016, Williams contacted Pantaleoni to revise a living trust after the death of Williams’ wife, but Pantaleoni sold him a $100,000 NWL annuity. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages totaling almost $3 million. In the Court of Appeal's prior opinion reversing the judgment, the Court concluded Pantaleoni was an independent agent who sold annuities for multiple insurance companies and had no authority to bind NWL. The Court determined that Pantaleoni was an agent for Williams, not NWL. The California Supreme Court vacated that decision and remanded, asking the appeals court to reconsider its finding that Pantaleoni did not have an agency relationship with National Western Life Insurance Company in light of Insurance Code sections 32, 101, 1662, 1704 and 1704.5 and O’Riordan v. Federal Kemper Life Assurance Company, 36 Cal.4th 281, 288 (2005). Upon remand, the Court of Appeal affirmed the judgment finding NWL liable for negligence and financial elder abuse. However, punitive damages assessed against NWL were reversed. The Court found no abuse of discretion in the trial court’s calculation of the attorney fee award, but remanded the case for the court to reconsider the award in light of the reversal of punitive damages. View "Williams v. Nat. W. Life Ins. Co." on Justia Law

The Supreme Court answered a question certified to the Supreme Court by the United States District Court for the District of Connecticut in this declaratory judgment action by holding that Defendant's plea of nolo contendere could not be used to trigger a criminal acts exclusion in a homeowners insurance policy governed by Connecticut law.At issue was whether Plaintiff, Allstate Insurance Company, could use Defendant's plea of nolo contendere to the charge of assault in the first degree to trigger a criminal acts exclusion that would bar Plaintiff's coverage of Defendant in a civil action involving the same underlying incident. The district court certified the question to the Supreme Court. The Supreme Court answered that Defendant's plea of nolo contendere could not be used by Plaintiff to establish the applicability of the criminal acts exclusion of the relevant policy. View "Allstate Insurance Co. v. Tenn" on Justia Law

Before the South Carolina Supreme Court in this appeal was the trial court's dismissal of respondent Jeanne Beverly's claims pursuant to Rule 12(b)(6) of the South Carolina Rules of Civil Procedure. Beverly brought claims against Grand Strand Regional Medical Center, LLC. Blue Cross Blue Shield of South Carolina (BCBS) was a mutual insurance company that provided health insurance coverage through Member Benefits Contracts to its Members. Beverly was a BCBS Member. In 2005, Grand Strand and BCBS entered into a contract labeled "Institutional Agreement." The Institutional Agreement contained a clause entitled, "No Third Party Beneficiaries," that provided in part, "This Agreement is not intended to, and shall not be construed to, make any person or entity a third party beneficiary." Grand Strand and BCBS were the only parties to the Institutional Agreement. Grand Strand made two promises to BCBS in the Institutional Agreement that Beverly contended created rights she and other BCBS Members could enforce. Beverly was injured in an automobile accident on September 6, 2012. The same day, she received health care services at a Grand Strand emergency room for injuries she sustained in the accident. Beverly alleges she provided Grand Strand proof of her status as a BCBS Member. Some time later, Beverly received a bill directly from Grand Strand for $8,000. Beverly alleges the $8,000 bill does not reflect the discount Grand Strand promised in the Institutional Agreement. Beverly filed this action on behalf of herself and a class of similarly situated BCBS Members who were denied the right to have their bills processed and discounted according to Grand Strand's promises in the Institutional Agreement. The primary question before the Supreme Court was whether the "no beneficiary" clause in the Institutional Agreement overrode an otherwise manifestly clear purpose of the contracting parties to provide a direct benefit to non-contracting parties. "Mindful that we are reviewing a Rule 12(b)(6) dismissal order—not an order on the merits—we hold it does not." The Supreme Court affirmed the court of appeals' opinion reversing the 12(b)(6) dismissal. The case was remanded to circuit court for discovery and trial. View "Beverly v. Grand Strand Regional Medical Center, LLC" on Justia Law

In 2011, during the course and scope of his employment as a shipwright, Claimant Robert Arlet slipped and fell on an icy sidewalk on the premises of his employer, Flagship Niagara League (Employer), sustaining injuries. Employer had obtained a Commercial Hull Policy from Acadia Insurance Company (Insurer). Through the policy, Insurer provided coverage for damages caused by the Brig Niagara and for Jones Act protection and indemnity coverage for the “seventeen (17) crewmembers” of the Brig Niagara. Employer had also at some point obtained workers’ compensation insurance from the State Workers’ Insurance Fund (SWIF). Insurer paid benefits to Claimant under its Commercial Hull Policy’s “maintenance and cure” provision. Claimant filed for workers’ compensation benefits. Employer asserted Claimant’s remedy was exclusively governed by the Jones Act. Employer also filed to join SWIF as an additional insurer in the event the Workers' Compensation Act (WCA) was deemed to supply the applicable exclusive remedy, and Employer was found to be liable thereunder. SWIF denied coverage, alleging Employer’s policy was lapsed at the time of Claimant’s injury. Thereafter, Claimant filed an Uninsured Employers Guaranty Fund (UEGF) claim petition, asserting the fund’s liability in the event he prevailed, and Employer was deemed uncovered by SWIF and failed to pay. The Workers’ Compensation Appeals Board (WCAB) found that as a land-based employee, Claimant did not meet the definition of seaman under the Jones Act and was, therefore, entitled to pursue his workers’ compensation claim. The issue this case presented for the Pennsylvania Supreme Court's review was one of first impression: the right of an insurer to subrogation under the WCA. The Supreme Court concluded Insurer’s Commercial Hull Policy did not cover Claimant, because Claimant was not a “seaman” or crew member. The WCA’s exclusive remedy applied, but Insurer was seeking subrogation for payment it made on a loss it did not cover. "[T]he 'no-coverage exception' to the general equitable rule precluding an insurer from pursuing subrogation against its insured comports with the purposes and public policy supporting the rule and hereby adopt it as the law of this Commonwealth. ... any equitable rule precluding an insurer from seeking subrogation against its insured is best tempered by the exception adopted herein today." View "Arlet v. WCAB (L&I)" on Justia Law

The Supreme Court affirmed the order of the circuit court enforcing a settlement agreement between Petitioner and his insurer, Respondent Allstate Company, and denying Petitioner's request to amend his complaint or allow the filing of a new complaint, holding that there was no error.The settlement agreement at issue related to water damages occurring at Petitioner's real property. Petitioner failed to execute and return the agreement, after which Respondent filed a motion to enforce settlement. Petitioner then filed a motion to amend the complaint or, in the alternative, allow the filing of a new complaint. The circuit court granted Respondent's motion to enforce the settlement and denied Petitioner's motion to amend. The Supreme Court affirmed, holding that the circuit court did not err as to any of its challenged rulings. View "Donahue v. Mammoth Restoration & Cleaning" on Justia Law

Grinnell Mutual Reinsurance Company appealed a district court judgment ordering it to pay Larry Pavlicek $214,045.55 under a commercial general liability insurance (CGL) policy Grinnell had with JRC Construction. Grinnell argued the district court misinterpreted the insurance policy, and that it was not required to indemnify JRC Construction because its work product was defective. In 2013, Pavlicek hired a contractor to construct a steel building on his property. JRC Construction installed the concrete floor and floor drain for the project. Another subcontractor installed the in-floor heating system for the concrete floor. After JRC completed the floor drain, it failed to properly install the concrete floor, and its attempts to repair the concrete damaged the drain. Pavlicek sued JRC for breach of contract relating to the defective work. In February 2020, Pavlicek filed a supplemental complaint against Grinnell, alleging it was required to satisfy the judgment as JRC’s insurer. Grinnell claimed it had no obligation to indemnify JRC under the CGL policy. The district court concluded JRC’s defective work on the concrete floor was not covered under the CGL policy, but damage to the floor drain was covered. Because removal and replacement of the floor and in-floor heat were necessary to repair the drain the court concluded the CGL policy covered all of those costs. The North Dakota Supreme Court found that although the CGL policy provided coverage to repair the floor drain, it did not cover the cost of replacing the concrete floor because that damage was the result of JRC’s defective work. The district court erred in finding the CGL policy covered the entire concrete floor replacement because replacement of the floor was the only way to repair the floor drain. Further, the Supreme Court found the district court erred in concluding the CGL policy provided coverage for replacement or repair of the in-floor heating system beyond that which may be necessary to repair the drain. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law

After incurring a million-plus-dollar loss for sending gold coins to a thief who forged check payments and intercepted the shipment of those coins, Gage filed an insurance claim. The underwriters denied the claim citing a coverage exclusion for losses incurred “consequent upon” delivering insured property to any third party against payment by a fraudulent check.The Fifth Circuit certified questions to the Texas Supreme Court: Whether Gage's losses were sustained consequent upon delivering insured property to UPS against a fraudulent check, causing the policy exclusion to apply; if yes. whether UPS's alleged errors are considered an independent cause of the losses under Texas law. The Texas Supreme Court concluded the ordinary meaning of “consequent upon” is but-for causation and answered “yes” to the first question. On the second question, the Texas Supreme Court answered “no” by concluding UPS’s alleged negligence was a concurrent cause of loss, dependent upon Gage’s handing over of the gold coins against fraudulent checks. In light of those answers, the Fifth Circuit affirmed the district court. Gage’s losses were excluded from coverage. Gage’s extra-contractual claims were properly dismissed as they were predicated on coverage under the policy. View "Dillon Gage, Inc. v. Certain Underwriters at Lloyds" on Justia Law