Justia Insurance Law Opinion Summaries

Defendant Navigators Specialty Insurance Company (Navigators) appealed a trial court order denying its special motion to strike under California’s anti-SLAPP statute. Plaintiff Trilogy Plumbing, Inc. (Trilogy) alleged that Navigators, as Trilogy’s insurer, gave instructions with which Trilogy did not agree to attorneys Navigators had retained to defend Trilogy and wrongfully negotiated settlements without Trilogy’s consent. Navigators contended the alleged conduct constituted protected activity under Code of Civil Procedure section 425.17 (e)(2) and, therefore, the trial court erred by denying the anti-SLAPP motion. After review, the Court of Appeal affirmed: the allegations challenged by the anti-SLAPP motion described Navigators’ mishandling of the claims process with regard to 33 different lawsuits involving Trilogy. While the alleged acts were generally connected to litigation, they did not include any written or oral statement or writing made in connection with an issue under consideration or review by a judicial body and therefore did not constitute protected activity under section 425.16. View "Trilogy Plumbing, Inc. v. Navigators Specialty Ins. Co." on Justia Law

Defendant ReadyLink Healthcare, Inc. (ReadyLink) was a nurse staffing company that placed nurses in hospitals, typically on a short-term basis. Plaintiff State Compensation Insurance Fund (SCIF) was a public enterprise fund created by statute as a workers' compensation insurer. Premiums that SCIF charged were based in part on the employer's payroll for a particular insurance year. SCIF and ReadyLink disputed the final amount of premium ReadyLink owed to SCIF for the 2005 policy year (September 1, 2005 to September 1, 2006). ReadyLink considered certain payments made to its nurses as per diem payments; SCIF felt those should have been considered as payroll under the relevant workers' compensation regulations. The Insurance Commissioner concurred with SCIF's characterization of the payments. A trial court rejected ReadyLink's petition for a writ of administrative mandamus to prohibit the Insurance Commissioner from enforcing its decision, and an appellate court affirmed the trial court's judgment. SCIF subsequently filed the action underlying this appeal, later moving for a judgment on the pleadings, claiming the issue of the premium ReadyLink owed for the 2005 policy year had been previously determined in the administrative proceedings, which was then affirmed after judicial review. The trial court granted SCIF's motion for judgment on the pleadings. On appeal, ReadyLink conceded it previously litigated and lost its challenge to SCIF's decision to include per diem amounts as payroll for the 2005 insurance year, but argued it never had the opportunity to challenge whether SCIF otherwise properly calculated the premium amount that it claims was due pursuant to the terms of the contract between the parties, or whether SCIF's past conduct, which ReadyLink alleged included SCIF's acceptance of ReadyLink's exclusions of its per diem payments from payroll in prior policy years and SCIF's exclusion of per diem amounts in paying out on workers' compensation claims filed by ReadyLink employees, might bar SCIF from being entitled to collect that premium amount under the contract. To this, the Court of Appeal concurred the trial court erred in granting SCIF's motion for judgment on the pleadings. Judgment was reversed, and the matter remanded for further proceedings. View "State Comp. Ins. Fund v. ReadyLink Healthcare, Inc." on Justia Law

The Supreme Court affirmed the judgment of the superior court dismissing Plaintiff's breach of contract case against Defendant, her homeowner's insurance carrier, after a hearing justice granted Defendant's motion for summary judgment, holding that summary judgment was properly granted in this case.Plaintiff, who had a homeowner's insurance policy purchased from Defendant, sought coverage for damage done to her residence when her water heater leaked and flooded her basement. When Defendant declined coverage Plaintiff filed a complaint claiming breach of contract. Defendant field a motion for summary judgment, arguing that Plaintiff's breach of contract claim failed as a matter of law because, under the unambiguous language of the policy, the flooding caused by the defective water heater was not a loss covered by the policy. The hearing justice granted the motion for summary judgment. The Supreme Court affirmed, holding that the damage caused by Plaintiff's malfunctioning water heater was clearly not one of the hazards articulated in the policy language. View "Nelson v. Allstate Insurance Co." on Justia Law

After defending the general contractor in two construction defect actions, general liability insurer St. Paul Mercury Insurance Company (St. Paul) sought reimbursement of defense costs under an equitable subrogation theory against six subcontractors (defendants) that had worked on the underlying construction projects and whose contracts required them to defend the general contractor in suits involving allegations related to their work. After a bench trial, the court denied St. Paul’s claim. Relying on Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506, 514 (1967), the trial court concluded St. Paul had not demonstrated it was fair to shift all of the defense costs to defendants because their failure to defend the general contractor had not caused the homeowners to bring the construction defect actions. St. Paul argued this conclusion misconstrued the law governing equitable subrogation and therefore constitutes an abuse of discretion. To this, the Court of Appeal agreed: (1) a cause of action based on equitable subrogation allowed an insurer to step into the shoes of its insured and recover only what the insured would be entitled to recover from the defendants; and (2) the appropriate inquiry should have been whether defendants’ failure to defend the general contractor caused St. Paul to incur the defense costs, not whether that failure caused the underlying lawsuits. Judgment was reversed and the matter remanded to the trial court to grant judgment in St. Paul's favor and for a determination of defense costs each defendant owed. View "Pulte Home Corp. v. CBR Electric, Inc." on Justia Law

Kinsale Insurance Company appealed a district court’s partial summary judgment determining Kinsale had a duty to defend QEP Energy Company (“QEP”). QEP moved to dismiss the appeal, arguing the partial summary judgment was not appealable. Kinsale responded, asserting the Declaratory Judgment Act provided a statutory basis for the appeal. The North Dakota Supreme Court concluded the Declaratory Judgment Act did not provide a statutory basis for the appeal, and therefore dismissed the appeal for lack of jurisdiction. View "Dellinger v. Wolf, et al." on Justia Law

Colorado Center Development, LLC, the owner of certain property in Denver, Colorado, hired J.E. Dunn Construction Company to construct an office building (the Project). Colorado Center purchased from Defendant Liberty Mutual Fire Insurance Company a Builder’s Risk insurance policy (the Policy). The Policy provided protection against “direct physical loss or damage caused by a covered peril to ‘buildings or structures’ while in the course of construction, erection, or fabrication.” J.E. Dunn hired plaintiff Rocky Mountain Prestress, LLC (RMP) as a subcontractor to perform work including “engineer[ing], supply[ing,] and install[ing] all precast concrete components, connections, and erections aids” and “[s]upply[ing] and install[ing] grout and/or patching of all connections required by the engineering for the structural integrity of the precast.” Because of “potential concerns that arose at another project” relating to “sinking pillars/columns,” J.E. Dunn requested RMP to retain a third-party engineering firm to investigate “potential structural issues” with RMP’s work on the Project. The engineering firm concluded that the Project required “repairs to insufficiently grouted joints between precast concrete column and pilaster elements” at 264 locations throughout the structure. The engineering firm began its investigation in August 2016, and the final grouting repair work was completed in February 2017. In the meantime, in November 2016, RMP submitted a claim to Liberty seeking coverage under the Policy. The district court granted summary judgment in favor of the insurance company on three independent grounds: (1) RMP had not shown that the claimed loss was fortuitous; (2) the claimed loss did not constitute “direct physical loss or damage” as required for coverage under the policy; and (3) even if there might otherwise have been coverage, the claimed loss fell within the policy’s exclusion for defective workmanship. After review, the Tenth Circuit affirmed the district court’s decision based on the defective-workmanship exclusion. View "Rocky Mountain Presstress v. Liberty Mutual Fire Insurance" on Justia Law

The Oklahoma Supreme Court granted certiorari to address first impression questions of: (1) whether a home warranty plan met the definition of an insurance contract; (2) and if it was insurance, whether a forced arbitration clause in such a contract was unenforceable under the Oklahoma Uniform Arbitration Act; (3) whether 12 O.S. 2011 section 1855 of the Oklahoma Uniform Arbitration Act was a state law enacted for the purpose of regulating insurance under the McCarran-Ferguson Act; and (4) whether pursuant to the McCarran-Ferguson Act, did section 1855 preempted the application of the Federal Arbitration Act. The Supreme Court answered all questions in the affirmative. View "Sparks v. Old Republic Home Protection Co., Inc." on Justia Law

In 2018, TVPX filed an amended class action complaint in the Eastern District of Virginia against Genworth, alleging that Genworth violated the terms of one of its life insurance policies by imposing inflated "cost of insurance" (COI) charges on its insureds. Genworth brought this action in district court seeking to enjoin TVPX's Virginia lawsuit, arguing that TVPX's claims were barred by a 2004 agreement settling a prior class action about the same life insurance policies. The district court then granted Genworth's motion to enjoin TVPX's Virginia action, finding that TVPX's complaint was barred by the doctrine of res judicata.The Fifth Circuit vacated the district court's order enjoining TVPX's Virginia lawsuit. Although the primary right and duty at issue in TVPX's complaint were also at issue in the settlement, the court held that the record does not support the district court's finding that Genworth's "cost of insurance" (COI) practices remain unchanged since the settlement. The court remanded to the district court for limited discovery on whether Genworth has in any way changed how it calculates and charges COI since the settlement. Finally, the court held that, when read in its entirety, the Pre-Settlement Policy Administration does not constitute a preservation of rights, but instead clarifies that Genworth may continue administering its policies in the same manner that it did before the settlement. View "Genworth Life and Annuity Insurance Co. v. TVPX ARS, Inc." on Justia Law

After Affinity was sued for allegedly submitting Medicaid reimbursement claims for services that they never provided, it sought coverage for the suit under its insurance policy with StarStone. StarStone denied coverage because the lawsuit's claims did not fall within the policy's coverage for "damages resulting from a claim arising out of a medical incident." The district court agreed and granted judgment on the pleadings against Affinity on a declaratory judgment claim and breach of contract claim.The Fourth Circuit first found that it had appellate jurisdiction over the appeal, because Affinity properly appeals from a "final" decision. In this case, Affinity properly appealed the district court’s order dismissing its contractual claims after voluntarily dismissing extra-contractual claims that were necessarily precluded by the order. On the merits, the court applied North Carolina law and held that the allegations in the underlying complaint fall within the insurance policy's coverage provision. The court found that the False Claims Act action "arises out of" a medical incident as required to fall under the coverage provision of StarStone's policy. Accordingly, the court vacated the district court's order granting StarStone's motion for judgment on the pleadings and vacated the order denying Affinity's motion for partial summary judgment. View "Affinity Living Group, LLC v. Starstone Specialty Insurance Co." on Justia Law

This insurance coverage case concerns flood damage from Hurricane Harvey to two office buildings owned by Pan Am and insured by Lexington.The Fifth Circuit affirmed the district court's grant of summary judgment in favor of Lexington. The court held that the unequivocal language of the "Windstorm" deductible, which covered flood damage, controls. Therefore, Pan Am may not recover because its buildings were damaged solely by flooding. Furthermore, even if the generic $100,000 "Flood" deductible were to also apply, the 5% TIV-based deductible would prevail under the policy's anti-stacking clause. View "Pan Am Equities, Inc. v. Lexington Insurance Co." on Justia Law