Justia Insurance Law Opinion Summaries

John and Michelle Strauss challenged the Court of Appeals decision affirming summary dismissal of their action against Premera Blue Cross, which arose out of the denial of coverage for proton beam therapy (PBT) to treat John's prostate cancer. At issue was whether the Strausses established the existence of a genuine issue of material fact regarding PBT's superiority to intensity-modulated radiation therapy (IMRT), thereby demonstrating that proton beam therapy was "medically necessary" within the meaning of their insurance contract. The Washington Supreme Court determined they did, and therefore reversed the Court of Appeals' decision, and remanded for a jury trial on the disputed facts. View "Strauss v. Premera Blue Cross" on Justia Law

While driving his truck, Moun Keodalah and an uninsured motorcyclist collided. After Keodalah stopped at a stop sign and began to cross the street, the motorcyclist struck Keodalah's truck. The collision killed the motorcyclist and injured Keodalah. Keodalah's insurance policy with Allstate Insurance Company included underinsured motorist (UIM) coverage. Keodalah requested Allstate pay him his UIM policy limit of $25,000. Allstate refused, offering $1,600 based on its assessment Keodalah was 70% at fault for the accident. After Keodalah asked Allstate to explain its evaluation, Allstate increased its offer to $5,000. Keodalah sued Allstate asserting a UIM claim. The ultimate issue before the Washington Supreme Court in this case was whether RCW 48.01.030 provided a basis for an insured's bad faith and Consumer Protection Act claims against an insurance company's claims adjuster. The Supreme Court held that such claims were not available, and reversed the Court of Appeals. View "Keodalah v. Allstate Ins. Co." on Justia Law

The United States Court of Appeals for the Third Circuit certified a question of law to the Pennsylvania Supreme Court regarding whether an increase to the limits of underinsured motorist (“UIM”) coverage for multiple vehicles that are insured under an existing policy constitutes a “purchase” for purposes of Subsection 1738(c) of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”). Michelle Barnard purchased a personal automobile policy from Travelers Home and Marine Insurance Company (“Travelers”) to insure her two vehicles. As part of this policy, Barnard purchased UIM coverage in the amount of $50,000 per vehicle. Barnard waived stacking of her UIM coverage limits. Two years later, Barnard increased the UIM coverage limit on each of her vehicles to $100,000. Barnard did not execute a new stacking waiver at that time. Then several more years later, Barnard was involved in a motor vehicle accident with an underinsured motorist. When Barnard sought UIM benefits from Travelers, Travelers offered her $100,000 based upon the UIM coverage limit on one of her vehicles. Barnard filed a complaint for declaratory judgment, seeking $200,000 in stacked UIM benefits. Travelers removed the case to the United States District Court for the Eastern District of Pennsylvania, where the parties filed cross-motions for summary judgment. Based upon the plain language of Subsection 1738(c), the Pennsylvania Supreme Court answered the Third Circuit's question in the affirmative: therefore, an increase of UIM coverage under circumstances as was presented here triggered an insurance company’s statutory obligation to offer an insured the opportunity to waive stacking of the new, aggregate amount of UIM coverage. View "Barnard v. Travelers Home, et al" on Justia Law

DVO was to design and build an anaerobic digester for WTE to generate electricity from cow manure to be sold to the electric power utility. WTE sued DVO for breach of contract. Crum initially provided a defense under a reservation of rights, but a later advised DVO that it would no longer provide a defense. The court ordered DVO to pay WTE $65,000 in damages and $198,000 in attorney’s fees. DVO’s Crum insurance policies provided commercial general liability, pollution liability, and Errors & Omissions coverage. Under the E&O professional liability coverage, Crum is required to pay “those sums the insured becomes legally obligated to pay as ‘damages’ or ‘cleanup costs’ because of a ‘wrongful act’ to which this insurance applies.” An endorsement provides that the Policy does not apply to claims or damages based upon or arising out of breach of contract. DVO argued that the exclusion was so broad as to render the E&O professional liability coverage illusory. The district court disagreed. The Seventh Circuit reversed and remanded for contract reformation. The exclusion’s language is extremely broad. It includes claims “based upon or arising out of” the contract, thus including a class of claims more expansive than those based upon the contract, rendering the professional liability coverage in the E&O policy illusory. The court considered DVO's reasonable expectations in purchasing E&O coverage to insure against professional malpractice claims. View "Crum & Forster Specialty Insurance Co. v. DVO, Inc." on Justia Law

Sapa manufactures aluminum extruded profiles, pre-treats the metal and coats it with primer and topcoat. For decades, Sapa supplied “organically coated extruded aluminum profiles” to Marvin, which incorporated these extrusions with other materials to manufacture aluminum-clad windows and doors. This process was permanent, so if an extrusion was defective, it could not be swapped out; the whole window or door had to be replaced. In 2000-2010, Marvin bought about 28 million Sapa extrusions and incorporated them in about 8.5 million windows and doors. Marvin sometimes received complaints that the aluminum parts of its windows and doors would oxidize or corrode. The companies initially worked together to resolve the issues. In the mid-2000s, there was an increase in complaints, mostly from people who lived close to the ocean. In 2010, Marvin sued Sapa, alleging that Sapa had sold it extrusions that failed to meet Marvin’s specifications. In 2013, the companies settled their dispute for a large sum.Throughout the relevant period, Sapa maintained 28 commercial general liability insurance policies through eight carriers. Zurich accepted the defense under a reservation of rights, but the Insurers disclaimed coverage. Sapa sued them, asserting breach of contract. The district court held that Marvin’s claims were not an “occurrence” that triggered coverage. The Third Circuit vacated in part, citing Pennsylvania insurance law: whether a manufacturer may recover from its liability insurers the cost of settling a lawsuit alleging that the manufacturer’s product was defective turns on the language of the specific policies. Nineteen policies, containing an Accident Definition of “occurrence,” do not cover Marvin’s allegations, which are solely for faulty workmanship. Seven policies contain an Expected/Intended Definition that triggers a subjective-intent standard that must be considered on remand. Two policies with an Injurious Exposure Definition also include the Insured’s Intent Clause and require further consideration. View "Sapa Extrusions, Inc. v. Liberty Mutual Insurance Co." on Justia Law

In this breach of contract and negligent infliction of emotional distress action the Supreme Court affirmed the appellate court's judgment affirming the trial court's judgment denying Defendant's motion for judgment notwithstanding the verdict, holding that there was sufficient evidence to support the jury's verdict for Plaintiff.This action stemmed from Defendant's handling of Plaintiff's homeowner's insurance claim. The jury returned a verdict for Plaintiff on both counts. Defendant filed a motion for judgment notwithstanding the verdict, renewing its motion for a directed verdict, arguing that the verdict was not supported by sufficient evidence presented during Plaintiff's case-in-chief. The trial court denied the motion. On appeal, Defendant contended that the so-called waiver rule - which provides that a defendant waives the right to appeal the trial court's denial of the defendant's motion for directed verdict at the close of the plaintiff's case by opting to introduce evidence in its own behalf - is inapplicable to civil cases in which a trial court reserves decision on a motion for directed verdict. The Supreme Court disagreed, holding that a court reviewing the sufficiency of the evidence to support a jury's verdict must consider all of the evidence considered by the jury returning the verdict, not just the evidence presented in the plaintiff's case-in-chief. View "Riley v. Travelers Home & Marine Insurance Co." on Justia Law

The Supreme Court considered two questions from the federal court of appeals regarding California's common-law notice-prejudice rule and held (1) the notice-prejudice rule is a fundamental public policy of the state in the insurance context, and (2) the rule generally applies to consent provisions in the context of first party liability policy coverage and not to consent provisions in third party liability policies.The insurance policy in this case contained a choice of law provision designating that New York law should govern all matters arising under the policy. Under section 187 of the Restatement Second of Conflict of Laws the parties' choice of law generally governs unless it conflicts with a state's fundamental public policy. The party opposing the application of the choice of law provision sought to establish that California's notice-prejudice rule was a fundamental public policy for the purpose of choice-of-law analysis. The federal court of appeals issued certified questions to the Supreme Court, which answered as set forth above. The Court left it to the federal court of appeals to decide whether the consent provision at issue in this case was a consent provision contemplated first party or third party coverage. View "Pitzer College v. Indian Harbor Insurance Co." on Justia Law

Bonni Genzer, an Uber driver, contended James River Insurance Company, Uber’s insurer, breached its contractual obligations by declining coverage for injuries she sustained in an accident on the return leg of a lengthy fare. Genzer also contended that, under Oklahoma law, the “mend the hold” doctrine limited James River to the grounds it gave for declining coverage before she sued. The district court granted summary judgment in James River’s favor, first ruling that Oklahoma had not adopted the mend-the-hold doctrine, and next holding that Genzer’s claim falls outside the scope of the governing insurance policy. The Tenth Circuit agreed as to both issues. View "Genzer v. James River Insurance Company" on Justia Law

In 2013, Rachel Dixon was driving a car owned by her boyfriend, Rene Oriental-Guillermo (“Policyholder”), when she was involved in an accident with a vehicle in which Priscila Jimenez was a passenger, and which was owned by Iris Velazquez, and operated by Alli Licona-Avila. At the time of the accident, Dixon resided with Policyholder, who had purchased a personal automobile insurance policy (“Policy”) for his vehicle through Safe Auto Insurance Company (“Safe Auto”). The Policy contained an unlisted resident driver exclusion (“URDE”), which excluded from coverage any individuals who lived with, but were not related to, the policyholder, and whom the policyholder did not specifically list as an additional driver on the insurance policy. Jimenez and her husband Luis (collectively, “Appellants”) filed a personal injury lawsuit against Dixon, Policyholder, and Licona-Avila. On May 13, 2015, Safe Auto filed a complaint against Dixon, Policyholder, and Appellants, seeking a declaratory judgment regarding the enforceability of the URDE with respect to Dixon. The trial court granted summary judgment in favor of Safe Auto, finding the URDE unambiguous, valid, and enforceable, and concluding that Safe Auto had no duty under the Policy to defend or indemnify Dixon in the underlying personal injury lawsuit. Appellants timely appealed to the Superior Court, arguing: (1) the trial court erred in holding the URDE was valid and enforceable; (2) that the URDE violated the provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”); and (3) that the URDE violated public policy. The Superior Court affirmed the order of the trial court in a divided, published opinion. The Pennsylvania Supreme Court concurred the URDE at issue in this case was enforceable, and affirmed the Superior Court. View "Safe Auto v. Oriental-Guillermo" on Justia Law

Integrated Technologies, Inc. (ITI) appealed the grant of summary judgment in favor of Crum & Forster Specialty Insurance Company (Crum). ITI alleged Crum breached its duty to defend ITI against a suit brought by the GOAD Company. The court granted summary judgment to Crum, finding no claim in the GOAD complaint that was potentially covered by the policy’s Errors & Omissions (E&O) Liability Coverage Part. ITI argued on appeal that the trial court misread the allegations in the GOAD complaint and interpreted the policy coverage too narrowly. Finding no reversible error, the Vermont Supreme Court affirmed. View "Integrated Technologies, Inc. v. Crum & Forster Specialty Insurance Company" on Justia Law