Justia Insurance Law Opinion Summaries

In 2002, Toulon applied for Continental’s long-term care insurance policy. Continental provided a Long-Term Care Insurance Personal Worksheet to help Toulon determine whether the policy would work for her, given her financial circumstances. The Worksheet discussed Continental’s right to increase premiums and how such increases had previously been applied. Toulon did not fill out the Worksheet but signed and submitted it with her application. Toulon’s Policy stated that although Continental could not cancel the Policy if each premium was paid on time, Continental could change the premium rates. There was a rider, stating that premiums would not be increased during the first 10 years after the coverage date. In September 2013, Continental raised Toulon’s premiums by 76.5%. Toulon sued, on behalf of herself and a purported class. The Seventh Circuit affirmed dismissal, agreeing that Toulon failed to state claims for fraudulent misrepresentation because she did not identify a false statement or for fraudulent omission because Continental did not owe Toulon a duty to disclose. The court also properly dismissed Toulon’s claim under the Illinois Consumer Fraud and Deceptive Practices Act (ICFA) because she did not identify a deceptive practice, a material omission, or an unfair practice. The unjust enrichment claim failed because claims of fraud and statutory violation, upon which Toulon's unjust enrichment claim was based, were legally insufficient and an express contract governed the parties’ relationship. View "Toulon v. Continental Casualty Co." on Justia Law

The notice and repair process set forth in Fla. Stat. 558 is a “suit” within the meaning of the commercial general liability policy issued in this case by Crum & Forster Speciality Insurance Company (C&F) to Altman Contractors, Inc.According to the policy, C&F had a duty to defend Altman in any “suit” arising from the construction of a condominium. Altman claimed that this duty to defend was invoked when the property owner served it with several notices under chapter 558 cumulatively claiming over 800 construction defects in the project. Altman filed a declaratory judgment action seeking a declaration that C&F owed a duty to defend and to indemnify it under the policy. The federal district court granted summary judgment for C&F, concluding that nothing about the chapter 558 process satisfied the definition of “civil proceeding.” Altman appealed, and the United States Circuit Court of Appeals for the Eleventh Circuit certified the legal issue to the Supreme Court. The Supreme Court answered the certified question in the affirmative because the chapter 558 presuit process is an “alternative dispute resolution proceeding” as included in the policy’s definition of “suit.” View "Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co." on Justia Law

The Court of Appeals answered a question certified to it by the United States Court of Appeals in the negative, answering that under New York law generally, and particularly in light of the New York Court of Appeals’ decision in Excess Insurance Co. Ltd. v. Factor Mutual Insurance Co., 3 NY3d 577 (N.Y. 2004), there is neither a rule of construction nor a presumption that a per occurrence liability limitation in a reinsurance contract caps all obligations of the reinsurer, such as payments made to reimburse the reinsured’s defense costs. The court held definitively that Excess did not supersede the “standard rules of contract interpretation” otherwise applicable to facultative reinsurance contracts. Therefore, New York law does not impose either a rule or a presumption that a limitation on liability clause necessarily caps all obligations owed by a reinsurer, such as defense costs, without regard for the specific language employed therein. View "Global Reinsurance Corp. of America v. Century Indemnity Co." on Justia Law

The insurance policy in question in this case was issued by petitioner Admiral Insurance Company (Admiral) to the real party in interest, A Perfect Match, Incorporated (Perfect Match), a company that "match[es] surrogates and egg donors with infertile families." On the first page of the policy Admiral promised to provide coverage for potential claims that Perfect Match knew or reasonably should have known about, but failed to disclose. In this case, prior to purchasing the Admiral policy, there was no question Perfect Match knew about a potential claim former clients Monica Ghersi and Carlos Arango intended to file arising from the birth of their daughter with a rare form of eye cancer. A lawyer representing Ghersi and Arango sent a letter to Perfect Match in June 2012 giving notice of their intent to file a complaint alleging professional negligence. After consulting with its insurance broker, Perfect Match made the decision not to disclose the potential Ghersi/Arango claim to its current insurer out of concern it would result in a higher premium. When it applied for the Admiral policy in October 2012, Perfect Match likewise did not mention the potential Ghersi/Arango claim. But once the Ghersi/Arango complaint was filed and ultimately served in March 2013, Perfect Match claimed potential coverage under the Admiral policy based on a "professional incident" and asserted its right to a defense. Admiral denied coverage and refused to defend, citing the policy language that excluded coverage for claims the insured reasonably should have foreseen prior to inception of the policy. Perfect Match then sued alleging breach of contract and bad faith. The Court of Appeal found no material factual disputes in this case: Admiral was entitled to insist that Perfect Match disclose all potential claims of which it was, or should have been, aware; it could and did exclude from coverage any such claim that was not disclosed. The superior court erred in failing to grant summary judgment in favor of Admiral. Accordingly, the Court issued a writ of mandate directing the superior court to vacate its order denying Admiral's motion for summary judgment and instead enter an order granting the motion. View "Admiral Ins. Co. v. Superior Court" on Justia Law

This was an insurance bad faith case arising out of a claim for underinsured motorist coverage. In May 2008, Peggy Cedillo was injured in a collision while riding as a passenger on the back of a motorcycle. About a year after the collision, she settled her claim against the motorcycle driver for $105,000, the total amount available under his insurance policy. Cedillo married the motorcycle driver about eight months after the collision, and he was her lawyer in this lawsuit and designated as one of her experts. Cedillo claimed the district court erred when it: (1) granted summary judgment in favor of Farmers on her bad faith claim; (2) denied discovery of the entirety of Farmers’ claims file and certain electronic information; and (3) denied a motion to amend her complaint to include a claim for punitive damages. The Idaho Supreme Court, after review of the terms of the insurance contract and the district court record, affirmed the grant of summary judgment on Farmers’ motion relating to the bad faith claim: “General conclusions about Farmer’s conduct do not provide the facts needed to overcome summary judgment on the ‘fairly debatable’ element. Thus, the district court did not err in granting Farmers’ motion for summary judgment.” View "Cedillo v. Farmers Ins. Co. of Idaho" on Justia Law

The Pennsylvania Supreme Court granted allowance of appeal in this case to determine when the statute of limitations begins to run on an uninsured motorist (UM) claim under an insurance policy. Specifically, the issue reduced to whether the statute of limitations begins to run on an insured’s ability to initiate a court action to enforce a UM claim in a policy containing an arbitration agreement. The Superior Court held that, for the purpose of UM and underinsured motorist (UIM) claims, the statute of limitations begins to run when a claimant injured in an automobile accident first learns that the other driver is uninsured or underinsured. However, the Supreme Court determined this conclusion was not adequately grounded in the pertinent statutory text, prevailing statute of limitations doctrine, or significant public policy concerns. Accordingly, the Court held that statute of limitations principles attending contract claims apply, and that the running of the statute was commenced upon an alleged breach of a contractual duty, which in this case would be occasioned by the insurer’s denial of coverage or refusal to arbitrate. The Court therefore reversed the Superior Court’s order to the contrary. View "Erie Insurance Exchange v. Bristol" on Justia Law

Plaintiffs filed suit against Allstate after the insurance company denied their homeowner's insurance claim. The Eighth Circuit affirmed the district court's grant of Allstate's motion for judgment as a matter of law. In regard to the breach of contract claim, the court held that plaintiffs failed to present sufficient evidence of the home's value and the personal property's value before or after the fire. Furthermore, a bankruptcy filing was insufficient to establish value. In this case, plaintiffs could have submitted an estimate of the personal property's value immediately before the fire, but they did not. Values on their proof-of-loss list were estimates of original purchase prices and it did not account for deterioration, obsolescence, or other depreciation as required by the policy and under Missouri law. Because plaintiff's vexatious refusal claim was derivative of their breach of contract claim, the court affirmed as to that claim. View "Aziz v. Allstate Insurance Co." on Justia Law

McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") filed suit against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley and hired various subcontractors to help construct the Project. As relevant here, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured. The trial court granted Lexington's motion for summary judgment, reasoning, that there was no possibility for coverage for McMillin as an additional insured under the policies "[b]ecause there were no homeowners in existence until after the subcontractors' work was complete[ ] . . . ." On appeal, McMillin contended that the fact that the homeowners did not own homes in the Project at the time the subcontractors completed their work did not establish that its liability did not arise out of the subcontractors' ongoing operations. The trial court granted Financial Pacific's motion for summary judgment, finding McMillin did not establish homeowners in the underlying action had sought potentially covered damages arising out of the subcontractors' drywall installation. The Court of Appeal reversed as to Lexington, and affirmed as to Financial Pacific. View "McMillin Management Services v. Financial Pacific Ins. Co." on Justia Law

To seek redress for an opioid epidemic, characterized by the Court of Appeal as having placed a financial strain on state and local governments dealing with the epidemic’s health and safety consequences, two California counties sued (the California Action) various pharmaceutical manufacturers and distributors, including the appellants in this matter, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, “Watson”). The California Action alleged Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain - a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations. The issue presented by this appeal was whether there was insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, the issue was whether the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul) owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson. Travelers denied Watson’s demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured’s products and for warranties and representations made about those products. The California Court of Appeal concluded Travelers had no duty to defend Watson under the policies and affirmed. View "The Traveler's Property Casualty Company of America v. Actavis, Inc." on Justia Law

In 2009, Bancorp, which provides checking and savings accounts to individuals, purchased a bankers’ professional liability insurance policy from Federal. The policy stated: [Federal] shall pay, on behalf of an Insured, Loss on account of any Claim first made against such Insured during the Policy Period … for a Wrongful Act committed by an Insured or any person for whose acts the Insured is legally liable while performing Professional Services, including failure to perform Professional Services" but that Federal “shall not be liable for Loss on account of any Claim … based upon, arising from, or in consequence of any fees or charges” (Exclusion 3(n)). The 2010 Swift Complaint sought damages for Bancorp's "unfair and unconscionable assessment and collection of excessive overdraft fees.” Swift sought to represent a class of all U.S. BancorpSouth customers who "incurred an overdraft fee as a result of BancorpSouth’s practice of re-sequencing debit card transactions from highest to lowest.” In 2016, Bancorp agreed to pay $24 million to resolve all the claims, $8.4 million of which was for attorney’s fees, plus $500,000 in class administrative costs. Federal denied coverage. The Seventh Circuit agreed that Exclusion 3(n) excluded from coverage losses arising from fees and affirmed the dismissal of breach of contract claims and a bad faith claim. View "BancorpSouth Inc. v. Federal Insurance Co." on Justia Law