Justia Insurance Law Opinion Summaries

The insurers provided law enforcement liability coverage to the city of Waukegan and its employees acting within the scope of employment. In 2009, Starks filed a civil rights suit against the city and some current and former police officers, among others, alleging that each played a role in his wrongful conviction for a 1986 crime. The insurers obtained a declaratory judgment that they have no duty to defend or indemnify. The Seventh Circuit affirmed, noting that the policies were not in effect at the time of the crime, that Starks was not exonerated during the period when the policies were in place, and that any outrageous conduct that might be grounds for a claim of intentional infliction of emotional distress also fell outside the policy dates. View "Northfield Ins.Co. v. City of Waukegan" on Justia Law

Appellee pled guilty to fraudulent insurance acts by complicity. Pursuant to a plea agreement, the circuit court sentenced Appellee to a five-year probated sentence and ordered restitution to Amica Mutual Insurance Company in the amount of $48,597 - the full amount distributed by Amica after Appellee's house burned down. The court of appeals vacated the order of restitution and remanded to the trial court to make specific findings of the monetary damages suffered as a result of the insurance fraud, without regard to the proceeds distributed as a result of the property damage or alternate housing and living expenses. The Supreme Court reversed, holding (1) a trial court is authorized to order restitution for damages not suffered as a direct result of the criminal acts for which the defendant has been convicted when, as part of a plea agreement, the defendant freely and voluntarily agrees to the restitution condition; and (2) therefore, the trial court did not abuse its discretion when it ordered Appellee to reimburse Amica for the entire $48, 597. View "Commonwealth v. Morseman" on Justia Law

The Eleventh Circuit consolidated two criminal cases involving sophisticated financial structuring arrangements between related corporate subsidiaries. Appellants, William Allen Broughton and Richard William Peterson were convicted of conducting a "modern-day financial shell game" in which they falsified financial statements, exchanged paper ownership over non-extant fraudulent assets, and collected insurance premiums and monthly payments from unwitting innocents. Collectively, they stated two bases for reversal: (1) Broughton contended that the Government's purported failure to file charges within the relevant statutes of limitations "demand[ed]" reversal; and (2) both Appellants claimed that the district court erred in denying their motions for judgment of acquittal due to an insufficiency of evidence. Finding no error, the Eleventh Circuit affirmed Appellants' convictions. View "United States v. Peterson" on Justia Law

In 2005 Truman and partners purchased a vacant commercial building for $175,000, insured for $4,250,000 in fire-related losses. The property, without the building, was worth more than with the building. After a minor accidental fire, Truman told an employee that if it ever caught fire again, just get out. Considering leasing, Truman stated that it would make more money if it burnt. By late 2006, Truman had less than $5,000 in personal bank accounts. Premiums were paid through November 17. The building burned down November 12. Truman, Jr. confessed that he had burned the building at his father’s direction. State charges were dismissed because of inability to corroborate junior’s testimony, as required under New York law. Truman was charged with aiding and abetting arson, 18 U.S.C. 844(i); mail fraud, 18 U.S.C. 1341; use of fire in commission of a felony, 18 U.S.C. 844(h); and loan fraud, 18 U.S.C. 1341. Following a guilty verdict the district court granted acquittal and conditionally granted a new trial. The Second Circuit vacated and remanded for sentencing. Junior’s refusal to answer certain questions did not render his testimony incredible as a matter of law, and his prior state testimony was nonhearsay. Truman was not prejudiced by improper cross-examination or summation argument references to the cooperation agreement. View "United States v. Truman" on Justia Law

The Supreme Court granted certiorari to the Court of Appeals in "Glass v. Gates" to answer whether the definition of "any motor vehicle" in OCGA 33-24-51(a) continued to be the broader definition of the term provided for in prior case law, notwithstanding the 2002 passage of OCGA 36-92-1. As inmates at the Troup County Correctional facility, Jonathan Glass and Tony Smith were operating tractors when Smith's tractor got stuck in a ditch. Donrell Gates, Glass' detail supervisor, instructed the men to attach a chain to the tractors so Glass could use his tractor to pull Smith's from the ditch. As Glass did so, Smith engaged his tractor's bush hog, causing a rock to take flight and pierce Glass' throat. Glass bled profusely and died later that day. Plaintiffs, Glass' minor son and the executor of his estate, brought a wrongful death and survivor action against Troup County and Gates. The county sought summary judgment, claiming plaintiffs' claims were barred by sovereign immunity. The County asserted that by revising OCGA 33-24-51 (b) in 2002 (effective 2005), the legislature demonstrated its intent to apply the more narrow definition of "motor vehicle" found in OCGA 36-92-1 (6) in determining whether a local government waived sovereign immunity by purchasing liability insurance on a motor vehicle. The trial court agreed and granted summary judgment in favor of the County, concluding that the county did not waive sovereign immunity because neither a tractor nor a bush hog could be deemed a "motor vehicle" under OCGA 36-92-1. The Court of Appeals reversed, holding that the broader definition of "motor vehicle" should have been applied under 33-24-51, and that therefore, the County waived its sovereign immunity as long as it purchased insurance for the tractor and bush hog used by Smith. The Supreme Court agreed with the Court of Appeals' reasoning, and affirmed by answering the appellate court's original question in the affirmative. View "Gates v. Glass" on Justia Law

Defendant, an alleged embezzler, entered an Alford plea to first-degree theft and entered a deferred judgment on that charge. The subrogated insurer (EMCC) of Defendant's employer brought a civil action against Defendant to recover $66,749 it paid on the theft loss. The district court entered summary judgment in favor of EMCC in that amount, concluding that Defendant's Alford plea precluded her from denying the theft or the amount. Defendant appealed, contending her deferred judgment should have no res judicata effect in the civil case. The Supreme Court affirmed the district court's summary judgment establishing Defendant's liability to EMCC for damages of $10,000 based on issue preclusion and reversed the summary judgment in excess of $10,000, holding (1) the victim of a crime or the victim's subrogated insurer may invoke the doctrine of issue preclusion in a civil action based on the defendant's Alford plea regardless of whether the defendant successfully complies with the conditions for the deferred judgment on the criminal charge; but (2) the preclusive effect of Defendant's Alford plea is limited to $10,000, the minimum amount required to support a charge of first-degree theft, and genuine issues of material fact precluded summary judgment in excess of $10,000.

This appeal arose from an insurance coverage dispute where the City sought coverage from Genesis for 42 U.S.C. 1983 claims in the nature of malicious prosecution. Genesis filed suit against the City, seeking a declaratory judgment that its policies provided no coverage for the underlying actions. The district court granted summary judgment to Genesis and the City appealed, arguing that the district court erred in ruling as a matter of law that the policies did not provide the City insurance coverage for the claims. Because Genesis did not have an insurance contract with the City in 1977, when the underlying charges were filed, it did not have a duty to defendant and indemnify the city in the suits. Accordingly, the court affirmed the judgment.

This appeal concerned the 2003 fire that occurred at the Station nightclub, wherein one hundred people died. The nightclub was co-owned by Plaintiffs, Michael and Jeffrey Derderian. A grand jury returned separate criminal indictments against Plaintiffs on charges of involuntary manslaughter. Prior to the fire, Essex Insurance Company had issued an insurance policy to Michael. Plaintiffs demanded, pursuant to R.I. Gen. Laws 12-28-5 and the policy, that Essex afford them a defense against the criminal prosecutions. When Essex refused, Plaintiffs filed a complaint against Essex, seeking a declaratory judgment that the grand jury indictments against them constituted a suit as defined in the Essex policy and that, accordingly, Essex had a duty to provide them with a defense in the related criminal proceedings. The superior court granted summary judgment in favor of Essex. The Supreme Court affirmed, holding that the language of the policy clearly showed that the parties' intention when entering into the contract was that Essex would provide Plaintiffs with a defense only in civil proceedings in which bodily injury or property damage were alleged, and therefore, Essex had no duty to defend Plaintiffs in their criminal prosecutions.

In this case, an insurance agency had a contract with an insurance company that allowed the agency to commingle collected insurance premiums with its other funds in its general operating account. The government contended that the premiums collected by the agency were the property of the insurance company and held "in trust" by the agency; it alleged that when the funds were not remitted but used for other purposes, they were embezzled by the agency's treasurer, defendant. Defendant was charged with ten counts of embezzlement of insurance premiums in violation of 18 U.S.C. 1033(b)(1) and one count of conspiracy to commit embezzlement. The court held that under long-standing Arizona law, the contract between the agency and the company, which permitted agency commingling, required monthly agency payments whether premiums were collected or not, and created a right of interest on late payments, created a creditor-debtor relationship, not a trust. The agency had contractual and fiduciary duties to the company, but was not a trustee. Because the funds in question were not held "in trust" by the agency as a matter of law, an essential element of embezzlement was lacking. Therefore, the court reversed the denial of defendant's motion for judgment of acquittal.

Appellant Steven DeLoge, an inmate in the state penitentiary, was working in the kitchen when he was injured in an altercation with another inmate. Appellant filed a workers' compensation claim based on the injuries sustained from a head-butt from the other inmate. The Wyoming Workers' Safety and Compensation Division (Division) denied the claim. The Office of Administrative Hearings (OAH) concluded that Appellant's injuries were the result of illegal activity and were therefore not compensable under the Wyoming Worker's Compensation Act. The district court affirmed. The Supreme Court affirmed, holding that because the head-butt was a battery under the criminal statute then existing, and therefore an illegal activity, Appellant was not eligible for workers' compensation benefits.