Justia Insurance Law Opinion Summaries

Under Ariz. Rev. Stat. 20-259.01, insurers must offer uninsured motorist (UM) and underinsured motorist (UIM) coverage to their insureds and may prove compliance by having their insureds sign a Department of Insurance (DOI) approved form selecting or rejecting such coverage. Plaintiff obtained car insurance from State Farm through Defendant, an insurance agent. Plaintiff requested that her policy include both UM and UIM coverage, but Defendant procured insurance that did not include UIM coverage. Plaintiff signed the DOI-approved form, which had been filled out by Defendant to reject UIM coverage. Plaintiff and her husband later sued Defendant for malpractice for failing to procure the insurance coverage they had requested. The trial court concluded that Defendant’s compliance with section 20-259.01 demonstrated that it fulfilled its duties to Plaintiff regarding the offer of UM/UIM coverage, and therefore, Defendant breached no duty owed to Plaintiffs. The court of appeals reversed, holding that section 20-259.01(B) did not abolish the common law duty of reasonable care insurance agents owe their clients. The Supreme Court affirmed, holding that compliance with section 20-259.01 does not bar a negligence claim alleging that the insurance agent failed to procure the UIM coverage requested by the insured. View "Wilks v. Manobianco" on Justia Law

Ray Dillard attempted to collect workers' compensation benefits from the president and majority shareholder of his employer. In 1997, The Commission held that Dillard suffered a compensable injury. After the mandate issues, one of Dillard's attorneys filed a lis pendens notice regarding several parcels of real property the company's president owned. Because none of that property belonged to the company itself, Dillard's attorney informed the president that it was asking the Commission to hold the president personally liable for Dillard's benefits because the company failed to carry workers' compensation insurance. Dillard died in 2005 while unresolved issues regarding who would ultimately be responsible for Dillard's benefits was pending before an administrative law judge. Dillard's estate filed a complaint at the circuit court against the president and company, claiming that the company was required to carry workers' compensation insurance but failed to do so. Therefore, the Estate argued the president was personally liable for Dillard's benefits. Among other things, the president argued that the Estate's claim was barred by the statute of limitations and the doctrine of res judicata. Eventually, the administrative law judge granted the Estate's renewed motion for summary judgment, and entered a judgment of approximately $223,000 against the president and the company "jointly and individually." The president appealed, and the case was assigned to the Court of Appeals. The appellate court held that Dillard's claim against the company president was barred by res judicata and the statute of limitations. The Supreme Court held the Court of Appeals erred in reaching that conclusion, reversed and reinstated the trial court's judgment in favor of Dillard. View "Jarrett v. Dillard" on Justia Law

Milton Harper, the managing partner and president of Banks, Finley, White & Company of Mississippi (“Banks”), suffered a severe stroke in August 2000, and died of another stroke in July 2001. His dependents sued Banks for workers’ compensation benefits. The administrative law judge and the Workers’ Compensation Commission held that Harper’s injuries and death arose out of the scope and course of his employment at Banks. On appeal, the circuit court agreed that substantial evidence in the record supported the Commission’s conclusion that Harper’s stroke arose out of his employment, but that court held that Harper’s dependents were barred from recovering workers’ compensation benefits because Harper had failed to obtain workers’ compensation insurance for Banks. In turn, the Court of Appeals in "Harper v. Banks, Finley, White & Co. of Mississippi," (136 So. 3d 462 (Miss. Ct. App. 2014)), held that Harper’s dependents were not barred from recovery because Section 71-3-79 of the Mississippi Code allowed members of partnerships to exempt themselves from workers’ compensation coverage by giving notice in writing. Because Harper had not opted out of coverage in writing, the Court of Appeals held that Banks was required to provide workers’ compensation benefits to Harper’s beneficiaries. On writ of certiorari, the Supreme Court affirmed in part, and reversed in part. The Court held that the Court of Appeals erred in applying Section 71-3-79 of the Mississippi Code to the facts of this case. Because Banks did not have workers’ compensation insurance coverage, there was no coverage for Harper to opt out of in writing as contemplated by Section 71-3-79. Instead, the Court held that Section 71-3-52 of the Mississippi Code controlled the analysis of this case: because Banks had more than five employees, it was required to obtain workers’ compensation insurance and provide workers’ compensation benefits to its employees. The Court affirmed the Workers’ Compensation Commission’s finding that Harper suffered a fatal injury through the course of his employment at Banks was supported by substantial evidence. View "Harper v. Banks, Finley, White & Co. of Mississippi, P.C." on Justia Law

Jeffrey Epp suffered severe injuries after diving into a swimming pool at the St. Regis Resort, Monarch Beach. Epp and his wife sued the owner of the St. Regis and the entities involved in the design and construction of the swimming pool. The defendants included Valley Crest Landscape Development, Inc. (the general contractor for exterior improvements at the St. Regis), and Mission Pools of Escondido, Inc. (the subcontractor that built the swimming pool). Summary judgment motions and settlements reduced the litigation to a cross-complaint by Valley Crest and its insurer, National Union Fire Insurance Company of Pittsburgh, PA, against Mission Pools. Valley Crest sought to recover the amount it spent in the litigation based on a claim of express indemnity under the terms of the subcontract with Mission Pools. National Union sought to recover attorney fees and costs it had spent for Valley Crest’s defense and settlement of the Epps’ claims pursuant to the policy of general liability insurance that National Union had issued to Valley Crest. National Union proceeded on a claim it was equitably subrogated to Valley Crest’s claims against Mission Pools. The trial court conducted a two-part bench trial on the cross-complaint, found in favor of both Valley Crest and National Union on their respective claims, and awarded them the full amount of recovery sought. In this appeal, Mission Pools argued: (1) the cross-complaint was time-barred under Code of Civil Procedure, section 337.1, subdivision (a); (2) the trial court erred by finding National Union could recover on its claim for equitable subrogation because, under the element of balancing the equities, National Union should have borne the loss; and (3) the trial court erred by denying Mission Pools a jury trial on Valley Crest’s claim for express indemnity. As to the first contention, the Court of Appeal concluded section 337.1(a) did not apply to claims for express indemnity, and, therefore, the first amended cross-complaint was timely. As to the second contention, the Court concluded the trial court did not abuse its discretion by finding that National Union was entitled to recover based on equitable subrogation. The trial court erred, however, by denying Mission Pools a jury trial on Valley Crest’s claim for express indemnity. The Court therefore reversed on that claim and remanded for further proceedings. The Court affirmed in all other respects. View "Valley Crest Landscape v. Mission Pools" on Justia Law

Alfa Mutual General Insurance Company ("Alfa") petitioned for a writ of mandamus to direct the Mobile Circuit Court to grant its motion seeking to realign the parties to the underlying litigation so that Alfa may "opt out" of participation in the trial. In October 2012, respondent Mark Trotter was injured when a "road sweeper" he was operating was struck by a vehicle being operated by Daniel Elijah Davis, an uninsured motorist. In October 2014, Trotter sued Alfa seeking to recover uninsured/underinsured motorist ("UIM") benefits pursuant to a policy of insurance issued by Alfa to Trotter, which was in place at the time of the 2012 accident. Trotter did not include Davis as a codefendant in his action against Alfa. Alfa subsequently filed a third-party complaint adding Davis as a third-party defendant. Specifically, Alfa's third-party complaint alleged that, to the extent it was determined to be liable to Trotter for UIM benefits, then Alfa was subrogated to and entitled to recover the amount of that liability from Davis. Thereafter, Alfa filed a "Motion to Realign Parties" in which it asked to "opt out" of the litigation. Without explaining the findings on which its decision was based, the trial court denied Alfa's motion. The Alabama Supreme Court concluded after a review of the record, that Alfa has demonstrated a clear legal right to have its motion to realign the parties granted and to allow it to opt out of the underlying litigation. No authority is cited requiring that, in order to make the permitted election, Alfa must first release the right of subrogation to which it was also clearly entitled. View "Ex parte Alfa Mutual General Insurance Company." on Justia Law

F.H. Stoltze Land & Lumber Company and Maxum Specialty Insurance Group (collectively, “Stoltze”) and Les Schlegel Enterprises (“Schlegel”) contracted for Schlegel to log Stoltze’s property. Schlegel obtained liability insurance from American States Insurance Company (ASI). Whitney Shanks, a worker for Schlegel, injured himself during logging operations on Stoltze’s property. Shanks filed a personal injury lawsuit against both Schlegel and Stoltze. Stoltze tendered defense and indemnity of Shanks’s suit to ASI. After ASI accepted the tender, the district court dismissed the case against Schlegel on the grounds that Schlegel was immune to suit under the Workers’ Compensation Act’s exclusive remedy provision. ASI subsequently withdrew its defense of Stoltze, asserting that the policy covered Stoltze only to the extent that Schlegel was liable. Stoltze then filed a complaint against ASI, seeking declaratory judgment that ASI was required to defend and indemnify Stoltze against Shanks’s suit. The district court entered summary judgment for ASI, concluding that because the court in the underlying action determined that Schlegel was immune and not liable, ASI had no duty to defend or indemnify Stoltze. The Supreme Court affirmed, holding that ASI’s insurance policy with Schlegel did not require ASI to defend and indemnify Stoltze in an action in which Schlegel could not be held liable. View "F.H. Stoltze Land & Lumber Co. v. Am. States Ins. Co." on Justia Law

Priesendorf, distraught and drunk, asked Purscell for a ride to a cemetery. On the return trip, Priesendorf's behavior became erratic. She put her foot on the accelerator, on top of Purscell's foot. Purscell got her to stop. Later, Priesendorf unbuckled her seat belt, scooted over, and repeated the behavior. Purscell was unable to remove his foot. Approaching a stop sign, he put his other foot on the brake, with no effect. Purscell saw the Carrs' vehicle. Priesendorf continued to press the accelerator. Purscell swerved, but the vehicles collided and overturned. The Carrs' vehicle caught fire. Priesendorf was dead at the scene. Later, Purscell learned the gravesite Priesendorf had visited belonged to a person who had been killed in an accident while Priesendorf was driving drunk. Priesendorf had attempted suicide following her friend's death; none of her other friends would give her a ride because of her erratic behavior. Infinity insured Purscell's vehicle with policy limits of $25,000 per person and $50,000 per accident for bodily injury. Infinity immediately put the full amount on reserve, with $25,000 designated to Priesendorf's fatality and $25,000 designated to the Carrs. Infinity immediately received a settlement offer from the Carrs, seeking policy limits. Tim's medical expenses were over $97,000 and ongoing. Amy had separate claimes. Infinity stated that it needed to investigate coverage. Infinity informed Purscell of his right to seek independent counsel. The Carrs withdrew their settlement offer. Infinity eventually filed an interpleader, depositing policy limits in court. A jury awarded Tim Carr $830,000 and Carr $75,000; Priesendorf's wrongful death claim settled for $7,764.50, leaving Purscell with a substantial judgment against him. Purscell sued Infinity, alleging bad faith and breach of fiduciary duty. The district court first and Eighth Circuit rejected the claims. View "Purscell v. Tico Ins. Co." on Justia Law

Charles and Deborah Bate were both seriously injured in a head-on vehicle collision. After obtaining a judgment against the driver of the opposing vehicle the Bates sued Greenwich Insurance Company seeking underinsured motorist coverage under a policy allegedly issued to Charles Bate’s employer by Greenwich. Greenwich did not answer the petition, and the Bates obtained a default judgment in the amount of $3 million. More than two years later, Greenwich filed an amended motion to set aside the default judgment as void, arguing that service of process was invalid. The trial court set aside the default judgment as void, stating that there was no valid service of process. The Supreme Court reversed, holding that the Bates properly effected service of process under Mo. Rev. Stat. 375.906 and complied with all service requirements of that statute. View "Bate v. Greenwich Ins. Co." on Justia Law

Tenth-grader Jesus Rodriguez was injured while traveling to a soccer match in the bed of a pickup truck driven by a fellow student and teammate. Mutual of Omaha Insurance Company had issued a policy to the Kansas State High School Activities Association, which administered various extracurricular activities in the state. Rodriguez’s mother (Plaintiff) filed a claim with Mutual of Omaha. Mutual of Omaha denied the claim, reasoning that the travel during which Rodriguez was injured did not qualify as covered under the policy. Plaintiff sued the school district, Mutual of Omaha, and other defendants. The district judge held that Mutual of Omaha should be dismissed as a defendant in the case because Rodriguez’s travel was neither authorized by the school district nor subject to reimbursement, the two requirements for “covered travel” under the definition in the Mutual of Omaha policy. The court of appeals affirmed, holding that the travel involved in this case did not qualify as subject to reimbursement, and thus there was no coverage under the policy. The Supreme Court reversed, holding that the travel during which Rodriguez was injured was “authorized” and “subject to reimbursement,” and therefore, there was coverage under the policy language. View "Rodriguez v. United Sch. Dist. No. 500" on Justia Law

Zierle was driving and rear-ended Wolfe. Zierle’s blood alcohol level tested at 0.25%. Zierle had three prior DUIs. Wolfe required treatment at the emergency room. Zierle was insured by Allstate. Zierle’s policy stated that Allstate would not defend an insured for damages not covered by the policy. Zierle’s policy excluded coverage for punitive damages. Wolfe made a settlement demand of $25,000. Allstate counteroffered $1200. Wolfe filed suit. Allstate informed Zierle that he could face damages above the $50,000 policy limit and would be personally liable for the excess. During discovery, Wolfe learned of the extent of Zierle’s intoxication and added a claim for punitive damages. During settlement conferences, judges placed a value of $7500 on the compensatory damage claim. After trial, Allstate paid $15,000 in compensatory damages, but not a $50,000 punitive damages award. Zierle assigned his rights against Allstate to Wolfe, who sued, alleging breach of contract; bad faith; and violation of Pennsylvania’s Unfair Trade Practices Consumer Protection Law. The court denied Allstate’s motions for summary judgment, which argued that, since it had no duty to indemnify for punitive damages, it was not required to consider potential punitive damages when deciding whether to settle and that indemnification for punitive damages was impermissible under Pennsylvania law. The jury found violation of Pennsylvania’s bad faith statute and breach of contract; it awarded no compensatory damages, but $50,000 in punitive damages. The Third Circuit vacated and remanded for a new trial at which Wolfe will be barred from introducing evidence of the punitive damages award, affirming the denials of summary judgment. View "Wolfe v. Allstate Prop. & Cas. Ins. Co." on Justia Law