Justia Insurance Law Opinion Summaries

This appeal stems from an arbitration decision regarding Peggy Cedillo's underinsured motorist insurance policy with Farmers Insurance Company of Idaho, and damages for injuries she suffered in a motorcycle accident. After the arbitrator issued his final award, Farmers provided the arbitrator evidence that Farmers had already paid Cedillo the total amount of remaining damages. The arbitrator adjusted the award by subtracting Farmers' payment from the prejudgment interest Farmers owed Cedillo. The district court confirmed the arbitrator's amended award and awarded Cedillo attorney fees. On appeal, Farmers argued the district court should have modified the award because the arbitrator miscalculated prejudgment interest by applying Farmers' payment to the interest award. Farmers also argued numerous grounds that Cedillo was not entitled to attorney fees. Finding no reversible error, the Supreme Court affirmed. View "Cedillo v. Farmers Insurance Co of Idaho" on Justia Law

Brooks was riding her bicycle when Lawrence negligently struck her with his car. Lawrence later died of unrelated causes. Brooks sued Lawrence’s estate, which settled for the $50,000 limit of Lawrence’s auto insurance policy. Brooks agreed not to seek additional recovery from Lawrence’s estate, heirs, or insurer, but retained the right to seek recovery from the Brookses’ auto insurance policy (Midwestern), which provides underinsured motorist (UIM) bodily injury coverage. On the declarations page for the UIM endorsement, the policy states, “Insurance is provided where a premium entry is shown for the coverage.” This page lists “Underinsured Motorist Bodily Injury” with liability limits of $100,000 per-person and $300,000 per-accident. A premium amount appears for each of five vehicles, indicating the Brookses pay a premium for UIM coverage for each vehicle. Midwestern paid $100,000, declaring this per-person limit the maximum amount for a single application of the policy’s UIM coverage, then sought declaratory judgment that its UIM coverage limits for multiple vehicles do not stack to multiply the per-person limit. Granting Midwestern summary judgment, the district court determined the plain language of the policy makes it “quite clear” intra-policy stacking is prohibited and the per-person limit for one accident is $100,000. The Eighth Circuit affirmed. View "Midwestern Indem. Co. v. Brooks" on Justia Law

LuAnn Shubert fell and injured her lower back while working at a Macy’s store. She appealed the Idaho Industrial Commission’s order holding that she was: (1) medically stable on November 21, 2007; (2) not entitled to medical benefits beyond that date; (3) not entitled to temporary disability benefits; (4) entitled to a permanent partial impairment rating of 5% of the whole person; and (5) entitled to a 10% permanent partial disability rating. Shubert argued that she was entitled to ongoing medical care, temporary disability benefits, and total permanent disability benefits over 10%. Macy’s West (Macy’s) and Liberty Insurance Corporation argued that Shubert was rearguing the facts. Finding no reversible error in the Commission's decision, the Idaho Supreme Court affirmed. View "Shubert v. Macy's West, Inc." on Justia Law

In November 2005, petitioner Barbara Shepard was working for the Oklahoma Department of Corrections when she was injured. The Workers' Compensation Court found that Shepard had sustained a permanent partial disability. The court ordered the respondent Department of Corrections and/or its insurance carrier "to provide the claimant with reasonable and necessary continuing medical maintenance limited to prescription medications and four (4) visits per year to monitor same with Dr. M." There was no limit imposed on the doctor's exercise of a medical judgment as to which prescriptions were needed by Shepard, except those that were medically reasonable and necessary. The court also directed payment of reasonable and necessary medical expenses incurred by Shepard as a result of her injury. In 2010, Shepard moved to reopen her claim based upon a change of condition for the worse. In 2011, the Workers' Compensation Court reopened the claim and determined that Shepard had a change of condition for the worse and allowed additional compensation for the worsening of her left shoulder. The order of the Workers' Compensation Court en banc stated that respondent/insurance carrier "shall pay all reasonable and necessary medical expenses incurred by claimant as a result of said injury through the date of this order." The previous award of continuing medical maintenance was not disturbed by the order that reopened her claim. The order on reopening was appealed to the Court en banc which affirmed in part and modified in part the previous order. In 2011, the Court en banc modified a provision relating to temporary total disability, and two provisions of attorney's fees. The award of reasonable and necessary medical expenses was not modified. The previous award of continuing medical maintenance was not disturbed. In 2012, Respondents sought a hearing to "discuss prescriptions." They objected one of Dr. M.'s medical reports. The court ordered Shepard to submit to a medical examination by Dr. Y., and directed this doctor to determine whether Shepard needed pain management and the nature and extent of necessary continuing medical maintenance. The order also directed Dr. Y. to determine if Shepard's current continuing medical maintenance by Dr. M. was within the Oklahoma Treatment Guidelines. The court also directed Dr. Y. to determine whether Shepard's continuing medical maintenance was within the Oklahoma Treatment Guidelines; and if not, to advise whether her continuing medical maintenance in her best interest. Respondents then sought an order that would have the effect of terminating Shepard's medical prescriptions. In June 2014, the Workers' Compensation Court of Existing Claims ordered that Dr. M. could provide continuing medical maintenance to the Shepard. In July 2014, Shepard sought review of this decision by by the Supreme Court, arguing that respondents made an impermissible retroactive application of a new workers' compensation law. Respondents argued that application of the new law to medical benefits currently being provided was not a retroactive application, and that even if the application was a retroactive application, such application was permissible. The Supreme Court held that 85 O.S.2011 section 326(G) and the statutorily incorporated Guidelines were unconstitutionally applied retroactively to employee's previous award for medical treatment that predated section 326. View "Shepard v. Dept. of Corrections" on Justia Law

Plaintiff Augustine Badiali was injured when his motor vehicle was rear-ended by an uninsured motorist. Plaintiff filed a UM claim, which proceeded to arbitration and resulted in an award in plaintiff s favor. Plaintiff filed suit against his insurer, defendant New Jersey Manufacturers Insurance Group ( NJM ), after NJM rejected the arbitration award and refused to pay its share. The trial court confirmed the arbitration award in a summary action and found NJM liable for its share of the award. In a subsequent action, plaintiff asserted that NJM litigated in bad faith by advocating that its policy language allowed for a rejection of the arbitration award at issue. The trial court granted summary judgment in favor of NJM. The court agreed that the case was ripe for summary judgment although discovery had not been completed. The court was further persuaded that NJM s position was fairly debatable based on its policy language and on the existence of an unpublished Appellate Division decision involving nearly identical facts, in which NJM was also a party. The Appellate Division affirmed, holding that NJM s position was fairly debatable because it was supported by a prior, unpublished opinion of the court. Plaintiff was thereby barred from recovering counsel fees or any other consequential damages. Finding no reversible error in the appellate court's judgment, the Supreme Court affirmed. View "Badiali v. N.J. Mfg. Ins. Grp." on Justia Law

Plaintiff Kwabena Wadeer suffered injuries in a motor vehicle accident that occurred while he was attempting to avoid an unidentified vehicle. Plaintiff filed a UM claim against New Jersey Manufacturers Insurance Company (NJM), his insurer. The insurance policy provided $100,000 in UM and UIM coverage. NJM made no offers to attempt to settle plaintiff's UM claim and the parties proceeded to private arbitration pursuant to the terms of the policy. The panel determined that plaintiff was 30% liable for the accident, the phantom vehicle was 70% liable, and plaintiff was entitled to a net award of $87,500. NJM rejected the $87,500 arbitration award and demanded a trial. By letter, plaintiff's attorney acknowledged NJM s rejection of the arbitration award and notified NJM that he believed it was acting in bad faith by rejecting that award. Plaintiff submitted an Offer of Judgment to NJM in the amount of $95,000 and reiterated his belief that defendant's conduct was in bad faith. NJM rejected the offer and the case proceeded to trial. The jury determined that the phantom vehicle was 100% liable for the underlying accident and awarded plaintiff $210,000 for pain and suffering and $12,175 in lost wages. Plaintiff thereafter moved to enter judgment for the full amount of the verdict, notwithstanding the $100,000 policy limit, as well as for prejudgment interest on the verdict and attorneys fees. During argument on the motion, plaintiff's counsel raised the issue of bad faith, contending that defendant was on notice of the claim. In response, NJM argued that plaintiff failed to plead bad faith in his complaint. The trial judge entered an order reducing and molding the jury verdict to conform to the insurance policy limit of $100,000 and awarding plaintiff attorneys fees and prejudgment interest. In his accompanying statement of reasons, the trial judge found that NJM s actions did not constitute bad faith because NJM had fairly debatable reasons for denying the benefits of the policy. Plaintiff and NJM filed cross-appeals. Plaintiff contended the trial court should not have molded the verdict to the policy limits because NJM acted in bad faith. The Appellate Division affirmed the trial judge's modified jury verdict, but reversed the award of attorneys fees and expenses. Plaintiff then filed a separate complaint alleging that NJM breached its duty of good faith and fair dealing by failing to make a settlement offer to plaintiff and by failing to settle the claim in a timely manner. NJM moved for summary judgment, arguing that plaintiff's complaint was barred by the entire controversy doctrine, res judicata, and/or collateral estoppel. After review, the Supreme Court agreed that plaintiff's bad faith claim was barred in this action under the principle of res judicata because it was raised, fairly litigated, and determined by the trial court in the first litigation. View "Wadeer v. N.J. Mfrs. Ins. Co." on Justia Law

Travelers Home and Marine Insurance Company ("Travelers") appealed the grant of summary judgment in favor of Dianne and Martin Gray in the Grays' action arising from injuries Dianne suffered as the result of a motor-vehicle accident. In 2010, Lawana Coker and Dianne were involved in a motor-vehicle accident in Elmore County; Coker was without motor-vehicle insurance at the time of the accident. Two years later, the Grays filed in the trial court a three-count complaint naming as defendants Coker and Travelers and a fictitiously named defendant. Travelers answered the complaint, denying the material allegations therein and asserting certain affirmative defenses. Coker, however, failed to answer the complaint. In 2013, the Grays moved the trial court to enter a default judgment in their favor and against Coker, requesting that the trial court assess damages in the amount of $500,000 for Dianne and $50,000 for Martin. The Grays' motion requested no relief as to Travelers. Shortly thereafter, the Grays filed a new summary-judgment motion in which, for the first time, they sought relief against Travelers. The Grays did not base their summary judgment motion against Travelers on the ground that there was no genuine issue of fact as to whether tortious conduct by Coker caused them to suffer injury. Instead, they based their summary-judgment motion against Travelers solely on the fact that they previously had obtained a default judgment against Coker. In this regard, the Grays argued that they were entitled to a judgment as a matter of law against Travelers because, they said, "Travelers as a party defendant had notice and adequate opportunity to intervene and present any defenses and arguments necessary to protect its position with respect to the entry of or the amount of damages in the Default Judgment. By failing to do so, Defendant Travelers legally is bound by the judgment." After review, the Supreme Court reversed: because Travelers as the Grays' UM carrier, was not bound by the default judgment entered against Coker, Travelers was not required to submit evidence in opposition to a motion for a summary judgment that relied solely on that default judgment. Consequently, the trial court erred in entering a summary judgment in favor of the Grays and against Travelers. View "Travelers Home & Marine Ins. Co. v. Gray" on Justia Law

Lodholtz was injured in the Pulliam factory and sued, seeking compensation. Pulliam filed a claim with its insurer, Granite State, which retained a claims adjuster, York. Pulliam assumed, erroneously, that Granite would provide a defense and defaulted on the state court claim. Neither Granite nor York ever had communicated to Pulliam whether they believed Granite had a duty to defend Pulliam under the terms of the policy. Pulliam subsequently entered into a settlement agreement with Lodholtz, assigning to Lodholtz any claims it had against Granite or its agents for failing to undertake a defense. The agreement also provided that Lodholtz would not seek to recover its damages from Pulliam. Granite sought a declaratory judgment that it had no duty to indemnify Pulliam. Lodholtz later filed a complaint against Granite, alleging breach of contract, bad faith, and negligence, and against York for negligence. The district court consolidated the cases. After the district court entered a final judgment in favor of York, Lodholtz appealed. The Seventh Circuit affirmed. The Court of Appeals of Indiana has held that an insurance adjuster owes no legal duty to the insured, and Lodholtz failed to establish that the Indiana Supreme Court would disagree with that decision. View "Lodholtz v. York Risk Servs. Grp., Inc." on Justia Law

Daer filed a personal injury suit, alleging material and design defects in a tire manufactured by Yokohama and sold by Costco. Costco settled for $5.5 million and Yokohama for $1.1 million. National, as excess insurer of Costco, sued Yokohama and its insurers (Tokio) to recover the costs of defending plus money paid on behalf of Costco to settle that lawsuit. National, as subrogee of Costco, sought recovery based on an express indemnity provision in the supplier agreement between Costco and Yokohama, and alleged breach of Yokohama’s contractual insurance obligations. It sued Tokio for indemnity and contribution. The court ruled in limine that National’s proof of a tire defect would be limited to the opinions of Daer’s expert in the underlying case. After National made its opening statement in a proceeding to determine whether a tire defect was a cause of Daer’s accident, the court dismissed the express indemnity claim. Having determined that the tire was not defective, the court granted summary adjudication as to claims based on refusal to defend and Yokohama’s breach of insurance obligations. The court awarded Yokohama $863,706.75 in fees as the prevailing party on the indemnity claim. The court of appeal reversed in part, holding that the court erred in excluding relevant, material expert evidence on a matter properly subject to expert opinion. View "Nat'l Union Fire Ins. Co. v. Tokio Marine & Nichido Fire Ins. Co." on Justia Law

Footstar operated the footwear departments in various Kmart stores as though they were islands. Footstar employees could only work in those departments unless they had written permission from Kmart. In 2005, a Footstar employee tried to help a customer get an infant carrier off a shelf outside the footwear department and the customer was injured. She sued. Kmart sought indemnification from Footstar and its insurer, Liberty Mutual. A magistrate judge found that Footstar and Liberty Mutual both had a duty to defend beginning the day Kmart formally requested coverage since the injury was potentially coverable under the agreement between Kmart and Footstar and the insurance policy. The Seventh Circuit reversed, holding that neither Liberty Mutual nor Footstar had a duty to indemnify Kmart because the injury did not occur “pursuant to” or “under” the agreement between Kmart and Footstar. That agreement specifically precluded Footstar employees from working outside of the footwear department, where the injury occurred, and actions taken in contravention of the agreement were not “pursuant to” or “under” it. Liberty Mutual did not deny coverage in bad faith and that Kmart did not breach the relevant notice provisions such that Liberty Mutual and Footstar could withhold defense costs. View "Kmart Corp. v. Footstar, Inc." on Justia Law