Justia Insurance Law Opinion Summaries

Douglas Lunsford was injured in an accident involving multiple tortfeasors. Lunsford filed a negligence action against Thomas Mills, Mills’ employer James Crowder, and Shawn Buchanan, who carried liability policies totaling $1,050,000. Plaintiff was covered by two underinsured motorist (UIM) policies with North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau) with combined limits of $400,000. Buchanan’s provider tendered to plaintiff the $50,000 limits of Buchanan’s policy, and Plaintiff settled his claim with Mills’ and Crowder’s coverage provider for $850,000. Farm Bureau, an unnamed defendant, moved for summary judgment, arguing that Plaintiff was not entitled to UIM coverage because the combined policy limits of Defendants exceeded Plaintiff’s UIM limits. Plaintiff also moved for summary judgment, arguing that he was was entitled to recover $350,000 - Farm Bureau’s UIM policy limits minus an offset for Buchanan’s insurance payment. The trial court granted summary judgment for Lunsford. The Court of Appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) an insured is only required to exhaust the liability insurance coverage of a single at-fault motorist in order to trigger the insurer’s obligation to provide UIM benefits; but (2) the Court of Appeals erred in determining that Lunsford was entitled to interest and costs against Farm Bureau. View "Lunsford v. Mills" on Justia Law

Elvira was driving a car, owned by Mullalli, when she hit ice and collided with a negligently parked vehicle. Elvira, who suffered a traumatic brain injury, acute cervical and lumbar sprains, bulging discs, and other injuries, sued in federal court to recover under Mullalli’s no-fault State Farm automobile insurance policy,. Elvira and Mullalli are citizens of Michigan; State Farm is an Illinois citizen. The district court dismissed for lack of diversity jurisdiction, reasoning that the suit was a “direct action” under 28 U.S.C. 1332(c)(1), requiring Mullalli’s Michigan citizenship to be imputed to State Farm. The Sixth Circuit reversed. Because the direct action proviso does not apply to suits brought against the insurer by insured persons identifiable before the accident occurs, this suit was not a direct action and Mullalli’s citizenship should not have been imputed to State Farm. The court distinguished between the personal protection provisions of Michigan’s no-fault law that require coverage of an identifiable group of individuals: the named insured, a spouse, any relatives living with them, and any occupant of a car they own and the property protection provision of the statute, which states simply that “an insurer is liable to pay benefits for accidental damage.” View "Ljuljdjuraj v. State Farm Mut. Auto. Ins. Co." on Justia Law

Paulino suffered a spinal-cord injury in a work-related accident that left him permanently paraplegic. Employer's workers’ compensation insurer was Chartis. After medical treatment and intensive rehabilitation, Paulino moved to CCS for post-acute rehabilitation. When Paulino was capable of basic self-care, CCS set a discharge date of April 30. Paulino had workers’ compensation income of less than $400 per week and was ineligible for other assistance as an undocumented Mexican national. He required wheelchair-accessible housing, an electric hospital bed, and access to public transportation. His case manager was unable to locate suitable, affordable housing acceptable to Paulino. CCS refused to discharge Paulino to a residence not adequately adapted to Paulino’s needs. Chartis continued to pay medical bills and was prepared to pay for modifications to a permanent home, but notified Paulino that it would not pay his CCS living expenses (rent, utilities, groceries, cable television) after April 30. On May 6, Chartis withdrew those payments. Paulino continued to reside at CCS. A court affirmed the Iowa Workers’ Compensation Commissioner's conclusion (Ia Code 85.27) that special circumstances case made Paulino's continued stay at CCS appropriate and compensable. Paulino sued, alleging bad-faith denial of benefits as of May 6, seeking consequential and punitive damages. The Eighth Circuit affirmed the district court’s grant of summary judgment for Chartis. View "Paulino v. Chartis Claims, Inc." on Justia Law

Appellant, a former plumbing inspector for the Town of Sangerville, sued a Town Selectman, asserting claims of common law slander and violations of his constitutional right to due process. The claims stemmed from the Selectman’s statement at a public meeting that Appellant had made “less than quality decisions” while serving as plumbing inspector. The Selectman filed an offer of judgment, which Appellant accepted. After judgment was entered, Appellant initiated this reach and apply action against Argonaut Insurance Company seeking to recover for the slander count and due process claims. The district court granted summary judgment for Argonaut, concluding that the exclusions in the insurance policies for “employment-related” practices barred Appellant’s recovery. The district court agreed and denied Appellant’s motion. The First Circuit affirmed, holding that because Appellant’s judgment against the Selectman arose from an employment-related dispute, the insurance policies unambiguously excluded coverage for claims arising from employment-related practices. View "Ruksznis v. Argonaut Ins. Co." on Justia Law

This appeal stemmed from an action for auto negligence arising out of injuries sustained by Plaintiffs Rachael Montgomery and her three year old son, Noah Orcutt. Montgomery was rear-ended by Defendant Morgan Potter, who claims that her car brakes failed. As a result of Defendant's negligence, Montgomery claimed she sustained a severe back injury that required surgery. Among other damages sought Montgomery sought damages for her pain and suffering. Montgomery was an uninsured driver at the time of the accident. Citing 47 O.S. Supp. 2011, section 7-116, which prevents uninsured motorists from recovering certain non-economic damages such as pain and suffering, Defendant denied that Montgomery was entitled to damages for pain and suffering. Plaintiffs argued on appeal that section 7-116 was a special law in violation of art. 5, section 46 of the Oklahoma Constitution and filed a motion for declaratory relief declaring the statute unconstitutional. The trial court ruled in Plaintiffs' favor. The Supreme Court agreed: because 47 O.S.2011, section 7-116 impacted less than an entire class of similarly situated claimants it was under-inclusive and, therefore, the Court found it to be an unconstitutional special law prohibited by the Oklahoma Constitution. View "Montgomery v. Potter" on Justia Law

In 2007, Jared Wolfe was injured when his vehicle was hit from behind by an automobile driven by Karl Zierle. Wolfe attributed blame to Zierle and demanded $25,000 from Zierle’s insurer carrier, Appellant Allstate Property and Casualty Insurance Company, equating to half the liability limits under the applicable policy. Allstate counteroffered $1,200, which Wolfe refused. Wolfe then instituted a personal injury action against Zierle seeking compensatory damages grounded in negligence. Allstate assumed Zierle’s defense while maintaining its additional right, under the policy, to effectuate a settlement. The Pennsylvania Supreme Court accepted certification from a federal appeals court to clarify whether, under Pennsylvania law, an insured may assign the right to recover damages from his insurance company deriving from the insurer’s bad faith toward the insured. The Court concluded that the entitlement to assert damages under Pennsylvania law may be assigned by an insured to an injured plaintiff and judgment creditor such as Wolfe. Having answered the certified question, the Court returned the matter to the federal court. View "Allstate Prop & Casualty Ins Co. v. Wolfe" on Justia Law

A church filed a claim with its insurer for damage to its sanctuary after a severe winter storm. The insurer hired an independent insurance adjuster to adjust the claim. The church eventually filed suit against both its insurer and the independent adjuster alleging breach of contract, bad faith, and gross negligence. The church settled with its insurer, and the trial court granted summary judgment for the independent adjuster. The issues this case presented for the Supreme Court's review on appeal were: (1) whether a special relationship existed between an insured entity and an independent adjuster hired by the insurer, sufficient to subject the independent adjuster to the implied covenant of good faith and fair dealing arising under the insurance contract; and (2) whether an independent insurance adjuster owed a legal duty to the insured such that it may be liable to the insured for negligence in its adjustment of the claim. The Oklahoma Supreme Court determined the answer to both questions was no, and affirmed the trial court's judgment. View "Trinity Baptist Church v. Brotherhood Mutual Insurance Services, LLC" on Justia Law

Hoey, who owns a farmers’ market that offers hay rides, pony rides, and pumpkin picking, hired Armbruster to run the hay wagon for eight weekends. Armbruster is now a paraplegic because an accident with the wagon crushed her spine. She sued for negligence in Michigan state court. Armbruster and Hoey also sought a declaratory judgment, again in state court, that Armbruster was covered by Hoey’s General Commercial Liability insurance policy. The insurer, Western, sought a federal declaratory judgment that Armbruster was not covered by the insurance policy. The cases were consolidated in federal court. Counsel, provided by Western to Hoey, filed a workers’ compensation claim on the theory that Armbruster was an “employee” eligible for workers’ compensation. The state tort claim has been stayed until the workers’ compensation claim is resolved. The district court accepted jurisdiction and construed the policy to exclude Armbruster’s injury from coverage. The Sixth Circuit affirmed, agreeing that it would be helpful for the parties to know whether Western was liable for Hoey’s legal fees, that Western was not playing procedural games, and that the federal forum could resolve the action without interfering in Armbruster’s tort suit or taking on difficult questions of state law. View "W. World Ins. Co. v. Armbruster" on Justia Law

Santana Morales died while working for Lawns Nursery and Irrigation Designs, Inc. (Lawns). Thereafter, Lawns’ surviving spouse entered into a workers’ compensation settlement agreement with Lawns and Zenith Insurance Company (Zenith), Lawns’ workers’ compensation and employer liability insurance carrier. In a separate wrongful death lawsuit, Morales’ Estate obtained a default judgment against Lawns. Zenith refused to pay the tort judgment, and the Estate sued Zenith under Lawns’ employer liability policy. A federal district court entered summary judgment for Zenith, holding that the policy’s workers’ compensation exclusion barred the Estate’s suit. On appeal, the Eleventh Circuit certified three questions of law to the Supreme Court. The Court answered (1) the Estate had standing to bring direct action against Zenith to recover the judgment against Lawns; (2) the workers’ compensation exclusion barred coverage of the Estate’s tort judgment under the employer liability policy; and (3) a release in the workers’ compensation settlement agreement, through which Mrs. Morales elected the consideration described in the agreement as the sole remedy with respect to the insurance coverage that Zenith provided to Lawns, precluded the Estate from collecting the tort judgment from Zenith. View "Morales v. Zenith Ins. Co." on Justia Law

Claimant-appellant Trudy Deon brought worker compensation claims against her employer, H&J, Inc., and its surety, Liberty Northwest, (Employer/Surety) and the Idaho Special Indemnity Fund (ISIF). Deon eventually settled with ISIF but the claim against Employer/Surety went to a hearing that resulted in the Idaho Industrial Commission finding Employer/Surety 100% liable for her total and permanent disability (TPD). The Commission decided sua sponte to reconsider its decision and invited the parties to brief the issue of whether Deon was estopped from arguing Employer/Surety was 100% liable, given her settlement with ISIF. In an order on reconsideration, the Commission held that Deon was so estopped and apportioned 23.92% of her TPD to Employer/Surety. Deon appealed. Upon review, the Supreme Court determined the Commission erred by sua sponte raising the issue of collateral estoppel. The Commission and Employer/Surety knew about the ISIF settlement agreement for months before a decision was rendered and never raised the estoppel issue. Deon filed complaints against both her Employer/Surety and the ISIF. As a result of mediation, she reached a tentative settlement agreement with ISIF on October 5, 2012. The agreement was reduced to writing, signed by the parties on October 19, 2012, and approved by the Commission on November 8, 2012. When the Commission issued its Decision, it determined that Deon was totally and permanently disabled and that Employer/Surety was 100% liable under the odd-lot doctrine as Deon had argued. After considering all the hearing evidence and the parties’ briefing, the Commission found apportionment between the ISIF and Employer/Surety “is not appropriate” because “[t]he record does not establish that Claimant’s pre-existing leg condition combined with her 2008 industrial accident to render her totally and permanently disabled. However, on the same day the Commission issued its Decision, it also issued a notice of reconsideration pursuant to Idaho Code section 72-718, which raised for the first time the collateral estoppel. Specifically, the Commission wanted to know whether Deon’s stipulation to ISIF’s partial liability for her TPD estopped her from then arguing that Employer/Surety was 100% liable. After the parties briefed the issue, the Commission issued a new order holding that Deon was estopped from asserting a position inconsistent with her stipulation that ISIF was partially liable for her TPD. It then apportioned TPD liability according to the "Carey" formula, changing Employer/Surety’s liability from 100% to 23.92%. The Supreme Court concluded the revised findings were hinged solely on the Commission’s erroneous view of the law, and were without any support in the hearing record. Therefore, the Court reversed the Order on Reconsideration. Because the Commission did, in fact, hear Deon’s claim against Employer/Surety on the merits and determined Employer/Surety was 100% liable, Deon was entitled to 100% of her benefits from Employer/Surety. View "Deon v. H &J, Inc." on Justia Law