Justia Insurance Law Opinion Summaries

Jonathan Quinn and his family were residential tenants of Barker & Little, Inc., when Quinn’s daughter was diagnosed with lead poisoning, Quinn sued Barker & Little for the injuries his daughter sustained from the high concentrations of lead in the leased premises. Barker & Little tendered the claim to Farmers Insurance Exchange (Farmers) and Truck Insurance Exchange (Truck). Farmers declined to defend Barker & Little under the applicable insurance policies. After a trial, the circuit court rendered judgment for Quinn. Quinn then asserted standing to bring all claims against Farmers and Truck that otherwise could have been brought by Barker & Little. Farmers and Truck moved for summary judgment on the basis of exclusions in the applicable policies. The circuit court granted the motion, concluding that Farmers had no duty to defend or indemnify Barker & Little in the underlying action. The Supreme Court reversed, holding that genuine issues of material fact existed that precluded summary judgment in this case. View "Quinn v. Farmers Ins. Exch." on Justia Law

An underinsured motorist collided with a city bus driven by Plaintiff. Plaintiff received a net workers’ compensation award of $71,958. Plaintiff also received $25,000 from the tortfeasor’s insurer. Plaintiff carried an underinsured (UM) policy issued by American Family Mutual Insurance Company that provided coverage up to $50,000 per person. Plaintiff submitted a UM claim to American Family, which denied coverage. Plaintiff filed a breach of contract action against American Family, asserting that he was entitled, under the terms of the policy, to $25,000 - the difference between his UM policy limit of $50,000 and the $25,000 he received from the tortfeasor’s insurer. The trial court granted summary judgment for American Family, concluding that the workers’ compensation benefits Plaintiff received operated as a setoff against the policy limit, thus reducing American Family’s liability to zero. The Supreme Court reversed, holding (1) the policy language unambiguously provided for a setoff against the policy limit; but (2) because this particular set-off would reduce the policy limit below the statutory minimum, Plaintiff was entitled to recover the remaining $25,000 from American Family. View "Justice v. Am. Family Ins. Co." on Justia Law

After Plaintiff was rear-ended by an underinsured motorist (UM), Plaintiff requested her $100,000 UM policy limits from State Farm. Plaintiff indicated that her damages were estimated to be $3.5 million because she suffered from reflex sympathetic dystrophy syndrome. State Farm responded that Plaintiff must schedule a compulsory medical examination (CME) pursuant to the terms of the policy. Plaintiff refused to attend a CME and instead filed suit against State Farm. The trial court entered judgment against State Farm for the UM policy limits. The court of appeal affirmed, holding (1) Plaintiff breached the contract when she failed to attend the CME; but (2) State Farm must plead and prove prejudice to avoid liability based on noncompliance with the CME clause, and State Farm failed to meet its burden in this case. The Supreme Court approved of the court of appeal’s decision, holding (1) the forfeiture of benefits under a UM policy will not automatically result upon an insured’s breach of a CME provision unless the insurer pleads and proves actual prejudice as an element of its affirmative defense; and (2) the undisputed facts demonstrate that State Farm was not prejudiced in this case. View "State Farm Mut. Auto. Ins. Co. v. Curran" on Justia Law

Truck Insurance Exchange (TIE) issued an apartment-owners insurance policy to appellant Jeanne Estates Apartments (JEA) that became effective in 1998. In 2006, Farmers Insurance Exchange (FIE) renewed the policy and continued to provide coverage. In 2008 and 2010, JEA became involved in three underlying lawsuits, which involved several appellants. JEA submitted claims for coverage to TIE/FIE in regard to those cases. TIE/FIE filed a complaint requesting that the circuit court declare that they owed no coverage to any person for any of the alleged misconduct which formed the basis of the claims in the underlying lawsuits and that they had no duty to provide a defense to any person or entity who was a defendant in the underlying lawsuits. The circuit court granted summary judgment in favor of TIE/FIE. The Supreme Court affirmed, holding that the apartment-liability contract issued by TIE/FIE did not provide an insured coverage for the type of harm alleged by the plaintiffs in the underlying suit. View "Kolbek v. Truck Ins. Exch." on Justia Law

The general contractor of a Wisconsin construction project, hired Harsco to supply scaffolding. Krien, injured in a fall when a plank on a scaffold on which he was standing, broke, sued Harsco. The parties settled his claim for $900,000. Harsco filed a third‐party complaint against the contractor, seeking indemnification plus interest and attorneys’ fees. The district judge granted the contractor summary judgment. The Seventh Circuit reversed and remanded after examining the complex provisions of the contract between the two. The plank may or may have been supplied by Harsco and may or may not have been defective, as claimed by Krien, who could not sue Riley in tort, because against his employer his only remedy for a work‐related accident was a claim for workers’ compensation, but there has never been judicial resolution of these questions, because Krien’s suit was settled before there was any judgment. Indemnification, however, is a form of insurance, and could apply even if the party seeking indemnification was negligent. Riley’s duty to indemnify Harsco extends to legal expenses incurred by Harsco in defending against Krien’s suit and in litigating this suit. View "Krien v. Harsco Corp." on Justia Law

Lewis was injured in an automobile accident and her health plan paid $180,000 for her medical treatment Lewis filed a tort suit against the driver (her son-in-law), represented by Georgia lawyer Lashgari, and obtained a $500,000 settlement. Lashgari knew the plan had a subrogation lien, but split the proceeds between himself and Lewis. He claimed that the plan was owed nothing. The plan filed suit under ERISA to enforce the lien, 29 U.S.C. 1132(a)(3). The defendants argued that because the settlement funds have been dissipated, the suit was actually for damages, not authorized by ERISA. The district judge ordered the defendants to place $180,000 in Lashgari’s trust account pending judgment. The defendants did not comply. A year later, the defendants having neither placed any money in a trust account nor produced any evidence of their inability to pay, the judge held them in civil contempt, ordered them to produce records that would establish their financial situations, and ordered Lashgari to documents relating to the contempt to the General Counsel of the State Bar for possible disciplinary proceedings against him. The defendants appealed the contempt order. The Seventh Circuit dismissed, characterizing the appeal as frivolous and the defendants’ conduct as outrageous. View "Cent. States, SE & SW Areas Health & Welfare Fund v. Lewis" on Justia Law

Golden purchased automobile insurance from State Farm. The mandatory liability portion of her policy provided that State Farm would defend the insured against a third-party lawsuit using attorneys chosen by State Farm. Following a collision, Golden was represented by in-house counsel. She later filed a purported class action, claiming that “historically and traditionally” State Farm and other insurers defended third-party claims against insureds by hiring private, independent attorneys. State Farm now routinely uses in-house staff attorneys to represent insureds against such claims. Golden filed a purported class action, alleging that State Farm owes its insureds a duty to explain in its policies that house counsel may be used. The district court dismissed, holding that Indiana law creates no obligation to provide advance notification to an insured that an insurer uses house counsel to defend insureds. The court denied Golden’s request to certify the question to the Indiana Supreme Court. The Seventh Circuit affirmed, noting that Golden did not allege that she received deficient representation or that she ever objected to the use of house counsel in her suit. All of her claims depended on the existence of a duty to disclose; State Farm had no duty to disclose.View "Golden v. State Farm Mut. Auto. Ins. Co." on Justia Law

Plaintiff filed suit under the West Virginia Unfair Trade Practices Act (WVUTPA), W. Va. Code 33-11-4(9)(f), based on IOF's allegedly unlawful conduct in connection with its handling of her insurance claim. The court held that plaintiff's WVUTPA claim sounds in tort and not in contract; West Virginia governed the underlying lawsuit pursuant to the lex loci delicti approach and the Restatement choice-of-law approach; and, insofar as the Supreme Court of Appeals of West Virginia has previously entertained questions regarding an action brought under the WVUTPA against an insurer subsequent to settlement, where the cause of action was limited to unfair settlement practices, plaintiff's complaint stated a claim upon which relief could be granted. Accordingly, the court reversed the district court's dismissal of the complaint. View "Kenney v. Indep. Order of Foresters" on Justia Law

Ember Buckley was a passenger in a motor vehicle driven by Harvey Betts when the vehicle was involved in an accident. Buckley, who sustained injuries in the accident, settled with GEICO, Betts’ insurer, for the full policy limits and signed a full release of all claims against Betts and a hold harmless agreement in favor of GEICO. Buckley then attempted to recover for the remainder of her outstanding medical bills under her uninsured/underinsured motorist (“UM”) policy with The Brethren Mutual Insurance Company (“Brethren”), which denied coverage. Buckley filed suit, alleging breach of contract and seeking the policy limit in compensatory damages. The circuit court entered summary judgment for Brethren, concluding that the release was a general release, and thus released all entities from future claims, regardless of whether they were a party to the release. The court of special appeals reversed, holding that the general release did not prejudice Buckley’s claim against Brethren. The Court of Appeals affirmed, holding (1) the broad, all-inclusive language of the release must be read with an eye toward the parties’ overall intent; and (2) that the court of special appeals correctly held that the release did not waive Buckley’s UM claim against Brethren. View "Brethren Mut. Ins. Co. v. Buckley" on Justia Law

State Farm Mutual Automobile Insurance Company petitioned the Supreme Court for a writ of mandamus to direct the Clarke Circuit Court to vacate its order denying State Farm's motion to transfer this case to the Mobile Circuit Court and to enter an order granting the motion. The underlying action arose from an automobile accident that occurred in Mobile County in 2010. Sandra Banks, a resident of both Clarke and Mobile Counties, sued Robert Spray, a resident of Baldwin County, and State Farm. Banks alleged that she suffered injuries as a result of the wrongful, negligent, and/or wanton conduct of Spray when the vehicle he was driving and owned struck her vehicle. Additionally, Banks alleged that at the time of the accident she had a policy of insurance with State Farm, which included uninsured-/underinsured-motorist coverage, and that she was due proceeds under her coverage. Because both the "convenience of parties and witnesses" and the "interest of justice" prongs of the doctrine of forum non conveniens compelled the transfer of this case from Clarke County to Mobile County, the Supreme Court concluded the trial court abused its discretion in refusing to transfer the action. Therefore, the Court granted State Farm's petition and issued a writ directing the Clarke Circuit Court to vacate its order and to enter an order granting the motion. View "Banks v. Spray" on Justia Law