Justia Insurance Law Opinion Summaries

Articles Posted in Injury Law
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West Virginia sued pharmaceutical distributors, seeking to hold them liable for contributing to the state’s epidemic of prescription drug abuse. The complaint alleged that certain pharmacies, “pill mills,” knowingly provided citizens with hydrocodone, oxycodone, codeine, and other prescription drugs, not for legitimate uses, but to fuel and profit from their addictions. The state contends that those pharmacies ordered drugs in quantities so large that the distributors should have known they would be used for illicit purposes. H.D. Smith, a distributor, had a general commercial liability insurance policy issued by Cincinnati Insurance. The policy covered damages that H.D. Smith became legally obligated to pay “because of bodily injury,” defined as “bodily injury, sickness or disease sustained by a person, including death.” “[D]amages because of bodily injury” include “damages claimed by any person or organization for care, loss of services or death resulting at any time from the bodily injury.” Cincinnati refused to defend the suit and obtained a declaratory judgment. The Seventh Circuit reversed summary judgment. The plain language of the policy requires Cincinnati to defend a suit brought by a plaintiff to recover money paid to care for someone who was injured by H.D. Smith. West Virginia’s suit fits that description. View "Cincinnati Ins. Co. v. H.D. Smith, LLC." on Justia Law

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In December 2007, a driver rear-ended Donald Etherton’s vehicle. He injured his back in the accident. Etherton filed a claim with his insurer, Owners Insurance Company (“Owners”), seeking uninsured or underinsured motorist coverage up to his policy limit. After months of back and forth, Owners offered to pay an amount significantly lower than the policy limit. Etherton sued, alleging claims for (1) breach of contract and (2) unreasonable delay or denial of a claim for benefits. A jury found in Etherton’s favor on both claims. The district court entered judgment for Etherton, awarding $2,250,000 in damages. Owners appealed, arguing the trial court erred: (1) by denying Owners' motion for a new trial based on the allegedly erroneous admission of expert testimony; (2) by denying its motion for judgment as a matter of law based on Owners' purported reasonableness; and (3) in granting Etherton's motion to amend the judgment. Finding no reversible error, the Tenth Circuit affirmed in all respects. View "Etherton v. Owners Insurance Company" on Justia Law

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Plaintiff was injured in an automobile accident and filed a claim for underinsured motorist (UIM) benefits with defendant Country Preferred Insurance. The insurer submitted a letter that satisfied the attorney fee safe harbor requirements of ORS 742.061(3). The case was arbitrated, and plaintiff prevailed and was awarded attorney fees. Defendant filed exceptions to the fee award in the circuit court, and the court concluded that defendant’s safe harbor letter precluded the award of fees. Plaintiff appealed, and the Court of Appeals reversed, holding that defendant was ineligible for the protection of the attorney fee safe harbor because, in arbitration, in its answer to plaintiff’s complaint, defendant had raised issues in addition to the liability of the underinsured motorist and the damages due to plaintiff. On review, the Oregon Supreme Court agreed with the Court of Appeals that defendant was not entitled to the protection of ORS 742.061(3), and affirmed the award of reasonable attorney fees. View "Kiryuta v. Country Preferred Ins. Co." on Justia Law

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Plaintiff's almost-new Toyota Tundra Pickup sustained structural damage, while parked, as a result of a collision between the vehicles of Hollandsworth and Sebastian. Plaintiff had an insurance policy through AAA covering collision-related damages.Hollandsworth also had an AAA insurance policy, covering property damage that he caused through negligence. AAA refused to consider the pickup a “total loss,” had the vehicle repaired at a reported cost of $8,196.06, and provided a rental car during the interim. As a result of the collision and the repairs, the pickup’s future resale value was decreased by more than $17,100. Plaintiff sued Hollandsworth and Sebastian for negligence and sued AAA for breach of contract and bad faith. The trial court dismissed the claims against AAA, finding that plaintiff essentially was seeking reimbursement for the lost market value of his pickup, a loss that specifically was excluded under his insurance policy. The court of appeal affirmed, rejecting an argument that the resale value exclusion violated public policy and was void. The court stated that, in the insurance context, courts are not at liberty to imply a covenant (of good faith) directly at odds with a contract’s express grant of discretionary power, View "Baldwin v. AAA N. Cal." on Justia Law

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Three female employees of Metro Paramedic Services sued Metro and Antioch Rescue Squad, alleging an unrelenting practice of egregious sexual harassment, assault and battery, retaliation for whistleblowing, and failure to supervise. They alleged that Antioch and Metro were a partnership or joint venture, jointly staffed and operated. Metro used Antioch ambulances, and employees of both entities used Antioch uniforms and gear. Two of the employees resolved their claims, based on an offer of judgment from Metro and Antioch; the third reached a settlement with both. AAIC, Antioch’s liability insurer, covered Antioch’s defense costs and indemnified its offers of judgment and settlement, but insisted that it had no obligation to cover Metro under Antioch’s policy and sought a declaratory judgment. The district court found, and the Seventh Circuit affirmed, that AAIC owed Metro a duty to defend. The policy stated, “If you are ... a partnership or joint venture, you are an insured. Your members and your partners are also insureds but only within the course and scope of your operations.” The arrangement qualified as a joint venture. View "Am. Alternative Ins. Corp. v. Metro Paramedic Servs., Inc." on Justia Law

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The Bjornebys insured their farming operation with a Nodak Mutual insurance policy. Bryan Hurst was their insurance agent. During potato harvest, a fire started in the break room of the Bjornebys' potato washing facility. The fire spread and caused substantial damage. The Bjornebys filed an insurance claim, and Nodak Mutual covered a number of losses. Nodak Mutual, however, refused to cover certain potatoes because the Bjornebys reported the potatoes after they became aware of the fire. The Bjornebys sued alleging Nodak Mutual breached their insurance contract and Hurst was negligent. A jury returned a general verdict in the Bjornebys' favor; the verdict did not allocate liability between Nodak Mutual and Hurst. Nodak Mutual and Hurst moved for judgment as a matter of law or, in the alternative, a new trial. The district court denied their motions. Both Nodak Mutual and Hurst appealed. Finding no reversible error, the North Dakota Supreme Court affirmed the district court's decision. View "Bjorneby v. Nodak Mutual Insurance Company" on Justia Law

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Appellant-plaintiff Robert Leritz was a Kansas resident whose motorcycle and two other vehicles were garaged in Kansas under an insurance policy issued by Appellee, Farmers Insurance Company (Farmers) in Kansas. Plaintiff was injured in a motorcycle accident in Oklahoma when Defendant Larry Yates made a left hand turn and collided with Plaintiff causing serious bodily injuries. Plaintiff brought this action alleging that he had incurred medical expenses and suffered damages exceeding Yates's liability coverage. There was a question as to whether he could stack his uninsured motorist (UM) coverage based on his ownership of policies on each of his three vehicles. Oklahoma allowed the practice, until the Oklahoma Legislature amended the UM provision in 2014. Kansas did not allow stacking. The trial court granted summary judgment to the insurer and the Court of Civil Appeals affirmed, applying the insurer's proposed solution to a perceived conflict of laws issue. The Oklahoma Supreme Court found no conflict of laws issue on these facts because the policy specified which law would apply to an issue of stacking of policies. Giving the policy provisions effect made a choice of law analysis unnecessary; the Court vacated the Court of Civil Appeals, reversed the district court and remanded for further proceedings. View "Leritz v. Farmers Insurance Company, Inc." on Justia Law

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Norma Hoff owned a home she rented through a property management agency. The roof sustained hail damage, and she contracted with Alliance Construction & Restoration, Inc. (Alliance) to make the repairs. Alliance subcontracted the roof repairs to MDR Roofing, Inc. (MDR). MDR employed Hernan Hernandes as a roofer. While working on Hoff's roof, Hernandez fell from a ladder and suffered serious injuries. He filed a workers' compensation claim against MDR, but MDR's insurer, Pinnacol Assurance, denied the claim because MDR's insurance coverage had lapsed. The issue this case presented for the Supreme Court's review was whether Pinnacol had a legal obligation to notify MDR of a certificate of insurance when the policy evidenced by the certificate was cancelled. Based on the certificate at issue in this case and the applicable statute, the Colorado Supreme Court concluded that the insurer had no such obligation. Therefore, the Court reversed the appellate court's judgment to the contrary. View "Pinnacol Assurance v. Hoff" on Justia Law

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After Siasmorn Gopal was admitted to the emergency room at Kaiser Foundation Hospitals and died after she was transferred to another hospital, Gopal's husband and the trustee of her estate filed suit alleging that defendants violated California law. Plaintiffs alleged that Kaiser Hospitals, SCPMG, and Health Plan treated Gopal differently than they would have treated a member and that the different treatment caused her death. The court affirmed the trial court's rejection of plaintiffs' enterprise theory of liability. The court concluded that there is nothing inequitable in requiring plaintiffs to look to Kaiser Hospitals and SCPMG - the providers at issue - for compensation for their claims. Thus, plaintiffs are not without recourse or remedy. The court noted that the fact that health care providers, and not health plans, are subject to the Medical Injury Compensation Reform Act of 1975 (MICRA), Civ. Code, 3333.2, is not an inequitable result, but a public policy determination made by the Legislature. Accordingly, the court affirmed the judgment. View "Gopal v. Kaiser Found. Health Plan" on Justia Law

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Respondent Jennifer Hansen was injured in a motor vehicle accident in late 2007. Four months later, she presented an underinsured motorist (“UIM”) claim to petitioner American Family Mutual Insurance Company (“American Family”), insurer of her vehicle. As proof of insurance, Hansen offered lienholder statements issued to her by American Family’s local agent that identified her as the named insured at the time of the accident. American Family’s own records, however, indicated that the named insureds on the policy at the time of the accident were Hansen’s stepfather and mother, William and Joyce Davis (the “Davises”). In reliance upon the policy as reflected in its own records, American Family determined that Hansen was not insured under the policy and denied coverage. Hansen filed an action against American Family asserting claims for breach of contract, common law bad faith, and statutory bad faith for unreasonable delay or denial of benefits under sections 10-3-1115 and -1116, C.R.S. (2015). Prior to trial, American Family reformed the contract to name Hansen as the insured, and the parties settled the breach of contract claim, leaving only the common law and statutory bad faith claims for trial. The trial court ruled that the deviation in the records issued by American Family’s agent and those produced by its own underwriting department created an ambiguity in the insurance policy as to the identity of the named insured, and instructed the jury that an ambiguous contract must be construed against the insurer. The jury found in favor of Hansen on the statutory bad faith claim, indicating on a special verdict form that American Family had delayed or denied payment without a reasonable basis for its action. The trial court awarded Hansen attorney fees, court costs, and a statutory penalty. American Family appealed the judgment and award of statutory damages, arguing, among other things, that the trial court erred in finding that the lienholder statements created an ambiguity in the insurance contract as to the identity of the insured and that, at the very least, the contract was arguably unambiguous such that the company had a reasonable basis to deny coverage and could not be liable for statutory bad faith. The court of appeals affirmed, finding that the lienholder statements created an ambiguity and that, even assuming American Family’s legal position was a reasonable one, American Family could still be held liable for statutory bad faith. After its reverse, the Supreme Court reversed. Because the insurance contract unambiguously named William and Joyce Davis as the insureds at the time of the accident, the trial court and court of appeals erred in relying on extrinsic evidence to find an ambiguity in the insurance contract, "[a]n ambiguity must appear in the four corners of the document before extrinsic evidence can be considered." Accordingly, American Family’s denial of Hansen’s claim in reliance on the unambiguous insurance contract was reasonable, and American Family could not be held liable under sections 10-3-1115 and -1116 for statutory bad faith. View "Am. Family Mut. Ins. Co. v. Hansen" on Justia Law