Justia Insurance Law Opinion Summaries

Shane Traylor Cabinetmaker, L.L.C. ("STC"), and Michael Shane Traylor sued American Resources Insurance Company, Inc., alleging breach of contract and bad faith, based on American Resources' refusal to defend or to indemnify STC and Traylor on counterclaims filed against them by Robert Barbee and R.L. Barbee Builders, Inc. in a separate action. The circuit court entered a summary judgment in favor of American Resources, and STC and Traylor appealed. Finding no error, the Supreme Court affirmed. View "Shane Traylor Cabinetmaker, L.L.C. v. American Resources Insurance Company, Inc. " on Justia Law

In 2006, Plaintiffs sustained serious injuries in an automobile accident and incurred medical expenses in excess of $1,000,000. Plaintiffs subsequently learned that they had only $5,000 in medical payments coverage and did not have any underinsured motorist (UIM) coverage after a transfer of their Oregon State Farm policy to Montana by the Mark Olson State Farm Agency. The driver who caused the accident carried the statutory minimum automobile liability insurance limits. Plaintiffs sued State Farm and Mark Olson, requesting declaratory relief and a reformation of the contract and alleging negligence, breach of fiduciary duty, and conduct sufficient to support an award of punitive damages. The district court entered summary judgment in favor of Defendants. The Supreme Court reversed, holding that the district court erred in entered summary judgment in favor of State Farm and Olson on Plaintiffs' negligence claims. Remanded for trial. View "Bailey v. State Farm Auto. Ins. Co." on Justia Law

This case involved the interpretation of two contractual provisions under Minnesota law: an indemnification clause in a contract between PDSI and Miller and an insurance contract between Harleysville and PDSI which extended insurance coverage to PDSI's indemnification of third parties for tort liability caused, in whole or in part, by PDSI or by those acting on its behalf. The court agreed with the district court's finding that a PDSI employee's suit fell squarely within the indemnity provision of the 1989 Agreement between PDSI and Miller. The court also agreed with the district court's interpretation of the insurance agreements as requiring Harleysville to cover Miller's settlement of the employee's claims. Further, the court concluded that the undisputed facts established as a matter of law that PDSI or those acting on its behalf at least partly caused the employee's bodily injury within the terms of the Harleysville policy. Accordingly, the court affirmed the judgment. View "Harleysville Ins. Co. v. Physical Distrib. Serv., et al" on Justia Law

Following a car accident with an uninsured motorist, Lori McDonnell filed suit against her insurer State Farm Mutual Automobile Insurance Company on behalf of herself and her minor son, Luke. McDonnell sought a declaratory judgment that: (1) she was entitled to have her personal injury claims settled by appraisal under the mandatory appraisal statute; and (2) a provision in her State Farm insurance policies requiring her to file suit against the insurance company within two years of the accident was void as against public policy. The superior court ruled that the mandatory appraisal statute did not apply to personal injury claims. The court further ruled that the contractual two-year limitations provision was enforceable, but only if State Farm could show that it was prejudiced by an insured's delay in bringing suit, and that the appropriate accrual date for the limitations period was the date State Farm denied an insured’s claim, rather than the date of the accident. McDonnell and State Farm both appealed that decision. Finding no error in the trial court's decision, the Supreme Court affirmed. View "McDonnell v. State Farm Mutual Automobile Ins. Co." on Justia Law

The question before the Supreme Court in this appeal was whether a defendant who pled no contest to disorderly conduct in a criminal action could be collaterally estopped from relitigating the elements of that crime in a related civil declaratory judgment action regarding insurance coverage, thereby precluding coverage. Kent Bearden pled no contest to disorderly conduct for punching Paul Rasmussen. Rasmussen subsequently filed a civil complaint against Bearden, and Bearden tendered the lawsuit to State Farm Insurance Company to defend and indemnify him under his homeowners insurance policy. State Farm sought declaratory relief and moved for summary judgment on the ground that Bearden's conduct could not be considered an "accident" within the meaning of the insurance policy because his no-contest plea collaterally estopped him from relitigating the issues of mens rea and self-defense. The superior court granted the motion. Finding no error with the superior court's decision, the Supreme Court affirmed. View "Bearden v. State Farm Fire & Casualty Co." on Justia Law

Brooks Insurance Agency, Sidney Brooks (its agent), and Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively "Nationwide") petitioned the Supreme Court for a writ of mandamus to direct the Jefferson Circuit Court to vacate its order denying their motion to dismiss an action filed by Guster Law Firm, LLC, and Guster Properties, LLP (collectively "Guster"), against them. Guster made a claim for a fire loss under commercial property policies issued to it by Nationwide. In April 2011, Nationwide filed a declaratory-judgment action requesting that the federal court determine the rights and obligations under the insurance policies it had issued to Guster. Guster answered and asserted compulsory counterclaims against Nationwide, including bad-faith failure to pay an insurance claim and breach of contract, among others. Months later, Guster filed a lawsuit in the Jefferson Circuit Court alleging against the agency, Brooks, and Nationwide: negligent/wanton failure to provide insurance coverage; misrepresentation; suppression and concealment; and negligent/wanton failure to train. The agency, Brooks, and Nationwide moved to dismiss the state court action on the ground that the action violated the state abatement statute and the compulsory-counterclaim rule. The trial court summarily denied the motion to dismiss. The agency, Brooks, and Nationwide then petitioned the Supreme Court for mandamus relief. Upon review, the Supreme Court affirmed in part, reversed in part, and issued the writ. Although the causes of action in the federal court and the state court arose out of the same transaction or occurrence and were thus related, Guster's claims against the agency and Brooks were not compulsory counterclaims in the federal declaratory-judgment action because the agency and Brooks were not "opposing part[ies]" in the federal action. Accordingly, the Alabama abatement statute mandated that the claims against Nationwide in Guster's complaint filed in state court be dismissed. The Court concluded that the agency and Brooks did not show a clear legal right to the dismissal of Guster's claims against them in the state-court action. However, Nationwide did show a clear legal right to the dismissal of Guster's claims against it in the state-court action, therefore the trial court erred in denying the motion to dismiss as to Nationwide. View "Guster Law Firm, LLC v. Brooks Insurance Agency" on Justia Law

Plaintiffs claimed that PacifiCare was not entitled to any reimbursement payments out of the wrongful death benefits paid by an insurance policy to them. PacifiCare counterclaimed, arguing that it was entitled to reimbursement under both the terms of its contract with the deceased (Count I) and directly under the Medicare Act (Count 11), 42 U.S.C. 1395. At issue was whether a private Medicare Advantage Organization (MAO) plan could sue a plan participant's survivors, seeking reimbursement for advanced medical expenses out of the proceeds of an automobile insurance policy. Because interpretation of the federal Medicare Act presented a federal question, the district court had subject matter jurisdiction to determine whether that act created a cause of action in favor of PacifiCare against plaintiffs. The district court properly dismissed the causes of action arising under the Medicare Act for failure to state a claim where section 1395y(b)(2) did not create a federal cause of action in favor of a MAO and where, under section 1395y(b)(3)(A), the Private Cause of Action applied in the case of a primary plan which failed to provide for primary payment, which was not applicable in this instance. The court affirmed the district court's dismissal of Count II for failure to state a claim as well as its decision to decline to exercise supplemental jurisdiction over Count 1. View "Parra v. Pacificare of Arizona" on Justia Law

Appellant, a medical doctor, challenged the partial denial of personal injury protection benefits after treating a patient insured by Appellee. While Appellant's request for an administrative hearing was pending in the Insurance Division of the State Department of Commerce and Consumer Affairs, the patient's available benefits under her policy were exhausted on account of payments to Appellant and other medical providers. Because of the exhaustion, the Insurance Division dismissed Appellant's claim. The circuit court and intermediate court of appeals (ICA) affirmed. The circuit court also denied Appellant's request for attorney's fees and costs under Haw. Rev. Stat. 431:10C-211(a), which allows fees and costs to be awarded even when a party does not prevail on its claim for benefits, finding Appellant's pursuit of the benefits to be unreasonable. The ICA affirmed. Appellant appealed the denial of attorney's fees. The Supreme Court vacated the ICA's judgment and the circuit court's final judgment, holding that the circuit court and ICA erred in concluding that Appellant's claim was unreasonable due to exhaustion of benefits where Plaintiff had made his claim prior to that exhaustion. Remanded. View "Jou v. Schmidt" on Justia Law

Plaintiff, on behalf of herself and the Estate, challenged the district court's grant of summary judgment to Zenith on the Estate's breach of the insurance contract claim. After review and oral argument, the court certified questions to the Florida Supreme Court: (1) Does the estate have standing to bring its breach of contract claim against Zenith under the employer liability policy? (2) If so, does the provision in the employer liability policy which excludes from coverage "any obligation imposed by workers' compensation . . . law" operate to exclude coverage of the estate's claim against Zenith for the tort judgment? (3) If the estate's claim was not barred by the workers' compensation exclusion, does the release in the workers' compensation settlement agreement otherwise prohibit the estate's collection of the tort judgment? View "Morales v. Zenith Ins. Co." on Justia Law

Decedent died intestate as a result of a motor vehicle accident. Petitioner, the former spouse of Decedent, sought a share in the settlement proceeds from a wrongful death action based on her monthly receipt of payments from Decedent for a child support arrearage. The circuit court ruled that Petitioner was not entitled to a portion of the subject settlement funds because Petitioner could not demonstrate she was financially dependent on Decedent at the time of trial. The Supreme Court affirmed, holding that the trial court did not err in ruling that Petitioner was not entitled to a share of the wrongful death settlement proceeds, as Petitioner's receipt of monthly arrearage payments was not sufficient to demonstrate the statutory requirement of financial dependence. View "Ellis v. Swisher" on Justia Law