Justia Insurance Law Opinion Summaries

Firefighters, who suffered career-ending injuries during required training exercises, obtained line-of-duty disability pensions and sought continuing health coverage under the Public Safety Employee Benefits Act, 820 ILCS 320/10, which requires employers of full-time firefighters to pay health insurance premiums for the firefighter and family if the firefighter suffers a catastrophic injury as a result of a response to what is reasonably believed to be an emergency. The trial court dismissed a declaratory judgment action by one firefighter and affirmed denial of the insurance benefit for one firefighter. The appellate court affirmed. The supreme court held that an "emergency" means an unforeseen circumstance calling for urgent and immediate action and can arise in a training exercise. The other firefighter had obtained a declaratory judgment, which was affirmed by the appellate court. The supreme court distinguished the situation because, although he was instructed to "respond as if it were an actual emergency," he was not injured while making an urgent response to unforeseen circumstances involving an imminent danger to person or property.

Appellant was physically injured as a result of an accident caused by an underinsured motorist. Prior to the accident, Appellant purchased a Dairyland Insurance Policy through his insurance agent, Jonathan Schrack. Although Appellant requested full coverage, the policy did not include underinsured motorist coverage. When the other driver's insurance did not fully cover Appellant's damages, Appellant sued Dairyland and Schrack (Defendants), raising numerous theories as to why he should recover under the Dairyland policy. The district court granted Defendants' motions for summary judgment. The Supreme Court affirmed, holding, inter alia, (1) Wyoming's uninsured motorist statutes unambiguously do not require insurers to provide underinsured motorist liability coverage; (2) Appellant's failure to read the policy was available as a defense to Defendants as to Appellant's negligence and contract claims against them and barred application of the doctrine of promissory estoppel; and (3) the doctrine of reasonable expectations was not available to alter the unambiguous terms of the policy.

Two houseguests suffered serious injuries after their host left her car running overnight in an attached garage and the house filled with carbon monoxide. Plaintiff, the insurer with whom the homeowner had a homeowner's insurance policy, brought a declaratory judgment action against Defendants, the homeowner, the houseguests, and the homeowner's automobile insurer, seeking a declaration that the homeowner's policy did not cover the injuries suffered by the houseguests. The trial court granted summary judgment in favor of Plaintiff, finding that the policy did not cover the injuries because they fell within the policy exclusion for injuries arising out of the use of a motor vehicle. The Supreme Court affirmed, holding that the injuries suffered by the houseguests fell under the policy's motor vehicle exclusion.

This appeal related to insurance claims settlement practices of a primary and an excess insurance carrier. The underlying lawsuit involved a tort action against, among others, the truck driver who rear ended plaintiff's car, causing her serious injuries. The court concluded that the damages plaintiff and her family (plaintiffs) were entitled to recover under G.L.c. 93A, section 9, on account of defendants' postjudgment violation of G.L.c. 93A, section 2 and G.L.c. 176D, section 3(9)(f), must be based on the underlying judgment in plaintiffs' tort action, and not the loss of use of the sum ultimately included in the excess insurer's late-tendered settlement offer months after the jury's verdicts. This conclusion made it unnecessary to determine whether the excess insurer's willful and knowing violation of the application statutes before the verdicts in the tort case caused injury to plaintiffs, because even if, as they argued, plaintiffs did establish the requisite causal link between the excess insurer's preverdict violations and injury and thereby were entitled to a multiple of the underlying tort judgment as damages, plaintiffs could not recover that amount twice. Accordingly, the court affirmed the judge's determination that the primary insurer did not violate G.L.c. 93A and G.L.c. 176D, and was not liable to plaintiffs.

This case involved a dispute between an excess and primary insurer, both of whom insured a trucking company whose tractor trailer was involved in a fatal accident. Parties injured in the accident sued the trucking company and obtained a jury verdict which exposed the excess carrier to a $17 million dollar liability. The excess carrier sued the primary carrier, alleging bad faith in failing to settle the underlying claim within the policy limits. The court held that the district court did not err in applying Missouri law because the excess insurer failed to identify Washington as a state "with a relationship to, or an interest in the issues that approaches Missouri's[.]" The court also held that the excess insurer's bad faith claim failed because its insured never made a demand of the primary insurer to settle the underlying litigation within the policy limits. Accordingly, the court affirmed the district court's grant of summary judgment to the primary insurer.

Patrick Kendall suffered a work-related injury while working at John Morrell and Company, a self-insured employer. Morrell initially accepted Kendall's workers' compensation claim, but because Kendall later missed a number of physical therapy and doctor's appointments, Morrell later denied all further benefits relating to the injury. Almost three years later, Kendall filed a petition with the state Department of Labor requesting additional benefits for the injury. The Department granted summary judgment in favor of Morrell, concluding that the petition was barred by the statute of limitations. The circuit court affirmed. The Supreme Court affirmed, holding that all of Kendall's claims for benefits were procedurally barred by the statute of limitations in S.D. Codified Laws 62-7-35.

The Supreme Court consolidated "Matsyuk v. State Farm Fire & Casualty Company" and "Weismann v. Safeco Insurance Company of Illinois" for the purpose of clarifying the pro rata sharing rule announced in several precedential cases, including "Mahler v. Szucs" (957 P.2d 632). The rule is based on the "common fund" exception to the "American rule" on attorney fees. The rule requires personal injury protection (PIP) insurers to share pro rata in the attorney fees incurred by injured persons when the PIP insurer wins at trial. Plaintiffs in these cases recovered PIP funds as insureds under policies held by the tortfeasors. They incurred attorney fees arising from the recovery of the liability insurance. The insurance companies attempted to offset the funds expended under PIP policies by reducing plaintiffs' award under the tortfeasors' liability insurance. The Court of Appeals held that neither plaintiff was entitled to recoup a pro rata share of attorney fees. Upon review, the Supreme Court reversed the appellate court, holding that the pro rata fee sharing rule applied in this context.

Two insurers disputed whether their respective insurance policies required them to defend the insured against allegations regarding an accidental death. Both insurers sought a declaratory judgment from the district court that their policies did not cover the underlying lawsuit. Alma Batie, daughter of Darline Rigsby, sued Preferred Ambulance in Texas state court on behalf of herself and as a representative of Rigsby's estate (the underlying lawsuit). After the district court ruled that each insurer must provide primary coverage for the accident, both insurers appealed. The court held that, for purposes of defining the scope of each insurer's duty to defendant, both Western World and National Casualty must provide primary coverage of the underlying lawsuit. Neither the exclusions in their respective policies nor the "other insurance" provision in the Western World policy limited either insurer's duty to defendant. Accordingly, to the extent that National Casualty had paid more than half of the defense costs in the underlying lawsuit to this point, it was entitled to contribution from Western World.

In this case, an insurer sought a declaratory judgment that it was required to indemnify its insured for no more than 40% of a state court judgment because it had covered its insured for no more than 40% of the time in which the state court plaintiff was exposed to lead poisoning. The district court agreed that the insurer was responsible for only a portion of the judgment, notwithstanding the fact that its insured was held jointly and severally liable for the entire judgment in the underlying state proceeding. Plaintiff challenged the district court's decision to allocate the insurer's liability on a pro rata basis. Plaintiff next argued that even if pro rata allocation was appropriate, the district court should have used the date of her first elevated blood lead level rather than her date of birth to calculate her period of exposure. The insurer challenged the district court's refusal to reduce its period of coverage to 22 months. Applying Maryland law, the court affirmed the district court's judgment with respect to plaintiff's arguments. With respect to the matter raised by the cross-appeal, the court reversed. The principle underlying the court's decision was that an insurance company could not be held liable for periods of risk it never contracted to cover. Accordingly, the court reversed in part and affirmed in part.

Todd Olson filed suit against Robert Farrar, alleging he was liable for property damage to Olson's trailer home and vehicle. Farrar's insurer, Mt. Morris Mutual Insurance Company, sought a declaration that it had neither a duty to defend nor a duty to indemnify Farrar under the terms of its insurance policy. The circuit court granted a declaratory and summary judgment in favor of Mt. Morris. The court of appeals reversed. Mt. Morris appealed, arguing that it had no duty to defend or indemnify because of certain coverage exclusions. The Supreme Court affirmed, holding that the policy provisions at issue were ambiguous; therefore, the Court construed them in favor of coverage. Remanded.