Justia Insurance Law Opinion Summaries

Appellant appealed the district court's summary judgment on her ERISA, 29 U.S.C. 1132(a)(1)(B), claim to recover denied health care benefits and the magistrate judge's decision to limit discovery. At issue was the scope of admissible evidence and permissible discovery in an ERISA action to recover benefits under section 1132(a)(1)(B). The court held that the district court too narrowly defined the scope of discovery where appellant sought to discover evidence that would indicate whether the administrative record was complete, whether Blue Cross complied with ERISA's procedural requirements, and whether Blue Cross previously afforded coverage claims related to the jaw, teeth, or mouth. The court concluded that appellant's discovery request was at least reasonably calculated to lead to the discovery of some admissible evidence and that the district court's abuse of discretion prejudiced appellant's ability to demonstrate that Blue Cross failed to comply with ERISA's procedural requirements. Accordingly, the court vacated and remanded for further proceedings.

Plaintiff, a workers' compensation claimant, brought suit against defendant regarding the company's conduct in referring his claim to the insurance fraud bureau (IFB), communicating with fraud investigators and prosecutors regarding his activity and claim, and using criminal processes to gain leverage in dealings with him. At issue was whether summary judgment in favor of defendant was properly denied. The court held that defendant enjoyed qualified immunity regarding its reporting of potentially fraudulent activity but that summary judgment was inappropriate because all of plaintiff's claims rely, at least in part, on conduct falling outside the scope of the immunity. The court also held that portions of plaintiff's claims could be barred by workers' compensation exclusivity under G.L.c. 152, but that not one of plaintiff's counts was barred entirely such that the Superior Court would be without subject matter jurisdiction. Accordingly, the court affirmed the order of the Superior Court denying summary judgment and remanded the case for further proceedings.

After meeting with Robert Swendra, an insurance agent selling American Family Insurance products, Curtis Graff purchased an automobile policy and an umbrella policy. Based on Swendra's representations, Graff wrongfully believed the umbrella policy contained $1 million in underinsured motorist (UIM) coverage. Later, Graff injured his back in a car accident with an underinsured motorist. Graff filed a complaint alleging breach of contract against American Family and negligent procurement of insurance coverage against the Swendra Agency. After Graff entered into a settlement agreement with American Family Graff's contract claim against American Family was dismissed, and the negligence claim against the Swendra Agency proceeded to trial. The jury found Swendra Agency liable and awarded damages. Pursuant to the collateral source statute, the district court reduced the damages award by $200,260. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the court of appeals did not err in finding that Graff's release of American Family did not extinguish Graff's claim against the Swendra Agency, and (2) the district court properly excluded the attorney fees paid to Graff's counsel from the collateral source calculation.

A semi-truck jackknifed while making a delivery for a federally licensed carrier and struck a vehicle, killing its driver. The estate brought a wrongful death action in Illinois state court against the driver, his wife (titular owner of the truck), and the company. The suit settled with entry of a $2 million consent judgment against the company, the driver, and his wife. The estate agreed that payment by the company's carrier of the $1 million policy limit would satisfy part of the judgment; the remainder would come from the driver's policy for "Non-trucking/bobtail liability" that covers driving cabs without trailers outside the service of the federally licensed carriers under whose authority drivers operate. That carrier declined coverage, citing a policy exclusion for vehicles "while in the business of anyone to whom ... rented," and obtained summary judgment in federal district court. The Seventh Circuit affirmed, citing 49 C.F.R. 376.2(d)(2), which defines "owner" as including someone like the driver, "who, without title, has the right to exclusive use of equipment" and reasoned that the driver, as agent for his wife, leased the truck to the company, even though the company was unaware that the wife held title.

The insurance coverage dispute at issue in this appeal stemmed from a civil action brought by Ronald and Mildred Destremps against Viking Stone for allegedly damaging property. At the time, Viking Stone was insured by Employers, the plaintiff in the instant case. Arbella, the defendant in the instant case, had previously provided insurance coverage to Viking Stone. Employers filed a petition for declaratory judgment in superior court, seeking a declaration (1) that Arbella owed a duty to defend and indemnify Viking Stone in connection with the Destrempts' complaint, and (2) that the facts claimed in the Destrempts' complaint triggered one occurrence under the Arbella policy and that, for that reason, no coverage was afforded to Viking Stone under the Employers policy. The superior court granted Employers' motion for partial summary judgment, and Arbella appealed. The Supreme Court vacated the judgment of the superior court, holding that genuine issues of material fact precluded the grant of summary judgment. Remanded.

While traveling in a vehicle insured by Travelers Insurance, Wayne DeMarco was injured in a collision. DeMarco filed a personal injury action against Travelers. The trial court entered judgment in favor of DeMarco for $2,801,939, including interest. DeMarco then commenced the instant civil action against Travelers in the superior court, demanding, inter alia, (1) a declaratory judgment ordering Travelers to pay the entire judgment from the personal injury litigation above and beyond the $1 million policy limits, and (2) a declaratory judgment pursuant to the rejected settlement offer statute requiring Travelers to pay interest on the entire amount. The superior court granted partial summary judgment in favor of DeMarco, holding (1) Travelers was liable to DeMarco for the entire judgment even in a multiple claimant context, and (2) the rejected settlement offer statute was unambiguous in providing that an insurer is liable for interest due on a judgment where it has rejected a plaintiff's written offer to settle within the policy limits. On appeal, the Supreme Court (1) vacated the grant of partial summary judgment as to Travelers' liability, but (2) affirmed the ruling with respect to the applicability of the rejected settlement offer statute. Remanded.

Plaintiff, employed by a company contracted to do grounds maintenance, was injured while mowing grass at an Army base. A deteriorating steam pipe fell, striking him in the head. The district court granted summary judgment to the United States, reasoning that under the Kentucky Workers' Compensation Law, the United States was an up-the-ladder contractor, or statutory employer, so that plaintiff's only remedy was the workers' compensation benefits he received from his direct employer. The Sixth Circuit affirmed, holding that the U.S. government is a "person" entitled to the up-the-ladder defense and that the waiver of immunity under the Federal Torts Claims Act, 28 U.S.C. 1346, provides for claims in the same manner and to the same extent as a private individual. The government "secured the payment of compensation" by hiring a contractor and, therefore, cannot be treated as an employer that did not secure benefits. The work performed by plaintiff was a "regular and recurrent" part of work at the facility and the government was entitled to contractor immunity.

In 1999, four employees of a Domino Sugar refinery sued parent company Tate & Lyle North America Sugars, Inc. (T&L) for damages from noise exposure during their employment with T&L between 1947 and 1994. Continental Casualty Insurance Company insured T&L with eight general liability policies. Each of the policies contained exclusions for bodily injury to employees arising out of the course and scope of their employees. In one of the eight policies, the exclusion was deleted by a special endorsement effective in 1975. After T&L notified Continental of the lawsuit, Continental retained defense counsel to defend T&L. In 2001, 125 new plaintiffs were added to the suit, and the complaint was amended to allege noise exposure from 1947 to 2001. At some point, trial was continued to allow for settlement. In 2003, without Continental's consent, T&L settled with 1 of 15 "flights" of plaintiffs for $35,000 per plaintiff. After that settlement, Continental was notified. One month later, Continental withdrew from the defense, disclaiming its liability based on a mistaken belief that all of its policies contained the exclusions for injuries to employees. In the subsequent years following the first settlement, additional plaintiffs were added. In 2004, the trial court granted partial summary judgment to T&L, finding that Continental had waived its right to rely on its policy exclusion defenses for "first flight" plaintiffs. The issue before the Supreme Court centered on Continental's exclusions and its disclaiming liability for subsequent plaintiffs. Upon careful consideration of the trial court record, the Court held that an insurer's breach of the duty to defend does not result in a waiver of all coverage defenses when the insured seeks indemnity under the policy. In this case, Continental had disclaimed coverage at the time more plaintiffs were added to the lawsuit, and did not provide a defense to those claims. Therefore, waiver principles did not apply. Continental was only liable to T&L in indemnity on a pro rata basis for the exposures that took place during the coverage period. The Court remanded the case for a determination of whether twelve remaining plaintiff-flights met the settlement criteria.

Consolidated Graphics defendants sought to recover the cost of defending a suit against them and indemnity for an adverse judgment against them in that suit from two insurers. At issue was whether the primary insurer or an excess insurer had a duty to defend and indemnify the Consolidated Graphics defendants in an underlying tort suit. The court held that the district court did not err in holding that the primary insurer had no duty to defend the Consolidated Graphics defendants in the underlying litigation and therefore, the excess insurer had no duty to defend the primary insurer's policy limits. The court also held that the Consolidated Graphics defendants could not establish a basis for coverage and therefore, the primary insurer and excess insurer were not obligated to indemnify them. The court also held that the district court's grant of the primary insurer's motion to amend its pleadings on the same day that court entered final judgment in the case did not alter the summary judgment evidence in the record or the arguments in the motion. Accordingly, any error in that regard was harmless.

Debbie Costello and Philip Casler were involved in an automobile accident, after which Casler died from unrelated causes. Costello submitted a claim with Casler's insurance provider, American Family, for injuries relating to the accident. After the statute of limitations expired, Costello submitted a motion in the district court pursuant to Nev. R. Civ. P. 25, seeking to substitute the special administratrix of Casler's estate for Casler. American Family submitted a countermotion for summary judgment, arguing that any amendment adding a party was now time-barred because the statute of limitations had expired. The district court granted Casler's countermotion for summary judgment. The Supreme Court reversed, holding (1) under Nev. R. Civ. P. 15(c), an amendment to a complaint adding a decedent's estate as a party to an action will relate back to the date of the original pleading filed prior to the expiration of the statute of limitations; and (2) a decedent insurer's notice and knowledge of the institution of an action may be imputed to the decedent's estate for purposes of satisfying the relation back requirements of Rule 15(c). Remanded.