Justia Insurance Law Opinion Summaries

Plaintiff, the father of decedent, commenced an action seeking to recover from defendants, decedent's grandparents, for decedent's wrongful death and for her conscious pain and suffering where she accidentally drowned in defendants' pool. At issue was an exclusion in defendants' homeowner's insurance policy excluding coverage for bodily injury to an insured where an insured would receive "any benefit" under the policy. The court held that judgment should have been granted in plaintiff's favor where the exclusion did not operate to bar coverage for the noninsured plaintiff's wrongful death claim for the death of the insured decedent. Accordingly, the court reversed the Appellate Division's judgment and remanded for further proceedings.

Plaintiff Denise Perrelli appealed a trial court decision in favor of Defendants Bridget and Paul Pastorelle. Plaintiff believed the last time she sent her car insurance company a check for coverage was in 2005. She believed she had coverage on August 4, 2006, the day she got into an accident with Defendants. Geovanni Velverde, a friend, was driving at the time of the accident. He died of his injuries, and Plaintiff suffered serious injuries. Plaintiff sued Defendants alleging that her injuries were caused by Defendants' negligence. Defendants moved for summary judgment, arguing that as an uninsured motorist, Plaintiff had no right to sue. Upon careful consideration of the arguments and the applicable legal authority, the Supreme Court affirmed the lower court's decision. The Court found that under the state's "No Fault Act," a person injured while a passenger in her on uninsured vehicle was barred from suing for her injuries.

In 1995, 14 years of applications and appeals, an ALJ found that the mine worker was entitled to black lung benefits, dated to 1981. The award was reversed in 1996. In 2000 the Seventh Circuit held that denial of a 1981 claim did not preclude the award and remanded. In 2001 an ALJ again awarded benefits. The company initiated proceedings for modification and refused to pay. In 2003 an ALJ denied the petition for modification; in 2004 the benefits review board reversed. The company, by then liquidated in bankruptcy, withdrew. The issuer of a surety bond, was notified, but did not intervene. The ALJ declined to hold the proceedings in abeyance. In 2008 a successor insurer filed a motion for conditional intervention in the modification proceedings. An ALJ granted the motion and the modification. In 2009 the miner died and the review board affirmed the modification, terminating benefits. The Seventh Circuit reversed. The modification proceeding should have been dismissed when the company ceased to be a real party in interest to serve as the proponent of modification, and the surety, which might have served as a real party in interest in support of modification, failed to seek timely intervention.

Plaintiff filed a declaratory judgment action against its insurer to determine whether its professional liability policy issued to plaintiff provided coverage for plaintiff's erroneous disbursement of client funds from its trust account. At issue was whether the district court properly granted the insurer's motion for summary judgment denying coverage where the district found no coverage under the policy. The court held that plaintiff's erroneous transfer of its clients' trust funds to a third party was an act or omission in the conduct of its professional fiduciary duties to its clients that would give rise to a claim of negligence against it by those clients and for which it would have been liable for damages. Such a claim for a negligent act or omission was covered by the plain terms of the policy issued by the insurer to plaintiff. Accordingly, the entry of summary judgment for insurer was reversed and the case remanded for entry of summary judgment for plaintiff. The district court's award of costs against plaintiff was also reversed.

Plaintiff sued defendant, a general contractor at a residential construction site, alleging claims of negligence, cross negligence and/or willful, wanton, or reckless conduct which resulted in the deaths of two employees hired by the subcontractor that was hired by defendant. At issue was whether, pursuant to G.L. c. 152, 23, a general contractor that paid workers' compensation benefits to an employee of an uninsured subcontractor, was immune from liability for common law claims the employee could have against that general contractor. The court held that the plain language of section 23 did not release a general contractor that paid workers' compensation benefits to its uninsured subcontractor's employee and that G.L. c. 152, 18 made clear that suits were not barred against general contractors that were obligated to pay workers' compensation benefits to the uninsured subcontractor's employees. Accordingly, the immunity provided under section 23 did not apply to defendant and therefore, the court vacated summary judgment in favor of defendant and remanded for further proceedings.

Appellants Bunn Builders, Inc. (Bunn) hired Appellees Richard Womack and Roy Turner (Womack & Turner) to paint the ground floor office of the Bunn Building in Arkadelphia. On August 19, 2004, a fire was reported at the building. The building sustained major structural damage as a result of the fire. Bunn insured the building through Employers Mutual Casualty Company (EMC). Within a few days, EMC hired investigators to find the cause and origin of the fire. The investigators asked Womack & Turner's liability insurance carrier Farm Bureau Mutual Insurance Company of Arkansas, Inc. (Farm Bureau) to preserve certain items for testing. In particular, they requested to test a halogen work lamp that the painters used on the Bunn job. EMC later sent a letter to Farm Bureau stating that EMC believed that the electrical components from the "electrical tools" used on the job were eliminated as a possible cause for igniting the fire. Testimony at trial by Womack & Turner revealed that EMC believed that the halogen lamp had been eliminated as a possible cause. However, EMC's investigators submitted reports identifying the lamp as the possible source of ignition. These reports were not sent to Farm Bureau. Farm Bureau wanted to do its own independent testing and asked EMC for the tools. EMC admitted that it had destroyed the items once its investigation was complete. Bunn and EMC sued Womack & Turner for negligence, alleging that the halogen lamp started the fire. In their response, Womack & Turner raised the issue of "spoliation," arguing that Bunn and EMC had a duty to preserve the evidence if they intended to sue for negligence. A trial was held, and the jury was given an instruction on "spoliation." The jury returned a verdict in favor of Womack & Turner. On appeal to the Supreme Court, Bunn and EMC argued that it was an abuse of discretion for the trial court to instruct the jury on spoliation. The Supreme Court found that the trial court did not abuse its discretion, and affirmed the decision in favor of Womack & Turner.

Plaintiffs, injured in an automobile accident, sought $10,000 from defendant, the driver, the amount received by plaintiffs from plaintiffs' insurer. At issue was whether the circuit court erred in denying plaintiffs a judgment of $10,000 against defendant when defendant did not pay plaintiffs' insurer $10,000, a sum that represented the insurer's subrogation claim. The court concluded that the collateral source rule did not, under the facts of the case, entitle plaintiffs to recover $10,000 when the case was indistinguishable from Paulson v. Allstate. Ins. where the Paulson court determined that the injured party's recovery from the tortfeasor was not affected by the subrogated insurer's settlement of its subrogation claim with the tortfeasor.

The driver of a vehicle, owned by the driver's girlfriend's father, in which plaintiff was a passenger, lost control of the vehicle and drove into a ditch wherein the driver and one other passenger were killed and plaintiff sustained severe injuries. The vehicle was insured by Wisconsin American Mutual Insurance Company ("Wisconsin American") through an automobile insurance policy issued to the driver's girlfriend's father. The girlfriend permitted the driver to use the vehicle as long as he went to a local grocery store. The driver, instead, picked up passengers including plaintiff, and was driving to a party when the accident occurred. At issue was whether the alleged negligent entrustment of the vehicle constituted an independent concurrent cause of plaintiff's injuries sufficient to trigger coverage under Wisconsin American's insurance policy. The court held that the alleged negligent entrustment of the vehicle did not constitute an independent concurrent cause of plaintiff's injuries sufficient to trigger coverage when no coverage existed for the alleged negligent operation of the vehicle. Therefore, there was no coverage for plaintiff's negligent entrustment claim and Wisconsin American was entitled to summary judgment. The court also held that its holding was dispositive of the case and did not need to reach the issue of whether plaintiff's negligent entrustment claim was barred by claim or issue preclusion.

Plaintiff Mark Strawn filed a class action suit against Defendants Farmers Insurance Company of Oregon, Mid-Century Insurance Company, and Truck Insurance Exchange (collectively, Farmers). Plaintiff alleged that Farmers had breached contractual duties and committed fraud by instituting a claims handling process that arbitrarily reduced payments for reasonable medical benefits owed under its automobile insurance policies. A jury returned a verdict in favor of Plaintiff, and awarded damages totaling approximately $8.9 million. Farmers appealed, and the appellate court concluded that the punitive damages awarded by the trial court exceeded constitutional limits, but otherwise affirmed the judgment. Both parties sought the Supreme Courtâs review. Farmers challenged the damages award, arguing that it should be lower. Plaintiff argued that the original award should be reinstated. The Supreme Court rejected Farmersâ arguments, and concluded that the appellate court should not have reached Farmersâ constitutional challenge to the amount of the punitive damages award. Consequently, the Court affirmed part, and reversed part of the appellate decision, and affirmed the judgment of the trial court.

Appellant Jane Henry, as the personal representative of the estate of her deceased husband Ernest, sued multiple parties, including Continental Casualty Company (Continental), Washington Regional Medical Center (Washington), Irma De La Cruz R.N., and Amber Hefner R.N. Among other things, Mrs. Henry asserted that Washington was vicariously liable for the conduct of its employees, including nurses De La Cruz and Hefner. Mrs. Henry proceeded against the hospital's insurer, Continental, under the state's "direct-action" statute. All Defendants moved to dismiss, because Mrs. Henry failed to obtain service of process on the nurses before the statute of limitations expired. Because Washington's alleged negligence arose from its vicarious liability based on the actions of the nurses, Defendants argued that claims against Washington and Continental must also be dismissed. The circuit court granted Defendants' motion, and Mrs. Henry appealed. The Supreme Court held that "because direct-action statutes are remedial in nature, we liberally construe them for the benefit of the injured parties and to effectuate the intended purposes." On review of the applicable case law, the Court found that failing include the nurses in this case was not fatal. Appellant could still pursue the hospital and its insurance carrier for the alleged negligence of its employees. The Court reversed the lower courts' decisions and remanded the case for further proceedings.