Justia Insurance Law Opinion Summaries

A five-year-old child tragically died after being struck by a vehicle driven by an Alltrade employee at an apartment complex owned by Whispering Brook Acquisitions LLC. Alltrade had a commercial general liability policy with Motorists Mutual Insurance Company, while Whispering Brook had a similar policy with First Specialty Insurance Corporation. Both policies contained "other insurance" provisions, which led to a dispute over which insurer was primarily responsible for covering the incident.The Jefferson Circuit Court determined that Alltrade and its employees were insured under First Specialty’s policy. The court found that the "other insurance" provisions in both policies were mutually repugnant excess clauses, meaning neither could claim to be secondary to the other. Consequently, the court ruled that both insurers shared primary liability and must contribute equally to defend and indemnify the insureds. Motorists' argument that First Specialty should be primarily liable due to an indemnification provision in the Service Agreement between Alltrade and Whispering Brook was rejected. First Specialty appealed, and the Court of Appeals reversed the trial court, holding that First Specialty’s provision was a nonstandard escape clause, making Motorists primarily liable.The Supreme Court of Kentucky reviewed the case and reversed the Court of Appeals' decision. The court held that both "other insurance" provisions were mutually repugnant excess clauses, requiring Motorists and First Specialty to share primary liability equally. The court also overruled the earlier decision in Empire Fire & Marine Insurance Co. v. Haddix, which the Court of Appeals had relied upon. Additionally, the court found that Motorists had waived its indemnification argument by not filing a cross-appeal and requesting the Court of Appeals to affirm the trial court's summary judgment. The case was remanded to the Jefferson Circuit Court for further proceedings. View "MOTORISTS MUTUAL INSURANCE COMPANY V. FIRST SPECIALTY INSURANCE CORP." on Justia Law

The case involves a dispute over whether an insurance policy issued by State Auto Property and Casualty Company to Greenville Cumberland Presbyterian Church covered the collapse of the Church’s roof. The Church's roof, part of a one-story sanctuary building, was around 120 years old. In September 2019, during a roof replacement project, a significant section of the roof dropped overnight. An engineer, Harold Gaston, found that the roof trusses had decayed due to long-term water infiltration, causing the roof to collapse. The Church filed a claim with State Auto, which was denied on the basis that the damage did not constitute a collapse under the policy.The Muhlenberg Circuit Court granted summary judgment in favor of State Auto, ruling that there was no collapse as defined by Kentucky precedent in Niagara Fire Ins. Co. v. Curtsinger and Thiele v. Kentucky Growers Ins. Co. The court held that the roof's condition did not meet the "rubble on the ground" standard for collapse.The Kentucky Court of Appeals reversed, finding that the roof had indeed collapsed under the Curtsinger definition, which does not require the building to fall to the ground. The court also found the policy ambiguous and ruled in favor of the Church.The Supreme Court of Kentucky affirmed the Court of Appeals, holding that the policy provided coverage for the actual collapse of any part of the building, including the roof. The court found that the roof had indeed collapsed due to hidden decay and insect damage, and that the Church had taken reasonable steps to mitigate further damage. The court vacated the circuit court’s summary judgment in favor of State Auto and remanded for entry of summary judgment in favor of the Church on its breach of contract claim, and for further proceedings on the Church’s extra-contractual claims. View "STATE AUTO PROPERTY & CASUALTY COMPANY V. GREENVILLE CUMBERLAND PRESBYTERIAN CHURCH" on Justia Law

Donna Miller Bruenger, the ex-wife of the late Coleman Miller, filed a petition for declaratory judgment against Courtenay Ann Miller, Coleman’s daughter, seeking entitlement to Coleman’s Federal Employee’s Group Life Insurance (FEGLI) benefits. Coleman had failed to designate a beneficiary for his FEGLI benefits before his death, and MetLife distributed the benefits to Courtenay. Bruenger argued that Coleman’s legal obligation under a Qualified Domestic Relations Order (QDRO) to assign her the benefits should prevail.The Jefferson Circuit Court ruled against Bruenger, concluding that federal law precluded her claim because Coleman’s employer did not receive the QDRO before his death. Bruenger’s subsequent appeal was dismissed by the Court of Appeals as untimely, and the court also imposed sanctions for filing a frivolous appeal. Bruenger then sought relief under CR 60.02, which the trial court granted, allowing her to refile the appeal. The Court of Appeals dismissed the refiled appeal as frivolous and awarded attorney’s fees to Courtenay.The Supreme Court of Kentucky reviewed the case and determined that the Court of Appeals had jurisdiction to consider the merits of the CR 60.02 relief. The Supreme Court held that RAP 11(B) authorizes the award of attorney’s fees as a sanction for frivolous appeals but found that the imposition of sanctions in this case violated due process because Bruenger was not given notice or an opportunity to be heard. The Supreme Court affirmed the dismissal of the appeal for lack of jurisdiction but reversed the sanctions imposed by the Court of Appeals. View "BRUENGER V. MILLER" on Justia Law

In this case, the plaintiff, David Yaffee, was awarded $3,299,455 in damages by a jury for past and future economic earnings and noneconomic loss due to injuries sustained when his vehicle was rear-ended by a truck driven by Joseph Skeen, who was employed by KLS Transportation, Inc. The accident occurred in 2015, and Yaffee experienced significant medical issues, including back pain and leg tingling, leading to multiple medical treatments and surgeries.The Superior Court of Sacramento County entered a judgment on the jury's verdict, which included awards for past and future medical expenses, lost earnings, and noneconomic damages. Defendants, including National Liability & Fire Insurance Company, challenged the awards on several grounds, including the reasonableness of past medical expenses, the speculative nature of future medical expenses, and the sufficiency of evidence supporting lost earnings.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court found that the trial court had erred in its interpretation of the Hospital Lien Act (HLA) regarding the measure of past medical damages, leading to the improper admission of evidence on the reasonable value of services. The court concluded that the HLA only applies to services provided while the patient remains in the hospital or affiliated facility following emergency services. Consequently, the award for past medical expenses was reversed.The court also found that the award for future medical expenses was not supported by substantial evidence, particularly regarding the speculative nature of the need for a dorsal root ganglion stimulator. The court reversed the award for future medical expenses and remanded for a new trial on this issue.The awards for past and future lost earnings were upheld, as the court found sufficient evidence supporting the jury's findings. The award for future noneconomic damages was also upheld, as the evidence established a reasonable certainty of future pain and suffering.The court vacated the award for costs and prejudgment interest, as these were based on the reversed portions of the judgment. The case was remanded for a new trial on the issues of past and future medical expenses. View "Yaffee v. Skeen" on Justia Law

The case involves the Pennsylvania Professional Liability Joint Underwriting Association (JUA), which was established by the General Assembly of the Commonwealth of Pennsylvania nearly fifty years ago to address a medical malpractice insurance crisis. The JUA acts as a professional liability insurer of last resort for high-risk medical providers and is funded solely by premiums paid by its policyholders. Over the years, the JUA has accumulated a surplus of about $300 million through investments. From 2016 to 2019, the Commonwealth attempted to transfer the JUA’s surplus to the General Fund or assume control of the JUA through legislative actions.The United States District Court for the Middle District of Pennsylvania reviewed the case multiple times. In 2017, the JUA sued the Governor after the enactment of Act 44, which mandated the transfer of $200 million from the JUA to the General Fund. The District Court granted a preliminary injunction and later summary judgment in favor of the JUA, holding that the JUA was a private entity and that the Act violated the Takings Clause. In 2018, after the enactment of Act 41, which placed the JUA under the control of the Insurance Department and mandated the transfer of all its assets, the JUA again sued. The District Court ruled in favor of the JUA, reiterating its earlier decision. In 2019, the JUA challenged Act 15, which required the JUA to be funded by the Commonwealth and categorized it as a Commonwealth agency. The District Court granted partial summary judgment for the JUA, holding that certain provisions of Act 15 constituted a regulatory taking and violated the First Amendment.The United States Court of Appeals for the Third Circuit reviewed the case and applied the principles from Trustees of Dartmouth College v. Woodward to determine whether the JUA is a public or private entity. The Court concluded that the JUA is a public entity because it was created to serve a public purpose, exercises the Commonwealth’s coercive power, and only the Commonwealth has a legally protectable interest in the JUA. Consequently, the JUA cannot assert constitutional claims against the Commonwealth. The Court reversed the District Court’s rulings in part, affirmed in part, and remanded for further proceedings. View "Pennsylvania Professional Liability Joint Underwriting Association v. Governor of Pennsylvania" on Justia Law

Autumn Bertels was severely injured in a car accident involving her grandmother, Elizabeth Bertels, and another driver, Denver Barr, who both died in the crash. Autumn later filed a lawsuit against Elizabeth's estate, and they reached an agreement where the estate assigned its claims against Elizabeth's insurer, Farm Bureau Property & Casualty Insurance Company, to Autumn. The agreement stipulated that Autumn would not seek to collect from the estate's assets and would cover the estate's litigation expenses. A judge awarded Autumn a $15.75 million judgment against the estate, and she subsequently sued Farm Bureau for breach of contract and bad faith.The United States District Court for the District of Kansas dismissed Autumn's suit against Farm Bureau, ruling that she lacked standing because the assignment from the estate was invalid. The court determined that Autumn provided no consideration for the assignment, as her promises were already required by the Kansas nonclaim statute, which bars claims against a deceased person's estate after a certain period and requires the claimant to pay the estate's litigation expenses.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that the nonclaim statute barred Autumn's claim against the estate's assets and required her to pay the estate's expenses, rendering her promises in the agreement illusory and without consideration. Consequently, the assignment was invalid, and Autumn lacked standing to sue Farm Bureau. The court also rejected Autumn's arguments regarding tolling of the nonclaim statute due to her minority and other constitutional claims, finding them unpersuasive or procedurally barred. View "Bertels v. Farm Bureau Property & Casualty Insurance Co." on Justia Law

Restaurants in North Carolina were forced to suspend operations due to COVID-19-related government orders. Each restaurant had a commercial property insurance policy with Cincinnati Insurance Company, which covered business income from any "direct physical loss" to property. The dispute centered on whether the government orders constituted a "direct physical loss" under the policy.The Superior Court of Durham County sided with the restaurants, granting partial summary judgment in their favor, finding that the losses were covered under the policy. The Court of Appeals reversed this decision, interpreting the insurance contract to exclude such losses and remanded the case with instructions to enter summary judgment for the defendants.The Supreme Court of North Carolina reviewed the case and disagreed with the Court of Appeals. The court held that a reasonable policyholder could expect "direct physical loss" to include the effects of COVID-19 government orders that restricted the use of and access to the restaurants' physical property. The court noted that the policy did not exclude viruses and construed the ambiguity in favor of coverage. Consequently, the court reversed the judgment of the Court of Appeals and remanded the case for further proceedings consistent with its opinion. View "North State Deli, LLC v. Cincinnati Insurance Co." on Justia Law

A clothing retailer, Cato Corporation, with over 1,300 stores, purchased an "all-risk" commercial property insurance policy from Zurich American Insurance Company in July 2019. In the spring of 2020, Cato alleged that the COVID-19 virus and related government orders forced it to close or severely curtail operations, causing significant revenue losses and expenses for remediation and reconfiguration of its stores. Cato sought coverage for these losses under its insurance policy, but Zurich refused, leading Cato to file a lawsuit seeking a declaratory judgment and damages for breach of contract and violations of North Carolina's Unfair and Deceptive Trade Practices Act.The Superior Court of Mecklenburg County dismissed Cato's claims on a Rule 12(b)(6) motion, relying on the Court of Appeals' decision in North State Deli, LLC v. Cincinnati Insurance Co. The Court of Appeals affirmed the dismissal, concluding that tangible alteration to the property was necessary to recover for a "direct physical loss of or damage" to property, which Cato failed to allege sufficiently.The Supreme Court of North Carolina reviewed the case and agreed with the Court of Appeals' decision to affirm the dismissal but disagreed with its reasoning. The Supreme Court concluded that Cato sufficiently alleged a "direct physical loss of or damage" to property under the precedent set in North State Deli. However, the Court found that the viral contamination exclusion in Cato's policy precluded coverage for the alleged losses. Therefore, the Supreme Court modified the Court of Appeals' decision but affirmed its judgment dismissing Cato's claims. View "Cato Corp. v. Zurich American Insurance Co." on Justia Law

Renee Sevelitte and the Estate of Joseph F. Sevelitte dispute the entitlement to the proceeds of a life insurance policy Joseph purchased during his marriage to Renee. Massachusetts law automatically revokes a spouse's beneficiary status upon divorce unless specific exceptions apply. The life insurance policy named Renee as the beneficiary, but the policy did not address the effect of divorce on beneficiary status. Renee and Joseph's divorce agreement included provisions about life insurance policies but did not explicitly state that Renee would remain the beneficiary of the policy in question.The United States District Court for the District of Massachusetts granted summary judgment to the Estate, determining that Renee could not establish that any exceptions to the automatic revocation applied. Renee appealed, arguing that the district court erred in its decision.The United States Court of Appeals for the First Circuit reviewed the case. The court noted that its previous decision did not determine that the divorce agreement satisfied the statutory exceptions but only that it was plausible. The court emphasized that Renee needed to provide evidence to support her claim that the divorce agreement intended to maintain her beneficiary status. The Estate presented evidence, including an affidavit from Joseph's divorce attorney and an expert report, indicating that the divorce agreement did not intend to retain Renee's beneficiary status.The First Circuit affirmed the district court's decision, concluding that Renee failed to present any evidence to create a genuine dispute about the intended meaning of the divorce agreement. Therefore, the court held that the Estate was entitled to the proceeds of the life insurance policy. View "Sevelitte v. The Guardian Life Insurance Company of America" on Justia Law

Dionicio Rodriguez, an employee of SIR Electric LLC (SIR), was injured while working and filed for workers' compensation benefits under SIR's policy with Hartford Underwriters Insurance Company (Hartford). After receiving benefits, Rodriguez filed a personal injury lawsuit against SIR, alleging negligence, gross negligence, recklessness, and intentional wrongdoing. SIR requested Hartford to defend against the lawsuit, but Hartford refused, citing policy exclusions. SIR then filed a third-party complaint against Hartford, claiming wrongful disclaimer of defense coverage.The trial court granted Hartford's motion to dismiss SIR's complaint, ruling that the policy excluded intent-based claims. SIR's motion for reconsideration and to amend its complaint, arguing that the policy's enhanced intentional injury exclusion (EII exclusion) violated public policy, was denied. The Appellate Division affirmed the trial court's decision.The Supreme Court of New Jersey reviewed the case and held that Hartford has no duty to defend SIR. The court determined that Rodriguez's claims of negligence, gross negligence, and recklessness are subject to the workers' compensation exclusivity bar and are not covered under Part One of the policy. These claims are also excluded from coverage under Part Two of the policy. Additionally, Rodriguez's claims of intentional wrongdoing are excluded under the policy's EII exclusion.The court concluded that the trial judge properly denied SIR's motion to amend its third-party complaint, as the EII exclusion does not violate public policy. The court affirmed the Appellate Division's judgment, upholding the dismissal of SIR's third-party complaint against Hartford. View "Rodriguez v. Shelbourne Spring, LLC" on Justia Law