Justia Insurance Law Opinion Summaries

Plaintiffs wereconsumers who sued Defendant Security Benefit Life Insurance Company under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), and state law, alleging Security Benefit developed a fraudulent scheme to design and market certain annuity products. The issue this case presented for the Tenth Circuit’s review centered on whether the district court properly dismissed Plaintiffs’ first amended complaint without prejudice for lack of particularity and plausibility in pleading fraud. Because the Tenth Circuit concluded Plaintiffs alleged facially plausible fraud claims with the particularity required under Federal Rule of Civil Procedure 9(b), the district court erred in granting Security Benefit’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). View "Clinton, et al. v. Security Benefit Life" on Justia Law

The Supreme Court reversed the judgment of the circuit court affirming the rules of the West Virginia Health Care Authority (WVHCA) denying War Memorial Hospital, Inc.'s (Hospital) certificate of need exemption application that would have allowed Hospital to acquire and utilize a fixed magnetic resonance imagining (MRI) scanner at its medical office building, holding that the circuit court erred.The WVHCA denied the Hospital's exemption application on the grounds that the MRI device would not be used in the Hospital's facility but, rather, that the Hospital intended to place the MRI device in a building in another country that was owned by the Hospital's parent corporation. The circuit court affirmed. The Supreme Court reversed, holding that there is no location-specific requirement in W. Va. Code 16-2D-11(c)(27) that the MRI the Hospital sought to acquire be utilized at its "primary hospital location." View "War Memorial Hospital v. W. Va. Health Care Authority" on Justia Law

In this case arising the death of James Savage after he was thrown from his motorcycle and run over by Oscar Ramos, the Supreme Court affirmed in part and reversed in part the judgment of the court of appeals remanding this case back to the circuit court for a new trial, holding that remand was required under the circumstances.Specifically, the Supreme Court held (1) Property & Casualty Insurance Company of Hartford was not the owner of the Jeep Wrangler at issue according to Ky. Rev. Stat. 186A.530(3), and Co-part of Connecticut, Inc. was required to obtain proof of insurance pursuant to sections 186A.215 and 186A.220; (2) the court of appeals improperly engaged in fact-finding that affected its judgment on other issues; (3) the court of appeals erred in ruling that the trial court abused its discretion by allowing Co-part to withdraw an admission; (4) strict liability does not apply as a matter of law for violations of Ky. Rev. Stat. 186A.500; and (5) Aull v. Houston, 345 S.W.3d 232 (Ky. App. 2010) is hereby abrogated to the extent that it can be read to hold that Social Security Disability benefits are inadmissible in a damages calculation in a wrongful death suit. View "Savage v. Co-Part of Connecticut, Inc." on Justia Law

Ron and Lorrie Meier investigated the purchase of a life insurance policy for Ron through Monarch Solutions. While they considered a policy offered by Lincoln, a nurse assessed Ron’s health and prepared a “Medical Supplement” and “Examiner’s Report.” Ron ultimately applied for a policy with Pacific. In June 2018, Pacific received a copy of the medical forms previously submitted to Lincoln. On July 26, Ron completed his Pacific application, referencing the Lincoln “medical examination.” Ron agreed to several terms, including a provision requiring him to update Pacific “in writing of any changes” to his health. Pacific accepted Ron’s application on July 30 and began the underwriting process. On August 6, Ron learned he had stage IV lung cancer and immediately began treatment. Ron and Lorrie orally disclosed Ron’s cancer diagnosis to their Monarch representative but did not inform Pacific. On September 6, Pacific delivered Ron's policy. A year later Ron died from lung cancer.After learning that Ron had failed to disclose his terminal cancer before the policy’s issuance date, Pacific rejected Lorrie’s claim. Pursuant to the Illinois Insurance Code, Pacific rescinded the policy and returned the premiums. The district court and Seventh Circuit ruled in favor of Pacific. Ron’s failure to inform Pacific of the diagnosis constituted a material misrepresentation allowing for the policy's rescission. View "Meier v. Pacific Life Insurance Co." on Justia Law

Insureds – who operate an annual motorcycle rally in Pattersonville, New York (the “Harley Rendezvous”) – appealed from the district court’s entry of summary judgment in favor of Covington Specialty Insurance Company (“Covington”) in this insurance-coverage dispute. Specifically, the parties disagree as to Covington’s duties, under a general commercial liability policy issued to the Insureds (the “Policy”), to defend and indemnify the Insureds against personal-injury claims asserted in a separate, state-court action by two motorcycle riders who were struck by another attendee’s automobile at the Harley Rendezvous. The district court found that a provision of the Policy (the “Absolute Auto Exclusion”) unambiguously excluded liability coverage for automobile accidents, regardless of whether the Insureds themselves owned or operated the vehicle at issue. On appeal, the Insureds argued that the district court was bound by – and erroneously failed to follow – a case in which a New York intermediate appellate court found ambiguity in a similarly worded exclusion provision in a different insurance policy.   The Second Circuit affirmed and found that Grande Stone Quarry is inapposite here and that countless other decisions by New York courts support the district court’s reading of the Absolute Auto Exclusion. The court explained the district court’s “task” here was simply “to determine how the New York Court of Appeals would decide” the issue. Here, the record reflects that the district court carried out that task soundly and carefully. The court concluded that under New York law, the Absolute Auto Exclusion unambiguously precludes coverage of the Insureds’ defense and indemnity in the Underlying Action. View "Covington Specialty Ins. Co. v. Indian Lookout Country Club, Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the order of the trial court granting judgment to the Estate of Daniel Keith Huck in this insurance dispute, holding that there was no error.Huck was killed by a motorist while he performed his job duties for the Village of Mount Pleasant. The Estate first received worker's compensation from Huck's employer's worker's compensation insurer (WC insurer) and then a settlement from the tortfeasor's insurer. By receiving the settlement from the tortfeasor the Estate was statutorily obligated to reimburse the WC insurer from the settlement. The Estate did as required and reimbursed the WC insurer $9,718.73 (the disputed amount). The Supreme Court affirmed, holding that Secura Supreme Insurance Company, from whom Huck had purchased an automobile insurance policy, was not statutorily authorized to reduce its liability limits by the total worker's compensation and tortfeasor settlement payments the Estate initially received but was obligated in part to reimburse. View "Secura Supreme Insurance Co. v. Estate of Huck" on Justia Law

An insured’s general liability insurer defended under a reservation of rights, and paid out its $2 million policy limits to settle the lawsuit. The insured’s workers’ compensation and employers’ liability insurer denied coverage and did not participate in the defense or settlement. This lawsuit followed, with the general liability insurer suing the workers’ compensation and employers’ liability insurer for equitable contribution. Following a bench trial, the trial court entered judgment for the general liability insurer, awarding roughly half the cost of defense and indemnity. The Court of Appeals reversed: an equitable contribution claim only lies if the two insurers share the same level of liability on the same risk as to the same insured. In this case, the general liability insurer is not entitled to equitable contribution because it did not insure the same risk as the workers’ compensation and employers’ liability insurer. View "California Capital Ins. Co. v. Employers Compensation Ins. Co." on Justia Law

Wilmington Trust National Association, acting as securities intermediary for Viva Capital Trust, was the downstream purchaser of two high- value life insurance policies issued by Sun Life Assurance Company of Canada. After the insureds died, Sun Life, believing that the policies were “stranger originated life insurance” ("STOLI") policies that lacked an insurable interest, filed suit in the Superior Court, seeking declaratory judgments that the policies were void ab initio. Sun Life sought to avoid paying the death benefits and to retain the premiums that had been paid on the policies. Wilmington Trust asserted affirmative defenses and counterclaims, alleging that Sun Life had flagged the policies as potential STOLI years before Wilmington Trust acquired them. Wilmington Trust sought to obtain the death benefits or, in the alternative, a refund of all the premiums that it and former owners of the policies had paid on the policies. Sun Life countered that allowing Wilmington Trust to recover the death benefits would constitute enforcing an illegal STOLI policy and that Wilmington Trust could not recover the premiums because, among other arguments, Wilmington Trust knew that it was buying and paying premiums on illegal STOLI policies. The trial court denied Wilmington Trust’s bid to secure the death benefits, but ordered Sun Life to reimburse, without prejudgment interest, all premiums “to the party that paid them.” The Delaware Supreme Court agreed with the trial court’s disallowance of Wilmington Trust’s death-benefit claim, accomplished in part by an earlier dismissal of Wilmington Trust’s promissory- estoppel counterclaim and the striking of certain of its equitable defenses, finding it was consistent with STOLI precedents. But its application of an “automatic premium return” rule—that is, ordering all premiums to be returned without conducting the fault-based analysis we adopted in Geronta Funding v. Brighthouse Life Ins. Co., 284 A.3d 47 (Del. 2022)—was not. Nor was the trial court’s denial of prejudgment interest. Therefore, the Supreme Court affirmed in part, reversed in part, and remanded to the superior court for reconsideration of its ruling on Wilmington Trust’s premium-return claim, including its claim for prejudgment interest. View "Wilmington Trust National Association v. Sun Life Assurance Company of Canada" on Justia Law

Plaintiff sought insurance coverage under an all-risks commercial insurance policy for business income losses during the COVID-19 pandemic. Finding no “direct physical loss of or damage to property” caused by COVID-19, the Louisiana Supreme Court reversed the appeal court and reinstated the trial court judgment denying coverage. View "Cajun County, LLC et al. v. Certain Underwriter at Llloyd's, London, et al." on Justia Law

In this case concerning the term "physical abuse" as used in an "abuse and molestation" policy exclusion the Supreme Judicial Court reversed the order of the superior court granting summary judgment in favor of Insurer on its action for declaratory relief, holding that the abuse and molestation exclusion did not exempt coverage under the circumstances of this case.The homeowners' insurance policy at issue precluded coverage under a policy exclusion exempting coverage for "[b]odily injury...arising out of sexual molestation, corporal punishment or physical or mental abuse." Insured initiated an unprovoked attack on Leonard Miville by punching and kicking him repeatedly. When Insurer denied coverage Miville commenced an action against Insured. Insurer brought this action seeking a judgment declaring that it had no duty to defend or indemnify Insured for the personal injury claims. The judge granted summary judgment for Insurer. The Supreme Judicial Court reversed, holding that a reasonable insured would not expect the abuse and molestation exclusion to preclude coverage for the incident. View "Dorchester Mutual Insurance Co. v. Miville" on Justia Law