Justia Insurance Law Opinion Summaries

Articles Posted in Insurance Law
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GWG DLP Funding V, LLC was the policy owner and beneficiary of a life insurance policy issued by PHL Variable Insurance Company. After GWG transferred beneficiary rights and ownership to Wells Fargo, PHL terminated the policy. GWG and Wells Fargo disputed the termination, and the parties attempted to settle the dispute. After some negotiations, the insured died, and PHL refused to honor the alleged agreement the parties had reached. GWG and Wells Fargo sued PHL for breach of contract and breach of the covenant of good faith and fair dealing and sought a declaratory judgment that prevents PHL from terminating the policy. Plaintiffs appealed the district court’s dismissal of their claims.   The Eighth Circuit affirmed. The court concluded that the alleged agreement in early February was incomplete and that Plaintiffs have failed to state a claim for breach of contract. Further, the court wrote that Plaintiffs have failed to state a claim for breach of the covenant of good faith and fair dealing. First, there is no enforceable agreement based on the email exchange. Thus, there was no contract under which PHL could have breached the duty of good faith. Second, even if the parties were bound by the early February communications, Plaintiffs alleged no dishonest motive on PHL’s part. View "GWG DLP Funding V, LLC v. PHL Variable Insurance Co." on Justia Law

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The Supreme Court reversed the judgment of the circuit court granting summary judgment to Liosha Miles on the issue of whether each of the two insurance policies in this case provided separate tranches of insurance of uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage, holding that the circuit court erred.Given her disagreement with GEICO Advantage Insurance Company and GEICO Choice Insurance Company (collectively, GEICO), Miles filed this action seeking a declaration that each policy at issue contained separate $50,000 limits for UM and UIM coverage and that GEICO owed her addition amounts for her UIM claims related to a single automobile accident caused by the negligence of two different drivers other than herself. The circuit court granted summary judgment in favor of Miles. The Supreme Court reversed, holding (1) UIM coverage is a constituent part of UM coverage; and (2) consequently, the circuit court erred in concluding that Va. Code 38.2-2206(A) required each policy to provide Miles with separate UM and UIM coverage limits for injuries arising from a single accident. View "GEICO Advantage Insurance Co. v. Miles" on Justia Law

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Plaintiffs in these 177 consolidated appeals1 were participants in a 401(k) Profit Sharing Plan (the “Plan”) provided to employees by DST Systems, Inc. (“DST”), a financial and healthcare services company based in Kansas City, Missouri. At the time in question, DST was the Plan’s sponsor, administrator, and a designated fiduciary. Ruane Cunniff & Goldfarb Inc. (“Ruane”) was a Plan fiduciary involved in managing the Plan’s investments. Between October and December 2021, the district court issued seven largely identical orders confirming the arbitration awards to 177 claimants and granting their requests for substantial costs and attorneys’ fees. Defendants appealed, raising numerous issues.   The Eighth Circuit vacated the district court’s judgment including the awards of attorney’s fees, and the consolidated cases are remanded to the district court for determination of transfer and subject matter jurisdiction issues, to the extent necessary. The court concluded that transfer under Section 1631 is an issue that can be addressed before the district court’s subject matter jurisdiction is resolved. The court declined to consider the issue because Badgerow has changed underlying circumstances that may affect whether transfer “is in the interest of justice.” View "Theresa Hursh v. DST Systems, Inc" on Justia Law

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In this insurance coverage dispute the Supreme Court held that State Farm Fire and Casualty Company was not required to cover repair costs to masonry under either Minn. Stat. 65A.10, subd. 1 or the State Farm policy at issue.Before the Supreme Court was the interpretation and application of Minn. Stat. 65A.10, subd. 1, which generally requires replacement cost insurance to cover the cost of repairing damaged property in accordance with state or local authorities' minimum code. Specifically in question was whether State Farm must cover the cost of repairing cracks in masonry that preexisted a storm that damaged the property of St. Matthews. Because the cracks violated the City of St. Paul's building code, the City would not allow St. Matthews to replace the drywall without also repairing the masonry. The district court granted summary judgment to State Farm, determining that because the storm did not damage the masonry, which led to the code upgrade requirements, no coverage existed. The Supreme Court affirmed, holding that, while State Farm was responsible for providing replacement cost coverage to the damaged drywall, it was not required to cover repair costs to the masonry. View "St. Matthews Church of God & Christ v. State Farm Fire & Casualty Co." on Justia Law

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Sheckler rented residential property from McIntosh. The lease provided McIntosh “shall maintain fire and other hazard insurance on the premises only” and that Sheckler was responsible for insurance on possessions contained in the premises. The lease's indemnification clause exculpated McIntosh from any damages or injury occurring on the premises. McIntosh obtained insurance from Auto-Owners; first-party dwelling coverage provided coverage for fire damage and third-party landlord liability coverage provided coverage for claims brought by third parties that the insured “becomes legally obligated to pay as damages because of or arising out of bodily injury or property damage.” The third-party coverage provided a duty to defend any claim covered by the policy, excluding “property damage to property occupied or used by an insured or rented to or in the care of, any insured.” The policy listed McIntosh as the only named insured. McIntosh claims no money received from Sheckler was used to pay the annual premium.Sheckler notified McIntosh that the gas stove was not working. McIntosh placed a service call. The technician’s efforts resulted in a fire that caused substantial property damage. Auto-Owners paid McIntosh for damages incurred due to the fire and lost rental income and filed a subrogation action against the technician (Workman), who filed a third-party contribution complaint against Sheckler. Sheckler tendered the defense to Auto-Owners, which rejected the claim. The Illinois Supreme Court reinstated the rejection of Sheckler’s claim. An insurer’s duty to defend or indemnify does not extend to the tenant of an insured property against a third-party negligence contribution claim when the tenant is not identified as a person insured under the policy. View "Sheckler v. Auto-Owners Insurance Co." on Justia Law

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The First Circuit affirmed the conclusion of the district court conclusion that the insurance policy issued by Motorists Commercial Mutual Insurance Company to the dealership that owned a motor vehicle that killed and injured several people did cover the accident at issue in this case, holding that the district court did not err.This dispute arose from an auction at which a motor vehicle being displayed for bidding suddenly accelerated into a group of auction attendees, killing five people and injuring several more. Motorists brought this action seeking a declaration that its policies did not provide coverage for the victims' claims against the auctioneer or its employee who was behind the wheel of the vehicle when it struck the victims. The district court granted summary judgment for Motorists. The First Circuit affirmed, holding that the policies at issue did not provide coverage for the accident. View "Motorists Commercial Mutual Insurance Co. v. Hartwell" on Justia Law

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This case concerns a $225,000 life insurance policy issued on the life of C.S. When C.S. died in 2018, his estate (“Estate”) made a claim for the policy proceeds. His former employer, Kansas City Chrome Shop (“KCCS”), together with KCCS’s president, Dora Clark-Wall, made a competing claim. After the district court granted partial summary judgment in favor of the Estate, Clark-Wall brought equitable claims in her personal capacity. Following a bench trial, the district court found that Clark-Wall was entitled to an equitable portion of the proceeds totaling $55,253.28 and that the Estate was entitled to the remaining $169,746.72. KCCS and Clark-Wall appealed.   The Eighth Circuit affirmed. The court explained that Clark-Wall’s continued payments and renewal of the policy were essentially a gamble on C.S’s life—a benefit she hoped to reap if he died before she did. The law does not view such conduct favorably. The court, therefore, failed to see how the principles of fairness and justice demand that Clark-Wall is awarded accumulated interest on her payments. Accordingly, the court found no abuse of discretion in the district court’s equitable award to Clark-Wall. View "The Estate of Charles D. Smith v. Kansas City Chrome Shop, Inc." on Justia Law

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The First Circuit reversed the ruling of the district court granting summary judgment in favor of a general liability insurer (Insurer) and dismissing Insured's complaint seeking full coverage of its defense when the company faced a trade secrets lawsuit brought by a competitor, holding that Insured was entitled to summary judgment on the duty to defend.Insured brought this action after Insurer only paid for some of Insured's defense. Insurer counterclaimed seeking a declaratory judgment of absolution from policy coverage. During discovery, both parties moved to compel responses. A magistrate judge denied Insurer's request for information exchanged between Insured and its lawyers and then stayed discovery until it ruled on cross-motions for summary judgment. The district court then granted summary judgment for Insurer. The First Circuit held (1) the district court erred in granting summary judgment for Insurer, and Insured was entitled to summary judgment on the duty to defend; (2) on the reasonableness of the defense, the case is remanded for further proceedings; and (3) the district court correctly granted Insurer's motion to compel. View "Lionbridge Technologies, LLC v. Valley Forge Insurance Co." on Justia Law

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The Fox and Puchlak filed purported class actions, alleging that Michigan counties seized property to satisfy property-tax delinquencies, sold the properties, and kept the difference between the sales proceeds and the tax debts.. The suits assert that the counties committed takings without just compensation or imposed excessive fines in violation of the Michigan and federal constitutions. Genesee County’s insurance, through Safety, precludes coverage for claims “[a]rising out of . . . [t]ax collection, or the improper administration of taxes or loss that reflects any tax obligation” and claims “[a]rising out of eminent domain, condemnation, inverse condemnation, temporary or permanent taking, adverse possession, or dedication by adverse use.”Safety sought a ruling that it owed no duty to defend or to indemnify. The district court entered summary judgment, finding no Article III case or controversy between Safety and Fox and Puchlak. The court also held that Safety owes Genesee County no duty to defend. The Sixth Circuit affirmed. Safety lacks standing to sue Fox and Puchlak over its duty to defend and its claim for the duty to indemnify lacks ripeness. Safety owes no duty to defend; the alleged tax-collection process directly caused the injuries underlying each of Fox’s and Puchlak’s claims. View "Safety Specialty Insurance Co. v. Genesee County Board of Commissioners" on Justia Law

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Plaintiff challenged Lincoln’s denial of her claim for long-term disability benefits. On de novo review, the district court affirmed Lincoln’s denial of Plaintiff's claim, but it adopted new rationales that the ERISA plan administrator did not rely on during the administrative process. Specifically, the district court found for the first time that Plaintiff was not credible and that she had failed to supply objective evidence to support her claim.The Ninth Circuit held that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. The district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.Here, the district court erred because it relied on new rationales to affirm the denial of benefits. View "VICKI COLLIER V. LINCOLN LIFE ASSURANCE COMPANY" on Justia Law