Justia Insurance Law Opinion Summaries

Alfa Mutual Insurance Company intervened in a lawsuit brought by its insured, Danielene Myricks, against Kelisha Saulsberry, an uninsured motorist. Two weeks before trial, Alfa moved to opt out of the lawsuit. The circuit court issued an order granting that motion, but it later vacated the order and required Alfa to continue participating in the case as a named defendant. Alfa appealed, asking the Alabama Supreme Court to direct the circuit court to allow it to opt out. Finding that Alfa did not establish a clear legal right to intervene then opt out before trial, the Supreme Court denied Alfa's petition for mandamus relief. View "Ex parte Alfa Mutual Insurance Company." on Justia Law

Defendants D.R.J. and his mother, Dana Sides, petitioned the Alabama Supreme Court for a writ of mandamus to direct the Circuit Court to vacate two orders holding that a pro tanto release executed in their favor was void, thus restoring them as defendants in the underlying lawsuit. Kathy and Barry King sued D.R.J. and Sides seeking damages for injuries the Kings sustained as a result of an automobile accident allegedly caused by D.R.J.'s negligence in driving Sides' vehicle. D.R.J. was a minor at the time of the accident. Defendants and their insurer, Alfa Mutual Insurance Company, offered to settle the Kings' claims for $95,000. Counsel for the Kings notified their insurer, State Farm, of the settlement offer, preserving its subrogation rights against defendants. State Farm responded by offering the Kings $25,000 to settle the UIM claim, which the Kings rejected. The Kings then accepted the $95,000 settlement offer without State Farm's consent, expressly reserving their UIM claim against State Farm. The Kings then moved to dismiss all claims against defendants, and the trial court entered an order dismissing defendants with prejudice. When State Farm learned of the pro tanto release, it moved the trial court for summary judgment, arguing the Kings forfeited their rights to UIM benefits by executing the pro tanto release without its consent. The trial court found State Farm validly objected to the Kings' settlement, made no ruling on State Farm's motion, and declared the pro tanto release void, thus restoring the "status quo" of the case. Defendants argued the trial court should have granted State Farm's motion and ended the litigation. The Supreme Court determined defendants' situation was not one in which they had a clear legal right to relief sought but the trial court refused to grant. They thus had not met their burden for the issuance of a writ of mandamus, and the Court denied their petition. View "Ex parte D.R.J." on Justia Law

In 2016, an unidentified driver struck a flagpole owned by 100 Renaissance, LLC, causing $2,134 in damage. Renaissance filed a claim with its insurance company, Travelers Property Casualty Company of America. Renaissance sought coverage under its automobile liability-insurance policy, which included uninsured-motorist(UM) coverage. Travelers denied the claim, determining there was no coverage under the UM policy because the flagpole was not a covered "auto." Renaissance's attorney sent an email to Travelers' claims handler, setting forth the Renaissance's legal arguments as to why coverage should be afforded under Mississippi's UM statute. The claims handler forwarded the email to Travelers' in-house counsel. When the claim was still denied, Renaissance filed suit on a bad-faith failure-to-pay theory. Renaissance took the claim handler's deposition, and asked her to explain the reasons Travelers denied the claim. In an effort to resolve the matter, Travelers paid the full amount for damage to the flagpole. Renaissance, however, continued to litigate its bad-faith claim. Travelers moved for summary judgment. Renaissance responded by asking for a continuance to conduct additional discovery. The additional discovery Renaissance claimed it needed was a production of the emails between the claims handler and the in-house counsel. The trial court granted the request for Travelers to produce the emails for in camera review. After that review, the trial court found that “Travelers ha[d] waived the attorney-client privilege as it relates to attorney Jim Harris.” The trial court ordered Travelers to produce the emails and to produce Harris (in-house counsel) for a deposition. Travelers filed a petition for interlocutory appeal, which the Mississippi Supreme Court granted. The Supreme Court did not disagree with the trial court's determination that the privilege was waived, and affirmed its judgment. View "Travelers Property Casualty Company of America v. 100 Renaissance, LLC" on Justia Law

Plaintiffs enrolled in a Group Variable Universal Life Insurance (GVUL) policy offered by MetLife. During the enrollment process, neither plaintiff indicated that he smoked tobacco, but MetLife nevertheless designated them as tobacco smokers, thus triggering their payment of higher insurance premiums. Plaintiffs filed suit after MetLife refused to refund the amount of overpayments, alleging breach of contract and tort violations under New York law.The Second Circuit affirmed the district court's dismissal of plaintiffs' claims as time-barred under New York's applicable statute of limitations. The court held that the continuing-violation doctrine did not toll the limitations period for the breach of contract claim where the issue in this case rests on a single allegedly unlawful act, namely MetLife's initial designation of both plaintiffs as smokers. The court noted that determining whether the Securities Litigation Uniform Standards Act bar applies here is a fraught and unnecessary endeavor. View "Miller v. Metropolitan Life Insurance Co." on Justia Law

Auburn Woods I Homeowners Association (HOA) and its property manager Frei Real Estate Services (FRES), tendered the defense of two lawsuits filed against them by a member of HOA under HOA’s condominium/association policy. HOA’s insurer, State Farm Insurance Company (State Farm), denied the tender for the first lawsuit, but accepted defense of the second lawsuit as to HOA only. HOA and Al Frei, individually and doing business as FRES, sued State Farm and its agent Frank Lewis for, among other things, breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court entered judgment in favor of State Farm and Lewis after a bench trial. HOA and Frei appealed, contending: (1) the trial court erred in concluding that State Farm did not owe a duty to defend HOA and FRES against the first lawsuit; (2) HOA had a reasonable expectation that FRES would be covered under the directors and officers liability provision of its policy; (3) State Farm failed to reimburse HOA for post-tender expenses related to the second lawsuit; (4) Lewis breached his contract with HOA by failing to include FRES as an additional insured and failing to alert HOA and Frei that itwas not possible to include FRES under the directors and officers liability provision; (5) State Farm breached the covenant of good faith and fair dealing implied in HOA’s policy; and (6) the trial court erred in denying HOA and Frei’s motion to tax the expert witness fees State Farm and Lewis sought to recover under Code of Civil Procedure section 998. After review, the Court of Appeal concluded: (1) State Farm did not have a duty to defend HOA and FRES against the first lawsuit; (2) HOA and Frei failed to establish that FRES should have been deemed an insured under the directors and officers liability provision; (3) substantial evidence supported the trial court’s finding that HOA did not present State Farm with a clear statement of the amount of attorney’s fees and costs HOA incurred in defending against the second lawsuit; (4) HOA and Frei did not establish the alleged contract between Lewis and HOA; (5) HOA and Frei failed to demonstrate error with regard to their breach of implied covenant cause of action; and (6) State Farm and Lewis’s pretrial offer to compromise was effective to trigger cost shifting under section 998. View "Auburn Woods I Homeowners Assn. v. State Farm General Ins. Co." on Justia Law

Insurance providers asked the Delaware Supreme Court whether certain costs incurred in connection with an appraisal action under 8 Del. C. 262 were precluded from coverage under the primary and excess directors’ and officers’ insurance policies (the “D&O Policies”) issued to Solera Holdings, Inc. (“Solera”). An affiliate of Vista Equity acquired Solera in 2016. That transaction gave rise to litigation, including an appraisal action. Solera requested coverage under the D&O Policies for the Appraisal Action. The insurers denied the request. Solera then filed suit against the insurers for breach of contract and declaratory judgment, seeking coverage for pre-judgment interest and defense expenses incurred in connection with the Appraisal Action. However, Solera did not seek coverage for the underlying fair value amount paid to the dissenting stockholders, upon which the pre-judgment interest was based. The issuer of the primary policy settled, and the excess policy insurers moved for summary judgment. The superior court denied the motion, interpreting the policy to hold that: (1) a “Securities Claim” under the policy was not limited to a claim alleging wrongdoing, and the Appraisal Action was for a “violation” under the Securities Claim definition; (2) because the “Loss” definition was not limited by any other language, the policy covered pre-judgment interest on a non-covered loss; and (3) as to defense expenses, Delaware law implied a prejudice requirement in insurance contract consent clauses, and Solera’s breach of the consent clause did not bar coverage for defense expenses absent a showing of prejudice. The Insurers appealed, contending that the superior court erred in holding that the Appraisal Action could be covered under the D&O Policies for a violation of a “Securities Claim.” The Supreme Court disagreed with the superior court's determination the Appraisal Action was for a “violation,” concluding the Appraisal Action did not fall within the definition of a “Securities Claim.” Because the Appraisal Action was not a Securities Claim, the remaining issues were moot. View "In Re Solera Insurance Coverage Appeals" on Justia Law

In the underlying action, two restaurant patrons filed suit against the restaurant owner and his landlords after a vehicle accident caused a car to crash through the restaurant, injuring the patrons. The patrons alleged that the property lacked safety measures that would have protected them from this type of injury. Summary judgment was granted for the restaurant owner but denied for the landlords, who later settled with the patrons.The landlords' insurer, Truck Insurance, then filed suit against the restaurant's insurer, AMCO, for equitable contribution. The "additional insured" provision in the restaurant's AMCO policy covered the landlords' liability "arising out of" the restaurant owner's "use" of the premises. The trial court found that the landlords' liability arose from the restaurant owner's use of the premises and was therefore covered under the AMCO policy.The Court of Appeal affirmed, holding that the phrase "arising from" in a general liability insurance policy requires only a minimal causal connection, which existed here, and the respective liability of the parties is irrelevant to the additional insured provision. Because AMCO failed to assert that the trial court's 50 percent apportionment was erroneous, the court found this argument forfeited. View "Truck Insurance Exchange v. AMCO Insurance Co." on Justia Law

In this insurance dispute, the Supreme Court affirmed the decision of the district court granting summary judgment for Allstate Indemnity Company, holding that property loss from Plaintiffs' tenants' producing or using methamphetamine indoors was not a covered peril under the insurance policy.Plaintiff filed an insurance claim alleging that his tenants damaged his rental house by producing or using methamphetamine indoors. Allstate denied the claim. Plaintiff subsequently filed a complaint against Allstate alleging breach of contract and bad faith. The district court granted summary judgment for Allstate, concluding that Plaintiff's property loss was excluded from coverage under certain portions of the insurance policy and was not covered by other portions of the policy. The Supreme Court affirmed, holding that Plaintiff's assignments of error were without merit. View "Kaiser v. Allstate Indemnity Co." on Justia Law

The Supreme Court granted a writ of prohibition prohibiting the circuit court from enforcing its sua sponte order dismissing count three of Respondents' complaint and finding that West Virginia law applied to all of Respondents' bad faith claims but declined to extend the writ to find that Georgia law applies to the entire dispute, holding that a writ of prohibition was not the proper avenue for such relief.After Petitioners denied insurance coverage for certain damages Petitioners filed a declaratory judgment action in the State of Delaware to determine their rights and responsibilities under the relevant insurance policies. Respondents subsequently filed the underlying complaint asserting five separate counts, including breach of contract and bad faith under Georgia law (count three). Petitioners sought to dismiss the West Virginia proceeding. The circuit court denied the motion but, sua sponte, dismissed count three. Petitioners then filed the instant petition. The Supreme Court granted the writ as moulded, holding (1) the circuit court exceeded its lawful authority when it sua sponte dismissed count three of the complaint and held that West Virginia law applied to Respondents' bad faith claims; and (2) this Court declines Petitioners' invitation to find that the Georgia choice-of-law provisions in the policies govern this action. View "State ex rel. National Union Fire Insurance Co. of Pittsburg, Pennsylvania v. Hummel" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the district court granting class certification in this action alleging breach of contract and violation of Montana's Unfair Trade Practices Act (UTPA), Mont. Code Ann. 33-18-101 et seq., holding that a sufficient factual basis was established to justify certification of the classes.Plaintiffs filed this action against Fergus Farm Mutual Insurance Company (FFM), alleging that FFM breached its insurance contract with Plaintiffs and all other insureds by failing to include general contractor overhead and profit in the cost to repair or replace Plaintiffs' property. The district court granted Plaintiffs' motion for class certification. The Supreme Court reversed in part, holding (1) the district court did not abuse its discretion by determining that common questions of law predominate the litigation and support certification of the class; but (2) certain conclusions reached by the district court were a "bridge too far" at this stage of litigation. View "Kramer v. Fergus Farm Mutual Insurance Co." on Justia Law