Justia Insurance Law Opinion Summaries

State Farm Fire and Casualty Company ("State Farm"), a defendant below, petitioned the Alabama Supreme Court for a writ of mandamus to challenge Clarke Circuit Court's failure to dismiss the underlying action or to enter a judgment in its favor on the claims of the plaintiffs, Samuel Boykin, Lucretia Boykin, Reginald Berry, and Ida Berry (collectively referred to as "the respondents"). Specifically, State Farm contended respondents' claims were barred by section 27-23-2, Ala. Code 1975 ("the direct-action statute). In denying the writ, the Supreme Court found it “never recognized an exception to the general rule that would permit interlocutory review of a trial court's denial of a motion to dismiss or for a judgment on the pleadings for cases that turn on whether the plaintiff has stated a cognizable claim under the applicable law. We will not make an exception here. Accordingly, the petition is denied.” View "Ex parte State Farm Fire & Casualty Company." on Justia Law

Allstate Property and Casualty Insurance Company ("Allstate") petitioned the Alabama Supreme Court for a writ of mandamus to direct the Macon Circuit Court to grant Allstate’s request for a jury trial in a pending action there. In August 2013, a vehicle occupied by Danielle Carter was involved in an accident with a vehicle being driven by Alvin Lee Walker. Carter sued Walker, alleging negligence and wantonness in the operation of his vehicle. In the same action, Carter also sued her underinsured-motorist carrier, Allstate, seeking underinsured-motorist benefits. In her complaint, Carter demanded a jury trial. Likewise, Allstate demanded a jury in its answer to the complaint. Pursuant to Lowe v. Nationwide Insurance Co., 521 So. 2d 1309 (Ala. 1988), Allstate opted out of active participation in the litigation. Opting out under Lowe keeps the jury in a vehicle-accident action from learning that insurance coverage might be available to pay damages. As the trial date approached, Carter and Walker decided that they would rather try the case without a jury. Allstate, however, demanded a jury trial. The trial court denied Allstate's demand and set the case for a nonjury trial. The Supreme Court determined that Lowe demonstrated there was a strong policy in Alabama against tainting a jury with knowledge of the possible availability of insurance to cover a party's damages. “There is also a strong policy of preserving the right to have a jury determine the extent of a party's liability.” Accordingly, the Court held Allstate could insist that a jury determine liability and damages and, at the same time, keep its involvement from the jury pursuant to the opt-out procedure adopted in Lowe. View "Ex parte Allstate Property & Casualty Insurance Company." on Justia Law

In this declaratory judgment action, the Supreme Court reversed the district court's decision entering summary judgment in favor of Gage County's insurer, Employers Mutual Casualty Company (EMC), and dismissing Gage County's claim that EMC had defense and indemnity obligations for federal court judgments entered against Gage County in 2016, holding that it was error to grant summary judgment for EMC.The district court granted EMC's summary judgment motion and denied Gage County's partial summary judgment motion, ruling that a commercial general liability policy's professional services exclusion barred coverage under the CGL policy for all claims brought against Gage County in the earlier litigation and that there was no coverage under either a linebacker policy or an umbrella policy. The Supreme Court reversed and remanded the cause with directions to sustain Gage County's motion for partial summary judgment, holding that the professional services exclusion in the CGL policy did not preclude coverage for Gage County's insurance claims. View "Gage County v. Employers Mutual Casualty Co." on Justia Law

The issue this case presented for the Court of Appeal's review centered on whether a binding arbitration clause in an insurance policy issued by plaintiff Philadelphia Indemnity Ins. Co., applied to a third party, defendant SMG Holdings, Inc. The policy had been issued to Future Farmers of America, which was holding an event inside the Fresno Convention Center. Future Farmers had licensed the use of the convention center from its property manager, SMG. As part of the license, Future Farmers agreed to obtain coverage for itself and to name SMG as an additional insured. Thereafter, Future Farmers obtained a policy from Philadelphia Indemnity, which provided coverage for “managers, landlords, or lessors of premises” as well as for any organization “as required by contract.” The policy also contained an arbitration clause for coverage disputes. During the Future Farmers event, an attendee was injured in the convention center parking lot. When the injured man sued SMG, which also managed the parking lot, SMG tendered its defense to Philadelphia under the policy. Philadelphia refused, believing SMG was not covered under the policy for an injury occurring in the parking lot. After two years, Philadelphia petitioned the trial court to compel arbitration against SMG. The trial court denied the petition, concluding no evidence was presented that the parties to the policy intended to benefit SMG, and Philadelphia was equitably estopped from claiming SMG was required to arbitrate the dispute. Philadelphia contended: (1) the trial court erred in determining SMG was neither a third party beneficiary of the policy, nor equitably estopped from avoiding the policy’s arbitration clause; (2) alternatively, the court erred in finding Philadelphia estopped from compelling SMG to arbitrate; and (3) the coverage dispute was encompassed by the arbitration clause and arbitration should be ordered. The Court of Appeal agreed SMG could be compelled to arbitrate. Judgment was reversed, the trial court's order vacated, and the trial court directed to order arbitration of the coverage dispute. View "Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc." on Justia Law

In a case of first impression, the Court of Appeal was asked to determine whether insurers have the right to appeal a small claims default judgment entered against their insureds. Vanessa Gonzalez sued Jonathan Johnson in small claims court after an auto accident in Orange, California. Johnson did not show up for the small claims hearing, and the small claims court entered a default judgment against him for $10,000, plus $140 in costs. Johnson’s auto insurer was Pacific Pioneer Insurance Company. Pacific Pioneer filed a timely notice of appeal. The trial court struck the notice of appeal, and Pacific Pioneer sought to set aside that order. This prompted the trial court to compose a minute order explaining why it had struck the notice: Code of Civil Procedure 116.710(d) precluded a non-appearing “defendant” - which the court equated with Pacific Pioneer - from appealing a small claims judgment. Pacific Pioneer then filed this writ petition, challenging the trial court’s reading of the relevant statutes. The Court of Appeal concluded the insured’s failure to appear in small claims court did not annul the appeal right conferred upon the insurer by Code of Civil Procedure section 116.710(c). The trial court thus erred in striking Pacific Pioneer’s notice of appeal. The Court issued a writ to direct the trial court to vacate its order striking Pacific Pioneer’s notice of appeal, and to reinstate its appeal of the small claims judgment in favor of Gonzalez. View "Pacific Pioneer Ins. Co. v. Super. Ct." on Justia Law

The Eighth Circuit affirmed the district court's determination that Westfield had a duty to defend its insurer, Miller Architects and Builders, because the claims against Miller in the underlying action did not "clearly" fall outside the scope of coverage. The court held that the alleged damages from the leaky roof were arguably within the policy's scope and there are no clearly applicable exclusions. View "Westfield Insurance Co. v. Miller Architects & Builders" on Justia Law

USAA Casualty Insurance Company (“USAA”) sought a declaratory judgment that it was not obligated to defend, indemnify, or provide insurance coverage for claims made in two lawsuits against Trinity Carr, the daughter of a USAA homeowner’s-insurance policyholder. The plaintiffs in the underlying lawsuits sought money damages from Carr and others for personal injuries and wrongful death suffered by Amy Joyner-Francis in a physical altercation - described in both complaints as a “brutal, senseless, forseeable [sic] and preventable attack” - between Joyner-Francis and Carr and her friends. USAA argued at trial, as it did before the Delaware Supreme Court, that the incident - whether it be labeled an altercation, an attack, or otherwise - was not an “accident” and therefore not a covered occurrence under the policy and that, even if it were, the purported liability was excluded from coverage. The Superior Court disagreed and entered summary judgment in favor of Carr. The Delaware Supreme Court agreed with USAA’s interpretation of the relevant policy provisions and therefore reversed the Superior Court’s judgment. "To label an intentional assault, as the parties agree occurred here, an accident is to disregard the ordinary, everyday meaning of 'accident.' We thus hold that whether an assault is an 'accident' is determined by the intent of the insured, and not by the viewpoint of the victim. ... even though Carr may not have intended to cause [the victim's] death, she certainly intended to cause injury to her." View "USAA Casualty Ins. Co. v. Carr" on Justia Law

Prime, a trucking company, covered its own liability without insurance for the first $3 million per occurrence and bought excess liability insurance from multiple insurers, following a common industry practice of stacking policies into sequential “layers” of excess insurance coverage. Two accidents occurred in 2015 when Prime was covered by RLI and AIG policies. The two cases settled for $36 million. Prime was covered $3 million for each occurrence. The RLI Policy provided the next layer of coverage with an “Aggregate Corridor Deductible” (ACD) that obligated Prime to pay out an additional $2.5 million annually before RLI began to pay. RLI argued that the ACD sat within RLI’s $2 million layer, leaving RLI with no responsibility for any payment until Prime had both paid $3 million per occurrence and the year’s ACD. AIG argued that the ACD sat below RLI’s $2 million layer, so AIG’s duty to pay would not be triggered until Prime and RLI had together paid $7.5 million for the first occurrence.The district court found that payments toward the ACD erode RLI’s policy layer. The Seventh Circuit affirmed. The custom-tailored ACD feature of the RLI Policy was ambiguous but undisputed extrinsic evidence shows that RLI is correct. RLI has consistently expressed that Prime’s ACD payments reduce its responsibility for losses; Prime did not disagree before this dispute. The only reasonable inference from the parties’ negotiations is that AIG did not believe the ACD affected the threshold at which its layer began—$5 million per occurrence. View "Lexington Insurance Co. v. RLI Insurance Co." on Justia Law

The First Circuit affirmed the judgment of the district court in favor of Sun Life Assurance Company of Canada finding that Sun Life properly permitted an offset of Appellant's benefits under tis employer-sponsored long-term disability insurance policy (the Plan) by the amount of Appellant's service-connection disability compensation (Veterans' Benefits), holding that the district court did not err.Specifically, the First Circuit held (1) Appellant's Veterans' Benefits fell squarely within the definition of "Compulsory Benefit Act or Law"; (2) that the district court did not err by concluding as a matter of law that Veterans' Benefits unambiguously qualify as a form of "Other Income Benefit" covered by the Plan's offset provision; and (3) the district court did not err by rejecting as a matter of law Appellant's assertion that Sun Life's offset determination was motivated, at least in part, by Appellant's military service in violation of the Uniformed Services Employment and Reemployment Rights Act. View "Martinez v. Sun Life Assurance Co. of Canada" on Justia Law

Kiselewski was driving with his two granddaughters in the backseat. Klamm's vehicle crossed the center line and struck Kiselewski’s vehicle. Kiselewski, one granddaughter, and Klamm were killed. Klamm was insured under a Meridian policy issued to his mother that provides coverage for four vehicles. The policy contains an “antistacking clause” with respect to bodily injury liability limits of $100,000 per person and $300,000 per accident. In a declaratory judgment action, the circuit court found that the policy, taken as a whole, was ambiguous and declared that Meridian had a duty under the policy to aggregate the bodily injury coverage limits for all four vehicles covered by the policy, resulting in coverage in the amount of $400,000 per person and $1.2 million per accident.The Illinois Supreme Court reversed. When the declarations are read together with the antistacking clause, there is no ambiguity. The policy provides bodily injury liability coverage of $100,000 per person and $300,000 per accident, regardless of the number of claims, insureds, covered vehicles, premiums, or vehicles involved in the accident. The policy does not list liability limits separately for each covered vehicle. It lists the limits once on the first page of the declarations, next to Autos 1, 2, and 3, and once on the second page, next to Auto 4. View "Hess v. Estate of TJay Klamm" on Justia Law