Justia Insurance Law Opinion Summaries

The Supreme Court answered in the negative a question certified to it by a federal district court regarding tension in case law between an insurer's duty to a third-party claimant and its duty to its insured.As a result of an accident caused by High County Paving, Inc., one person died and another was critically injured. United Fire & Casualty Co., High County's insurer, advance-paid the medical expenses of the injured parties prior to a final settlement. High County argued that any further payments to the injured parties without obtaining a release for High County would violate United Fire's duties to High Country, as general damages are not a type of damages that are required to be advance-paid to an injured third party. United Fire argued it was required to tender a payment of policy limits to the injured parties without a release for High Country because total damages exceeded policy limits. The Supreme Court held that an insurer does not breach its duty to its insured when it pays policy limits to an injured third party, without a release for its insured, after a motor vehicle accident when both liability for the accident is reasonably clear and it is reasonably clear that total damages caused by the insured exceed policy limits. View "High Country Paving v. United Fire & Casualty Co." on Justia Law

Among its reforms, the Patient Protection and Affordable Care Act (“ACA”) required private health insurers to provide coverage for individuals regardless of their gender or health status, including preexisting conditions. Congress anticipated these reforms might hamper the ability of insurers to predict health care costs and to price health insurance premiums as more individuals sought health insurance. To spread the risk of enrolling people who might need more health care than others, Congress established a risk adjustment program for the individual and small group health insurance markets. Congress tasked the Department of Health and Human Services (“HHS”) with designing and implementing this risk adjustment program with the states. HHS developed a formula to calculate how much each insurer would be charged or paid in each state. The formula relied on the “statewide average premium” to calculate charges and payments. Plaintiff-Appellee New Mexico Health Connections (“NMHC”), an insurer that was required to pay charges under the program, sued the HHS Defendants-Appellants under the Administrative Procedure Act (“APA”), alleging that HHS’s use of the statewide average premium to calculate charges and payments in New Mexico from 2014 through 2018 was arbitrary and capricious. The district court granted summary judgment to NMHC, holding that HHS violated the APA by failing to explain why the agency chose to use the statewide average premium in its program. It remanded to the agency and vacated the 2014, 2015, 2016, 2017, and 2018 rules that implemented the program. After the district court denied HHS’s motion to alter or amend judgment under Federal Rule of Civil Procedure 59(e), HHS appealed. The Tenth Circuit Court of Appeals: (1) determined NMHC’s claims regarding the 2017 and 2018 rules were moot, so the matter was remanded to the district court to vacate its judgment on those claims and dismiss them as moot; (2) reversed the district court’s grant of summary judgment to NMHC as to the 2014, 2015, and 2016 rules because it determined HHS acted reasonably in explaining why it used the statewide average premium in the formula. Because the Court reversed the district court on its summary judgment ruling in favor of NMHC, it did not address the denial of HHS’s Rule 59(e) motion. View "New Mexico Health Connections v. HHS" on Justia Law

In September 2014, a driver was rear-ended by an SUV driven by a Union Pacific employee. The motorist lost control of her car, spinning off the freeway and onto the dirt shoulder, where it struck a roadside light pole. The light pole, which was manufactured by Ameron Pole Products, was designed to “break away” on impact, causing the pole to pass over the impacting vehicle, thereby reducing the force of the collision and concomitant risk of injury. On this occasion, however, the light pole did not break away, but instead remained standing. The driver sustained multiple injuries, including skull fractures, injuries to her brain and face, a fracture of the right scapula, and bilateral chest trauma. The driver sued Union Pacific Railroad Comapny and Ameron. Union Pacific cross-complained against Ameron for equitable indemnity and apportionment. Ameron moved for summary judgment, arguing the driver would be unable to prove causation as a matter of law. Union Pacific opposed the motion, arguing Ameron failed to carry its initial burden or showing judgment as a matter of law. Alternatively, Union Pacific argued the evidence submitted raised triable issues of fact as to whether Ameron’s negligence was a substantial factor in causing the driver’s injuries. The trial court entered judgment in Ameron’s favor. The Court of Appeal reversed, concurring with Union Pacific’s alternate grounds. Summary judgment was reversed and the matter remanded for further proceedings. View "Union Pacific Railroad Co. v. Ameron Pole Products LLC" on Justia Law

ABK, LLC owned and operated a gas station in Post Falls, Idaho where underground storage tanks were damaged due to water infiltration into the gas stored in the tanks. After the damage occurred, ABK submitted a claim to its insurer, Mid-Century Insurance Company. Mid-Century denied the claim. ABK then sued Mid-Century alleging breach of contract and bad faith. Mid-Century moved for summary judgment on both claims. The district court granted summary judgment for Mid-Century on ABK’s breach of contract claim finding ABK failed to raise a genuine dispute as to the fact the underground storage tanks were damaged by water, specifically excluded by the terms of the policy. The district court also granted summary judgment for Mid-Century on ABK’s bad faith claim finding ABK failed to establish coverage. ABK appealed the district court’s grant of summary judgment in favor of Mid-Century on both claims. Finding no reversible error, the Idaho Supreme Court affirmed. View "ABK v. Mid-Century Insurance" on Justia Law

Plaintiff Robert Barnes filed a putative class action against defendant Security Life of Denver Insurance Company (SLD) alleging that SLD, in the course of administering life insurance policies purchased by Barnes and other similarly-situated class members, breached its contractual duties and committed the tort of conversion by imposing certain administrative costs that were not authorized under the terms of the policies. Jackson National Life Insurance Company (Jackson) moved to intervene, asserting that, as a result of reinsurance agreements entered into by SLD, Jackson was actually the entity responsible for administering Barnes’s policy and numerous other policies listed within the putative class. The district court denied Jackson’s motion. After reviewing the parties’ briefs and the record on appeal, the Tenth Circuit concluded Jackson established the requirements for intervention as of right, and accordingly reversed the decision of the district court and remanded with directions to grant Jackson’s motion to intervene. View "Barnes v. Security Life of Denver" on Justia Law

Two auto body collision repair shops filed a class action against dozens of insurance defendants, alleging claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and state law fraud and unjust enrichment theories.The Eleventh Circuit affirmed the district court's grant of defendants' motion to dismiss each of plaintiffs' claims. The court held that plaintiffs failed to allege at least two predicate acts of racketeering activity, fraud or extortion. The court also held that plaintiffs have not sufficiently pleaded their state law fraud and unjust enrichment claims; the district court did not err by excluding exhibits E1-E7; and the district court did not err by dismissing the complaint with prejudice. View "Crawford's Auto Center, Inc. v. State Farm Mutual Automobile Insurance Co." on Justia Law

Deena Wood was seriously injured in a car collision. At the time of the collision, Wood had auto insurance through Farmers Insurance Company of Idaho, which included $100,000 of underinsured motorist ("UIM") coverage but also contained a provision stating that the amount of coverage would be reduced by the liability limit of the at-fault driver. Because the at-fault driver’s bodily injury liability limit was equal to Wood’s underinsured motorist limit, Farmers determined that no underinsured benefits were owed to Wood. Wood challenged the denial in district court, arguing in a motion for reconsideration that the offset provision should be declared void as against public policy because it “diluted” UIM coverage. The district court rejected Wood’s argument. Finding no reversible error, the Idaho Supreme Court affirmed the district court’s decision. View "Wood v. Farmers Insurance Co of Idaho" on Justia Law

The Supreme Court approved the decision of the Fifth District Court of Appeal in this insurance dispute, holding that an insurer that issues a reduced premium collector vehicle policy may not limit uninsured motorist coverage under the specialty policy to accidents involving the occupancy or use of the collector vehicle.The Estate of Michael Lentini, who was operating his motorcycle when he was involved in a fatal accident, sought uninsured motorist benefits under a policy issued on a collector vehicle. The policy limited uninsured motorist coverage to accidents involving the covered collector vehicle. The Insurer denied coverage, and the Estate sued. The trial court entered summary judgment for the Insurer. The Fifth District reversed, concluding that the collector vehicle policy must and did not comply with the statutory requirements of Fla. Stat. 627.727. The Supreme Court affirmed, holding that the requirements of section 627.727 prohibited the limitations placed on uninsured motorist coverage in the collector vehicle policy at issue in this case. View "American Southern Home Insurance Co. v. Lentini" on Justia Law

The Supreme Court affirmed the judgment of the circuit court dismissing Joseph Corriveau's declaratory judgment action where Corriveau requested a determination that the uninsured motorist provision in his mother Tracey Ballagh's automobile insurance policy issued by State Farm Mutual Automobile Insurance Company provided coverage for his injuries arising from an assault that took place on his school bus, holding that no nexus existed between Corriveau’s injuries and the use of the school bus as a means of transportation.Corriveau, a special needs child, was abused while riding a school bus. The insurance policy in this case contained an uninsured motorist provision covering an insured's damages for bodily injuries that "arise out of the ownership, maintenance, or use" of the uninsured motor vehicle. The circuit court granted summary judgment for State Farm, finding that there was no causal connection between Corriveau's injuries and the use of the school bus as a vehicle used to transport children to school. The Supreme Court affirmed, holding that no causal connection existed between the assault and the employment of the school bus as a school bus. View "Corriveau v. State Farm Mutual Insurance Co." on Justia Law

The Eleventh Circuit affirmed the district court's grant of summary judgment to defendants in a putative class action seeking damages and a declaration that vehicle insurance purchased by plaintiffs was not valid. Plaintiffs alleged that the endorsement in the policy was illusory because it only provides coverage for vicarious liability against lessors, and that liability was foreclosed by the Graves Amendment. Determining that plaintiffs had Article III standing, the court held that the endorsement was not illusory because it imposed on defendants a duty to defend lessors from claims of vicarious liability. View "Hallums v. Infinity Insurance Co." on Justia Law