Justia Insurance Law Opinion Summaries

Universitas Education, LLC sought to recover funds lost in an insurance fraud scheme orchestrated by Daniel Carpenter, which defrauded Universitas of $30 million in life insurance proceeds. The fraud involved multiple corporate entities, including Avon Capital, LLC, and its affiliates. Universitas secured a civil judgment in the Southern District of New York for $30.6 million, including $6.7 million against Avon Capital, LLC. Universitas registered the judgment in Oklahoma and sought to garnish a $6.7 million insurance portfolio held by SDM Holdings, which Avon owned.The United States District Court for the Western District of Oklahoma granted summary judgment in favor of Universitas and authorized a receivership over Avon and SDM. Avon and SDM appealed, arguing procedural defects and disputes on the merits. The Tenth Circuit Court of Appeals vacated the summary judgment on mootness grounds, determining that the district court could not rely on the registered judgment because its five-year effective term had expired before the district court entered its order. The case was remanded for further proceedings.Upon remand, Universitas re-registered the New York judgment, and the district court re-entered summary judgment in favor of Universitas and reauthorized the receivership over Avon and SDM. Avon and SDM challenged the district court's jurisdiction and the re-entered orders. The Tenth Circuit Court of Appeals affirmed the district court's decision, holding that the district court retained jurisdiction to preserve the status quo during the appeal and properly re-affirmed its summary judgment and receivership orders after receiving the appellate mandate. The court concluded that Universitas did not need to file a new cause of action and that the district court did not abuse its discretion in its rulings. View "Universitas Education v. Avon Capital" on Justia Law

Between 2007 and 2009, Susan McCarthy’s minor child, M, was in the care of McCarthy’s friend, Glynis McCormack, at McCormack’s home. During this time, McCormack’s minor nephew, Z, who also lived there, physically, sexually, and emotionally abused M, resulting in ongoing mental health issues for M. McCormack was insured under a homeowner’s policy issued by Metropolitan Property and Casualty Insurance Company. McCarthy obtained a consent judgment against McCormack, agreeing to recover a limited amount directly from McCormack and seek the remainder from Metropolitan as McCormack’s insurer.The Superior Court (York County) declared that Metropolitan had no duty to indemnify McCormack for the consent judgment. McCarthy appealed this declaratory judgment. Previously, Metropolitan had filed a complaint for declaratory judgment in the United States District Court, asserting no duty to defend or indemnify McCormack due to policy exclusions. The District Court declared Metropolitan had a duty to defend McCormack but could not litigate its duty to indemnify until McCormack’s liability was determined. The First Circuit affirmed this decision. Subsequently, McCarthy and McCormack settled, and the Superior Court entered a consent judgment.The Maine Supreme Judicial Court reviewed the case and affirmed the Superior Court’s judgment. The court held that the “intentional loss” and “abuse” exclusions in McCormack’s policy barred coverage for McCarthy’s claims. The court concluded that both McCormack and Z fell within the policy definition of “you,” and thus, Z’s intentional acts of abuse, which were excluded from coverage, also excluded McCormack from coverage. Consequently, Metropolitan had no duty to indemnify McCormack for the consent judgment. View "Metropolitan Property and Casualty Insurance Company v. McCarthy" on Justia Law

BrunoBuilt, Inc. contracted with William and Amy Dempsey to build a home in the Boise Foothills. With the help of insurance agent Randy L. Richardson, BrunoBuilt purchased a Tailored Protection Policy (TPP) from Auto-Owners Insurance Company, which included "Builders' Risk" coverage. The policy excluded damage caused by landslides. In 2016, the Dempsey project was not included in the TPP renewal, allegedly due to Richardson's negligence. Shortly after, the nearly completed Dempsey home was damaged by a landslide. BrunoBuilt sued Richardson and Auto-Owners, claiming Richardson negligently failed to advise about landslide coverage and failed to renew the Dempsey project. BrunoBuilt also claimed Auto-Owners was vicariously liable for Richardson's negligence.The District Court of the Fourth Judicial District of Idaho granted summary judgment in favor of Auto-Owners, concluding Richardson was not acting as Auto-Owners' agent and that the policy excluded landslide damage. BrunoBuilt appealed.The Supreme Court of Idaho reviewed the case and found that the district court erred in granting summary judgment. The court held that the 2015 policy, which excluded only naturally occurring landslides, might still apply because Auto-Owners did not provide the required notice of the reduction in coverage in the 2016 policy, which excluded both naturally occurring and human-caused landslides. The court also determined that Auto-Owners bore the burden of proving the applicability of the landslide exclusion. The case was reversed and remanded for further proceedings to determine whether the 2015 policy's coverage continued and whether Richardson was acting as Auto-Owners' agent when he failed to renew the policy. The court did not award attorney fees to either party. View "BrunoBuilt, Inc. v. Auto-Owners Insurance Company" on Justia Law

Employees of Mercedes-Benz Research and Development North America, Inc. accidentally set fire to a property leased from Airport Boulevard Associates, LLC (ABA) while transferring gasoline between vehicles. ABA's insurer, Pioneer State Mutual Insurance Company, paid ABA for the damages and sought reimbursement from Mercedes and its insurer, Allianz Global Risks US Insurance Company. Unable to resolve the matter, Pioneer filed a lawsuit in federal court.The United States District Court for the Eastern District of Michigan denied Pioneer's motion for summary judgment and granted summary judgment to Mercedes and Allianz. Pioneer appealed the decision.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court's decision regarding Allianz, holding that the No-Fault Act did not apply because the vehicle was exempt from registration and the Allianz policy did not provide property protection insurance. The court also rejected Pioneer's argument for apportionment of recovery between the insurers, as the policies insured different parties and risks.However, the court reversed the district court's decision regarding Mercedes. The court found that Mercedes potentially breached the lease by handling hazardous materials, specifically gasoline, on the property. This breach could allow Pioneer to recover damages despite the lease's waiver-of-subrogation clause. The case was remanded for further proceedings on the claims against Mercedes. View "Pioneer State Mut. Ins. v. HDI Global" on Justia Law

The plaintiff, a roofing business owner, sought a judgment declaring that the defendant, a workers' compensation insurance carrier, was obligated to defend and indemnify him in connection with a claim filed by his employee. The trial court granted the plaintiff's motion for summary judgment, determining that the defendant did not effectively cancel the workers' compensation insurance policy. The court found that the conflicting notices provided by the defendant, including a noncooperation notice and a cancellation notice, did not constitute an unambiguous and unequivocal notice of cancellation.The Appellate Court reversed the trial court's judgment, concluding that the defendant effectively canceled the policy before the employee's injury by complying with the statutory requirements of § 31-348, which governs the reporting and cancellation of workers' compensation insurance policies. The plaintiff argued that the Appellate Court incorrectly concluded that the cancellation notice effectively canceled the policy.The Supreme Court of Connecticut reviewed the case and concluded that insurers must strictly comply with § 31-348 when canceling a workers' compensation insurance policy. However, compliance with the statute does not supplant an insurer's obligations under contract law, which requires that a notice of cancellation must be definite, certain, and unambiguous. The court held that the Appellate Court incorrectly limited its analysis to the statutory compliance and failed to consider all relevant communications between the parties.The Supreme Court found that the defendant's notice of cancellation was not objectively definite and certain due to the conflicting noncooperation and cancellation notices, which provided indefinite and ambiguous information about the status of the plaintiff's insurance coverage. Consequently, the Supreme Court reversed the judgment of the Appellate Court and remanded the case with direction to affirm the trial court's judgment in favor of the plaintiff. View "Napolitano v. Ace American Ins. Co." on Justia Law

Marcus A. Fear was involved in a rear-end collision in 2018, resulting in injuries and medical treatment. He held an underinsured motorist (UIM) policy with GEICO and settled with the tortfeasor's insurer for $25,000. Fear sought additional compensation from GEICO, which offered $2,500 and later $4,004, but Fear did not accept these offers. He then sued GEICO for statutory bad faith under section 10-3-1115, alleging unreasonable delay in payment of his UIM claim.The case proceeded to a bench trial where experts disagreed on GEICO's handling of the claim. The district court found that $3,961 of Fear's non-economic damages were undisputed and ruled that GEICO violated section 10-3-1115. GEICO appealed, and the Colorado Court of Appeals reversed, concluding that non-economic damages are inherently subjective and that admitting GEICO's claim evaluation as evidence of undisputed benefits violated CRE 408.The Supreme Court of Colorado reviewed the case and agreed with the lower court that CRE 408 bars the admission of internal settlement evaluations to show undisputed benefits owed. However, it noted that such evaluations might be admissible for other purposes, such as establishing an insurer's good or bad faith. The court also concluded that non-economic damages could be undisputed or not subject to reasonable dispute in some cases, contrary to the appellate court's ruling that they are always reasonably disputable.Ultimately, the Supreme Court affirmed the appellate court's judgment, finding that Fear did not provide admissible evidence to show that any portion of his non-economic damages was undisputed or not subject to reasonable dispute. View "Fear v. GEICO Cas. Co." on Justia Law

Jeromy McCrackin filed a wrongful death action against Tynan Mullen for the death of McCrackin’s son, who was shot and killed outside a pool hall in 2019. Safeco Insurance Company of America had issued a homeowners insurance policy to Mullen’s grandmother, with whom Mullen allegedly lived at the time. Mullen was indicted for first-degree murder and armed criminal action but pleaded guilty to first-degree involuntary manslaughter and armed criminal action. McCrackin offered to settle the wrongful death claim against Mullen in exchange for Safeco’s agreement to pay the total liability coverage limits, which Safeco declined, stating the policy excluded coverage for intentional acts.The Circuit Court of Jackson County overruled Safeco’s motion to intervene in the wrongful death action for the purpose of seeking a stay until a separate federal declaratory judgment action could be resolved. Safeco had filed the federal action to determine whether it had a duty to defend or indemnify Mullen. The circuit court held a bench trial in the wrongful death action, overruled Safeco’s motion to intervene, and entered a judgment against Mullen, awarding McCrackin $16.5 million in damages.The Supreme Court of Missouri reviewed the case and held that Safeco had a right to intervene in the wrongful death action pursuant to Rule 52.12(a)(2) for the limited purpose of seeking a stay. The court found that Safeco had an interest in the wrongful death action and that the disposition of the action could impair or impede its ability to protect that interest. The court vacated the circuit court’s judgment and remanded the case for further proceedings consistent with its opinion. The court did not direct how the circuit court should rule on the motion to stay, leaving that decision to the lower court. View "McCrackin vs. Mullen" on Justia Law

Joe David Hudson was injured while working for Joplin Regional Stockyards, Inc. (JRS) in 2002. In 2005, Hudson, JRS, and JRS' insurer, Star Insurance Company, entered into a settlement agreement where Hudson received an $80,000 lump sum. The settlement left future medical expenses for Hudson's left ankle open. In 2011, Hudson had a below-the-knee amputation, which Star refused to cover. Hudson filed the settlement in circuit court in 2013, and the court rendered judgment in accordance with the settlement. Hudson later filed an equitable garnishment action, leading Star to pay $92,000 for his medical bills. In 2015, Star agreed to reimburse Hudson up to $610,311.75 for future medical expenses. In 2016, Hudson and JRS entered into a subordination agreement, acknowledging all payments due under the judgment had been received.In 2022, Hudson filed a motion to revive the judgment, which JRS opposed, arguing the judgment had been satisfied and the Division of Workers' Compensation had not determined the future medical care provision. JRS also filed a motion for relief from the judgment, claiming it was void due to lack of due process. The Circuit Court of Jasper County sustained Hudson's motion to revive the judgment and overruled JRS' motion for relief.The Supreme Court of Missouri reviewed the case and determined that JRS had standing to appeal. The court found that the circuit court erred in reviving the judgment because JRS had satisfied the judgment by paying the $80,000 lump sum. The court reversed the circuit court's order sustaining Hudson's motion to revive the judgment and overruled Hudson's motion to revive the judgment. Hudson's motion for damages for a frivolous appeal was also overruled. View "Hudson v. Joplin Regional Stockyards, Inc." on Justia Law

Curtis Park Group, LLC (Curtis Park) encountered a significant issue during the construction of a new development called S*Park, which included five buildings supported by a single concrete slab. The slab began to sag due to construction defects, and Curtis Park hired a consultant to determine the cause and necessary repairs. The repairs cost $2,857,157.78, which were fronted by the general contractor, Milender White, as per their agreement. Curtis Park had a builder’s risk insurance policy with Allied World Specialty Insurance Company (Allied World) but did not include Milender White or subcontractors as named insureds.The United States District Court for the District of Colorado reviewed the case, where Curtis Park sued Allied World for breach of contract and bad faith after Allied World denied coverage for the repair costs. The district court ruled that Curtis Park could seek coverage for the repair costs even though Milender White had absorbed these costs. The jury found in favor of Curtis Park on the breach-of-contract and statutory bad-faith claims but not on the common-law bad-faith claim. Allied World’s motions for a new trial and judgment as a matter of law were denied.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court held that the district court erred in interpreting the insurance policy to allow Curtis Park to recover repair costs it had not paid and had no obligation to pay. The policy explicitly limited recovery to the amount the named insured (Curtis Park) actually spent on repairs. The Tenth Circuit reversed the jury’s verdict and remanded for a new trial, instructing that Curtis Park cannot recover the costs of repair that it did not pay. The court also vacated the remainder of the judgment and remanded for a new trial on all other issues. View "Curtis Park Group v. Allied World Specialty Insurance Company" on Justia Law

Eiden Construction, LLC (Eiden) entered into a subcontract with Hogan & Associates Builders, LLC (Hogan) for earthwork and utilities on a school construction project. Hogan sued Eiden and its bonding company, AMCO Insurance Company (AMCO), for breach of contract, claiming Eiden failed to complete its work, including draining sewage lagoons and constructing a fire pond. Eiden counterclaimed for unpaid work, arguing it was not responsible for draining the lagoons and that Hogan did not comply with the subcontract’s notice and opportunity to cure provisions. AMCO argued it was not liable under the performance bond because Eiden did not breach the subcontract and Hogan did not provide proper notice.The District Court of Uinta County found for Hogan on the claim regarding the sewage lagoons but not on other claims, ruling AMCO was not liable under the bond due to lack of notice. Eiden and Hogan both appealed. Eiden argued the court erred in finding it responsible for draining the lagoons and in awarding Hogan damages billed to an associated company. Hogan contended the court erred in not awarding damages for other work and in its calculation of prejudgment interest.The Wyoming Supreme Court affirmed the lower court’s decision. It held Eiden breached the subcontract by not draining the lagoons and that Hogan was entitled to recover costs for supplementing Eiden’s work. The court found Eiden’s late completion of the septic system justified Hogan’s directive to expedite lagoon drainage. It also ruled Hogan properly paid the supplemental contractors, despite invoices being sent to an associated company. The court rejected Hogan’s claims for additional damages, concluding Eiden complied with the notice to cure provisions for the fire pond and other work. The court also upheld the lower court’s calculation of prejudgment interest, applying the offset before calculating interest. View "Hogan & Associates Builders, LLC v. Eiden Construction, LLC" on Justia Law