Justia Insurance Law Opinion Summaries

This case involves American Coastal Insurance Company ("American Coastal") and San Marco Villas Condominium Association, Inc. ("San Marco"). American Coastal issued San Marco a policy covering the condominium complex against various perils, including hurricanes. When Hurricane Irma struck Marco Island, San Marco's buildings sustained damage and submitted a claim to American Coastal. After an investigation, American Coastal estimated San Marco’s losses to be $356,208.82 and paid $192,629.75, reflecting depreciation and application of policy deductibles. San Marco, however, obtained an estimate showing damages exceeding eight million dollars, leading to a disagreement over the amount of loss, which San Marco sought to resolve by invoking the appraisal provision in the policy.American Coastal refused, arguing that an appraisal was premature since its investigation was ongoing. San Marco subsequently sued American Coastal, seeking the court to compel an appraisal. American Coastal contested, arguing that appraisal was inappropriate because they had completely denied coverage based on a policy condition that voids coverage when the insured commits fraud or makes material misrepresentations about the insurance. The trial court sided with San Marco and ordered an appraisal. The Second District Court of Appeal affirmed the trial court's decision, and the Supreme Court of Florida granted review based on the certified conflict.The Supreme Court of Florida held that a trial court has discretion in determining the order in which coverage and amount-of-loss issues are resolved. It rejected American Coastal’s argument that coverage issues must be resolved before an appraisal can be ordered. The court found that the policy’s retained-rights provision contemplates appraisals occurring prior to resolution of coverage issues. Therefore, the court approved the decision of the Second District Court of Appeal and disapproved the certified conflict cases to the extent they are inconsistent with this opinion. View "American Coastal Insurance Company v. San Marco Villas Condominium Association, Inc." on Justia Law

In a case concerning the Senior Health Insurance Company of Pennsylvania ("SHIP"), the Supreme Court of Pennsylvania upheld a rehabilitation plan devised by the Pennsylvania Insurance Commissioner. SHIP, which sold long-term care policies in multiple states, became insolvent due to the high cost of care against inadequate premiums. The rehabilitation plan was designed to correct the company’s financial condition by adjusting the premiums and benefits of the existing policies. However, insurance regulators from Maine, Massachusetts, and Washington ("Regulators") objected to the plan, arguing that it exceeded the Insurance Commissioner's statutory authority and violated their states' regulatory authority over rates. The court rejected these claims, finding that the plan did not exhibit a "policy of hostility" to the public acts of other states and thus did not violate the Full Faith and Credit Clause of the U.S. Constitution. The court concluded that the Commonwealth Court, holding exclusive jurisdiction over the distribution of SHIP's assets, did not abuse its discretion by approving the plan. View "In Re: Senior Health Ins. Co. of PA" on Justia Law

The Supreme Court of Pennsylvania ruled that a "regular use" exclusion in a motor vehicle insurance policy does not violate the Motor Vehicle Financial Responsibility Law (MVFRL), thereby reversing the order of the Superior Court. The case involved Matthew Rush, a detective, who was injured in a motor vehicle accident while driving a city-owned car insured under the city's policy. Rush had his personal vehicles insured with Erie Insurance. When Rush's injuries exceeded the liability insurance limits of the other drivers involved in the accident and the underinsured motorist (UIM) coverage limits of the city's policy, he filed a claim for UIM benefits under his Erie policies. Erie denied coverage based on the "regular use" exclusion in the Erie Policies. The Supreme Court of Pennsylvania held that the "regular use" exclusion was valid and enforceable, and did not violate the MVFRL. The court reasoned that UIM coverage was not universally portable and could, therefore, be subject to policy exclusions. View "Rush v. Erie Insurance Exchange" on Justia Law

In this case, a woman was severely injured while moving an inoperable airplane owned by her husband. She sought recovery from her husband's homeowner's insurance policy. The insurance policy, however, excluded injuries "arising out of" the ownership, maintenance, use, loading or unloading of an aircraft. The woman argued that the policy should cover her injury because, in her view, the aircraft had become mere "parts" after her husband removed the wings, elevators, and tail rudder. The lower court disagreed and concluded that her injuries were not covered by the policy. The woman appealed this decision.The Supreme Court of the State of Alaska agreed with the lower court’s interpretation of the homeowner's insurance policy exclusion. The court maintained that regardless of whether the airplane was considered an aircraft or a collection of airplane “parts” when it injured the woman, the injury arose out of the husband’s ownership of the airplane. This interpretation was supported by the clear language of the policy which excluded coverage for bodily injury arising out of ownership or maintenance of an aircraft. As a result, the court affirmed the lower court’s decision. View "Thompson v. United Services Automobile Association" on Justia Law

The case in question arose from a multi-million-dollar loss suffered by Westlake Chemical Corporation and Axiall Corporation (the respondents) at their chlorine manufacturing plant in Natrium, West Virginia. The loss occurred when 90 tons of liquid chlorine leaked from a rupture in a railroad tanker car that had been recently repaired by third-party contractors. The liquid chlorine vaporized into a cloud or plume that caused corrosion damage to the equipment at the plant. The respondents claimed the damage costs from their insurance companies (the petitioners). However, the insurance companies denied coverage based on three exclusions in the insurance policies relating to corrosion, faulty workmanship, and contamination. The case reached the Supreme Court of Appeals of West Virginia, which was asked to review three orders of the Circuit Court of Marshall County, West Virginia, Business Court Division. The lower court had granted partial summary judgment to the respondents, finding that none of the three exclusions barred the respondents’ coverage claims. The Supreme Court of Appeals of West Virginia concluded that the lower court's orders were not final orders subject to appeal at this stage of the proceedings. This was due to unresolved issues of causation and damages, and because the orders did not conclusively determine the disputed controversy, resolve an important issue completely separate from the merits of the action, or were effectively unreviewable on appeal from a final judgment. Therefore, the court dismissed the appeal, without prejudice. View "NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. v. WESTLAKE CHEMICAL CORPORATION" on Justia Law

The case involves Susan Harriman and Associated Industries Insurance Company. Harriman was an investment advisor who was sued for defamation by Palmaz Scientific after she shared damaging information about the company with her clients. Harriman sought coverage from Associated, with which her employer had an insurance policy, for her defense against the defamation allegations. Associated, however, denied coverage, arguing that the policy only covered wrongful acts committed in the rendering or failure to render professional services on behalf of the company. The United States Court of Appeals for the Fourth Circuit affirmed the lower court's summary judgment in favor of Associated. The court held that Associated was never obligated to defend Harriman because the claims triggered both its policy and a separate policy Harriman had with Travelers Insurance Company, making Travelers the primary coverage provider. The court also held that Harriman failed to present evidence that would allow a factfinder to conclude that Associated lacked a reasonable basis for its coverage decision, thereby dismissing her bad faith claim. View "Harriman v. Associated Industries Insurance Company, Inc." on Justia Law

In this case, the South Carolina Supreme Court was asked to decide whether the requirement for a witness affidavit under subsection 38-77-170(2) of the South Carolina Code should be considered a condition precedent to filing a "John Doe" civil action. The case arose from a car accident where the plaintiff, Peter Rice, filed a lawsuit against an unidentified driver, referred to as "John Doe." Rice alleged that Doe's vehicle crossed into his friend's lane, causing his friend to swerve and hit a tree. Under South Carolina law, it's possible to recover damages under an uninsured motorist policy for accidents caused by unidentified drivers. However, the law requires that the accident must have been witnessed by someone other than the owner or operator of the insured vehicle and that the witness must sign an affidavit attesting to the truth of the facts of the accident. Doe moved to dismiss the case on the grounds that Rice had failed to comply with the requirement for a witness affidavit at the time of filing his complaint. The lower court initially denied Doe's motion, but later another judge ruled that the affidavit was a condition precedent to the right to bring an action and dismissed the case. The court of appeals reversed this decision, finding that the second judge did not have the authority to overrule the first judge's decision. On review, the South Carolina Supreme Court held that compliance with the witness affidavit requirement is not a condition precedent to filing a "John Doe" civil action. Rather, the court found that the witness affidavit may be produced after the commencement of the lawsuit. However, the court noted that the affidavit should be produced promptly upon request and if it is not, the action could be dismissed pursuant to Rule 56(c) of the South Carolina Rules of Civil Procedure. The Supreme Court therefore affirmed the decision of the court of appeals, albeit on different grounds, and remanded the case for trial. View "Rice v. Doe" on Justia Law

Ocean Walk, LLC, a company that operates a casino and other entertainment facilities in New Jersey, sought coverage under its commercial property insurance policies for losses sustained during the COVID-19 pandemic. The company claimed that the presence of the virus in its facilities and the government-mandated temporary suspension of its operations constituted a “direct physical loss” or “direct physical damage” to its property under the terms of the insurance policies issued by several defendants. The Supreme Court of New Jersey, however, disagreed with this interpretation and held that Ocean Walk’s allegations failed to meet the policy language's requirements. The court ruled that to demonstrate a “direct physical loss” or “direct physical damage,” Ocean Walk needed to show that its property was destroyed or altered in such a way that rendered it unusable or uninhabitable. The court noted that the company’s allegations did not suggest that the property suffered a physical change; rather, the company was simply not allowed to use its property due to the executive orders. Furthermore, the court ruled that even if Ocean Walk had pled facts supporting the finding of a covered “loss” or “damage,” the losses it claimed were excluded from coverage by the policies’ contamination exclusion. The court affirmed the lower court's dismissal of Ocean Walk’s complaint. View "AC Ocean Walk, LLC v. American Guarantee and Liability Insurance Company" on Justia Law

In this case, the plaintiff, William Loomis, a truck driver who was injured in a car accident in New York, sought recovery from his employer's insurance company, ACE American Insurance Company, for his remaining damages after the underinsured driver's insurer paid out their policy limit. Loomis claimed that ACE failed to comply with both New York and Indiana laws requiring an insurer to provide underinsured motorist coverage.The United States Court of Appeals for the Second Circuit had to determine whether New York's laws requiring insurers to offer optional supplemental uninsured/underinsured motorist coverage could make an insurer liable when it fails to offer this coverage, and whether Indiana law requires an insurer to provide underinsured motorist coverage when the insured suffers damages in excess of the tortfeasor’s policy limit and has no other underinsured motorist coverage to cover damages up to a certain limit.The court concluded that under New York law, Loomis was not entitled to relief. While insurers are required to offer supplemental uninsured/underinsured motorist coverage in New York, this coverage is optional. Even if ACE violated New York law by failing to offer this coverage, Loomis's claim seeking to reform the insurance contract to include this coverage was not supported by New York law. Therefore, the court affirmed the lower court's grant of summary judgment on this claim.In terms of the claim under Indiana law, the court could not confidently predict how the Indiana Supreme Court would interpret the relevant statute, and therefore, certified questions to the Indiana Supreme Court. View "Loomis v. ACE American Insurance Company" on Justia Law

A dispute arose between The Pep Boys — Manny, Moe & Jack and The Pep Boys Manny Moe & Jack of California LLC (collectively, Pep Boys) and their insurers, Old Republic Insurance Company (Old Republic); Executive Risk Indemnity Company, formerly known as American Excess Insurance Company (American Excess); and Fireman’s Fund Insurance Company (Fireman’s Fund). Pep Boys had been sued by hundreds of people claiming harm from exposure to asbestos in products sold by Pep Boys. Following these claims, Pep Boys sought coverage from their insurers who had sold them a "tower" of commercial general liability policies providing coverage between February 1, 1981, and July 1, 1982.The insurers claimed that their respective policies provided only a single aggregate annual limit, while Pep Boys filed a declaratory judgment action against them, arguing that each policy provided two aggregate annual limits, one for the first 12 months and one for the remaining period. The trial court ruled in favor of the insurers, holding that the policies each provided only a single aggregate limit.In the appeal, the Court of Appeal of the State of California First Appellate District Division Four held that Old Republic's and Fireman’s Fund's policies, which were for terms longer than 12 months, contained two separate annual periods for the purposes of the annual aggregate limits of liability. However, it agreed with the trial court that the American Excess policy, which had different language, had only one period for purposes of that policy’s annual aggregate limits. Therefore, the appellate court reversed the trial court’s judgment in part. View "The Pep Boys v. Old Republic Insurance Company" on Justia Law