Justia Insurance Law Opinion Summaries

Copart of Connecticut, Inc. (“Copart”) is a subsidiary of Copart, Inc., an online car-auction company that sells used, wholesale, and repairable vehicles. Copart owns several parcels of land in Lexington County, South Carolina, on which it operates “machine salvage junkyard and vehicle wash facilities.” This appeal concerns whether Copart’s insurer must defend or indemnify Copart with respect to a lawsuit filed against it in South Carolina Defendant Copart of Connecticut appealed the district court’s grant of summary judgment in favor of Plaintiffs Liberty Mutual Fire Insurance Company and Liberty Insurance Corporation.   The Fifth Circuit affirmed summary judgment as to Liberty’s duty to defend Copart in the Underlying Suit. The court reversed summary judgment as to Liberty’s duty to indemnify Copart with respect to the Underlying Suit and remanded to the district court for further proceedings to determine Liberty’s indemnity obligation, if any. The court explained that the duty to defend is negated here because the Livingston Plaintiffs only allege damage caused, either in whole or in part, by pollutants. But evidence arising from or related to the Underlying Suit may reveal that non-pollutants caused Plaintiffs’ damage. If, for example, relevant evidence shows that the plaintiffs’ “cloudy water” was caused only by sand and sediment, then the pollution exclusion may not apply. If this were so, Liberty may be obligated to indemnify Copart. View "Liberty Mutual Fire Ins v. Copart of CT" on Justia Law

This appeal arises out of a commercial property insurance policy (“Policy”) that Oregon Clinic, P.C. (“Oregon Clinic”) purchased from Fireman’s Fund Insurance Company (“Fireman’s Fund”). The Policy provides Oregon Clinic, a medical provider with more than fifty locations in Oregon, with coverage for a reduction of business income only if its insured property suffers “direct physical loss or damage.” In March 2020, after the COVID-19 pandemic began, Oregon Clinic, like hundreds of other insured businesses nationwide, sought coverage under its Policy. It alleged that it suffered “direct physical loss or damage” because of the COVID-19 pandemic and related governmental orders that prevented it from fully making use of its insured property. Fireman’s Fund denied coverage. Oregon Clinic then sued Fireman’s Fund in the United States District Court for the District of Oregon. At Oregon Clinic’s request, the Ninth Circuit certified to the Oregon Supreme Court the interpretation of “direct physical loss or damage” under Oregon law and stayed proceedings. The Oregon Supreme Court declined the certification request.   The Ninth Circuit affirmed the district court’s dismissal. The panel held that the Oregon Supreme Court would interpret “direct physical loss or damage” to require physical alteration of property, consistent with the interpretation reached by most courts nationwide. Because Oregon Clinic failed to state a claim under this interpretation and because the amendment would be futile, the panel affirmed the district court’s judgment. View "THE OREGON CLINIC, PC V. FIREMAN'S FUND INS. CO." on Justia Law

For many years, Zurn, a manufacturer of plumbing products and accessories, has faced multiple lawsuits in which claimants allege bodily injury or wrongful death caused by asbestos in its products. To cover litigation costs, Zurn used various insurance policies issued by various insurance companies. Eventually, Zurn was told by its primary and umbrella insurers that Zurn had exhausted the limits of liability under those policies. When Zurn’s excess policy insurers refused to pay, Zurn sought a declaratory judgment that it had exhausted the limits of liability under its primary and umbrella policies and that Zurn’s excess policy insurers had a duty to defend and pay defense costs in the underlying asbestos suits. After discovery, the district court interpreted the meaning of various primary, umbrella, and excess policies, and determined the scope of some duties insurers have under them.One excess policy insurer—American Home—appealed several partial summary judgment orders. The Third Circuit dismissed the appeal for lack of jurisdiction. American Home does not challenge orders that are functionally equivalent to an injunction, No part of the declaration-granting orders compels American Home “to undertake the defense” of Zurn. View "Zurn Industries Inc v. Allstate Insurance Co" on Justia Law

In this insurance dispute, the Supreme Court held that Ariz. Rev. Stat. 20-259.01 mandates that a single policy insuring multiple vehicles provides different underinsured motorist (UIM) coverages for each vehicle rather than a single UIM coverage that applies to multiple vehicles.Plaintiff's mother died in a car crash caused by a neglectful driver. Plaintiff submitted a UIM to CSAA General Insurance Company, her mother's insurer. At the time of the accident, Plaintiff's mother's CSAA policy covered the mother's two vehicles and provided UIM coverage of $50,000 per person. When CSAA paid only $50,000 Plaintiff sought an additional $50,000 under an "intra-policy stacking" theory. After CSAA rejected the claim, Plaintiff sued for declaratory judgment, alleging breach of contract, bad faith, and a class action. CSAA moved to certify two questions. The Supreme Court answered (1) insurers seeking to prevent insureds from stacking UIM coverages under a single, multi-vehicle policy must employ section 20-259.01(H)'s sole prescribed method for limiting stacking; and (2) section 20-259.01(B) does not bar an insured from receiving UIM coverage from the policy in an amount greater than the bodily injury or death liability limits of the policy. View "Franklin v. CSAA General Insurance" on Justia Law

A healthcare provider contended it was underpaid for substance abuse treatment that it rendered to 29 patients. Seeking to recover the difference directly from the insurance company, the provider filed suit alleging the insurer entered into binding payment agreements during verification of benefits and authorization calls with the provider and otherwise misrepresented or concealed the amounts it would pay for treatment. The trial court entered summary judgment against the provider. After review, the Court of Appeal concluded the court did not err in determining one or more elements of the provider’s causes of action could not be established. View "Aton Center v. United Healthcare Ins. Co." on Justia Law

The Supreme Court held that Arizona law does not permit an insurer to challenge the validity of a life insurance policy based on a lack of insurable interest after the expiration of the two-year contestability period required by Ariz. Rev. Stat. 20-1204.Columbus Life Insurance Policy, which issued a life insurance policy on the lives of Howard and Eunice Peterson, filed a lawsuit following the Petersons' death seeking a declaratory judgment that the policy was unenforceable and seeking to retain the premiums. Wilmington Trust N.A., which was designated as the owner of the policy, filed a motion for judgment on the pleadings, arguing that Columbus could not challenge the policy's validity in light of the incontestability provision in the provision and section 20-1204. The federal district court certified to the Supreme Court the question of whether Columbus could challenge the policy's validity. The Supreme Court answered the question in the negative, holding that section 20-1204 allows challenges to the validity of the policy after the incontestability period only for nonpayment of premiums. View "Columbus Life Insurance Co. v. Wilmington Trust, N.A." on Justia Law

In 2007, Defendant PHL Variable Insurance Company issued two life-insurance policies to Plaintiff Catholic Charities of Southwest Kansas, Inc. on the lives of Elwyn Liebl and John Killeen. Both policies guaranteed Plaintiff, as their named beneficiary, $400,000 upon the insureds’ death. Between 2013 and 2014, Defendant sent Plaintiff grace notices for both policies and demanded premium payments. Plaintiff believed the demanded premium payments were too high and that the grace notices were defective and untimely under the policies. So Plaintiff did not pay the requested premiums. Because Plaintiff did not pay the requested premiums, Defendant sent cancellation notices, informing Plaintiff that both policies had lapsed. In 2016, the insureds died. Plaintiff sought payment of benefits under both policies. Defendant declined, believing that it terminated Plaintiff’s policies for nonpayment of premiums two to three years earlier. In 2020, Plaintiff sued Defendant in the District of Kansas for failure to pay the death benefits under both policies. Defendant moved to dismiss both claims, arguing that Kansas’s five-year statute of limitations for breach of contract actions bars them. According to Defendant, the statute of limitations began to run in 2013 and 2014 when it informed Plaintiff that it was terminating the policies. In response, Plaintiff asserted that Defendant first breached both insurance contracts when it failed to pay the benefits upon the insureds’ death in 2016 because Defendant never successfully terminated the policies. The district court agreed with Defendant and dismissed Plaintiff’s claims as untimely. The appeal this case presented for the Tenth Circuit's review centered on a question of when the statute of limitations for a breach of contract claim alleging the wrongful termination of a life insurance contract began to run under Kansas law: if the limitations period began when Defendant acted to terminate Plaintiff’s policies, the district court correctly dismissed Plaintiff’s complaint; if the limitations period began when Plaintiff’s death benefits became due, the district court erred. Finding the district court did not err in dismissing Plaintiff's claims, the Tenth Circuit affirmed. View "Catholic Charities of Southwest Kansas v. PHL Variable Insurance Company" on Justia Law

The Supreme Court held that under California's Motor Carriers of Property Permit Act, Cal. Veh. Code 34600 et seq., a commercial automobile insurance policy does not continue in full force and effect until the insurer cancels a corresponding certificate of insurance on file with the Department of Motor Vehicles (DMV).Insured was driving a truck covered by his policy with Insurer when he collided with a car, killing its driver. The driver's parents sued Insured for wrongful death, and Insured tendered his defense to Insurer. Insurer settled the claim for its policy limits and then sued Insured's former insurer (Defendant) for declaratory relief, equitable contribution, and equitable subrogation. The trial court held that Defendant's policy remained in effect on the date of the collision because one of Defendant's cancellation notices was rejected by the DMV as incomplete. The Court of Appeals for the Ninth Circuit certified a question of law to the Supreme Court, which answered that the Act does not require a commercial auto insurance policy to remain in effective indefinitely until the insurer cancels the certificate of insurance on file with the DMV. View "Allied Premier Insurance v. United Financial Casualty Co." on Justia Law

Plaintiff sued Reliance Standard Life Insurance Company under 29 U.S.C. Section 1132(a)(1)(B), seeking to recover long-term disability benefits. The district court granted Plaintiff’s motion for summary judgment and denied Reliance’s cross-motion. Reliance appealed, and the Eighth Circuit reversed.   The court explained that the cases cited do not demonstrate that Reliance has a history of biased claims administration. Nor do they show some other systemic flaw in its claims review process that affected Reliance’s review of Plaintiff’s claim. On the other hand, Reliance does not argue that it maintained structural separations to minimize its conflict of interest. Therefore, the conflict of interest, in this case, deserves “some weight,” but the court concluded that it does not indicate that Reliance abused its discretion. The court wrote that substantial evidence supports Reliance’s decision, and neither the decisional delay in this case nor the purported conflict of interest leads us to conclude that Reliance abused its discretion. View "Melissa McIntyre v. Reliance Standard Life" on Justia Law

Defendant Union Mutual Fire Insurance Company appealed a superior court grant of summary judgment to plaintiff CC 145 Main, LLC, in a declaratory judgment action regarding the interpretation of an insurance policy exclusion. CC 145 Main owned an apartment building and purchased a “Businessowners Coverage” insurance policy that included “all risk” property insurance, which provided that Union Mutual would “pay for direct physical loss of or damage to” the covered property, unless coverage was specifically limited or excluded by the policy. The insured property sustained damage when a tenant poured cat litter down a toilet, clogging an interior pipe and causing water to overflow from a shower and toilet. The property required significant cleaning and repair, and tenants were required to temporarily relocate. CC 145 Main filed a claim with Union Mutual for water damage, which Union Mutual denied pursuant to a provision in the insurance policy excluding coverage for damage caused by “[w]ater that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment.” CC 145 Main filed a complaint seeking a declaration that the water exclusion does not apply to its claim. Union Mutual filed a motion for summary judgment, arguing that the damage at issue was caused by water that overflowed from “drains” within the meaning of the exclusion. The trial court concluded it was unclear whether the word “drain” in the water exclusion applied to shower and toilet drains and, therefore, the water exclusion was ambiguous and had to be construed in favor of CC 145 Main. Defendant challenged the trial court’s ruling that the policy’s water damage exclusion was ambiguous and its decision to construe the policy, therefore, in favor of CC 145 Main. But finding no reversible error, the New Hampshire Supreme Court affirmed the trial court. View "CC 145 Main, LLC v. Union Mutual Fire Insurance Company" on Justia Law