Justia Insurance Law Opinion Summaries

United provided Patterson's medical insurance under a plan subject to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1101. Patterson received a summary plan description, an ERISA-mandated synopsis of important plan terms but was not given a plan document with all of a plan’s governing language. The summary said that if a beneficiary recovered from a third party for an insured incident, the plan had a right to reimbursement. Patterson was injured in a traffic accident. United covered his medical expenses and notified Patterson it would invoke the reimbursement right. Patterson sued the other driver in state court and joined the plan, seeking a declaratory judgment that it had no reimbursement right. United’s lawyers claimed that no plan document existed. Patterson recovered and settled with the plan for $25,000. Months later, Patterson’s wife suffered injuries in another traffic accident. United paid her medical expenses. Patterson’s wife sued the driver in state court. She obtained a declaratory judgment after the plan's lawyers produced a plan document, stating that it took precedence over the summary and not including a reimbursement right.Patterson then filed a purported class action under ERISA, seeking the return of the $25,000. The district court dismissed the complaint. The Sixth Circuit affirmed in part. Patterson had standing to sue only on his own behalf but has cognizable claims for breach of fiduciary duty and engagement in prohibited transactions. View "Patterson v. United Healthcare Insurance Co." on Justia Law

Following a shooting at a bar in downtown St. Louis, Missouri, Plaintiff, who was injured as a bystander, obtained a $2.5 million judgment against the bar’s owner and operator, Steven Scaglione. Plaintiff thereafter filed this equitable-garnishment claim against Scaglione and his insurer, Acceptance Indemnity Insurance Company (Acceptance). Scaglione filed cross-claims against Acceptance, alleging that it had, in bad faith, failed to defend or indemnify him and breached its fiduciary duty. Acceptance filed motions to dismiss both Plaintiff’s and Scaglione’s claims, which the district court granted based on the applicability of an assault-and-battery exclusion in Scaglione’s policy. In this consolidated appeal, both Plaintiff and Scaglione assert that the district court erred in dismissing their claims. 
 The Eighth Circuit affirmed. The court explained that the district court did not suggest that the assault-and-battery exclusion did not apply solely because the purported victim was not the target. Accordingly, the court rejected this argument and concluded that the unambiguous policy language covers claims of injuries sustained by innocent bystanders arising out of an assault and battery. The court thus concluded that the policy exclusion applies. Further, the court concluded that Scaglione’s negligence was not independent and distinct from the excluded assault and battery. The court explained that the concurrent-proximate-cause rule thus does not apply, and, therefore, the exclusion bars coverage under the policy. Without coverage, Plaintiff and Scaglione cannot state a claim. The district court thus did not err in granting the motions to dismiss. View "Steven Scaglione v. Acceptance Indemnity Ins Co" on Justia Law

Michael Andary, conservator and guardian of Ellen Andary; Ronald Krueger, guardian of Philip Krueger; and Moriah, Inc., doing business as Eisenhower Center, brought an action against USAA Casualty Insurance Company and Citizens Insurance Company of America, seeking a declaratory judgment that the Michigan Legislature’s 2019 amendments of the no-fault act, MCL 500.3101 et seq., that placed new limitations on in-home family-provided attendant care in MCL 500.3157(10) and the non-Medicare fee schedule of MCL 500.3157(7) could not be applied to limit or change plaintiffs’ rights to benefits under the insurance policies defendants had issued to them before the 2019 amendments. Andary and Krueger, suffered traumatic injuries in automobile accidents before 2019, had been provided uncapped lifetime medical care covered by personal protection insurance (PIP) benefits under insurance policies and the no-fault act in effect at the time of their injuries. Plaintiffs argued that the retroactive application of the 2019 amendments to them was improper and would also violate their constitutional rights under the Contracts Clause of Const 1963, art 1, § 10 and their due-process and equal-protection rights. Additionally, plaintiffs all challenged the prospective application of the 2019 amendments on behalf of future motor vehicle accident victims and medical providers. Defendants moved to dismiss the case, and the trial court granted defendants’ motion. Plaintiffs appealed, and the Court of Appeals affirmed in part, reversed in part, and remanded the case to the circuit court. The Michigan Supreme Court found that the 2019 no-fault amendments of MCL 500.3157 did not impact services and care that were already being provided to Andary and Krueger and that had been reimbursable prior to the amendments. Andary’s and Krueger’s rights to the PIP benefits at issue in this case were both contractual and statutory in nature, and the 2019 no-fault amendments did not retroactively modify their vested contractual rights. Plaintiffs’ constitutional challenges to prospective application of the amended statutes were dismissed. View "Andary v. USAA Casualty Insurance Company" on Justia Law

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