Justia Insurance Law Opinion Summaries

A driver, Safet Miftari, was injured in an accident caused by an uninsured motorist while driving his taxi. He filed a claim for coverage under a policy he had for a different vehicle, which was denied by his insurer, Umialik Insurance Co., because the policy excluded uninsured and underinsured motorist (UIM) coverage for vehicles not insured under the same policy. Miftari then sued the uninsured motorist, who defaulted, and a jury awarded Miftari $1 million in noneconomic damages. Subsequently, Miftari sued Umialik to enforce the judgment.The Superior Court of Alaska, Fourth Judicial District, granted Miftari’s motion for partial summary judgment, holding that Umialik was bound by the prior judgment under the doctrine of res judicata. The court also denied Umialik’s motion to prevent Miftari from pursuing economic damages. In a separate order, the court held that the insurance policy’s exclusion of UIM coverage for injuries sustained in any of the policyholder’s vehicles insured under a separate policy was not authorized by Alaska law.The Supreme Court of the State of Alaska reviewed the case. It held that Alaska law does not authorize excluding UIM coverage for a vehicle not insured under the same insurance policy under which UIM coverage is sought. The court also concluded that res judicata prohibits the parties from relitigating noneconomic damages and litigating economic damages against the insurer. The court affirmed the superior court’s orders on summary judgment, binding Umialik to the jury’s damages verdict and precluding Miftari from seeking economic damages. View "Umialik Insurance Co. v. Miftari" on Justia Law

The case involves a billing dispute between a group of emergency room physicians (plaintiff) and an insurance company (defendant). The dispute centers on the interpretation of Connecticut’s surprise billing law, which aims to protect insured individuals from high medical bills when they receive emergency care from out-of-network providers. The plaintiff contends that the law requires the defendant to fully reimburse them for emergency services and then collect any applicable cost-sharing amounts (deductibles, copayments) from the insured. The defendant argues that it can deduct the insured’s cost-sharing amounts from the reimbursement it pays to the plaintiff.The United States District Court for the District of Connecticut dismissed the plaintiff’s stand-alone claims under the surprise billing law, concluding that the law does not create a private right of action. The court then certified three questions to the Connecticut Supreme Court: (1) whether a CUTPA claim can be maintained for conduct that violates the surprise billing law but not CUIPA, (2) whether the surprise billing law requires insurers to fully reimburse providers and then collect cost-sharing amounts from insureds, and (3) whether the defendant’s practice of deducting cost-sharing amounts from reimbursements violates the surprise billing law.The Connecticut Supreme Court held that Connecticut law does not recognize a cause of action under CUTPA for conduct that violates the surprise billing law but is not identified as an unfair insurance practice under CUIPA. The court also held that the surprise billing law does not require insurers to fully reimburse providers and then collect cost-sharing amounts from insureds. Instead, insurers can deduct the insured’s cost-sharing amounts from the reimbursement paid to the provider. Finally, the court concluded that the defendant’s practice of deducting cost-sharing amounts from reimbursements does not violate the surprise billing law. View "NEMS, PLLC v. Harvard Pilgrim Health Care of Connecticut, Inc." on Justia Law

Jon Willis, an employee of Shamrock Management, L.L.C., was injured while working on an offshore oil platform operated by Fieldwood Energy, L.L.C. The injury occurred when a tag line slipped off a grocery box being delivered by a vessel operated by Barry Graham Oil Service, L.L.C. Willis sued Barry Graham for negligence. Barry Graham then sought indemnification, defense, and insurance coverage from Shamrock and its insurer, Aspen, based on a series of contracts linking the parties.The United States District Court for the Western District of Louisiana denied Barry Graham's motion for summary judgment and granted Shamrock and Aspen's motion, ruling that Barry Graham was not covered under the defense, indemnification, and insurance provisions of the Shamrock-Fieldwood Master Services Contract (MSC). Willis's case was settled, and Barry Graham appealed the district court's decision on its third-party complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court concluded that the MSC required Shamrock to defend, indemnify, and insure Barry Graham because Barry Graham was part of a "Third Party Contractor Group" under the MSC. The court also determined that the cross-indemnification provisions in the contracts were satisfied, and that the Louisiana Oilfield Anti-Indemnity Act (LOAIA) did not void Shamrock's obligations because Fieldwood had paid the insurance premium to cover Shamrock's indemnities, thus meeting the Marcel exception.The Fifth Circuit reversed the district court's judgment and remanded the case for further proceedings consistent with its opinion. View "Barry Graham Oil v. Shamrock Mgmt" on Justia Law

In April 2013, Michael Riste applied for a bail bond for his son, Michael Peterson, and signed an Indemnity Agreement and a Premium Agreement with Bad Boys Bail Bonds (Bail Agent). The agreements required Riste to pay a $10,000 premium in installments. Peterson signed identical documents after his release. The Bail Agent executed a $100,000 bail bond on behalf of The North River Insurance Company (Surety), ensuring Peterson's appearance at future court proceedings. Peterson failed to appear, leading to the forfeiture of the bail bond and a summary judgment against the Surety in October 2015.Two panels of the California Court of Appeal previously affirmed the denial of motions by the Surety and Bail Agent to set aside the summary judgment, vacate the forfeiture, and exonerate the bond. In October 2020, a class action cross-claim in Caldwell v. BBBB Bonding Corp. argued that the Bail Agent's premium financing agreements were subject to Civil Code section 1799.91 and were unenforceable without proper notice to cosigners. The trial court and the Court of Appeal agreed, enjoining the Bail Agent from enforcing such agreements without the requisite notice.In September 2022, the Surety and Bail Agent filed a third motion to set aside the summary judgment, citing Caldwell and arguing that the premium was part of the consideration for the bail bond, making the bond void. The trial court denied the motion, and the Surety and Bail Agent appealed.The California Court of Appeal, Second Appellate District, Division Three, affirmed the trial court's order. The court held that the bail bond was not void because the consideration for the bail bond was Peterson's release from custody, not the premium financing agreement. The court concluded that the trial court had jurisdiction over the bond and properly denied the motion to set aside the summary judgment, vacate the forfeiture, and exonerate the bond. View "People v. North River Insurance Co." on Justia Law

Yolanda Bell obtained an automobile insurance policy from Shelter General Insurance Company. In February 2018, her vehicle was damaged, and Shelter determined it was a total loss, paying her $11,787 after deductions. Bell filed a class action suit in February 2022, alleging that Shelter breached its contractual duties by not including taxes and fees required to acquire a replacement vehicle in its payment. Bell argued that the policy did not require her to replace the vehicle before being reimbursed for these costs.The Circuit Court of Jackson County dismissed Bell's petition without prejudice, agreeing with Shelter's argument that the policy only covered taxes and fees if they were actually incurred by purchasing a replacement vehicle. Bell appealed the decision, standing on her original petition rather than amending it.The Supreme Court of Missouri reviewed the case de novo. The court found that Bell's petition adequately pleaded a breach of contract claim by alleging the existence of the insurance policy, her performance under the policy, Shelter's failure to pay the required taxes and fees, and the resulting damages. The court emphasized that the interpretation of the policy's terms was a matter for summary judgment or trial, not for a motion to dismiss. Consequently, the Supreme Court of Missouri reversed the circuit court's judgment and remanded the case for further proceedings. View "Bell vs. Shelter General Insurance Company" on Justia Law

Centaur, L.L.C. entered into a Master Services Contract (MSC) with United Bulk Terminals Davant, L.L.C. (UBT) in 2015 to build a concrete containment wall at UBT's dock facility. River Ventures, L.L.C. provided vessel transportation for Centaur’s employees working on the project. Centaur employee Devin Barrios was injured while transferring a generator from a River Ventures vessel to a barge leased by Centaur. The district court found River Ventures 100% at fault for the accident and imposed a $3.3 million judgment. River Ventures and its insurer, XL Specialty Insurance Company, satisfied the judgment and subsequently brought breach of contract claims against Centaur under the MSC.The United States District Court for the Eastern District of Louisiana held a bench trial on the breach of contract claims. The court dismissed the claims, finding an ambiguity in the MSC regarding Centaur’s insurance procurement obligations. Specifically, the court found that requiring Centaur to procure a Protection & Indemnity (P&I) policy with crew/employee coverage would result in an absurd consequence due to potential duplicative coverage with the Worker’s Compensation policy.The United States Court of Appeals for the Fifth Circuit reviewed the case. The appellate court found that the MSC unambiguously required Centaur to procure a P&I policy that included crew/employee coverage. The court disagreed with the district court’s finding of absurdity, noting that mutually repugnant escape clauses in the Worker’s Compensation and P&I policies would result in both policies being liable on a pro rata basis. The appellate court also reversed the district court’s dismissal of the excess/bumbershoot breach of contract claim, as it was contingent on the P&I claim. The Fifth Circuit reversed the district court’s judgment and remanded the case for further proceedings consistent with its opinion. View "Centaur v. River Ventures" on Justia Law

Annette McEachin, a human resources manager, was seriously injured in a car accident in 2017 and subsequently filed a disability claim with Reliance Standard Life Insurance Company. Reliance approved her for long-term disability benefits, which were later extended after another car accident worsened her condition. McEachin underwent multiple surgeries and treatments for her physical injuries and also received treatment for mental health issues, including depression and anxiety, exacerbated by her son's suicide in 2019. Reliance paid her benefits for nearly four years but stopped payments in April 2021, concluding that her physical health had improved sufficiently for her to return to work.The United States District Court for the Eastern District of Michigan found that McEachin no longer had a physical disability as of April 2021 but ruled that her mental health disabilities entitled her to two more years of benefits. Both parties appealed the decision. Reliance argued that the district court misinterpreted the insurance policy, while McEachin contended that her physical disabilities persisted beyond April 2021.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that McEachin's physical disabilities alone justified her disability benefits until April 2021, meaning the 24-month mental health limitation did not apply until then. The court affirmed the district court's finding that McEachin's physical disabilities no longer rendered her totally disabled as of April 2021. However, the court vacated the district court's decision regarding the mental health benefits and remanded the case to consider whether McEachin's post-April 2021 medical evidence could toll the 24-month mental health limitation period, potentially extending her eligibility for benefits beyond April 2023. View "McEachin v. Reliance Standard Life Ins. Co." on Justia Law

GEICO, a group of insurance companies, presented evidence that the defendants, collectively known as the Mayzenberg Defendants, paid third parties for referring patients eligible for no-fault insurance benefits to Mingmen Acupuncture, P.C. GEICO argued that this constituted an illegal kickback scheme, violating New York's rules of professional misconduct, and thus, under the Eligibility Regulation (11 N.Y.C.R.R. § 65-3.16(a)(12)), Mingmen was ineligible to receive no-fault payments. The Mayzenberg Defendants contended that paying for patient referrals might be professional misconduct but did not violate a "licensing requirement" under the Eligibility Regulation.The United States District Court for the Eastern District of New York granted summary judgment in favor of GEICO, agreeing that the Mayzenberg Defendants paid for patient referrals and that this conduct rendered Mingmen ineligible for no-fault benefits. The court also granted GEICO summary judgment on its common law fraud and RICO claims, based on the same conclusions about Mingmen’s ineligibility.The United States Court of Appeals for the Second Circuit reviewed the case and found that while the facts established that the Mayzenberg Defendants paid for patient referrals, the legal question of whether this conduct violated a "licensing requirement" under the Eligibility Regulation was unsettled. Given the lack of clear precedent from the New York Court of Appeals and the significant policy implications, the Second Circuit certified the question to the New York Court of Appeals to determine if paying for patient referrals in violation of New York Education Law § 6530(18) and 8 N.Y.C.R.R. § 29.1(b)(3) disqualifies a provider from receiving no-fault payments under the Eligibility Regulation. View "GEICO v. Mayzenberg" on Justia Law

A construction company chartered a barge and obtained insurance through a broker. Upon returning the barge, the owner discovered damage and sued the construction company in federal court. The construction company requested its insurer to defend it, but the insurer refused, citing lack of coverage. After the federal court awarded damages to the barge owner, the construction company sued the insurer and broker in state court, alleging breach of contract, insurance bad faith, and negligence.The Superior Court of Alaska denied the construction company's motion for summary judgment against the broker and insurer. The court granted summary judgment to the broker and insurer, finding that the construction company's claims were barred by the statute of limitations. The court held an evidentiary hearing and concluded that the construction company had not relied on any reassurances from the broker that would have delayed the filing of the lawsuit.The Alaska Supreme Court reviewed the case and affirmed the Superior Court's decision. The court held that the construction company's claims against the broker were time-barred, as the statute of limitations began to run when the insurer first denied coverage. The court also held that the construction company's claims against the insurer were time-barred, as the statute of limitations began to run when the insurer refused to defend the construction company in the federal lawsuit. The court concluded that the construction company's claims were untimely and affirmed the summary judgment in favor of the broker and insurer. View "Swalling Construction Company, Inc. v. Alaska USA Insurance Brokers, LLC" on Justia Law

A general contractor, Tocci Building Corporation, and its affiliates were involved in a dispute with their insurers, including Admiral Insurance Company, over coverage under a commercial general liability (CGL) insurance policy. The issue was whether the CGL policy covered damage to non-defective parts of a construction project caused by a subcontractor's defective work on another part of the project. Tocci sought defense and indemnity coverage under the Admiral policy for a lawsuit filed by Toll JM EB Residential Urban Renewal LLC, which alleged various issues with Tocci's work on a residential construction project.The United States District Court for the District of Massachusetts concluded that Admiral had no duty to defend Tocci. The court found that the lawsuit did not allege "property damage" caused by an "occurrence" as required for coverage under the policy. The court reasoned that the damage alleged was within the scope of the project Tocci was hired to complete and thus did not qualify as "property damage." Additionally, the court held that faulty workmanship did not constitute an "accident" and therefore was not an "occurrence" under the policy.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision, but for different reasons. The appellate court focused on the policy's exclusions, particularly the "Damage to Property" exclusion (j)(6), which excludes coverage for property that must be restored, repaired, or replaced because the insured's work was incorrectly performed on it. The court concluded that this exclusion applied to the entire project since Tocci was the general contractor responsible for the entire construction. The court also noted that Tocci did not meet its burden of showing that any exceptions to the exclusion applied, such as the "products-completed operations hazard," because Tocci's work was not completed or abandoned. Thus, the appellate court held that Admiral had no duty to defend Tocci in the underlying lawsuit. View "Admiral Insurance Company v. Tocci Building Corporation" on Justia Law