Justia Insurance Law Opinion Summaries

The Supreme Court vacated the opinion of the court of appeals affirming the judgment of the trial court, after a jury trial, in this tort action for first-party insurance bad faith, holding that the trial court erred in instructing the jury on waiver and mitigation of damages.Plaintiff sued Defendant for insurance bad faith. Defendant denied liability and asked the trial court to instruct the jury on waiver, in the form of a contract waiver instruction, and mitigation of damages. The trial court granted Defendant's request for both jury instructions, and the jury returned a verdict for Defendant. The court of appeals affirmed. The Supreme Court reversed, holding that the waiver jury instruction was misleading and prejudicial to Plaintiff, requiring a remand for a new trial. View "Cavallo v. Phoenix Health Plans, Inc." on Justia Law

The Court of Appeals reversed the order of the appellate division reversing the judgment of Supreme Court concluding that Petitioners did not establish that the recently amended Insurance Regulation 187, 11 N.Y.C.R.R. part 224, which provides protections to consumers engaging in life insurance and annuity transactions, was invalid, holding that there was no basis to invalidate the regulation.Petitioners commenced this N.Y. C.P.L.R. 78 proceeding alleging that the amended regulation was unconstitutionally vague because certain terms did not satisfy the test for constitutional vagueness and that the Department of Financial Services (DFS) exceeded its authority in promulgating the amendment. Supreme Court held that the amendment was a proper exercise of the powers granted to DFS. The appellate division reversed, ruling that the amended regulation was unconstitutionally vague. The Court of Appeals reversed, holding that DFS appropriately exercised its authority "to create a carefully considered and clear regulation." View "Independent Insurance Agents & Brokers of N.Y., Inc. v. New York State Dep't of Financial Services" on Justia Law

In 2012, a competitor sued Creation for trademark violations. Creation requested that Selective Insurance provide coverage. Selective refused. Creation’s settlement with its competitor prevented Creation from selling one of its primary lines. Creation struggled financially. Selective sought a declaration in Illinois state court that it had no duty to defend. Creation countersued and also alleged breach of the insurance policy. The Illinois court entered partial summary judgment for Creation on its duty-to-defend claim, limited to fees Creation incurred before the original trademark litigation was settled.In 2014—in the middle of the state-court litigation—Creation sued Selective in federal court for breach of contract and under the Illinois Insurance Code. In 2016, Creation voluntarily dismissed its state-court breach-of-contract claim with leave to refile. The Illinois court expressly reserved Creation’s right to maintain its federal action on its contract claim. After the 2017 state court award, the federal district court awarded Creation nearly $3 million in damages on the Insurance Code claim. After remand, Creation unsuccessfully sought to amend its complaint to seek punitive damages. The district court then concluded that the doctrines of claim and issue preclusion barred Creation’s remaining contract claim.The Seventh Circuit reversed, noting that the case is an “anomaly.” The state court expressly reserved Creation’s right to file the claim in federal court, so the suit is not precluded by its earlier state-court litigation. View "Creation Supply, Inc. v. Selective Insurance Co. of the Southeast" on Justia Law

A declaratory judgment action was filed in the context of two insurance- company liquidation matters. The parties asserted they informally agreed, among themselves, and the single Commonwealth Court Judge overseeing the cases, to a procedure for a three-judge panel of the Commonwealth Court to render a decision to be reviewable via exceptions by the Commonwealth Court, en banc. However, as the agreement was not memorialized as of record, the party aggrieved by the panel opinion, the statutory liquidator, lodged an immediate appeal with the Pennsylvania Supreme Court after that opinion and order were filed, and then filed exceptions with the Commonwealth Court, en banc. After the Commonwealth Court, en banc, rendered a second opinion and order, overruling the exceptions and confirming the panel’s initial decision, the statutory liquidator filed a second appeal with the Supreme Court parallel to the first. This raised a jurisdictional question. The Supreme Court found two of four petitions filed were properly dismissed for want of jurisdiction. The other two were properly before the Court, and on the merits, the Court affirmed the Panel's July 9, 2021 order: “[t]here is simply no statutory authority for this well-intentioned proposal [or] any standard to guide the Liquidator’s establishment [of the proposal] or [the Commonwealth Court’s] evaluation thereof.” View "In Re: American Network Ins. Co." on Justia Law

Appellant is a self-described “watchdog association” that brings actions for injunctive relief against immigration consultants under section 22446.5, which provides a right of action against an immigration consultant to anyone who suffers damages by reason of the immigration consultant’s fraud, misrepresentation, or failure to provide services.In October 2017, Appellant brought over 90 actions against immigration consultants, two of whom had bonds issued by Appellee insurance company. After Appellant prevailed at trial against the consultants, it filed suit against Appellee to recover its attorney fees and costs against the Immigration Consultant Act bond. The trial court granted summary judgment in the insurance company's favor.On appeal, the Second Appellate District affirmed, explaining a surety issuing a statutory bond is liable only to the extent indicated in the code section under which the surety executes the bond and under the plain language of the relevant bond statutes, a non-aggrieved person who suffers no damages is not entitled to recovery from an Immigration Consultant Act bond. View "Immigrant Rights Defense etc. v. Hudson Insurance Co." on Justia Law

Plaintiff sought accidental death benefits under an employee benefit plan governed by the Employee Retirement Income and Security Act of 1974 (ERISA) after his wife died from injecting herself with a cocktail of unprescribed narcotics. The district court upheld the Life Insurance Company of North America’s (LINA) decision to deny benefits based on a policy exclusion for the “voluntary ingestion of any narcotic, drug, poison, gas or fumes unless prescribed or taken under the direction of a Physician.” Plaintiff appealed, contending that the district court erred because LINA’s decision was unreasonable and not supported by substantial evidence.   The Eighth Circuit affirmed. The court decided that LINA’s interpretation of “ingestion” was reasonable. The court then turned to whether LINA’s application of its interpretation to the facts is supported by substantial evidence. Here, the wife undisputedly died because she willingly injected herself with a combination of unprescribed narcotics. Therefore, there is sufficient evidence to support LINA’s application of the voluntary ingestion exclusion to the wife’s death. Thus, because the court agreed with the district court’s conclusion that LINA’s denial of benefits was justified in light of the voluntary ingestion exclusion, the court wrote it need not address LINA’s assertion that the wife’s death was not accidental. View "Jay Richmond v. Life Insurance Company" on Justia Law

Olson and Zdroik sustained injuries while volunteering at municipal fireworks displays in 2018. Fireworks distributed by Spielbauer Fireworks exploded prematurely at both events, severely burning the two. Both towns used teams of volunteers to operate their Fourth of July displays. Olson opened and closed a bin from which other volunteers retrieved fireworks during the Rib Lake show. Zdroik worked at the Land O’Lakes event as a “shooter,” manually lighting the fuses on mortar shells.Spielbauer’s insurer, T.H.E. Insurance, contested coverage under Spielbauer’s general and excess liability policies, which stated: This policy shall NOT provide coverage of any kind ... for any claims arising out of injuries or death to shooters or their assistants hired to perform fireworks displays or any other persons assisting or aiding in the display of fireworks whether or not any of the foregoing are employed by the Named Insured, any shooter or any assistant. The issue was whether the exclusion extends to all volunteers or only to those assisting hired shooters or hired assistants.The Seventh Circuit affirmed, in favor of T.H.E. Insurance. The Shooters Endorsement plainly and unambiguously excludes from coverage hired shooters and their hired assistants and “any other persons” who assist the fireworks display, regardless of whether they assist hired persons. View "T.H.E. Insurance Co. v. Olson" on Justia Law

The Supreme Court affirmed in part and reversed in part the decision of the court of appeals reversing the judgment of the district court dismissing Millard Gutter Company's suit against Farm Bureau Property & Casualty Insurance Company without prejudice, holding that the district court correctly dismissed the first-party bad faith claims for lack of standing.After a storm, Millard Gutter obtained assignments of the right to insurance proceeds due under policies of Shelter. Thereafter, Millard filed suit against Shelter in its own name, as assignee, alleging breach of contract and first-party bad faith in failing to settle the claims. The district court granted Shelter's motion to dismiss, concluding that the complaint did not contain sufficient factual allegations to establish standing to assert first-party bad faith claims. The court of appeals reversed in part, concluding that Millard Gutter had stated a plausible claim for first-party bad faith. The Supreme Court reversed in part, holding that Millard Gutter lacked standing to prosecute the policyholders' tort actions for first-party bad faith against Shelter. View "Millard Gutter Co. v. Farm Bureau Property & Casualty Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the district court dismissing this action brought by Millard Gutter Company against Shelter Mutual Insurance Company seeking to recover damages for breach of insurance contracts and for first-party bad faith, holding that the district court did not err in concluding that Millard Gutter did not have standing to assert first-party bad faith claims against Shelter.After a storm, Millard Gutter obtained assignments from various policyholders of Shelter. Thereafter, Millard filed suit against Shelter in its own name, as assignee, alleging breach of contract and first-party bad faith in failing to settle the claims. The district court granted Shelter's motion to dismiss, concluding that the complaint did not contain sufficient factual allegations to establish standing to assert first-party bad faith claims. The Supreme Court affirmed, holding that Millard Gutter lacked standing to prosecute the policyholders' tort actions for first-party bad faith against Shelter. View "Millard Gutter Co. v. Shelter Mutual Insurance Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals in this appeal involving a dispute between a homeowner and an insurance company over prejudgment interest, holding that Minnesota standard fire insurance policy, Minn. Stat. 65A/01, entitled Homeowner to prejudgment interest in an amount that may result in a total recovery that exceeded the policy limit.Homeowner sought coverage from Insurer after fires damaged his home. Insurer denied coverage, leading Homeowner to bring this lawsuit. A jury found for Homeowner. The district court award awarded Homeowner prejudgment interest in a limited amount, finding that Homeowner's total recovery for his personal property loss could not permissibly exceed the policy coverage limit. The court of appeals affirmed. The Supreme Court reversed and remanded the case to the district court to recalculate prejudgment interest, holding that, consistent with past precedent interpreting the standard fire policy, prejudgment interest can lawfully begin accruing before ascertainment of the loss when the insurer denies all liability. View "Else v. Auto-Owners Insurance Co." on Justia Law