Justia Insurance Law Opinion Summaries

Pamela Edwards, owner of Allure Salon in Starkville, Mississippi, was diagnosed with cancer in 2019 and passed away in 2022. After her death, her husband, Jimmy Edwards, sought payment from her life insurance policy with Guardian Life Insurance. Guardian denied the claim, stating the policy had been canceled because the number of insured employees at Allure dropped to one, triggering their right to cancel the policy. Jimmy Edwards was unaware of the policy until informed by the insurance agent, Debbie Jaudon, who also did not receive a cancellation notice from Guardian.Jimmy Edwards sued Guardian in the Northern District of Mississippi, bringing claims under Mississippi common law and arguing that ERISA entitled him to recover benefits. Guardian moved for partial summary judgment, asserting that ERISA governed the plan and preempted the common-law claims. The district court granted Guardian’s motion, and Jimmy Edwards appealed.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court determined that ERISA applied to the Allure policy, as the salon technicians were considered employees under federal common law. The court found that Guardian had waived its right to cancel the policy by continuing to accept premium payments for 26 months after the right to cancel vested. The court held that Guardian could not avoid its obligation to pay the claim after accepting premiums for such an extended period. Consequently, the Fifth Circuit reversed the district court's judgment and rendered judgment in favor of James Edwards. View "Edwards v. Guardian Life Insurance" on Justia Law

Several estates filed a lawsuit against Tyson Foods Inc. and several of its corporate executives and plant supervisors, alleging gross negligence and fraud after four former workers at Tyson Foods’ pork processing plant in Waterloo died from COVID-19. The plaintiffs claimed that Tyson failed to implement adequate safety measures and misled workers about the risks of COVID-19, leading to the workers' deaths.The Iowa District Court for Black Hawk County dismissed the case, concluding that Iowa’s Workers’ Compensation Act (IWCA) provided the exclusive remedy for the estates’ claims, thus lacking subject matter jurisdiction. The court found that the plaintiffs did not sufficiently plead gross negligence to fall within an exception to the IWCA and that the claims were improperly "lumped" together without specifying each defendant's duty or claim.The Iowa Supreme Court reviewed the case and held that the plaintiffs had sufficiently pleaded gross negligence against the executive and supervisor defendants, thus falling within the IWCA’s exception. The court found that the petition provided fair notice of the claims and that the allegations met the elements of gross negligence: knowledge of the peril, knowledge that injury was probable, and a conscious failure to avoid the peril. The court also held that the fraudulent misrepresentation claims against the supervisor defendants were not preempted by the IWCA, as intentional torts fall outside its scope.However, the court affirmed the dismissal of the claims against the corporate defendants, Tyson Foods and Tyson Fresh Meats, as the IWCA’s exclusivity provisions barred any direct tort claims against employers. The court also affirmed the dismissal of the breach-of-duty claims against Adams and Jones due to waiver. The case was remanded for further proceedings consistent with the court’s opinion. View "Mehmedovic v. Tyson Foods Inc." on Justia Law

J.H. participated in an employee welfare-benefit plan insured by Anthem Blue Cross Life and Health Insurance Company, with her son, A.H., as a beneficiary. After seeking benefits for A.H.'s yearlong stay at a mental-health treatment center, Anthem denied coverage, and Plaintiffs' appeal to Anthem was unsuccessful. Over a year after their final appeal through Anthem was decided, Plaintiffs filed a lawsuit to recover benefits under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA).The United States District Court for the District of Utah dismissed the action, concluding it was time-barred under a provision of the Plan that required civil actions under ERISA § 502(a) to be brought within one year of the grievance or appeal decision. Plaintiffs argued that another sentence in the Plan set a three-year limitations period, creating an ambiguity that should be interpreted in their favor.The United States Court of Appeals for the Tenth Circuit reviewed the case and held that the two provisions were not inconsistent and both applied. The court explained that the one-year limitations period for § 502(a) actions and the three-year limitations period for other actions were distinct and could both be applicable. The court affirmed the district court's dismissal, concluding that Plaintiffs' action was time-barred as it was filed beyond the one-year limitations period specified in the Plan. View "J.H. v. Anthem Blue Cross Life and Health Insurance" on Justia Law

BlueCross BlueShield of Tennessee (BlueCross) is an insurer and fiduciary for an ERISA-governed group health insurance plan. A plan member in New Hampshire sought coverage for fertility treatments, which BlueCross denied as the plan did not cover such treatments. The Commissioner of the New Hampshire Insurance Department initiated an enforcement action against BlueCross, alleging that the denial violated New Hampshire law, which mandates coverage for fertility treatments. BlueCross sought to enjoin the state regulatory action, arguing it conflicted with its fiduciary duties under ERISA.The United States District Court for the Eastern District of Tennessee denied BlueCross's request for relief and granted summary judgment to the Commissioner. The court found that the Commissioner’s enforcement action was against BlueCross in its capacity as an insurer, not as a fiduciary, and thus was permissible under ERISA’s saving clause, which allows state insurance regulations to apply to insurers.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court’s decision. The Sixth Circuit held that the Commissioner’s action was indeed against BlueCross as an insurer, aiming to enforce New Hampshire’s insurance laws. The court noted that ERISA’s saving clause permits such state actions and that BlueCross could not use its fiduciary duties under ERISA to evade state insurance regulations. The court also referenced the Supreme Court’s decision in UNUM Life Insurance Co. of America v. Ward, which established that state insurance regulations are not preempted by ERISA when applied to insurers. Thus, the Sixth Circuit concluded that ERISA did not shield BlueCross from the New Hampshire regulatory action. View "BlueCross BlueShield of Tennessee v. Nicolopoulos" on Justia Law

Two former police officers, Mark Zukowski and Joshua Ruggiero, were injured in the line of duty and subsequently awarded both accidental disability retirement (ADR) benefits and workers' compensation benefits under Maryland's Workers' Compensation Act. The ADR benefits exceeded the workers' compensation benefits, resulting in an offset that left the officers with only a small portion of the workers' compensation benefits. The officers' attorney sought fees based on the total workers' compensation award before the offset was applied.The Maryland Workers' Compensation Commission awarded attorney's fees based on the reduced amount of workers' compensation benefits after applying the statutory offset. The Circuit Court for Anne Arundel County affirmed the Commission's decision, holding that attorney's fees should be calculated after the offset.The Supreme Court of Maryland reviewed the case and affirmed the lower courts' decisions. The Court held that the terms "benefits" and "compensation" are interchangeable in this context, meaning that attorney's fees should be calculated based on the amount of compensation actually payable to the claimant after applying the statutory offset. The Court emphasized that the attorney's fees are a lien on the compensation awarded, which is defined as the money payable to the injured employee. Therefore, the offset must be applied before calculating the attorney's fees. The Court also rejected the argument that this interpretation was unconstitutional, stating that the attorney voluntarily agreed to the fee arrangement and was aware of the statutory provisions governing attorney's fees. View "Zukowski v. Anne Arundel Cnty." on Justia Law

Martin Montano Jr., an employee of Casas Custom Floor Care, LLC, was involved in a fatal car accident while driving his mother's truck to correct his timesheet at the company's main yard. Michael Cravens, the surviving spouse of the deceased, sued Montano and Casas, alleging negligence and vicarious liability. Cincinnati Indemnity Company, which insured Casas, issued a reservation of rights letter to Montano, disputing its obligation to defend or insure him under the policy.The Superior Court in Pima County granted summary judgment in favor of Cravens, ruling that Montano was using the vehicle "in connection with" Casas's business at the time of the accident, thus obligating Cincinnati to indemnify Montano. The court also upheld the enforceability of a Morris Agreement between Montano and Cravens, which stipulated Montano's liability and assigned his rights under the policy to Cravens. The court of appeals affirmed the superior court's rulings on both coverage and the agreement.The Supreme Court of Arizona reviewed the case and held that an employee operates a non-owned auto "in connection with your business" when using the vehicle while engaged in the employer's business. This does not include a routine commute. The court also held that a contingent Morris agreement is enforceable if it meets the substantive requirements to ensure against fraud, collusion, unfairness, or unreasonableness. The court vacated the court of appeals' coverage ruling, affirmed the ruling on the Morris Agreement, reversed the superior court's judgment, and remanded for further proceedings consistent with its opinion. View "CRAVENS v MONTANO" on Justia Law

Haylee Hinton was injured in a car accident caused by another motorist running a red light. She initially sought compensation from her employer’s workers’ compensation insurer and later settled with the motorist’s insurance carrier. Hinton then filed a claim for underinsured motorist benefits with Midwest Family Mutual Insurance, her underinsured motorist coverage provider, and submitted the claim to arbitration as permitted by Utah law.Midwest sought a declaratory judgment from the district court to limit the categories of damages Hinton could recover in arbitration, citing Utah Code section 31A-22-305.3(4)(c)(i), which excludes benefits paid or payable under the Workers’ Compensation Act from underinsured motorist coverage. The district court interpreted the statute to mean that past and future medical expenses and two-thirds of lost wages were payable under workers’ compensation and ruled that Hinton could not recover these categories of damages from Midwest.Hinton petitioned for interlocutory review, arguing that the district court lacked jurisdiction and misinterpreted the statute. The Utah Supreme Court found that the district court had jurisdiction but misinterpreted the statute. The court concluded that “payable” means benefits that can or may be paid to a specific claimant in a particular case, not just categories of damages generally available under workers’ compensation. The court vacated the district court’s order and remanded the matter for further proceedings to determine what benefits remain payable to Hinton under the Workers’ Compensation Act. View "Hinton v. Midwest Family Mutual Insurance" on Justia Law

Joe David Hudson was injured while working for Joplin Regional Stockyards, Inc. (JRS) in 2002. In 2005, Hudson, JRS, and JRS' insurer, Star Insurance Company, entered into a settlement agreement where Hudson received an $80,000 lump sum. The settlement left future medical expenses for Hudson's left ankle open. In 2011, Hudson had a below-the-knee amputation, which Star refused to cover. Hudson filed the settlement in circuit court in 2013, and the court rendered judgment in accordance with the settlement. Hudson later filed an equitable garnishment action, leading Star to pay $92,000 for his medical bills. In 2015, Star agreed to reimburse Hudson up to $610,311.75 for future medical expenses. In 2016, Hudson and JRS entered into a subordination agreement, acknowledging all payments due under the judgment had been received.In 2022, Hudson filed a motion to revive the judgment, which JRS opposed, arguing the judgment had been satisfied and the Division of Workers' Compensation had not determined the future medical care provision. JRS also filed a motion for relief from the judgment, claiming it was void due to lack of due process. The Circuit Court of Jasper County sustained Hudson's motion to revive the judgment and overruled JRS' motion for relief.The Supreme Court of Missouri reviewed the case and determined that JRS had standing to appeal. The court found that the circuit court erred in reviving the judgment because JRS had satisfied the judgment by paying the $80,000 lump sum. The court reversed the circuit court's order sustaining Hudson's motion to revive the judgment and overruled Hudson's motion to revive the judgment. Hudson's motion for damages for a frivolous appeal was also overruled. View "Hudson v. Joplin Regional Stockyards, Inc." on Justia Law

Glenn O. Hawbaker, Inc. (GOH) engaged in a scheme to underpay its employees by misappropriating fringe benefits owed under the Pennsylvania Prevailing Wage Act (PWA) and the Davis-Bacon Act (DBA). This led to two class-action lawsuits against GOH. GOH sought coverage under its insurance policy with Twin City Fire Insurance Company (Twin City), which denied coverage and sought a declaratory judgment that it had no duty to provide coverage. GOH and its Board of Directors counterclaimed, alleging breach of contract and seeking a declaration that certain claims in the class actions were covered under the policy.The United States District Court for the Middle District of Pennsylvania dismissed GOH's counterclaims, concluding that the claims were not covered under the policy due to a policy exclusion for claims related to "Wage and Hour Violations." The court also granted Twin City's motion for judgment on the pleadings, affirming that Twin City had no duty to defend or indemnify GOH for the class-action claims.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's judgment. The Third Circuit agreed that the claims in question were not covered under the policy because they were related to wage and hour violations, which were explicitly excluded from coverage. The court emphasized that the exclusion applied broadly to any claims "based upon, arising from, or in any way related to" wage and hour violations, and found that the factual allegations in the class actions were indeed related to such violations. Thus, Twin City had no duty to defend or indemnify GOH under the terms of the policy. View "Twin City Fire Insurance Co. v. Glenn O. Hawbake, Inc." on Justia Law

In this case, the plaintiff, MVT Services, LLC (MVT), purchased a workers’ compensation and employers’ liability policy (WC/EL Policy) from Great West Casualty Company (Great West) for coverage from January 1, 2013, to January 1, 2014. MVT also entered into a Staff Leasing Agreement with OEP Holdings, LLC (OEP) and purchased a non-subscriber insurance policy from Crum & Forster Specialty Insurance Company (C&F). On August 13, 2013, MVT terminated its Texas coverage under the WC/EL Policy, effective September 16, 2013. On September 15, 2013, a day before the termination, MVT’s semi-tractor trailer crashed, killing driver Lawrence Parada. Parada’s widow filed a lawsuit against MVT. Great West denied coverage, leading MVT to seek defense under the C&F Policy.The United States District Court for the District of New Mexico found that Great West breached its duty to defend MVT, causing MVT to incur damages. The court awarded MVT damages and attorney fees. Great West appealed, arguing that the district court erred in finding that the Parada lawsuit would have resolved within the policy limit and that the breach did not proximately cause the damages.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court held that the district court did not clearly err in its factual findings that MVT would have invoked the Exclusive Remedy defense and that the gross negligence claim would have resolved within the policy limit. The court also found that the district court did not err in awarding damages for the $250,000 retention under the C&F Policy, the $250,000 MVT contributed to the settlement, and $41,476.84 in attorney fees. The court affirmed the district court’s award of attorney fees, concluding that Great West failed to show the district court committed legal error or clearly erred in its fact findings. The Tenth Circuit affirmed the district court’s judgment. View "MVT Services v. Great West Casualty Company" on Justia Law