Justia Insurance Law Opinion Summaries

Articles Posted in Maine Supreme Court

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This appeal arose from a motor vehicle collision involving Roger Linton and James Carey that resulted in Carey's death. At the time of the collision, Linton was driving a truck owned by Jonathan Jennings, for whom Linton worked as an independent contractor. Jennings's insurer, State Farm, filed a declaratory judgment action against Carey's Estate and Linton to determine whether it was responsible for liability coverage and obligated to defend and indemnify Linton for claims arising from the collision. The superior court entered a judgment in favor of State Farm, concluding that Linton was not an insured covered by Jennings's policy because his use of the truck was not within the scope of Jennings's consent. At issue on appeal was whether the superior court erred in its application of the minor deviation rule in determining that Linton's use of the truck exceeded the scope of Jennings's consent. The Supreme Court vacated the judgment, clarified the applicable burdens associated with the minor deviation rule, and remanded for the superior court to apply the minor deviation rule as clarified. View "State Farm Mut. Auto. Ins. Co. v. Estate of Carey" on Justia Law

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Maine Public Employees Retirement System (the System) appealed a superior court judgment reversing a decision of the System’s Board of Trustees that denied Petitioner Ellen Goodrich basic life insurance coverage under the group life insurance plan administered by the System. Upon review of the record, the Supreme Court vacated the Superior Court's judgment in part and remanded the case for entry of a judgment: (1) vacating the decision of the Board; and (2) remanding to the Board with instructions to provide Goodrich with prospective basic life insurance coverage after she paid back premiums accrued to date. View "Goodrich v. Maine Public Employees Retirement System" on Justia Law

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Michael Bryant, an owner and employee of Prime Cut Meat Market, assaulted another motorist, Francis Latanowich, in an apparent incident of road rage. Prime Cut and its employees were insured by a policy issued by The Travelers Indemnity Company. Latanowich and his wife sued Bryant and Prime Cut. Prime Cut successfully moved for summary judgment, and Bryant and the Latanowiches agreed to a settlement that included Bryant assigning all of his rights related to potential insurance coverage to the Latanowiches. Travelers later filed a complaint against Bryant and the Latanowiches seeking a declaratory judgment that it had no duty to indemnify Bryant for claims arising from the altercation because Bryant was not an insured under its policy issued to Prime Cut for purposes of that conduct. The superior court concluded that the policy language did not cover the incident, and it granted Travelers's motion for summary judgment. The Latanowiches appealed. The Supreme Court affirmed, holding that, pursuant to the unambiguous language of the policy, the court correctly concluded that Bryant's assault of Latanowich was not covered by the policy and properly entered summary judgment.

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Joshuah Farrington struck a moose while driving a vehicle loaned to him by Darling's Rent-a-Car, causing damages. Philadelphia Indemnity, Darling's insurer, compensated Darling's pursuant to the property damage provision of its commercial insurance policy. Philadelphia Indemnity, as Darling' subrogee, subsequently filed a complaint against Farrington, asserting that he breached the rental contract by damaging the vehicle. The Business and Consumer Docket entered judgment in Philadelphia Indemnity's favor. Farrington appealed, contending that he was insured by Darling's insurance policy with Philadelphia Indemnity and that Maine's anti-subrogation rule prohibited Philadelphia Indemnity to bring a claim against him. The Supreme Court affirmed, holding that the district court did not err in concluding that Farrington was not included as an insured within the meaning of the property damage portion of the contract Darling's made with Philadelphia Indemnity.

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Anthem Health Plans of Maine appealed from a judgment entered in the Business and Consumer Docket affirming a decision by the Superintendent of Insurance (1) determining that Anthem's proposed rate increase for its individual health insurance products was excessive and unfairly discriminatory, and (2) indicating that an average rate increase with a lower profit margin for those products would be approved. Anthem appealed, contending that the Superintendent's decision violated Me. Rev. Stat. Ann. 24-A, 2736 (the statute) and the state and federal Constitutions because the approved rate increase eliminated Anthem's opportunity to earn a reasonable profit on its line of individual health insurance products. The Supreme Court affirmed, holding (1) the Superintendent properly balanced the competing interests within the statutory framework of the statute in arriving at its approved rate increase; and (2) because the approved rate provided a built-in risk and profit margin, Anthem's argument that the Superintendent improperly cross-subsidized between Anthem's regulated and unregulated product lines, and the corollary argument that the approved rate resulted in an unconstitutional confiscatory taking, necessarily failed as a matter of law.

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Mark Cookson purchased two homeowner's insurance policies from Liberty Mutual, one to cover his primary residence in West Newfield and another to cover property in Acton, where he was constructing a house. Cookson would drive his tractor along public roads between the properties. Cookson's tractor was subsequently destroyed by fire. Cookson filed a claim for loss of the tractor, which Liberty Mutual denied based on a personal property exclusion in both policies. Cookson filed a complaint seeking, in part, a declaratory judgment that the Liberty Mutual policies provided coverage for his tractor. The superior court granted summary judgment in favor of Liberty Mutual, concluding that Cookson's policies excluded the tractor from loss coverage. The Supreme Court affirmed, holding (1) Cookson's tractor was not the type of vehicle that fell within the limited exception for "vehicles not subject to motor vehicle registration" to the otherwise broad personal property exclusion of all "motor vehicles or all other motorized land conveyances," and (2) Cookson's tractor was not the type a homeowner would commonly purchase and employ simply to service his or her residence.

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Edwin Mitchell, a lobster fisherman, was sued by Victor Ames, who alleged that a group of lobster fishermen had conspired to prevent him from fishing for lobster in the area. The Ames complaint alleged that Mitchell had, among other things, converted Ames's personal property. Mitchell held a homeowners policy with Allstate Insurance Company. By the policy's terms, Allstate agreed to provide a defense if the policyholder was sued for such damages. Allstate, however, declined to provide coverage to Mitchell on the Ames litigation, after which Mitchell sued Allstate for breach of contract. The superior court granted summary judgment in favor of Allstate, concluding that Allstate had no contractual duty to defend Mitchell because a policy exclusion for certain intentional acts applied. The Supreme Court vacated the superior court's judgment, holding that Allstate did have a duty to defend because the liability alleged in the Ames complaint had the potential to result in covered liability.

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While away for a competition in a school-supported event, students caused damage to a motel where they were lodging. The motel's property insurer paid to repair the damage then exercised its right of subrogation pursuant to its insurance contract with the motel to seek to recover compensation for those responsible for the loss. The insurer filed a complaint against the school district, alleging it was liable for breach of contract based on its failure to protect and safeguard the property from damage during the period of occupancy and to refrain from activities that would damage the property. The superior court granted the school district's motion for summary judgment. The Supreme Court affirmed, holding that because the school district did not undertake to be responsible to pay damages in a subrogation action, the insurer's action against the school board was barred.

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Appellants Samantha Young and Rebekah Alley were injured while riding in a vehicle driven by Joshua Weeks. Appellants appealed from a judgment entered in the superior court in which the court held Weeks liable but permitted North East Insurance Company to rescind its automobile insurance policy on the vehicle Weeks was driving. Specifically, Young and Alley challenged the court's entry of summary judgment in favor of North East on its complaint seeking a declaratory judgment that it had no duty to defend or indemnify the driver because Weeks' mother had made material, fraudulent misrepresentations in applying for the automobile insurance. The Court of Appeals vacated the judgment, holding that genuine issues of material fact existed regarding whether Weeks' mother made a material, fraudulent misrepresentation to North East in obtaining the insurance policy. Remanded.

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Plaintiff Scott Hackett aggravated a pre-existing low back injury while working as a long distance truck driver for Western Express. After Hackett was terminated for reasons unconnected to his injury, Hackett filed a petition for award to the Workers' Compensation Board and was awarded ongoing partial incapacity benefits for a gradual injury to his lower back. When calculating Hackett's weekly wage, the hearing officer (1) excluded the nine cents per mile Hackett received as per diem pay, concluding that it was paid to cover special expenses, and (2) concluded that the per diem payments were not a fringe benefit that could be included to a limited extent in average weekly wage. Hackett appealed. The Supreme Court affirmed the hearing officer's decision but remanded for a recalculation of Hackett's fringe benefits pursuant to Me. W.C.B. R. ch. 1, 5(1).