Justia Insurance Law Opinion Summaries

The case revolves around a car accident that occurred on November 4, 2015, involving Donna Powers and Fendol Carruthers, Jr. Carruthers was charged and pleaded guilty to operating a motor vehicle under the influence of alcohol or drugs. Powers claimed to have sustained serious, permanent injuries from the crash. Carruthers was insured by State Farm Mutual Automobile Insurance Company (State Farm) with a policy limit of $50,000. Powers began receiving Personal Injury Protection (PIP) benefits from her own insurance carrier, Kentucky Farm Bureau (KFB). The Kentucky Motor Vehicle Reparations Act (MVRA) imposes a two-year statute of limitations for tort actions arising from motor vehicle accidents. Powers received her last PIP payment on August 4, 2016, meaning any tort claim she wished to assert arising from her accident with Carruthers must have been filed by August 4, 2018.Powers filed a complaint in McCracken Circuit Court on April 3, 2018, asserting a negligence claim against Carruthers and an underinsured motorist (UIM) claim against KFB. However, Carruthers had died two years earlier in March 2016, unbeknownst to Powers or her attorneys. The case remained stagnant for the next year, with Powers failing to take any action to rectify the portion of her complaint that was a nullity against Carruthers. It wasn't until August 2019 that Powers successfully moved the district court to appoint the Public Administrator to act as Administrator of Carruthers’s Estate.The Supreme Court of Kentucky affirmed the decisions of the lower courts, which had dismissed Powers’s negligence claim against Carruthers, denied Powers’s motions for substitution and revival, denied Powers’s motion for leave to amend her complaint to raise a new claim, and granted summary judgment in favor of KFB. The court held that Powers’s claim against Carruthers was null, and her attempted claim against the Estate was untimely. Furthermore, Powers’s inability to recover from Carruthers or the Estate foreclosed her underinsured motorist claim against KFB. View "Powers v. Kentucky Farm Bureau Mutual Insurance Co." on Justia Law

The case involves Continental Indemnity Company (Continental) and its attempt to collect a default judgment against BII, Inc. (BII) from Starr Indemnity & Liability Company (Starr), BII's insurer. Continental had paid a workers' compensation claim for an employee injured at a construction site where BII was a subcontractor. Continental then sought reimbursement from BII, which had failed to maintain its own workers' compensation insurance. When BII did not pay, Continental secured a default judgment against BII and sought to collect from Starr under Illinois garnishment procedures.The district court in the Northern District of Illinois dismissed the garnishment proceeding against Starr, finding that it lacked subject matter jurisdiction. The court reasoned that the dispute over the scope of coverage under the Starr-BII insurance policy was too distinct from the underlying suit between Continental and BII. Continental appealed this decision to the United States Court of Appeals for the Seventh Circuit.The Seventh Circuit affirmed the district court's decision. The court found that the garnishment proceeding introduced new factual and legal issues, making it essentially a new lawsuit. The court explained that while federal courts have ancillary enforcement jurisdiction to consider proceedings related to an underlying suit, the subject of those proceedings must still be sufficiently related to the facts and legal issues of the original action. In this case, the court found that the garnishment proceeding fell outside the scope of ancillary enforcement jurisdiction. The court suggested that Continental could file a new civil action against Starr to litigate the dispute over the insurance policy's coverage. View "Continental Indemnity Company v. BII, Inc." on Justia Law

The case revolves around a dispute over who should pay for the personal injury protection (PIP) benefits of Justin Childers, who was severely injured in a car accident. Initially, Childers' PIP benefits were covered by American Fellowship Mutual Insurance Company, but the company was declared insolvent in 2013. The Michigan Property and Casualty Guaranty Association (MPCGA) then assumed responsibility for Childers' PIP benefits. The MPCGA, after an investigation, concluded that Progressive Marathon Insurance Company was next in line to provide Childers' PIP benefits. However, Progressive denied Childers' claim.The trial court granted summary disposition to Progressive, ruling that while the actions were not time-barred, Progressive was not within statutory priority for Childers' benefits. The Court of Appeals reversed this decision, concluding that the one-year limitations period did not apply because the MPCGA is not generally subject to the no-fault act, and the MPCGA did not bring the action under the no-fault act. Instead, the Court of Appeals reasoned that the MPCGA’s right to proceed against Progressive came from the guaranty act, which allows the MPCGA to claim reimbursement from another insurer in the chain of designated priority insurers.The Michigan Supreme Court, however, disagreed with the Court of Appeals. It held that the one-year limitations period in MCL 500.3145(1) applies where either an insured or the MPCGA brings an action for PIP benefits against a lower priority no-fault insurer after the higher priority insurer becomes insolvent. The court concluded that both the action brought by Childers' conservator and the MPCGA's action were time-barred. The court reversed part of the Court of Appeals' opinion, vacated the remainder, and remanded the case to the trial court for further proceedings. View "Childers v. Progressive Marathon Insurance Company" on Justia Law

The case involves a personal injury action initiated by Torrey Kath against Michael Prochnow and Prochnow Farms. After the parties filed a "Stipulation of Dismissal with Prejudice," the district court dismissed the case. Kath then filed a separate declaratory judgment action against Agraria Insurance Company, doing business as Farmers Union Mutual Insurance Company (FUMIC), seeking an order that FUMIC had a duty to indemnify Prochnow under an insurance policy. While FUMIC's motion in the declaratory judgment action was pending, Kath and Prochnow filed a "Joint Rule 60 Motion to Vacate Dismissal with Prejudice" in the original case, seeking an amended judgment.The district court had previously dismissed the case with prejudice. However, Kath and Prochnow filed a motion to vacate the dismissal, which the court granted. FUMIC then filed a motion to intervene, arguing that Kath and Prochnow were seeking to impair its rights. The district court ruled that it lacked jurisdiction to decide on FUMIC's intervention motion because the case had been dismissed.The Supreme Court of North Dakota disagreed with the district court's decision. The court noted that Kath and Prochnow's motion to vacate the dismissal re-invoked the district court's jurisdiction. Furthermore, FUMIC's intervention motion initiated a special proceeding, which also invoked the court's jurisdiction. Therefore, the Supreme Court held that the district court erred in ruling that it lacked jurisdiction to consider FUMIC's motion to intervene. The case was remanded for the district court to decide on FUMIC's motion to intervene and, if necessary, to conduct additional proceedings consistent with its disposition of the motion. View "Kath v. Prochnow" on Justia Law

The case involves a dispute over workers' compensation coverage for an employee, Braden Nanez, who was injured in a car accident while off work and away from his job at a remote fire base camp. The employer, Stonedeggs, Inc., expected employees not to leave the job site and to notify a manager if they did. Nanez did not notify a manager he was leaving camp. The Workers’ Compensation Appeals Board (the Board) found that Nanez’s use of his own car while off work to drive approximately 70 miles away from camp purportedly to obtain cellular service was conduct reasonably expected by his employer to be incident to its requirement that Nanez spend time away from home where cellular service was not adequately provided at the camp. The Board concluded that Nanez’s travel was for comfort and leisure and was not a distinct departure from his employment.The employer, Stonedeggs, Inc., and its insurer, Technology Insurance Company, Inc., administered by Amtrust North America, appealed the Board's decision, arguing that the Board acted in excess of its authority and that substantial evidence does not support the Board’s findings. They argued that Nanez was injured during a material deviation from his employment; he left the camp without employer approval on a personal activity that, under the unique circumstances of working at this remote fire camp, was not contemplated by the employer.The Court of Appeal of the State of California Third Appellate District affirmed the decision of the Workers’ Compensation Appeals Board. The court found that substantial evidence supported the Board’s findings that Nanez was a commercial traveler and that his departure from camp was a leisure activity that the employer may reasonably have expected to be incident to its requirement that Nanez spend time away from home. The court denied the petition for writ of review filed by Stonedeggs, Inc. and Technology Insurance Company, Inc. View "3 Stonedeggs, Inc. v. Workers' Comp. Appeals Bd." on Justia Law

In October 2018, Molitor Equipment, LLC purchased two tractors from Deere & Company. These tractors were a transitional model and did not include engine compartment fire shields as standard equipment, which were included in the subsequent 2019 model. A year after purchase, both tractors caught fire in separate incidents. Molitor had an insurance policy with SECURA Insurance Company, who paid Molitor's claim and then pursued Molitor's warranty claims against Deere. SECURA claimed the tractors were defective and unreasonably dangerous due to the absence of the fire shields and that Deere's warranty obligated them to remedy the problem or refund the purchase prices.Deere moved to dismiss the claims, arguing that its warranty only covered manufacturing defects, not design defects. The district court granted Deere's motion, dismissing SECURA's breach of warranty claim to the extent it was based on a design defect theory. The case proceeded on a manufacturing defect theory. At the close of discovery, both parties moved for summary judgment. Deere argued that since the tractors conformed to their intended design, there was no manufacturing defect. The district court granted Deere's motion, holding that SECURA could not establish its breach of warranty claim because Deere's warranty covers defects only in "materials or workmanship."On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court's decisions. The appellate court agreed with the district court's interpretation of Deere's warranty, concluding that it did not cover design defects. The court also agreed that SECURA could not establish a breach of warranty claim based on a manufacturing defect, as the tractors conformed to their intended design. Therefore, the court affirmed the district court's dismissal of SECURA's design defect claim and its grant of summary judgment to Deere on the manufacturing defect claim. View "Secura Insurance Company v. Deere & Company" on Justia Law

The case involves Nancy Anaya-Smith, the next of kin of Michael Brian Smith, who was killed in a single-car accident while he was a passenger in a company vehicle owned by Fixtures & Drywall Company of Oklahoma (FADCO). The vehicle was being driven by Smith's coworker, Duane Clark. Anaya-Smith alleges that Clark's negligence caused the fatal accident. At the time of the accident, FADCO maintained an insurance policy with Federated Mutual Insurance Company (Federated). The policy provided up to $1,000,000 of liability coverage per accident and an additional $6,000,000 of liability coverage per accident under an umbrella policy. However, FADCO had rejected uninsured motorist (UM) coverage for all employees, except for its directors, officers, partners, owners, and their family members.The United States District Court for the Western District of Oklahoma granted summary judgment in favor of Federated, concluding that the vehicle was an uninsured vehicle at the time of the accident because Clark is immune from tort liability under the workers' compensation exclusive remedy provision, and that FADCO's policy providing UM coverage for some individuals who qualify as insureds but rejecting UM coverage for other insureds does not violate Oklahoma law. Anaya-Smith appealed from the summary judgment order.The Supreme Court of the State of Oklahoma answered the first certified question in the affirmative, holding that the vehicle qualifies as an uninsured motor vehicle within the meaning of Oklahoma law. The court answered the second certified question in the negative, concluding that the plain language of Oklahoma law requires a named insured to either elect or reject uninsured/underinsured motorist coverage for all insureds under the policy, treating every insured in the same manner. The court declined to answer the third certified question as the record was undeveloped and the parties did not submit legal arguments pertaining to it. View "Anaya-Smith v. Federated Mutual Insurance Co." on Justia Law

This case involves a three-car consecutive rear-end collision. The plaintiffs, Scott Eastman and his wife, filed a lawsuit against Jillian Peterson and her insurer, State Farm Mutual Automobile Insurance Company, alleging that Peterson was solely liable for the accident because she negligently rear-ended Eastman's vehicle. Peterson and State Farm denied the allegations, contending that Eastman was comparatively at fault for the accident because he impacted the vehicle in front of him prior to being rear-ended by Peterson. They also disputed the severity of Eastman's injuries caused by the accident and argued that a majority of his alleged injuries and damages were due to a pre-existing condition.The case was tried before a jury, which found both Peterson and Eastman comparatively liable for the accident, assigning fifty-percent fault to each. The jury also found that Eastman had been injured in the accident and awarded him damages. Eastman then filed a motion for judgment notwithstanding the verdict (JNOV), arguing that the jury erred as the evidence strongly and overwhelmingly favored a finding of sole liability on the part of Peterson. The trial court granted the JNOV, finding Peterson solely liable for the accident and increasing the damages awarded to Eastman. The court of appeal affirmed the trial court's judgment.The Supreme Court of Louisiana granted certiorari to review the lower courts' judgments. The court found that the trial court erred in granting the JNOV as to both liability and damages. The court noted that there was conflicting, credible testimony as to whether Eastman collided with the vehicle ahead of him prior to being impacted from behind by Peterson. The court also found that the evidence did not so strongly and overwhelmingly favor Eastman that reasonable jurors could not reach different conclusions. Therefore, the court reversed the court of appeal, vacated the judgment of the trial court, and reinstated the jury's verdict. View "EASTMAN VS. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY" on Justia Law

The case involves a dispute between Stewart Kramer and Valerie Concinello (Parents) and Nationwide Property and Casualty Insurance Company (Nationwide) over the interpretation of their homeowners insurance policy. The dispute arose after the fatal drug overdose of Michael T. Murray, Jr. (Decedent) at Parents' home. The administrator of Decedent's estate sued Parents and their son, Adam Kramer, for wrongful death and survival actions. Parents sought coverage under their insurance policy with Nationwide, but Nationwide denied coverage based on a controlled substance exclusion in the policy. Parents then filed a declaratory judgment action, and the trial court ordered Nationwide to defend Parents.The Superior Court affirmed the trial court's decision but based its ruling on a different interpretation of the policy. The Superior Court concluded that the policy's controlled substance exclusion applied to the bodily injury claims in the underlying lawsuit but did not apply to emotional distress damages claimed in the wrongful death action.The Supreme Court of Pennsylvania reversed the Superior Court's decision. The Supreme Court held that the Superior Court's interpretation that Nationwide was potentially required to pay out for emotional and mental distress damages was contrary to the unambiguous provisions of the policy and erroneous as a matter of law. The Supreme Court concluded that Nationwide had no duty to defend the underlying lawsuit because emotional and mental distress damages in the wrongful death claims were not bodily injuries under the policy. View "Kramer v. Nationwide Insurance" on Justia Law

The case revolves around a patient, Tommy Harris, who contracted bacterial sepsis due to repeated infections from his dialysis treatment at a clinic in Belleville, Illinois. Harris filed a malpractice lawsuit against the operators of the clinic and later included a claim against Durham Enterprises, Inc., the janitorial company responsible for cleaning the facility. The case primarily concerns Durham’s insurance coverage. Durham submitted the lawsuit to Ohio Security Insurance Company, its insurer, which denied coverage based on the insurance policy’s exclusion for injuries caused by fungi or bacteria. Harris and Durham then negotiated an agreement in which Durham promised not to mount a defense and Harris promised to seek recovery only from the insurer. The state trial judge granted a motion to sever Harris's claim against Durham and set it for a bench trial. The judge held a short, uncontested bench trial and entered judgment against Durham for more than $2 million.Ohio Security was not a party to the state court proceedings and the insurance policy was not in the record. However, the consent judgment includes findings on insurance issues, notably, that the insurer breached its duty to defend and is estopped from asserting any policy defenses. After the judgment became final, Harris filed an amended complaint purporting to add Ohio Security as a defendant. Ohio Security removed the action to federal court and sought a declaration of its coverage obligations. The district court held that the bacteria exclusion precludes coverage.In the United States Court of Appeals for the Seventh Circuit, Harris and Durham jointly appealed, challenging the no-coverage ruling but also raising a belated challenge to subject-matter jurisdiction under the Rooker–Feldman doctrine. The court found the jurisdictional argument meritless, as the Rooker–Feldman doctrine does not block federal jurisdiction over claims by nonparties to state-court judgments. The court also affirmed the district court's ruling that the policy’s bacteria exclusion precludes coverage for this loss. View "Mitchell v. Durham Enterprises, Inc." on Justia Law