Justia Insurance Law Opinion Summaries

The Workers’ Compensation Commission and an Administrative Judge (AJ) had ordered Gamma Healthcare and Employers Insurance Company of Wausau (Employer/Carrier) to replace Sharon Grantham’s septic and HVAC systems and to pay for insurance on a handicapped-accessible van. The Commission, sua sponte, issued a separate order sanctioning the Employer/Carrier for causing an unnecessary delay by appealing the AJ’s order to the full Commission without reasonable grounds. The Employer/Carrier appealed. While this case was pending before the Court of Appeals, Sharon Grantham died. Thereafter, the Court of Appeals dismissed the case as moot. The Court of Appeals applied the general rule followed by federal courts by vacating the outstanding Commission and AJ orders. The appeals court reversed and rendered the Commission’s sanctions order against the Employer/Carrier, determining that the Commission had abused its discretion by its imposition of the sanction, reasoning that the Employer/Carrier had a reasonable legal argument for its appeal. Grantham’s estate filed a petition for a writ of certiorari, which the Mississippi Supreme Court granted. The Supreme Court concluded that in light of Grantham’s untimely death and the concession by her estate, it agreed with the Court of Appeals that this case was moot. "However, the main issue is not whether the case is moot. Rather it is whether the Court of Appeals erred by vacating the Commission’s and the AJ’s valid orders to replace the septic and HVAC systems in a case that became moot on appeal due to circumstances beyond the control of the parties. Additionally, did the court err by following federal vacatur law instead of existing Mississippi law?" These were issues of first impression. the Supreme Court found that the Court of Appeals did not err and that the federal vacatur rule was appropriate. The Commission’s orders were vacated properly. Furthermore, the Supreme Court affirmed the Court of Appeals’ reversing and rendering of the Commission’s sanctions award. View "Gamma Healthcare Inc., et al. v. Estate of Sharon Burrell Grantham" on Justia Law

The Supreme Court held that the Texas Workers' Compensation Act (TWCA) does not affect the enforceability of an additional-insured provision under the Texas Anti-Indemnity Act (TAIA).A general contractor's employee injured in an accident obtained a negligence judgment in Texas state court against the subcontractor that operated the crane (Berkel) and the company that leased the crane (Maxim). Berkel was an indemnity and Maxim was an indemnity for TAIA purposes because Berkel had provided Maxim with coverage as an additional insured. After the injured worker settled with Maxim, Maxim unsuccessfully sought reimbursement from Berkel's insurer (Zurich). The court of appeals reversed the judgment against Berkel, concluding that Berkel and the injured worker were "statutory co-employees" of the general contractor under the TWCA, and therefore, the TWCA provided the worker's exclusive remedy. In a separate suit in federal court, Maxim and Zurich disputed over whether the additional-insured coverage was enforceable. The Supreme Court answered a certified question by holding that the word "employee" in Tex. Ins. Code 151.103 bears its common meaning, which is not affected by whether the indemnity and injured employee are considered co-employees for purposes of the TWCA. View "Maxim Crane Works, LP v. Zurich American Insurance Co." on Justia Law

The Supreme Court answered a question certified to the Supreme Court by the United States District Court for the District of Connecticut in this declaratory judgment action by holding that Defendant's plea of nolo contendere could not be used to trigger a criminal acts exclusion in a homeowners insurance policy governed by Connecticut law.At issue was whether Plaintiff, Allstate Insurance Company, could use Defendant's plea of nolo contendere to the charge of assault in the first degree to trigger a criminal acts exclusion that would bar Plaintiff's coverage of Defendant in a civil action involving the same underlying incident. The district court certified the question to the Supreme Court. The Supreme Court answered that Defendant's plea of nolo contendere could not be used by Plaintiff to establish the applicability of the criminal acts exclusion of the relevant policy. View "Allstate Insurance Co. v. Tenn" on Justia Law

In this insurance dispute, the Supreme Court held that the MCS-90 endorsement, which provides that if a motor vehicle is involved in an accident the insurer may be required to pay any final judgment against the insured arising out of the accident, does not apply to an accident that occurred during an intrastate trip transporting non-hazardous property.One way motor carries can comply with the financial requirements of the federal Motor Carrier Act of 1980 is by adding an MCS-90 endorsement to their insurance policy. The insurer in this case brought an action seeking a declaration that the MCS-90 endorsement creating a suretyship whereby the insurer agreed to pay a final judgment against the insured in certain negligence cases did not apply. The trial court found that the MCS-90 endorsement applied, and the court of appeals affirmed. The Supreme Court reversed, holding (1) because the insured driver was neither engaged in interests commerce at the time of the action nor transporting hazardous property, the MCS-90 endorsement did not apply; and (2) the insurer had no duty to defend or indemnify the driver. View "Progressive Southeastern Insurance Co. v. Brown" on Justia Law

The Supreme Court reversed the judgment of the district court reversing the judgment of the county court dismissing the complaint brought by North Star Mutual Insurance Company without prejudice, holding that North Star violated the rule against claim splitting when it filed a subrogation action in its own name, without joining its insured.Julie Blazer, who was insured with North Star, was driving her vehicle when she was struck by a pickup truck driven by Travis Stewart. After paying Balzer insurance benefits as a result of the accident North Star filed suit against Stewart. North Star brought the negligence action in its own name as a subrogee of Blazer but did not join Blazer as a party. The county court dismissed the complaint without prejudice for lack of standing. The district court reversed. The Supreme Court reversed, holding that the allegations of the complaint were insufficient to demonstrate that North Star had standing to commence this action in its own name. View "North Star Mutual Insurance Co. v. Stewart" on Justia Law

In 2011, during the course and scope of his employment as a shipwright, Claimant Robert Arlet slipped and fell on an icy sidewalk on the premises of his employer, Flagship Niagara League (Employer), sustaining injuries. Employer had obtained a Commercial Hull Policy from Acadia Insurance Company (Insurer). Through the policy, Insurer provided coverage for damages caused by the Brig Niagara and for Jones Act protection and indemnity coverage for the “seventeen (17) crewmembers” of the Brig Niagara. Employer had also at some point obtained workers’ compensation insurance from the State Workers’ Insurance Fund (SWIF). Insurer paid benefits to Claimant under its Commercial Hull Policy’s “maintenance and cure” provision. Claimant filed for workers’ compensation benefits. Employer asserted Claimant’s remedy was exclusively governed by the Jones Act. Employer also filed to join SWIF as an additional insurer in the event the Workers' Compensation Act (WCA) was deemed to supply the applicable exclusive remedy, and Employer was found to be liable thereunder. SWIF denied coverage, alleging Employer’s policy was lapsed at the time of Claimant’s injury. Thereafter, Claimant filed an Uninsured Employers Guaranty Fund (UEGF) claim petition, asserting the fund’s liability in the event he prevailed, and Employer was deemed uncovered by SWIF and failed to pay. The Workers’ Compensation Appeals Board (WCAB) found that as a land-based employee, Claimant did not meet the definition of seaman under the Jones Act and was, therefore, entitled to pursue his workers’ compensation claim. The issue this case presented for the Pennsylvania Supreme Court's review was one of first impression: the right of an insurer to subrogation under the WCA. The Supreme Court concluded Insurer’s Commercial Hull Policy did not cover Claimant, because Claimant was not a “seaman” or crew member. The WCA’s exclusive remedy applied, but Insurer was seeking subrogation for payment it made on a loss it did not cover. "[T]he 'no-coverage exception' to the general equitable rule precluding an insurer from pursuing subrogation against its insured comports with the purposes and public policy supporting the rule and hereby adopt it as the law of this Commonwealth. ... any equitable rule precluding an insurer from seeking subrogation against its insured is best tempered by the exception adopted herein today." View "Arlet v. WCAB (L&I)" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Depositors Insurance Company in its declaratory judgment action to determine any obligation it had relative to Patrick Sandidge pursuant to Ridley v. Guaranty National Insurance Co., 951 P.2d 987 (Mont. 1997), holding that the district court did not err.Specifically, the Supreme Court held that the district court (1) did not err by holding a hearing on the parties' cross-motions for summary judgment; (2) did not err by holding that Depositors had standing to bring a declaratory action pursuant to Ridley; (3) did not err by granting Depositors' motion for summary judgment; and (4) did not abuse its discretion by denying Sandidge attorney fees and costs. View "Depositors Insurance Co. v. Sandidge" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the circuit court's grant of summary judgment in favor of State Farm Mutual Automobile Insurance Company and instead granting summary judgment in favor of Elliot Brey, holding that Wis. Stat. 632.32(2)(d) does not bar an insurer from requiring that an insured sustain bodily injury or death in order to trigger underinsured (UIM) coverage under an automobile liability insurance policy.The circuit court determined (1) the State Farm automobile liability insurance policy issued to Brey's mother and her husband did not provide uninsured motorist (UIM) coverage to Brey for the death of his father in an automobile accident because Brey was an insured under the policy but his father was not; and (2) Brey could not recover under the policy because he did not sustain bodily injury. The court of appeals reversed, concluding that sections 632.32(1) and (2)(d) bar an insurer from limiting UIM coverage to only those insureds who sustain bodily injury or death. The Supreme Court reversed, holding that section 632.32(2)(d) does not require insurers to extend UIM coverage to an insured for bodily injury or death suffered by a person who was not insured under the policy. View "Brey v. State Farm Mutual Automobile Insurance Co." on Justia Law

Dorothy Wright and her grandchildren (collectively, the “Decedents”) were killed when their vehicle was struck by a stolen vehicle that was being chased by College Park Police Department officers. At the time of the accident, the City of College Park had an insurance policy provided by Atlantic Specialty Insurance Company (“Atlantic”), which provided coverage for negligent acts involving the City’s motor vehicles up to $5,000,000 but also included immunity endorsements which said that Atlantic had no duty to pay damages “unless the defenses of sovereign and governmental immunity are inapplicable.” Plaintiffs filed suit against the City, raising claims of negligence and recklessness resulting in the wrongful deaths of the three Decedents, to which the City raised sovereign immunity as a defense. Plaintiffs claimed the insurance policy limit was $5,000,000 for the three deaths, while Atlantic contended the policy limit was capped at $700,000 under the relevant statutory scheme and the terms of the City’s policy. As the parties agreed, pursuant to OCGA 36-92-2 (a)(3), the sovereign immunity of local government entities was automatically waived up to $700,000 in this instance, regardless of whether the City had a liability insurance policy. Atlantic intervened in the case to litigate the limit of the insurance policy. The trial court ruled that the policy limit is $5,000,000, and the Court of Appeals affirmed. The Georgia Supreme Court then granted Atlantic’s petition for certiorari to decide whether the City’s insurance policy waived the City’s sovereign immunity under OCGA 36-92-2 (d)(3). The Supreme Court concluded the Court of Appeals incorrectly ruled that the City’s insurance policy increased the sovereign immunity waiver notwithstanding the immunity endorsements, which expressly precluded coverage when a sovereign immunity defense applies. Judgment was therefore reversed. View "Atlantic Specialty Insurance Co. v. City of College Park, et al." on Justia Law

In 2013, Vercellino was injured in an accident while riding on an ATV operated by his friend, Kenney. Both were minors. Vercellino was a covered dependent on his mother’s insurance plan. The plan is self-funded, so ERISA, 29 U.S.C. 1001, preempted state law. The Insurer paid nearly $600,000 in medical expenses and did not exercise its right to seek recovery in subrogation from Kenney or Kenney’s parents during the applicable statutory period, nor did Vercellino’s mother ever file suit to recover medical expenses from the Kenneys. In 2019, Vercellino, then an adult, filed suit against the Kenneys seeking general damages and sought declaratory judgment that the Insurer would have no right of reimbursement from any proceeds recovered in that litigation. The Insurer counterclaimed, seeking declaratory judgment that it would be entitled to recover up to the full amount it paid for Vercellino’s medical expenses from any judgment or settlement Vercellino obtained.The Eighth Circuit affirmed summary judgment for the Insurer. The plain language of the plan at issue here is unambiguous: the Insurer is entitled to seek reimbursement for medical expenses arising out of the ATV accident paid on Vercellino’s behalf from any judgment or settlement he receives in his litigation with Kenney. View "Vercellino v. Optum Insight, Inc." on Justia Law