Justia Insurance Law Opinion Summaries

After suffering two work-related injuries, Sheree Cleveland settled her workers’ compensation claims with Advance Auto Parts and its workers’ compensation insurance carrier, Indemnity Insurance Company of North America. The Workers’ Compensation Commission approved the settlement. Approximately one month later, the Employer/Carrier filed a Form B-31 indicating the last payment had been made. More than a year after that, Cleveland filed a motion asserting that the Employer/Carrier had not paid all compensation due under the settlement and that two medical bills remained outstanding. The Commission found that, because a one-year statute of limitations had expired, it lacked jurisdiction to enforce its order approving the settlement agreement. Cleveland appealed, and the Court of Appeals reversed, questioning whether the one-year statute of limitations applied to the claim. But instead of answering that question, the Court of Appeals found that the Employer/Carrier had been estopped from asserting a statute of limitations defense because it had agreed to pay the outstanding bills and had represented to the administrative law judge that it would do so. Further, the Court of Appeals also found Cleveland's contact with the Employer/Carrier within the limitations period tolled the statute of limitations, if, in fact, it applied. The Mississippi Supreme Court affirmed, but for different reasons than the appellate court. The Supreme Court determined the statute of limitations did not apply to Cleveland's motion for enforcement of the settlement order, therefore, her motion was timely filed. View "Cleveland v. Advance Auto Parts" on Justia Law

The Louisiana Supreme Court granted this writ application to determine whether “collectibility” was a relevant consideration in a legal malpractice action. Specifically, the issue presented was whether plaintiff’s damages in this legal malpractice action were limited to the amount she could have actually collected on a judgment against the tortfeasor in the underlying lawsuit. Elaine Ewing was injured in an automobile accident in 2015, when her vehicle was hit by a vehicle driven by Marc Melancon. Her counsel failed to forward the original petition for damages within seven days as required by La. R.S. 13:850. The original petition was filed on April 22, 2016, after the one-year prescriptive period had passed. Ms. Ewing’s suit was dismissed on an exception of prescription. Ms. Ewing subsequently filed a legal malpractice action against her attorney and Westport Insurance Corporation, counsel's malpractice insurer. Defendants filed a motion for partial summary judgment asserting the court should apply the “collectibility rule.” Defendants alleged Ms. Ewing’s recovery could be no greater than her potential recovery in the underlying personal injury lawsuit, and recovery in this case should have been capped at Mr. Melancon’s insurance policy limits. The Supreme Court held that proof of collectibility of an underlying judgment was not an element necessary for a plaintiff to establish a claim for legal malpractice, nor could collectibility be asserted by an attorney as an affirmative defense in a legal malpractice action. View "Ewing v. Westport Ins. Co., et al." on Justia Law

Appellants ACW Corporation (a.k.a. Arby’s, (Arby’s)) and Eastern Alliance Ins. Co., as Subrogee of Shanara Devon Waters (“Waters”), appealed the grant of summary judgment in favor of Appellees, Christopher Maxwell (“Maxwell”) and Donegal Mutual Ins. Co. (a.k.a. Donegal Ins. Group). Eastern Alliance was Arby’s’ workers’ compensation carrier. It paid Waters, an Arby’s employee, a $12,500 commuted, lump-sum workers’ compensation benefit to settle her workers’ compensation claims for injuries she received in a work-related motor vehicle accident caused by Maxwell. Arby’s and Eastern Alliance then brought this suit against Maxwell and his auto insurer, Donegal, under 19 Del. C. 2363, claiming that they were entitled to recover the $12,500 lump-sum payment from them. Maxwell and Donegal denied liability, though they acknowledged that under the Workers’ Compensation Act Arby’s and Eastern Alliance could assert a claim against Maxwell for damages that Waters would be entitled to recover against Maxwell in an action in tort. They argued, however, that Maxwell was not liable for the lump-sum payment because it was a settlement of potential or future workers’ compensation claims and did not include any damages that Waters would have been entitled to recover against Maxwell in an action in tort. Arby’s and Eastern Alliance argued that 19 Del. C. 2363(e) allowed them to recover from Maxwell “any amounts paid or payable [to Waters] under the Workers’ Compensation Act” in connection with the Maxwell accident, and that the lump-sum benefit was an amount paid to Waters under the Act. The Superior Court agreed with Maxwell, and after finding that Arby’s and Eastern Alliance failed to offer evidence that any of the $12,500 lump-sum benefit was for damages which Waters would be able to recover in a tort action against Maxwell, granted summary judgment in Maxwell’s and Donegal’s favor. Finding no reversible error in that judgment, the Delaware Supreme Court affirmed. View "ACW Corporation v. Maxwell" on Justia Law

Defendants D.R.J. and his mother, Dana Sides, petitioned the Alabama Supreme Court for a writ of mandamus to direct the Circuit Court to vacate two orders holding that a pro tanto release executed in their favor was void, thus restoring them as defendants in the underlying lawsuit. Kathy and Barry King sued D.R.J. and Sides seeking damages for injuries the Kings sustained as a result of an automobile accident allegedly caused by D.R.J.'s negligence in driving Sides' vehicle. D.R.J. was a minor at the time of the accident. Defendants and their insurer, Alfa Mutual Insurance Company, offered to settle the Kings' claims for $95,000. Counsel for the Kings notified their insurer, State Farm, of the settlement offer, preserving its subrogation rights against defendants. State Farm responded by offering the Kings $25,000 to settle the UIM claim, which the Kings rejected. The Kings then accepted the $95,000 settlement offer without State Farm's consent, expressly reserving their UIM claim against State Farm. The Kings then moved to dismiss all claims against defendants, and the trial court entered an order dismissing defendants with prejudice. When State Farm learned of the pro tanto release, it moved the trial court for summary judgment, arguing the Kings forfeited their rights to UIM benefits by executing the pro tanto release without its consent. The trial court found State Farm validly objected to the Kings' settlement, made no ruling on State Farm's motion, and declared the pro tanto release void, thus restoring the "status quo" of the case. Defendants argued the trial court should have granted State Farm's motion and ended the litigation. The Supreme Court determined defendants' situation was not one in which they had a clear legal right to relief sought but the trial court refused to grant. They thus had not met their burden for the issuance of a writ of mandamus, and the Court denied their petition. View "Ex parte D.R.J." on Justia Law

In October 2015, Amy Downing purchased a life insurance policy from Country Life Insurance Company. She purchased both an “executive whole life” policy that would pay a flat amount of $500,000 to her beneficiaries upon her death and a “Paid-Up Additions Rider” (PUAR) that provided an additional death benefit and an investment opportunity. Although Amy's father Tom worked for Country, another employee, Robert Sullivan, met with Amy and Tom to describe the terms of the policy. Amy asked Sullivan why she needed one and a half million dollars in insurance coverage because it was a larger benefit than she expected to need and it required higher yearly premiums. Sullivan explained that although she might not need the large death benefit, the structure of the PUAR provided an investment opportunity because it maximized the policy’s cash value. Sullivan later testified that he never represented to Amy that the death benefit associated with the PUAR was a flat amount. After paying the premiums for a year, Amy informed her parents that she intended to abandon the policy and withdraw its existing cash value. Her mother Kathleen decided to look into the policy as an investment. Kathleen decided to take over payment of the premiums on Amy’s life insurance policy, including the PUAR, as an investment. With Tom’s assistance, Amy assigned her policy to Kathleen. Four months later, on January 27, 2017, Amy died in an accident. Her death occurred in the second year of her policy coverage. Country paid the death benefit of $500,000 on Amy’s whole life policy. Country also paid $108,855 on Amy’s PUAR. Kathleen sued, alleging that she was entitled to $1,095,741 on Amy’s PUAR, minus the $108,855 already paid. Judgment was rendered in favor of Country, and Kathleen appealed. The Alaska Supreme Court determined the superior court did not err in its interpretation of the insurance policy at issue, and affirmed the decision. View "Downing v. Country Life Insurance Company" on Justia Law

In this insurance dispute stemming from a fatal car collision, the Supreme Court vacated the judgment of the trial court granting summary judgment in favor of Insurer, holding that the decedent's estate was entitled to summary judgment on the issues of whether the decedent was an "insured person" and the availability of $25,000 in further UIM coverage under the decedent's parents' Allstate policy.Shelina Glover died in a car accident. The insurers of the two responsible drivers paid policy limits, and Glover's estate received separate settlements for underinsured-motorist (UIM) coverage from Glover's own carrier and from that of Glover's husband, who was driving the vehicle on the day of the accident. The Estate requested further UIM coverage under Glover's parents' Allstate policy. The trial court granted summary judgment for Allstate, concluding that the policy's offset and anti-stacking provisions barred the Estate from recovery because the amount the Estate received from other insurers exceeded the limits under the policy. The Supreme Court vacated the judgment, holding (1) Glover was an "insured person" under the policy; and (2) the Estate's UIM settlements were not offset against the policy's UMI limit, and therefore, the Estate had an additional $25,000 UIM coverage available to it under the Allstate policy. View "Glover v. Allstate Property & Casualty Insurance Co." on Justia Law

In this insurance coverage dispute, the First Circuit vacated the decision of the district court holding that United Rentals, Inc. was entitled to defense costs from Scottsdale Insurance Company as an additional insured and that the Scottsdale policy afforded additional insured coverage to United Rentals for its direct and vicarious liability but that this coverage was excess above United Rentals' own coverage under its policies with ACE American Insurance Company, holding that the district court erred in part.Gomes Services, Inc. contracted with United Rentals to rent an electric boom lift. While operated by a Gomes employee, the lift struck and injured Guy Ayotte. Ayotte sued United Rentals and Gomes. At the time of the accident, Gomes was insured by Scottsdale under a policy that extended coverage to any party that Gomes was required by written contract to add as an "additional insured." United Rentals requested that Scottsdale defend and indemnify United Rentals. After the district court made its ruling both parties appealed. The First Circuit held (1) Scottsdale had a duty to indemnify United Rentals in the Ayotte action for both its direct and vicarious liability; and (2) United Rentals' relevant policies did not qualify as "valid and collectible insurance," and therefore, the Scottsdale policy afforded coverage to United Rentals. View "Scottsdale Insurance Co. v. United Rentals, Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the ruling of the trial court granting summary judgment for Insurer on Plaintiff's action seeking a declaration that Insurer was obligated to prove underinsured motorist (UIM) benefits under the terms of a commercial policy, holding that Plaintiff was not covered under the terms of the commercial UIM policy in this case.Plaintiff was a member of an LLC that bought a commercial automobile insurance policy from Insurer. Insurer included UIM coverage for the LLC's vehicles. Plaintiff was walking through the parking lot of a store where she had just purchased items for the LLC and was struck by an automobile. The driver of the vehicle was an underinsured motorist. Plaintiff submitted a UIM claim to Insurer. After Insurer denied the claim Plaintiff filed this declaratory action. The trial court granted summary judgment for Insurer, and the court of appeals affirmed. The Supreme Court affirmed, holding that the trial court correctly found there were no issues as to any material fact and that Insurer was entitled to judgment as a matter of law. View "Metzger v. Auto-Owners Insurance Co." on Justia Law

Kathleen Hendrix ("Hendrix"), as administratrix of the estate of Kenneth Morris Hendrix, deceased, appeals a circuit court judgment dismissing Hendrix's medical-malpractice wrongful-death claim against United Healthcare Insurance Company of the River Valley ("United"). Kenneth, who was covered by a health-insurance policy issued by United, died after United refused to pay for a course of medical treatment recommended by Kenneth's treating physician. The trial court determined that Hendrix's claim was preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), because the claim "relate[s] to" the ERISA-governed employee-benefit plan pursuant to which United had issued Kenneth's health-insurance policy. In October 2015, Kenneth was injured in an automobile accident. His physician recommended Kenneth be admitted to an inpatient-rehabilitation facility. Hendrix claimed United "imposed itself as [Kenneth's] health care provider, took control of [Kenneth's] medical care, and made a medical treatment decision that [Kenneth] should not receive further treatment, rehabilitation, and care at an inpatient facility." Instead, Hendrix contended United made the decision Kenneth should have been discharged to his home to receive a lower quality of care than had been ordered by his physicians. Kenneth died on October 25, 2015, due to a pulmonary thromboembolism, which, the complaint asserts, would not have occurred had United approved inpatient rehabilitation. The Alabama Supreme Court concurred with the circuit court that Hendrix's claim related to an ERISA-governed benefit plan, and thus preempted by the ERISA statute. View "Hendrix v. United Healthcare Insurance Company of the River Valley" on Justia Law

The Alabama Supreme Court granted Mid-Century Insurance Company permission to appeal the denial of its motion for a partial summary judgment in an action seeking underinsured-motorist benefits filed by Rodney Watts, as the personal representative of the estate of his wife Leiah Watts, deceased, and others (collectively, "the Watts plaintiffs"). In 2016, Leiah Watts, Caiden Watts, Jackson Watts, Faye Howard, Mary Adair, Evelyn Watts, Tammy McBurnett, Renee Stone, and Victoria Stone were traveling in a 2014 Ford Expedition sport-utility vehicle when it was struck by a vehicle driven by Wiley "Pete" Whitworth. The collision killed Leiah Watts, Faye Howard, Mary Adair, and Evelyn Watts. Tammy McBurnett, Renee Stone, Caiden Watts, Jackson Watts, and Victoria Stone suffered serious injuries in the collision. The Watts vehicle was insured by a policy of insurance issued by Farmers Insurance Exchange to Rodney Watts, underwritten by Mid-Century. Mid-Century contended that, because the policy allowed for the stacking of up to three UIM coverages, the maximum amount of UIM benefits available under the policy for the accident in this case was $300,000, based on $100,000 per accident. The Watts plaintiffs contended that each of the nine occupants of the Watts vehicle involved in the accident (or his/her personal representative) was entitled to $150,000 in UIM benefits ($50,000 per person limit of the occupied vehicle plus the per person limit of $50,000 for two additional coverages under the stacking provision of the policy). Thus, the total sought by Rodney in UIM benefits was $1,350,000 (9 x $150,000). The case was removed to federal district court, and the federal court granted Mid-Century's motion to dismiss in part, granting the motion as to fraud claims as to Farmers Insurance Exchange and Mid-Century. The court dismissed without prejudice claims of breach of contract and bad faith on ripeness grounds. The Alabama Supreme Court determined the Watts plaintiffs were unable to stack more than three coverages under the uninsured-motorist statute and insurance policy, and the fact that they could not do so did not render the coverage under the policy illusory. The Court reversed the trial court's order denying Mid-Century's motion for a partial summary judgment as to the UIM claim and remanded the case for further proceedings. View "Mid-Century Insurance Company v. Watts" on Justia Law