Justia Insurance Law Opinion Summaries

VIM opened its Elkhart wood recycling facility around 2000. By 2009 1,025 neighbors filed a class-action lawsuit, describing VIM’s site as littered with massive, unbounded outdoor waste piles and alleging that VIM processed old, dry wood outside, which violated environmental regulations; constituted an eyesore; attracted mosquitos, termites, and rodents; posed a fire hazard; and emitted dust and other pollution. Many neighbors alleged health problems. In the meantime, VIM acquired general commercial liability policies, running from 2004-2008, that obligated Westfield to pay up to $2 million of any judgments against VIM for “property damage” or “bodily injury.” Each policy required VIM “as soon as practicable” to notify Westfield of any occurrence or offense that “may result in” a claim. Upon the filing of a claim, the policies required that VIM to provide written notice. There were three separate lawsuits over the course of 10 years. VIM sometimes successfully fended off the claims but sometimes did nothing, resulting in a $50.56 million default judgment. In a garnishment action, the Seventh Circuit affirmed summary judgment for Westfield. The neighbors cannot credibly claim that VIM was unaware of the injuries before 2004 or that they would not reasonably have expected them to continue through 2008, so the notice requirements applied. Westfield only found out about the case from its own lawyer in 2010, while it was on appeal. View "Greene v. Westfield Insurance Co." on Justia Law

This matter went before the Alabama Supreme Court on consolidated appeals stemming from an action filed by Nancy Hicks for injuries sustained in an automobile accident. Hicks appealed when the trial court denied her motion for a new trial. Allstate Insurance Company ("Allstate") cross-appealed, challenging the trial court's denial of its motion for a partial judgment as a matter of law on the issue of causation of Hicks's injuries. By refusing to allow the jury to consider the mortality table, the trial court hindered the jury's ability to determine the appropriate amount of damages to which Hicks was entitled in a trial in which the only issue was the amount of damages. Because the trial court erroneously determined that the mortality table could not be admitted into evidence, the trial court's denial of Hicks's motion for a new trial was reversed. Because of the Court's holding on this issue, it pretermitted discussion of Hicks's other argument in support of her request for a new trial, namely that the trial court erred by not giving the requested jury instructions on permanent injuries and on the use of mortality tables. Because Allstate did not properly preserve for appellate review its motion for a partial judgment as a matter of law of the issue of causation underlying Hicks's claim, the trial court's denial of that motion was affirmed. The matter was remanded for further proceedings. View "Allstate Insurance Company v. Hicks" on Justia Law

Rochelle Frett was injured when she slipped and fell at her place of employment during a scheduled lunch break. She filed a claim for benefits under the Workers’ Compensation Act, but the State Board of Workers’ Compensation denied her claim. Frett appealed, and the superior court upheld the denial of her claim. Frett then appealed the decision of the superior court, and the Court of Appeals affirmed. Relying on Ocean Acc. & Guar. Corp. v. Farr, 178 SE 728 (1935), the Court of Appeals held that Frett suffered no injury compensable under the Act because she sustained her injury during a scheduled break, and her injury, therefore, did not arise out of her employment. The Georgia Supreme Court issued a writ of certiorari to reconsider Farr and reviewed the decision of the Court of Appeals in this case. The Supreme Court overruled Farr, and reversed the decision below. View "Frett v. State Farm Employee Workers Compensation" on Justia Law

David Turner appealed the grant of summary judgment entered in favor of State Farm Mutual Insurance Company. In August 2017, Turner was on duty as a paramedic and was riding in the passenger seat of an ambulance while responding to an emergency call. While traversing an intersection, the ambulance collided with a vehicle being driven by Michael Norris. Turner suffered multiple injuries, including a broken leg. In November 2017, Turner sued Norris, asserting claims of negligence and "recklessness." Norris answered the complaint, denying that he had been negligent or reckless. Because the Alabama Supreme Court Held that State Farm was discharged from its obligation to pay Turner UIM benefits based on State Farm's payment of a "Lambert" advance and Turner's repudiation of his policy with State Farm, the Court pretermitted consideration of Turner's alternative argument regarding State Farm's failure to disclose the substance of its investigation of Turner's claim for UIM benefits, and expressed no opinion concerning that issue. The Court also expressed no opinion regarding any potential liability State Farm may or may not have to Turner in tort because Turner did not assert such a claim in this action. View "Turner v. State Farm Mutual Insurance Company" on Justia Law

New Jersey Transit Corporation (New Jersey Transit) sought to recover workers’ compensation benefits paid to an employee, David Mercogliano, who sustained injuries in a work-related motor vehicle accident. It sued the individuals allegedly at fault in the accident, defendants Sandra Sanchez and Chad Smith, pursuant to N.J.S.A. 34:15-40, a provision of the Workers’ Compensation Act that authorized employers and workers’ compensation carriers that have paid workers’ compensation benefits to injured employees to assert subrogation claims. The issue this case presented for the New Jersey Supreme Court's review was whether that subrogation action was barred by the Auto Insurance Cost Recovery Act (AICRA). The trial court granted defendants’ motion, ruling that New Jersey Transit could not assert a claim based on economic loss. It noted that N.J.S.A. 39:6A-2(k) defined economic loss for purposes of AICRA to mean “uncompensated loss of income or property, or other uncompensated expenses, including, but not limited to, medical expenses.” In the trial court’s view, because New Jersey Transit’s workers’ compensation carrier paid benefits for all of Mercogliano’s medical expenses and lost income, he had no “uncompensated loss of income or property,” and thus sustained no economic loss for purposes of AICRA. The trial court relied on Continental Insurance Co. v. McClelland, 288 N.J. Super. 185 (App. Div. 1996), and policy considerations in reaching its decision. The Appellate Division reversed that judgment, agreeing with New Jersey Transit that its subrogation action arose entirely from “economic loss comprised of medical expenses and wage loss, not noneconomic loss.” However, it rejected the trial court’s view that an employer’s or workers’ compensation carrier’s subrogation claim based on benefits paid for economic loss contravened AICRA’s legislative intent. Finding no error in the appellate court's judgment, the New Jersey Supreme Court affirmed. View "New Jersey Transit Corporation v. Sanchez" on Justia Law

In this case involving the collusive fraud of an insured and the driver of the other car involved in a car crash the Supreme Court adopted an exception to the eight-corners rule to determine the liability insurer's duty to defend, holding that courts may consider extrinsic evidence regarding whether the insured and a third party suing the insured colluded to make false representations of fact for the purpose of securing a defense and coverage.Osbaldo Hurtado Avalos and Antonio Hurtado (collectively, the Hurtados) sued Karla Guevara after the car accident and sought coverage from Loya Insurance Company (Insurer). Insurer furnished an attorney to defend Guevara, but when Insurer discovered that Guevara and the Hurtados had lied to secure coverage Insurer denied both a defense and coverage. The trial court rendered judgment against Guevara, who assigned to the Hurtados her rights against Insurer. Hurtados then filed suit against Insurer. The trial court granted summary judgment for Insurer. The court of appeals reversed, holding that Insurer had duty to defend under the eight-corners rule. The Supreme Court reversed, holding that the trial court (1) correctly considered extrinsic evidence regarding whether Guevara and the Hurtados colluded to secure a defense and coverage; and (2) correctly determined that the evidence conclusively showed collusive fraud. View "Loya Insurance Co. v. Avalos" on Justia Law

The Supreme Court granted Petitioners' petitions for extraordinary relief in part and denied the petitions in part, holding that intervention after final judgment is impermissible under Nev. Rev. Stat. 12.130 and that an action that reached final judgment has no pending issues and, therefore, consolidation is improper.In 2007, Gary Lewis struck Cheyenne Nadler in an automobile accident. When Lewis and his insurer, United Automobile Insurance Company (UAIC), failed to defend Nalder's tort action, a default judgment was entered. In 2018, Nadler attempted to collect on the judgment through a new action. UAIC moved to intervene in and consolidate the 2007 case and the 2018 action. The district court granted the motions. The Supreme Court held (1) the district court erred in granting intervention in the 2007 action because a default judgment had been entered, but the court properly granted intervention in the 2018 action because a final judgment had not yet been entered; (2) the district court improperly consolidated the two cases; and (3) the district court properly vacated a judgment erroneously entered by the district court clerk when a stay was in effect. View "Nalder v. Eighth Judicial District Court" on Justia Law

Progressive Northwestern Insurance filed suit to obtain a declaratory judgment that it had not violated any duty to its insureds in the defense of a wrongful-death suit. The underlying suit had been brought in 2013 by Gabriel Gant against Justin Birk; his parents, Edward and Linda; and the Birks’ family company, Birk Oil. The suit alleged that Justin had negligently killed Kathyrn Gant (Gabriel’s wife) in a car accident; that his parents were liable because they had negligently entrusted the vehicle to him; and that Birk Oil was liable under the doctrine of respondeat superior because Justin was driving the vehicle incidental to his employment by the company. Gant’s attorneys estimated damages of many million dollars, which far exceeded defendants’ insurance coverage. Defendants had assets from which Gant could have collected additional money on a judgment against them, but his attorneys apparently thought that a better way to collect a large judgment would be if defendants had a claim against Progressive for not representing them properly and exposing them to a judgment far exceeding their insurance coverage. Accordingly, shortly before trial Gant entered into an agreement with the Birks in which Gant promised not to execute any judgment against the Birks, and in exchange the Birks assigned to Gant their rights to the policy limits under the Progressive and corporate insurance policies, and any claims the Birks had against Progressive for breach of contract, negligence, or bad faith. After a bench trial, Gant was awarded $6.7 million in damages. Progressive then brought this declaratory-judgment action and Gant counterclaimed, arguing that Progressive: (1) breached its duty to discover and disclose the corporate insurance policy; (2) was negligent in hiring attorney Kevin McMaster to defend the suit; and (3) was vicariously liable for McMaster’s conduct. The district court granted summary judgment in favor of Progressive on its claim and the counterclaims. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Progressive Northwestern Ins v. Gant" on Justia Law

In 2005, a van containing six family members van slipped off the edge of an Illinois roadway. In the ensuing rollover crash, everyone was hurt; one passenger died. The crash occurred in a construction zone; a guardrail had been removed and not replaced. All lines had not been repainted on the repaved road, and pieces of asphalt lay on the shoulder. In a suit against the construction companies, the defense attorney told the plaintiffs that the two companies were operating as a joint venture with a $1 million liability insurance policy. The parties settled for $1 million. Plaintiffs signed a release of all claims that stated the plaintiffs agreed they were not relying on any statements by any parties’ attorneys. Four years later, the plaintiffs discovered that the companies carried separate liability policies.The district court ruled as a matter of law that the failure to identify the individual policies violated FRCP 26; that the undisclosed policies would have covered plaintiffs’ claims; and no joint venture agreement existed under Illinois law, so joint venture exclusions in the individual policies were inapplicable. A jury awarded damages of $8,169,512.84 for negligent misrepresentation. The Seventh Circuit reversed. The district court erred in allowing plaintiffs to rely on a Federal Rule of Civil Procedure for a duty of care; in deciding, before trial, that plaintiffs reasonably relied on the insurance disclosures; and in excluding the defense’s expert testimony on liability and settlement value. View "Turubchuk v. Southern Illinois Asphalt Co., Inc." on Justia Law

At issue in this appeal was whether the alleged conduct of an insured, Harold McCutcheon, Jr. (McCutcheon), as described in a personal injury lawsuit filed against his estate by Richard Carly, obligated McCutcheon’s insurer, appellant Erie Insurance Exchange (Erie) to defend the estate against Carly’s complaint. In 2013, McCutcheon broke into the home of his ex-wife, Terry McCutcheon, in order to shoot and kill her, and then kill himself. He communicated these intentions in a note he left for his adult children. McCutcheon succeeded in executing this plan, first shooting and killing Terry and, eventually, shooting and killing himself. However, after McCutcheon killed Terry but before he killed himself, Carly arrived on the scene. Carly, who had been dating Terry, approached the front door of her home, rang the doorbell and received no answer. Carly became concerned, placed his hand on the doorknob “in order to enter and the door was suddenly pulled inward by [McCutcheon] who grabbed [Carly] by his shirt and pulled him into the home.” McCutcheon was “screaming, swearing, incoherent, and acting ‘crazy.’” Then, “a fight ensued between the two and at the time, [McCutcheon] continued to have the gun in his hand” which he apparently had used to kill Terry. During this “struggle” between the two men, McCutcheon was “knocking things around, and in the process [he] negligently, carelessly, and recklessly caused the weapon to be fired which struck [Carly] in the face,” causing severe injuries. In addition, “other shots were carelessly, negligently and recklessly fired” by McCutcheon, “striking various parts of the interior of the residence and exiting therefrom.” Carly filed suit against McCutcheon’s estate, and the estate — administered by McCutcheon’s adult children — sought coverage of the lawsuit under two insurance policies issued by Erie to McCutcheon: the Erie Insurance Home Protector Policy (homeowner’s policy) and the Erie Insurance Personal Catastrophe Liability Policy (personal catastrophe policy). The Pennsylvania Supreme Court held Carly’s allegations were sufficient to trigger Erie’s duty to defend, and accordingly, affirmed the superior court's order. View "Erie Ins. v. Moore, et al" on Justia Law