Justia Insurance Law Opinion Summaries

Plaintiff-Appellant Luzetta Murphy-Sims appealed after a jury ruled in favor of Defendant-Appellee Owners Insurance Company (Owners) on her complaint against Owners' insured stemming from a car accident. The insured was at fault; Murphy-Sims maintained that she suffered extensive injuries, and consequently incurred significant medical costs, as a result of the accident. In February 2014, she sent Owners a letter demanding settlement claiming $41,000 in medical expenses. Owners timely replied with a request for more information. When Murphy-Sims failed to reply, Owners sent two additional follow-up requests. Finally, in June 2014, Murphy-Sims provided Owners with some of the requested information. It did not offer a settlement payment in response. In July 2014, Murphy-Sims sued the insured. The parties agreed roughly three weeks later to enter into a Nunn agreement, which bound the matter over to binding arbitration. The arbitrator awarded Murphy-Sims approximately $1.3 million and judgment was entered against the insured. Pursuant to the agreement, Murphy-Sims did not execute on the judgment. In March 2016, Murphy-Sims, standing in the insured's shoes as permitted under the Nunn agreement, filed the underlying lawsuit against Owners in state district court, claiming Owners breached its contract with Switzer and had done so in bad faith. Owners removed the suit to federal court and the case proceeded to trial. The jury ultimately found that Owners did not breach its contract with the insured, thereby declining to award $1.3 million in damages to Murphy-Sims. The jury did not reach the bad faith claim having been instructed that it need not be reached in the absence of a breach of contract. After review of Murphy-Sims arguments on appeal, the Tenth Circuit determined the district curt committed no reversible error, and affirmed its judgment. View "Murphy-Sims v. Owners Insurance Company" on Justia Law

The Supreme Court answered in the negative a question certified to it by a federal district court regarding tension in case law between an insurer's duty to a third-party claimant and its duty to its insured.As a result of an accident caused by High County Paving, Inc., one person died and another was critically injured. United Fire & Casualty Co., High County's insurer, advance-paid the medical expenses of the injured parties prior to a final settlement. High County argued that any further payments to the injured parties without obtaining a release for High County would violate United Fire's duties to High Country, as general damages are not a type of damages that are required to be advance-paid to an injured third party. United Fire argued it was required to tender a payment of policy limits to the injured parties without a release for High Country because total damages exceeded policy limits. The Supreme Court held that an insurer does not breach its duty to its insured when it pays policy limits to an injured third party, without a release for its insured, after a motor vehicle accident when both liability for the accident is reasonably clear and it is reasonably clear that total damages caused by the insured exceed policy limits. View "High Country Paving v. United Fire & Casualty Co." on Justia Law

In September 2014, a driver was rear-ended by an SUV driven by a Union Pacific employee. The motorist lost control of her car, spinning off the freeway and onto the dirt shoulder, where it struck a roadside light pole. The light pole, which was manufactured by Ameron Pole Products, was designed to “break away” on impact, causing the pole to pass over the impacting vehicle, thereby reducing the force of the collision and concomitant risk of injury. On this occasion, however, the light pole did not break away, but instead remained standing. The driver sustained multiple injuries, including skull fractures, injuries to her brain and face, a fracture of the right scapula, and bilateral chest trauma. The driver sued Union Pacific Railroad Comapny and Ameron. Union Pacific cross-complained against Ameron for equitable indemnity and apportionment. Ameron moved for summary judgment, arguing the driver would be unable to prove causation as a matter of law. Union Pacific opposed the motion, arguing Ameron failed to carry its initial burden or showing judgment as a matter of law. Alternatively, Union Pacific argued the evidence submitted raised triable issues of fact as to whether Ameron’s negligence was a substantial factor in causing the driver’s injuries. The trial court entered judgment in Ameron’s favor. The Court of Appeal reversed, concurring with Union Pacific’s alternate grounds. Summary judgment was reversed and the matter remanded for further proceedings. View "Union Pacific Railroad Co. v. Ameron Pole Products LLC" on Justia Law

Deena Wood was seriously injured in a car collision. At the time of the collision, Wood had auto insurance through Farmers Insurance Company of Idaho, which included $100,000 of underinsured motorist ("UIM") coverage but also contained a provision stating that the amount of coverage would be reduced by the liability limit of the at-fault driver. Because the at-fault driver’s bodily injury liability limit was equal to Wood’s underinsured motorist limit, Farmers determined that no underinsured benefits were owed to Wood. Wood challenged the denial in district court, arguing in a motion for reconsideration that the offset provision should be declared void as against public policy because it “diluted” UIM coverage. The district court rejected Wood’s argument. Finding no reversible error, the Idaho Supreme Court affirmed the district court’s decision. View "Wood v. Farmers Insurance Co of Idaho" on Justia Law

In 2014, Brian Shotts was injured in a car accident caused by Dana Pollard. Shotts was insured under a policy issued by GEICO General Insurance Company (“GEICO”), which included underinsured motorist (“UM”) coverage. Pollard had automobile insurance through Farmers Insurance (“Farmers”). Shotts filed a claim with Farmers, which offered Pollard’s policy limits as settlement. Before accepting the offer, Shotts notified GEICO of the accident. GEICO opened a claim, assigned an adjuster, and began an investigation. GEICO also waived its subrogation rights, allowing Shotts to accept the offer from Farmers. GEICO’s investigation determined that Shotts’s injuries exceeded Pollard’s policy limits by $3,210.87. GEICO offered Shotts a settlement of that amount, but Shotts declined the offer as “unreasonably low.” Shotts demanded GEICO promptly “pay the first dollar of his claim, up to the value of [the] claim or the total available UM limits” of $25,000. He also asked GEICO to reevaluate the offer. In response, GEICO requested additional information about Shotts’s injuries. It then proposed a peer review to determine whether his injuries exceeded the $3,210.87 offer. Shotts sued for bad faith breach of contract, alleging that GEICO acted in bad faith by: (1) conducting “a biased and unfair investigation and evaluation of [his] claim”; and (2) failing to pay the full value of his claim. He also requested punitive damages. The district court granted summary judgment for GEICO on both bad faith claims and denied punitive damages. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Shotts v. GEICO" on Justia Law

Dow Corning Corporation, Dow Corning Alabama, Inc., Rajesh Mahadasyam, Fred McNett, Zurich American Insurance Company, and National Union Fire Insurance Company of Pittsburgh, Pa., petitioned the Alabama Supreme Court for a writ of mandamus to direct the trial court to vacate an order, entered in a declaratory-judgment action, requiring disclosure of what the petitioners contended was information protected by the attorney-client privilege and the work-product doctrine and to grant their motion for a protective order. In August 2011, Scotty Blue II was injured while working at a facility owned by Dow Corning Alabama. Blue's employer at the time of the accident was Alabama Electric Company, Inc., of Dothan ("Alabama Electric"), which was, pursuant to a contract with Dow Corning Alabama, installing a vacuum system at Dow Corning Alabama's facility. The Alabama Supreme Court determined that although the Dow parties sought contribution from Alabama Electric and National Trust, thereby raising an issue of whether a settlement with Blue was a good-faith, reasonable settlement, resolution of that issue did not require privileged information. The Court surmised the issue could be resolved by consideration of the nonprivileged materials generated in connection with Blue's personal-injury action. Thus, the Dow parties did not waive those protections by seeking indemnity. Accordingly, the Court granted the Dow parties' petition and directed the trial court to vacate its discovery order requiring disclosure of the requested information, and to enter an appropriate protective order. View "Ex parte Dow Corning Alabama, Inc., et al." on Justia Law

In its motion for summary judgment, Farmers Insurance Company of Idaho argued that Erica Klein was barred from pursuing a supplemental UIM claim because the five-year statute of limitations in Idaho Code section 5-216 had run. Farmers asserted the statute of limitations began to run on either the date of the accident or the date Klein settled with the third party tortfeasor, both of which occurred more than five years prior to Klein filing her complaint to compel arbitration of her UIM claim. The district court denied Farmers’s motion and subsequent motion for reconsideration, holding that the “breach of contract” rule was the proper method of calculating the accrual date for Klein’s cause of action. Farmers appealed the district court’s denial of both motions. The Idaho Supreme Court determined the issue raised by this case was one of first impression, inasmuch as it was asked to determine when the statute of limitations began to run on a cause of action for UIM benefits under an automobile insurance policy. After considering the different approaches taken by other states, the Court adopted the majority’s “breach of contract” rule and affirmed the district court’s decisions. View "Klein v. Farmers Insurance Co." on Justia Law

In separate incidents, claimants Miguel Velazquez and Servando Velazquez suffered injuries within the scope of their employment, and each required Spanish language interpreting services in connection with their medical care. Meadowbrook Insurance Company was the workers’ compensation carrier for the claimants’ employers and accepted both claims and administered benefits. DFS Interpreting (“DFS”), which provided interpreter services to each claimant, timely submitted invoices to Meadowbrook for the services provided. Meadowbrook refused to pay the invoices DFS submitted. DFS objected to the insurance company’s explanations of review, but did not request a second review pursuant to Labor Code section 4603.2 (e) or California Code of Regulations, title 8, section 9792.5.5. Meadowbrook petitioned for writ of review of the Workers’ Compensation Appeal Board’s (WCAB) decision on reconsideration that liens held by DFS Interpreting (DFS) against Meadowbrook regarding unpaid invoices for interpreter services DFS provided to Meadowbrook’s insureds were not foreclosed by DFS’s failure to follow procedural rules. The Court of Appeal issued the writ, and held that DFS’s failure to comply with required procedures resulted in DFS’s bills being deemed satisfied. This result meant Meadowbrook was not liable for further payment. The Court annulled the WCAB’s decision to the contrary and remanded for further proceedings. View "Meadowbrook Ins. Co. v. Workers' Comp. Appeals Bd." on Justia Law

This matter came from two separate lawsuits commenced in the Pennsylvania courts of common pleas which were subsequently removed to federal district courts on the basis of diversity jurisdiction, and thereafter consolidated for disposition by the United States Court of Appeals for the Third Circuit. Appellee William Scott was covered by an automobile insurance policy issued by Appellant Travelers Commercial Insurance Company. Appellee Samantha Sayles was covered by an automobile policy issued by Appellant Allstate Insurance Company. Allstate’s policy contained a clause, similar to the one in Scott’s policy, providing that, in order to receive first-party medical benefits, the insured had to submit to mental and physical examinations by physicians selected by the insurance company at the company’s behest before medical benefits were paid. Both appellees were injured in separate car accidents, and their respective insurance companies refused to pay their medical bills. The United States Court of Appeals for the Third Circuit certified a question of Pennsylvania law to the Pennsylvania Supreme Court: Does an automobile insurance policy provision, which required an insured seeking first-party medical benefits under the policy to submit to an independent medical exam whenever the insurer requires and with a doctor selected by the insurer, conflict with 75 Pa.C.S. Section 1796(a) of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), such that the requirement was void as against public policy? After review, the Supreme Court concluded that the provision indeed conflicted with Section 1796(a), and was void as against public policy. View "Sayles. v. Allstate Ins Co." on Justia Law

These consolidated actions arose from fatal injuries suffered by James Andrew Brenek, II when he was electrocuted by an electrically-energized generator housing cabinet on a rig in Jefferson County, Texas. Brenek was employed by Guichard, which had leased the generator involved in the accident from Aggreko. Guichard had a primary commercial liability policy with Gray and an excess commercial liability policy with Chartis. Aggreko had a primary insurance policy with Indian Harbor. Indian Harbor appealed the district court's grant of summary judgment for Gray, and Gray conditionally appealed the district court's decision to apply Texas, rather than Louisiana, law to the issues before it.The Fifth Circuit affirmed the district court's judgment, concluding that the outcome of the dispute would be the same under both Texas and Louisiana law. Therefore, the court need not engage in a conflict-of-laws analysis and applied Texas law. Under Texas law, the court held that Gray exhausted its policy limit and its duty to defend Aggreko when it paid $950,000—the remainder of its liability coverage limit—to the Breneks in exchange for the Breneks agreement not to execute any judgment against Aggreko and to recognize Aggreko's entitlement to claim a $950,000 damages credit. View "Aggreko, LLC v. Chartis Specialty Insurance Co." on Justia Law