Justia Insurance Law Opinion Summaries

The Supreme Court accepted certification of a question of law in a proceeding pending before the United States District Court for the District of Connecticut and answered that Virginia law recognizes that the collateral source rule can apply to breach of contract cases.Specifically at issue was whether Virginia law applies the collateral source rule to a breach of contract action where the plaintiff has been reimbursed by an insurer for the full amount it seeks in damages from the defendant. The Supreme Court answered that the same rationales supporting the recognition of the collateral source rule in tort cases also supports the rule's application in certain breach of contract actions. The Court further explained that whether the rule applies to a given case requires a case by case analysis as to whether the parties' expectations, in light of those rationales, support the rule's application. View "Dominion Resources, Inc. v. Alstom Power, Inc." on Justia Law

The Supreme Court accepted a question certified to it by the United States District Court for the District of Montana to address an Estate's third-party claim to stacked liability limits in an aircraft insurance policy that covered multiple aircraft, concluding that the answer to the question, which the Court reformulated, was no.The Supreme Court reformulated the question as follows: "Is the Estate of Darrell L. Ward entitled to stack the limits of liability coverage for three separate aircraft under the terms of an insurance policy issued to the pilot of an aircraft in which Ward was a passenger at the time it crashed?" The Supreme Court answered no to the reformulated certified question because (1) the plain, unambiguous language of the contract limits the coverage to the aircraft that is involved in the accident; (2) there is no public policy or statute that mandates payment of the cumulative coverage for separate aircraft in an aviation liability insurance policy that does not provide for such payment; and (3) the insurance policy at issue was not subject to stacking of its passenger liability coverages. View "U.S. Specialty v. Estate of Ward" on Justia Law

The Georgia Supreme Court granted certiorari in this case to review whether the Court of Appeals erred in reversing the grant of summary judgment to the insurer on the insured’s failure-to-settle claim. The Court also asked the parties to address whether an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits or whether, even absent such an offer, a duty arises when the insurer knows or reasonably should know that settlement within the insured’s policy limits is possible. As to this threshold issue, the Court concluded an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits. Applying the applicable rules of contract construction to correspondence from two injured parties in the instant case, the Court concluded the injured parties presented to the insurer a valid offer to settle within the insured’s policy limits but that the offer did not include any deadline for accepting the offer. Based on the undisputed evidence, as a matter of law, the insurer did not act unreasonably in failing to accept the offer before it was withdrawn by the injured parties. As the insurer was entitled to summary judgment, the Court reversed the decision of the Court of Appeals. View "First Acceptance Insurance Company of Georgia, Inc. v. Hughes" on Justia Law

The Supreme Court granted this petition for a writ of prohibition brought by insurers (collectively, Petitioners) seeking to have the Court prohibit enforcement of a ruling by the circuit court that denied Petitioners’ motion for summary judgment against Respondent, holding that the circuit court erred as a matter of law in denying Petitioners’ motion for summary judgment.David Ralph Allen died from injuries he sustained in a motorcycle collision with a car. The car was owned by an auto dealership, and Petitioners provided an insurance policy for the dealership. The garage operations and auto hazard provision of the policy provided a limit of $300,000 in liability coverage. The commercial umbrella provision provided up to $5 million in liability coverage. Respondent, administratrix of Allen’s estate, asserted a declaratory judgment action against Petitioners to determine the amount of insurance coverage available. Petitioners asserted that the umbrella coverage part of the policy did not cover Respondent’s claims against the driver. The circuit court denied Petitioners’ motion for summary judgment on the coverage issue. The Supreme Court disagreed, holding that the circuit court erred in denying summary judgment for Petitioners on the umbrella coverage issue. View "State ex rel. Universal Underwriters Insurance Co. v. Honorable Patrick Wilson" on Justia Law

The Supreme Court affirmed the judgment of the district court entering judgment against a commercial general liability (CGL) insurer on a homeowners’ insurer’s lawsuit seeking reimbursement for the amount it paid to settle a death claim, holding that the district court correctly interpreted the CGL insurance contract, and substantial evidence supported the court’s factual findings on potential liability and the reasonableness of the settlement.A dentist and his wife formed a limited liability company (LLC) that held title to investment properties, including a farmhouse. An accidental shooting at the farmhouse resulted in a death, and a death claim followed. The dentist had purchased homeowners liability insurance and CGL insurance from separate insurers. The CGL insurer denied coverage. The homeowners’ insurer settled the death claim for $900,000. Thereafter, the homeowners’ insurer filed this action seeking subrogation from the CGL insurer. The district court entered judgment against the CGL insurer for $450,000. The Supreme Court affirmed, holding that the LLC, as owner of the farmhouse, had potential liability under a premises liability theory for a dangerous condition and that the CGL insurer, as coinsurer of the farmhouse property, was obligated to indemnify the homeowners’ insurer for half of the $900,000 settlement. View "Metropolitan Property & Casualty Insurance Co. v. Auto-Owners Mutual Insurance Co." on Justia Law

Tony Kourianos worked as a coal miner for more than 27 years before filing a claim for benefits under the Black Lung Benefits Act (“BLBA”). His claim was reviewed through a three-tiered administrative process. Ultimately, the Benefits Review Board (“BRB”) found that he was entitled to benefits. The BRB also found that Kourianos’s last employer, Hidden Splendor Resources, Inc., was the “responsible operator” liable for paying those benefits. Hidden Splendor’s insurer, Rockwood Casualty Insurance Company, petitioned the Tent Circuit Court of Appeal for review of the BRB’s decision: (1) challenging the administrative law judge’s (“ALJ”) decision prohibiting Hidden Splendor from withdrawing its responsible operator stipulation; and (2) contending the BRB incorrectly found that Kourianos was totally disabled and entitled to benefits. Finding no abuse of discretion in the BRB decision, the Tenth Circuit denied Rockwood's petition. View "Rockwood Casualty Insurance v. Director, OWCP" on Justia Law

Timothy Hinton died from injuries sustained in a fall from a tree stand. At the time of his fall, Timothy was wearing a fall-arrest system which included a full-body harness, tether and tree strap. Timothy had purchased the tree stand and fall-arrest system from The Sportsman’s Guide, Inc. (“TSG”), in 2009. C&S Global Imports, Inc. (“C&S”) had manufactured the items and marketed them to TSG. Pekin Insurance Company insured C&S at the time of Timothy’s injury and death. After filing their third amended complaint, the Hintons filed a motion for partial summary judgment against Pekin, claiming Pekin waived its defenses to coverage or should have been estopped from asserting any coverage defenses. Among other arguments, the Hintons maintained that Pekin failed to defend C&S, did not file a declaratory-judgment action and allowed a default judgment against C&S. The circuit court denied the Hintons’ motion. Pekin then moved for summary judgment, arguing the insurance policy excluded coverage for tree or deer stands and related equipment. The circuit court granted Pekin’s motion and entered a final judgment dismissing Pekin from the suit. The Hintons appealed both of the circuit court’s rulings. After review, the Mississippi Supreme Court affirmed the order denying partial summary judgment to the Hintons, the order granting summary judgment to Pekin and the final judgment dismissing Pekin from the suit. View "Hinton v. Pekin Insurance Company" on Justia Law

In this case involving the proper method of applying a personal injury protection (PIP) insurance policy deductible to a medical provider’s bill for hospital emergency services and care, the Supreme Court approved the Fifth District Court of Appeal’s decision, holding that the deductible should be subtracted from the total charges prior to application of the reimbursement limitation in Fla. Stat. 627.736(5)(a)1.b.While this case was pending in the Court, the Fourth District Court of Appeal issued an opinion in State Farm Mutual Automobile Insurance Co. v. Care Wellness Center, LLC (Care Wellness), 240 So. 3d 22 (Fla. 4th DCA 2018), holding that the deductible should be applied after charges are reduced under any fee schedule found in section 627.736. The Supreme Court approved the Fifth District’s decision in the instant case and disapproved the Fourth District’s decision in Care Wellness, holding that, under Fla. Stat. 627.739(2), the deductible should be applied to the total medical charges prior to reduction under the reimbursement limitation. View "Progressive Select Insurance Co. v. Florida Hospital Medical Center" on Justia Law

In 2002, Charles Herron, who was under the influence of alcohol and not old enough to legally possess or consume it, was involved in a single-vehicle accident in Bethel, Alaska A 15-year-old passenger in Herron’s vehicle, Angelina Trailov, was injured. Herron was insured by Allstate Insurance Company. Allstate filed a complaint for declaratory relief in the U.S. District Court in anticipation of Herron confessing judgment in the accident-related personal injury suit. Allstate requested a declaration that “its good faith attempt to settle Trailov and Mary Kenick's (Trailov's mother) claims satisfied its obligation to its insured, and a further declaration that Allstate [wa]s not obligated to pay any portion of the confessed judgment that exceed[ed] the limit of the bodily injury coverage afforded Herron under the [p]olicy.” Due to Herron’s April confession of judgment and assignment of claims, Allstate amended its federal complaint for declaratory relief. The only material addition was the statement that Herron had confessed judgment and assigned his rights against Allstate. The issue this case presented for the Alaska Supreme Court's review centered on the preclusive effect of that declaratory judgment in favor of the insurance company against its insured in federal court in a subsequent state court proceeding. The superior court concluded that the declaratory judgment had no preclusive effect on a negligent adjustment action brought in state court by the insured’s assignees against the insurance company and its claims adjuster. The state action proceeded to an 11-day jury trial ending with a multi-million dollar verdict against the insurance company and its claims adjuster. The declaratory judgment determined that the insurance company and the adjuster acted reasonably when they offered policy limits to settle the underlying claim against the insured. Because the insurance company’s and adjustor’s reasonableness in adjusting the insurance claim was a necessary element of a negligent adjustment tort, the Supreme Court held that the assignees of the insured were precluded from relitigating this issue. The superior court therefore erred in denying the insurance company’s and claims adjuster’s motions for summary judgment. View "Allstate Insurance Company v. Kenick" on Justia Law

This appeal required the Pennsylvania Supreme Court to determine whether a “household vehicle exclusion” contained in a motor vehicle insurance policy violated Section 1738 of the Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa.C.S. 1738, because the exclusion impermissibly acted as a de facto waiver of stacked uninsured and underinsured motorist (“UM” and “UIM,” respectively) coverages. In 2012, Appellant Brian Gallagher was riding his motorcycle when William Stouffer ran a stop sign in his pickup truck, colliding with Gallagher’s motorcycle, causing Gallagher to suffer severe injuries. At the time of the accident, Gallagher had two insurance policies with GEICO; one included $50,000 of UIM coverage, insured only Gallagher’s motorcycle; the second insured Gallagher’s two automobiles and provided for $100,000 of UIM coverage for each vehicle. Gallagher opted and paid for stacked UM and UIM coverage when purchasing both policies. Stouffer’s insurance coverage was insufficient to compensate Gallagher in full. Consequently, Gallagher filed claims with GEICO seeking stacked UIM benefits under both of his GEICO policies. GEICO paid Gallagher the $50,000 policy limits of UIM coverage available under the Motorcycle Policy, it denied his claim for stacked UIM benefits under the Automobile Policy. GEICO based its decision on a household vehicle exclusion found in an amendment to the Automobile Policy. The exclusion states as follows: “This coverage does not apply to bodily injury while occupying or from being struck by a vehicle owned or leased by you or a relative that is not insured for Underinsured Motorists Coverage under this policy.” According to Gallagher, by denying him stacked UIM coverage based upon the household vehicle exclusion, GEICO was depriving him of the stacked UIM coverage for which he paid. The Pennsylvania Supreme Court held the household vehicle exclusion violated the MVFRL, and vacated the Superior Court’s judgment, reversed the trial court’s order granting summary judgment in favor of GEICO, and remanded to the trial court for further proceedings. View "Gallagher v. GEICO" on Justia Law