Justia Insurance Law Opinion Summaries

The Supreme Court concluded that under the continuous-trigger theory, when an insurance claim is made by alleging a progressive injury caused by chemical exposure or other analogous toxic, injurious substance, damages that are caused, continuous, or progressively deteriorating throughout successive policy periods are covered by all the occurrence-based policies in effect during those periods.This case involved claims against a standardized commercial general liability (CGL) policy alleging that long-term exposure to chemicals caused a disease to develop over a number of years before being diagnosed. The exposure to the chemicals and the development of the disease, however, happened across numerous CGL policy periods. Insurer denied coverage under its CGL policies and filed a complaint for declaratory relief. The district court granted a judgment in favor of Insured, finding that Insurer owed Insured a duty to defend and indemnify under all of its policies. The Supreme Court answered a certified question that, under the continuous-trigger theory, when a claim is made alleging a progressive injury caused by chemical exposure or other analogous harm, every occurrence-based policy in effect from the initial exposure, through the latency and development period and up to the manifestation of the bodily illness, is triggered and must cover the claim. View "Westfield Insurance Co. v. Sistersville Tank Works, Inc." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals in this dispute arising out of environmental-cleanup and remediation work at two Superfund sites in Bronson, Michigan, holding that Restatement (Second) 193 does not govern the choice-of-law analysis for bad faith claims.Scott Fetzer Company filed this action asserting a breach of contract claim against certain insurance companies, including Travelers Casualty and Surety Company, alleging breaches of certain insurance contracts. Fetzer also asserted a tort claim against each company, arguing that they had acted in bad faith when handling his claims. As to Travelers, an administrative judge concluded that Ohio law applied to a discovery dispute concerning Scott Fetzer's bad faith claim. The court of appeals affirmed, determining that Ohio law governed the bad-faith discovery dispute because the cause of action was a tort. In affirming, the court applied the choice-of-law rules set forth in section 145 of the Restatement. Travelers appealed, arguing that section 193 governs the choice-of-law analysis for bad faith claims because they arise out of insurance contracts. The Supreme Court affirmed, holding that the court of appeals correctly ruled that the choice-of-law analysis applicable to a bad-faith claim as provided by section 145. View "Scott Fetzer Co. v. American Home Assurance Co." on Justia Law

State Farm Mutual Automobile Insurance Company ("State Farm") appealed a judgment entered against it on a jury verdict in an automobile-accident case. Brian Wood ("Brian") was driving through an intersection in Auburn when his vehicle was T-boned by a vehicle being driven by Mark Stafford. Brian and his wife Jennifer sued Stafford, an uninsured motorist, alleging claims of negligence, wantonness, and loss of consortium. Because Stafford was uninsured, the Woods also sued State Farm, their automobile-insurance company, seeking uninsured-motorist benefits under their policy. The jury returned a verdict in the Woods' favor, awarding them $700,000 in compensatory damages, and the trial court entered a judgment on that verdict. The jury did not award any punitive damages. State Farm filed a postjudgment motion challenging the judgment on various grounds, including whether the wantonness claim should have gone to the jury. The postjudgment motion was denied by operation of law, and State Farm appealed. After review, the Alabama Supreme Court concluded State Farm failed to establish the trial court erred by not setting aside its judgment entered on the jury's verdict, therefore the judgment was affirmed. View "State Farm Mutual Automobile Ins. Co. v. Wood" on Justia Law

After Plaintiff sustained serious injuries from a hot-soup spill at Noodle College Park, an Atlanta-area restaurant, she and her spouse sued Shou & Shou, Inc., which owned and operated the restaurant. Shou & Shou tendered the defense to and sought coverage from AmGuard Insurance Company. But AmGuard denied coverage on the ground that the policy named “Noodle, Inc.”—an entity that did not exist—as insured. Shou & Shou settled the suit and assigned the Lowerys its rights under the policy. Plaintiffs, as assignees, then sued AmGuard for equitable reformation of the policy. The district court granted partial summary judgment in favor of Plaintiffs and later entered a final judgment.   The Eleventh Circuit affirmed, holding that reformation of the policy was proper under Georgia law. The court explained that the district court correctly equitably reformed the 2016–17 policy to insure the true owner of the restaurant. The court explained that AmGuard insists that it could not have shared Shou & Shou’s mistake because it did not know the “identity” of the intended insured and could not have intended to “name” Shou & Shou as an insured. But Georgia law does not demand that degree of specificity in defining a mutual mistake. Further, the court held that Plaintiffs claim of breach of contract merges with reformation of the policy. View "Hee Lowery, et al v. AmGuard Insurance Company" on Justia Law

After a fatal truck accident claimed the lives of members of two families, the victims' families filed a personal injury action against the trucking company. The trucking company's insurer ultimately transferred $1 million to the law firm representing one of the families. The insurer then notified the other family that the policy limits had been exhausted. That same day, the insurer submitted two checks: one to the victim's family and one to the law firm.The family that was not party to the settlement filed an involuntary bankruptcy petition against the trucking company. The trustee brought an adversary proceeding against the other victim's family and their law firm, seeking to avoid and recover the transfer of the policy proceeds pursuant to 11 U.S.C. Secs. 547 and 550 of the Bankruptcy Code. The bankruptcy court denied the law firm's motion to dismiss.On appeal, the family that settled and the law firm argued that the district court erred in determining that the trucking company held an equitable property interest in the policy proceeds. The Fifth Circuit affirmed, finding that these facts fit the "limited circumstances" under which the policy proceed are considered the property of the estate. View "Law Office of Rogelio Solis v. Curtis" on Justia Law

Plaintiff planned on hosting a music festival in Austin, Texas. However, Austin canceled the event due to concerns related to COVID-19. In turn, ticket holders who were refused a refund sued, resulting in a judgment against PLaintiff of over $1 million. Plaintiff sued its insurer for failure to defend against the class action. The district court denied Plaintiff's motion for summary judgment and granted the insurer's motion for summary judgment. Plaintiff appealed.On appeal. the parties agreed that the district court had jurisdiction under 28 U.S.C. 1332(a)(1) and Plaintiff claimed the Fifth Circuit had jurisdiction pursuant to 28 U.S.C. 1291.Exercising its independent judgment, the Fifth Circuit could not find proper allegations or evidence of Plaintiff's citizenship, giving the parties an opportunity to respond. However, the Fifth Circuit found the proffered evidence of Plaintiff's citizenship insufficient, remanding the case for the limited purpose of determining whether jurisdiction exists. View "SXSW v. Federal Insurance" on Justia Law

The Fifth Circuit reversed and remanded in part and affirmed in part the district court’s ruling in Plaintiff’s suit against the truck driver, trucking company, and insurance company.  The court found that there were genuine issues of material fact regarding whether Defendants acted in bad faith in destroying the tire. Plaintiff was driving on an interstate highway in Louisiana when his car was struck by part of a tire that came from the tractor-trailer being driven directly in front of him. The resulting crash caused serious injuries to Plaintiff and damage to his vehicle. The tractor-trailer was owned by Defendant New Prime, Inc. d/b/a Prime, Inc. and operated by its employee, Defendant James Arthur Rogers. The tread of the failed tire — a refurbished, retread tire manufactured by Prime’s own EcoTire facility — separated from the casing or tire core before it hit Plaintiff’s vehicle. Plaintiff filed suit against a truck driver, trucking company, and insurance company. The district court granted summary judgment in favor of Defendants. On appeal, Plaintiff contends the district court erred in ruling on several motions. The central question is whether the district court was correct to hold that there were no genuine issues of material fact.   The Fifth Circuit reversed and remanded in part and affirmed in part. The court explained that Plaintiff should be permitted a jury instruction that if jurors find bad faith, they may infer that the destroyed evidence would have been adverse to Prime’s defense in this suit. The court wrote that Prime destroyed the most crucial piece of evidence just weeks after learning that its tire may have caused a car accident, and Prime cannot explain why it transported the tire to its Salt Lake facility or what happened to the tire following the accident. These circumstances create a fact question on bad faith, necessitating a jury determination. View "Van Winkle v. Rogers" on Justia Law

After suffering personal injuries and property damage in a multi-car collision with an underinsured motorist, Kelly Lynn Christmann filed suit against her insurer, State Farm Mutual Automobile Insurance Company (“State Farm”). Christmann was seeking to obtain the underinsured motorist benefits provided under her contract of insurance, which she claimed State Farm failed to pay in an amount justly due under her policy. She also alleged that certain terms of her insurance agreement violate public policy. State Farm argued that Christmann waived her rights to additional benefits by failing to comply with the contractual obligations of her insurance policy, thereby prejudicing State Farm’s right to subrogation against the underinsured motorist. The district court awarded summary judgment to State Farm in determining it had been prejudiced by Christmann’s conduct and that the terms of the insurance policy were valid. The court also denied Christmann’s motion for reconsideration and her Rule 60(b) motion for relief. Christmann appealed. Because the record showed State Farm fully settled its claims against the underinsured motorist and waived its subrogation rights, the Idaho Supreme Court concluded it suffered no actual prejudice from Christmann’s actions. Accordingly, the judgment was reversed. View "Christmann v. State Farm Mutual Automobile Insurance Co." on Justia Law

After Plaintiff’s home sustained water damage in a hailstorm, he asked his insurer Allstate to cover the loss; consequently, Steamatic was hired to perform water abatement and mold remediation services. Plaintiff claimed that the mold was not remediated properly and that he developed a severe and permanent lung condition as a result. New Mexico does not permit a civil plaintiff to recover duplicate compensatory damages for the same injuries. The collateral source rule presents an exception to the prohibition of double recovery, permitting a plaintiff to recover the same damages from both a defendant and a collateral source. The New Mexico Supreme Court has held that the payor of the prejudgment settlement of a claim qualifies as a collateral source and that the payment does not reduce the same damages the plaintiff may recover from an adjudicated wrongdoer. The issue this case presented for review centered on whether a payment in postjudgment settlement of a claim by an adjudicated wrongdoer qualified as a collateral source. The Court clarified that the collateral source rule had no application to a postjudgment payment made by an adjudicated wrongdoer. Here, the Court held that the payment, which Plaintiff received in a postjudgment settlement with Allstate satisfied a portion of Plaintiff’s damages and extinguished Plaintiff’s right to recover the same damages from Steamatic. The Court explained that the share of damages fully satisfied by Allstate must offset the damages Plaintiff may recover from Steamatic. View "Gonzagowski v. Steamatic of Albuquerque" on Justia Law

In a previous action between these parties, the Delaware Supreme Court addressed whether the exclusive-remedies provision in the workers’ compensation act precluded an injured employee from pursuing recovery from an uninsured motorist policy. After the Court held that the exclusive-remedies provision did not apply, the employer and its workers’ compensation carrier sought a declaratory judgment that they were permitted to assert a lien against any recovery the employee might obtain for injuries already compensated under the workers’ compensation act. The employee and the uninsured motorist insurer contended that any such lien was barred by statute, relying on the Court’s decision in Simendinger v. National Union Fire Insurance Co., 74 A.3d 609 (Del. 2013). The superior court followed that binding precedent as it was required to do and dismissed the declaratory judgment claim. After review however, the Delaware Supreme Court concluded Simendinger was decided in error. The Court therefore reversed the superior court’s decision and held that the workers’ compensation act expressly allowed the employer and its workers’ compensation carrier to assert a subrogation lien against benefits paid to the employee under the employer’s uninsured motorist policy. View "Horizon Services, Inc. v. Henry" on Justia Law