Justia Insurance Law Opinion Summaries

At issue in this case was the applicability of a broad, absolute insurance pollution exclusion clause to a claim based on negligent installation of a hot water heater that led to the release of toxic levels of carbon monoxide in a residential home. Zhaoyun "Julia" Xia purchased a new home constructed by Issaquah Highlands 48 LLC. Issaquah Highlands carried a policy of commercial general liability insurance through ProBuilders. Soon after moving into her home, Xia began to feel ill. A service technician from Puget Sound Energy investigated Xia's home and discovered that an exhaust vent attached to the hot water heater had not been installed correctly and was discharging carbon monoxide directly into the confines of the basement room. The claims administrator for ProBuilders, NationsBuilders Insurance Services Inc. (NBIS), mailed a letter to Xia indicating that coverage was not available under the Issaquah Highlands policy. As a basis for its declination of coverage, NBIS rested on two exclusions under the policy: a pollution exclusion and a townhouse exclusion. NBIS refused to either defend or indemnify Issaquah Highlands for Xia's loss. When a nonpolluting event that was a covered occurrence causes toxic pollution to be released, resulting in damages, the Washington Supreme Court believed the only principled way for determining whether the damages are covered or not was to undertake an efficient proximate cause analysis. Under the facts presented here, the Court found ProBuilders Specialty Insurance Co. correctly identified the existence of an excluded polluting occurrence under the unambiguous language of its policy. However, it ignored the existence of a covered occurrence negligent installation-that was the efficient proximate cause of the claimed loss. Accordingly, coverage for this loss existed under the policy, and ProBuilders's refusal to defend its insured was in bad faith. View "Xia v. Probuilders Specialty Ins. Co." on Justia Law

Laura Miller appeals from a summary judgment entered by the Jefferson Circuit Court ("the circuit court") in favor of the City of Birmingham ("the City"), Sandy Roberts, and Alice Crutchfield (collectively, "the City defendants"). Robert Miller, Laura's husband, was employed by the City as a firefighter. Unum Life Insurance Company of America ("Unum") issued a group life and accidental death and dismemberment policy. According to the summary of benefits, the policy included different life-insurance benefits for active employees and for retired employees. Under the policy, as an active employee, the City paid Robert's insurance premiums, thereby entitling him to a life-insurance benefit of $151,000. However, if Robert were to retire, he would be required to pay his life-insurance premiums and would be entitled to only a $50,000 life-insurance benefit. The summary of benefits specified that, in order to be eligible for a waiver of the life-insurance premiums, the insured had to "be disabled through your elimination period," which was nine months. In 2012, Robert was diagnosed with brain cancer and soon became unable to perform the duties of his job. Laura contended once the Millers learned of Robert's condition, they "sought to obtain information about [Mr. Miller's] life insurance benefit and all other benefits that might be available." The Millers did not have a copy of the policy or the summary of benefits at that time. The Millers and Ed Bluemly, Mrs. Miller's brother-in-law, met with Sandy Roberts, the assistant benefit administrator and the pension coordinator for the Jefferson County Personnel Board, and Alice Crutchfield, a personnel technician for the Jefferson County Personnel Board, to learn about the available benefits. The Millers asked for a copy of the policy, and there was a dispute over whether the Crutchfield gave the Millers a copy. The Millers ultimately sued the City for negligence with respect to the policy and collection of the benefits to which Robert was entitled. After review of this matter, the Supreme Court affirmed the circuit court's summary judgment in favor of the City insofar as the circuit court based its summary judgment in favor of the City on the City defendants' argument that the City was entitled to immunity from Laura's claim alleging wanton and reckless misrepresentation. However, the Court reversed the circuit court's summary judgment in favor of the City defendants in all other respects. The Case was remanded for further proceedings. View "Miller v. City of Birmingham et al." on Justia Law

The Federal Employees Health Benefits Act (FEHBA) authorizes the Office of Personnel Management to contract with private carriers for federal employees’ health insurance; 5 U.S.C. 8902(m)(1) states that the “terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law . . . which relates to health insurance.” OPM’s regulations make a carrier’s “right to pursue and receive subrogation and reimbursement recoveries" a condition of the provision of benefits under the plan’s coverage. In 2015, OPM confirmed that subrogation and reimbursement rights and responsibilities “relate to the nature, provision, and extent of coverage or benefits” under section 8902(m)(1). Nevils, insured under a FEHBA plan offered by Coventry, was injured in an automobile accident. Coventry paid his medical expenses and asserted a lien against the settlement Nevils recovered from the driver who caused his injuries. Nevils satisfied the lien, then filed a state court class action, citing Missouri law, which does not permit subrogation or reimbursement in this context. The Missouri Supreme Court ruled in favor of Nevils. The Supreme Court reversed. Because contractual subrogation and reimbursement prescriptions plainly “relate to . . . payments with respect to benefits,” they override state laws barring subrogation and reimbursement. When a carrier exercises its right to reimbursement or subrogation, it receives from either the beneficiary or a third party “payment” respecting the benefits it previously paid. The carrier’s very provision of benefits triggers that right to payment. Strong and “distinctly federal interests are involved,” in uniform administration of the FEHBA program, free from state interference, particularly concerning coverage, benefits, and payments. The regime is compatible with the Supremacy Clause. The statute, not a contract, strips overrides state law View "Coventry Health Care of Missouri, Inc. v. Nevils" on Justia Law

The issue in this workers’ compensation case was whether claimant was entitled to benefits for his “combined condition” claim. Claimant filed- and his employer’s insurer, SAIF Corporation, initially accepted-a claim for a lumbar strain combined with preexisting lumbar disc disease and related conditions. SAIF later denied the combined condition claim on the ground that the lumbar strain had ceased to be the major contributing cause of the combined condition. Claimant objected. He did not contest that his lumbar strain had ceased to be the major contributing cause of his combined condition. Instead, he argued that the otherwise compensable injury was not limited to the lumbar strain that SAIF had accepted as part of his combined condition claim. In claimant’s view, an “otherwise compensable injury” within the meaning of ORS 656.005(7)(a)(B) referred not just to the condition that SAIF accepted, but also includes any other conditions not accepted that might have resulted from the same work-related accident that caused the lumbar strain, and that larger group of work-related conditions continued to be the major contributing cause of his combined condition. As a result, claimant contended that an employer could not close a combined condition claim if any of those non accepted conditions remained the major cause of the combined condition claim. The Workers’ Compensation Board rejected claimant’s argument and upheld SAIF’s denial of claimant’s combined condition claim, concluding that existing precedent defined the “otherwise compensable injury” component of combined conditions to consist of the condition or conditions that the employer has accepted as compensable. The Court of Appeals reversed, acknowledging that its holding was “potentially at odds” with existing precedents from both that court and the Oregon Supreme Court. It nevertheless concluded that those precedents were either distinguishable or should be reconsidered. The Supreme Court concluded that the Court of Appeals erred and that the Workers’ Compensation Board was correct. View "Brown v. SAIF Corp." on Justia Law

Beth Rylee’s husband, Richard Rylee, was injured in a motorcycle accident. After the Rylees received the full "each person" policy limit for damages resulting from Richard’s bodily injury, the Rylees sued their two insurers. They claimed Beth was entitled to her own each-person policy limit for her "separate and distinct" loss-of-consortium claim. But both the language of the relevant policies and the Mississippi Supreme Court’s precedent were clear: if there was only one person who suffered bodily injury in an accident, then all claims based on that person’s bodily injury are included in the each-person policy limit. Only Richard was injured in the accident, so Beth's loss-of-consortium claim fell under the each-person policy limit for damages arising from Richard’s bodily injury, which the two defendant insurance companies already satisfied. The Supreme Court therefore affirmed the circuit court’s grant of summary judgment to the two insurers. View "Rylee v. Progressive Gulf Insurance Co." on Justia Law

The Eleventh Circuit Court of Appeals certified a question of Georgia law to the Georgia Supreme Court stemming from an appeal in a personal injury case arising from an automobile accident. The Eleventh Circuit asked for the proper interpretation of OCGA 9-11-67.1, which governed the formation of settlement agreements pursuant to a pre-suit “offer to settle a tort claim for personal injury, bodily injury, or death arising from the use of a motor vehicle and prepared by or with the assistance of an attorney on behalf of a claimant or claimants” (a “Pre-Suit Offer”). The Supreme Court responded that OCGA 9-11-67.1 did not prohibit a claimant from conditioning acceptance of a Pre-Suit Offer upon the performance of some act, including a timely payment. The Court left it to the Eleventh Circuit to apply this principle to the facts of this case. View "Grange Mutual Casualty Co. v. Woodard" on Justia Law

Adrian Burdette was seriously injured when he fell while attempting a controlled descent from a cell-phone tower in contravention of instructions by his employer, Chandler Telecom, LLC (“Chandler”), that technicians must climb down from towers. This case presented the question of whether an employee could, in deliberate disobedience of his employer’s explicit prohibition, act in a knowingly dangerous fashion with disregard for the probable consequences of that act, and still recover workers’ compensation when injured by that disobedient act. The Supreme Court concluded that OCGA 34-9-17(a) could bar recovery in such cases. View "Chandler Telecom, LLC v. Burdette" on Justia Law

Pertinent to this appeal, the Motor Vehicle Financial Responsibility Law (“MVFRL”) required insurers to offer insureds Underinsured Motorist coverage. Subsection 1731(c.1) of the MVFRL stated that any UIM coverage rejection form that does not “specifically comply” with Section 1731 of the MVFRL was void and that, if an insurer failed to produce a valid UIM coverage rejection form, then UIM coverage shall be equal to the policy’s bodily injury liability limits. The Pennsylvania Supreme Court granted allowance of appeal in this matter to determine whether an insurer’s UIM coverage rejection form “specifically compl[ied]” with Section 1731 of the MVFRL if the insurer’s form was not a verbatim reproduction of the statutory rejection form found in Subsection 1731(c) of the MVFRL but, rather, differed from the statutory form in an inconsequential manner. The Court held that a UIM coverage rejection form specifically complies with Section 1731 of the MVFRL even if the form contains de minimis deviations from the statutory form. Because the Superior Court reached the proper result in this case, the Supreme Court affirmed that court’s judgment. View "Ford v. American States Ins." on Justia Law

Debra Jarvis was driving a bus owned by Lake Shore Motor Coach Lines, Inc. when she experienced a sudden and unforeseeable loss of consciousness. Her loss of consciousness caused the bus to roll over, injuring several passengers. Some of the injured passengers filed separate lawsuits in a Utah court seeking damages. Two of the plaintiffs moved for partial summary judgment, asserting that Lancer Insurance Co., Lake Shore’s insurer, was strictly liable for the passengers’ injuries under Utah Code 31A-22-303(1). The motions were denied. Lancer Insurance filed a separate federal case seeking a declaratory judgment confirming the state district court’s interpretation of Utah Code section 31A-22-303(1), thus reinforcing the conclusion that this provision preserves the common-law “sudden incapacity” defense and requires proof of fault to sustain liability. The federal district court certified two questions to the Supreme Court regarding the proper interpretation of section 31A-22-303(1). The Supreme Court answered (1) section 31A-22-303(1) overrules the common-law doctrine of sudden incapacity in a manner imposing strict liability on a driver (and her insurer); and (2) a driver (and her insurer) is subject to liability only up to the amount of the insurance coverage available under an applicable policy. View "Lancer Insurance Co. v. Lake Shore Motor Coach Lines, Inc." on Justia Law

Plaintiff-appellant Malinda Falcone brought an insurance claim against defendants-appellees for payment of her emergency room medical expenses. Her claim was made pursuant to the Uninsured/Underinsured Motorist (UM) provisions of her mother's automobile insurance policy following the injuries she sustained as a passenger in her mother's car when an uninsured driver ran a stop sign and collided with them. Defendants initially questioned the decision to refer Plaintiff to the level 2 trauma center of the emergency room and refused to pay the bill Plaintiff received from the OU Medical Center trauma center. After nearly a year of offers and rejections, Plaintiff sued for breach of the implied duty of good faith and fair dealing for failing to pay her trauma room "compensatory damages" as required under the policy. The trial court granted summary judgment in favor of defendants and denied Plaintiff's motion for new trial. After review, the Supreme Court held that it was a question for the trier of fact whether defendants showed a lack of good faith in handling Plaintiff's claim for payment. The trial court erred in granting summary judgment in defendants' favor, holding as a matter of law that defendants did not commit the tort of bad faith. View "Falcone v. Liberty Mutual Ins. Co." on Justia Law