Justia Insurance Law Opinion Summaries

In 2007, Fifth Third loaned Buford $406,000 in exchange for a mortgage on property that Buford purportedly owned. Fifth Third obtained a title-insurance policy from Direct Title, an issuing agent for Chicago Title. Direct Title was a fraudulent agent; its sole “member” was the actual title owner of the property and conspired with Buford to use that single property as collateral to obtain multiple loans from different lenders. When creditors foreclosed on the property in state court, Fifth Third intervened and asked Chicago Title to defend and compensate. Chicago Title refused to defend or indemnify. Chicago Title sought to avoid summary judgment, indicating that it needed discovery on the questions whether “Fifth Third failed to follow objectively reasonable and prudent underwriting standards” in processing Buford’s loan application and whether Direct Title had authority to issue the title-insurance policy. The district court granted Fifth Third summary judgment. The Sixth Circuit affirmed, noting that “When a party comes to us with nine grounds for reversing the district court, that usually means there are none.”View "Fifth Third Mortg. Co. v. Chicago Title Ins. Co." on Justia Law

In this declaratory judgment proceeding, the defendant, Citizens Insurance Company of America, appealed a superior court order which ruled in favor of the plaintiff, The Barking Dog, Ltd., which operates a dog kennel and grooming business at several locations in New Hampshire. The court ruled that an insurance policy issued by the defendant provided coverage for damage to the plaintiff’s septic system and ordered the defendant to pay the plaintiff $20,000, the agreed upon damage amount. The court also ruled that the defendant was not prejudiced by the plaintiff’s failure to disclose its expert’s report in a timely manner or its failure to disclose its expert’s curriculum vitae and, accordingly, permitted the plaintiff’s expert to testify at trial. The defendant argued that both rulings were error. Finding no error, the Supreme Court affirmed. View "The Barking Dog, Ltd. v. Citizens Insurance Company of America" on Justia Law

In 2005 Truman and partners purchased a vacant commercial building for $175,000, insured for $4,250,000 in fire-related losses. The property, without the building, was worth more than with the building. After a minor accidental fire, Truman told an employee that if it ever caught fire again, just get out. Considering leasing, Truman stated that it would make more money if it burnt. By late 2006, Truman had less than $5,000 in personal bank accounts. Premiums were paid through November 17. The building burned down November 12. Truman, Jr. confessed that he had burned the building at his father’s direction. State charges were dismissed because of inability to corroborate junior’s testimony, as required under New York law. Truman was charged with aiding and abetting arson, 18 U.S.C. 844(i); mail fraud, 18 U.S.C. 1341; use of fire in commission of a felony, 18 U.S.C. 844(h); and loan fraud, 18 U.S.C. 1341. Following a guilty verdict the district court granted acquittal and conditionally granted a new trial. The Second Circuit vacated and remanded for sentencing. Junior’s refusal to answer certain questions did not render his testimony incredible as a matter of law, and his prior state testimony was nonhearsay. Truman was not prejudiced by improper cross-examination or summation argument references to the cooperation agreement. View "United States v. Truman" on Justia Law

Liberty entered into a Master Declaration and Easements, Covenants, Conditions and Restrictions for a shopping mall. PMI purchased the property and entered into a Declaration that gave Liberty the right to prior approval of future purchasers and an option to purchase. PMI borrowed $3.5 million from Nationwide, using the property as collateral. Nationwide purchased title insurance from Commonwealth, containing the ALTA 9 endorsement. PMI defaulted and conveyed the property to Nationwide, which attempted to sell to Ironwood. Liberty’s successor, Franklin, refused to approve Ironwood under its rights conferred by the Declaration, based on Ironwood’s planned use as a school. Nationwide claimed that the restrictions upon which Franklin justified refusal rendered the property unusable and unsalable. Commonwealth denied the claim. The district court dismissed. The Third Circuit remanded, holding that Commonwealth is obligated to cover the claim if the restriction causing Nationwide’s harm was covered by the ALTA 9 Endorsement and not expressly excepted on Schedule B. The district court then ruled in favor of Nationwide. The Third Circuit affirmed and remanded for determination of damages owed Nationwide, relying on the plain language of the ALTA 9 rather than deferring to industry custom and usage. View "Nationwide Life Ins. v. Commonwealth Land Title Ins. Co." on Justia Law

Plaintiffs sued behalf of themselves and all other purchasers of title insurance in Ohio from March 2004 through the present. They alleged that 22 title-insurance companies and the Ohio Title Insurance Rating Bureau violated antitrust laws (Sherman Act, 15 U.S.C. 1; Ohio Rev. Code 1331.01) by conspiring to set unreasonably high title-insurance rates. The title-insurance companies filed rates with the Ohio Department of Insurance through OTIRB, a properly licensed rating bureau. Plaintiffs claimed that it was impossible for the Department to review the reasonableness of the rates collectively set by defendants because those rates are based principally on undisclosed costs, which allegedly included “kickbacks, referral fees and other expenses designed to solicit business referrals.” The district court dismissed, holding that the filed-rate doctrine applied to title insurance, and foreclosed claims for monetary damages and that Ohio statutes (Title XXXIX) completely foreclosed federal and state antitrust claims. The Sixth Circuit affirmed, noting that there are at least 45 similar cases, nationwide. The filed-rate doctrine, which limits antitrust remedies available to private parties, is irrelevant because the actions are barred by state law. View "Katz v. Fidelity Nat'l Title Ins." on Justia Law

After a storm began, water stopped flowing down the parking lot drain on the property, which had become clogged with debris. Water seeped under the door of the building, flooding its lower level and damaging carpeting, baseboards, and walls. The owner had an "all risk" insurance policy, covering damage from any peril that was not specifically excluded. One of the exclusions was for water damage. After investigating, the insurer denied the claim, finding that the damage resulted at least in part from surface water, which was excluded by the policy. The owner alleged breach of contract, breach of the implied covenant of good faith and fair dealing, unfair or deceptive insurance practices in violation of G.L. c. 176D, and unfair or deceptive acts or practices in violation of G.L. c. 93A. The Superior Court granted the insurer summary judgment, finding that the damage was caused at least in part by "surface water." Although the damage was also partially caused by water that had backed up from a drain, the "anticoncurrent cause" provision of the policy excluded coverage for surface water "regardless of any other cause or event that contributes concurrently or in any sequence to the loss." The Massachusetts Supreme Court affirmed. View "Surabian Realty Co., Inc. v. NGM Ins. Co." on Justia Law

The EPA initiated efforts to remediate contamination at the Rhode Island Centredale Manor Superfund Site under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 and issued a unilateral administrative order to compel entities, including NE Container and Emhart to remove hazardous substances that had been disposed of at the Site as part of the former operations of several companies. Emhart sued NE Container and its insurers, which had provided general commercial liability policies to NE Container during different time periods from the late 1960s through the mid-1980s. Travelers agreed to contribute to NE Container's defense pursuant to a reservation of rights, while PWIC took the position that it had no duty to defend. Travelers has incurred significant defense costs and filed this suit, seeking contribution from PWIC. The district court ruled that PWIC was not contractually obligated to defend NE Container in the Emhart action, observing that the alleged property damage occurred before the commencement of the PWIC policy period between 1982 and 1985. The First Circuit vacated. The district court mistakenly focused solely on the timing of the insured's alleged polluting activities, rather than also considering the potential timing of property damage caused by those activities. View "Travelers Casualty & Surety Co. v. Providence WA Ins. Co., Inc." on Justia Law

Defendants are title insurance companies, members of TIRSA, a rate service organization. Plaintiffs purchased title insurance from defendants. Rates are established and regulated by the New York Insurance Department, N.Y. Ins. Law 2305, 2306, which reviews loss experience and financial data submitted by individual insurers and rate service organizations, licensed by the Insurance Department. TIRSA annually submits data from its members and prepares the New York Title Insurance Rate manual, which is submitted to the Insurance Department for approval and sets forth collectively-fixed rates, which are based on: value of property insured; cost of insuring risk associated with issuing the policy; costs associated with examination of records; and agency commissions. While title agents do provide actual services, commissions exceed the value of the services. Plaintiffs alleged that title insurers get business by encouraging those making purchasing decisions to direct business to that insurer. The complaint alleged claims under the Real Estate Settlement Procedures Act, 12 U.S.C. 2607(a); the Sherman Act; New York General Business Law; and unjust enrichment. The district court dismissed. The Second Circuit affirmed. The complaint did not allege facts that would allow a plausible inference that defendants paid kickbacks for business referrals in violation of RESPA. View "Galiano v. Fid. Nat'l Title Ins." on Justia Law

Safeco issued plaintiffs a homeowner’s policy that went into effect when they closed on the property and covered all accidental direct physical loss to property, unless limited or excluded, “occurring during the policy period.” Before receiving the policy and first seeing its terms, but after beginning renovations, plaintiffs discovered severe inner wall water leaks and significant water infiltration on three exterior walls. A mold specialist found that the home had numerous construction deficiencies that existed long before they purchased the home, resulting in chronic water intrusion that damaged interior finished walls, insulation, external plywood sheathing, and other aspects of the structure. Safeco denied coverage, stating that the prepurchase inspection confirmed multiple areas of water damage that were in need of attention and that the loss qualified as a preexisting condition that occurred outside of the policy period. The district court held that Safeco was precluded from raising the exclusions because it did not notify plaintiffs the exclusions until after they discovered the damage, awarded $485,100.64, and held that Safeco lacked a reasonable basis for denial and demonstrated reckless disregard, entitling plaintiffs to damages resulting from bad faith. The Seventh Circuit affirmed.View "Miller v. Safeco Ins. Co. of Am." on Justia Law

Plaintiff, who dealt with Chicago Title sued both Chicago Title and Ticor, on behalf of herself and similarly situated individuals, alleging that they qualified for a reduced refinance rate, but paid more, and that the practice of overcharging on title insurance for refinanced properties violates the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. 42-110b(a). She also claimed unjust enrichment, breach of implied contract, and money had and received. The complaint alleged that the companies are “juridically linked,” coordinated drafting their premium rate schedules, and operate in the same manner with respect to overcharging. The district court dismissed the Ticor defendants, holding that plaintiff lacked standing. The Second Circuit affirmed, rejecting plaintiff’s argument concerning standing. View "Mahon v. Chicago Title Ins. Co." on Justia Law