Justia Insurance Law Opinion SummariesArticles Posted in Supreme Court of Alabama
Protective Life Insurance Company v. Apex Parks Group, LLC
Protective Life Insurance Company ("Protective") appealed a circuit court judgment entered on a jury verdict against Protective and in favor of Apex Parks Group, LLC ("Apex"), in the amount of $11,495,890.41. Apex, a California-based corporation, owned and operated 16 moderately sized amusement parks, water parks, and family-entertainment centers nationwide. Apex's founder and chief executive officer was Alexander Weber, who had possessed 43 years' experience in the industry and who was critical to Apex's success. Because of Weber's importance, in early 2016 Apex sought a "key-man" insurance policy on Weber. Protective is a Birmingham-based insurance company owned by the Dai-ichi Corporation. At that time, Weber was 64 years old. Answers from Weber's interview with a paramedical examiner were incorporated into the Apex application for insurance. Weber underwent a series of medical examinations, all of which were reported and incorporated into the key-man policy. In November 2016, after the first premium payment was made and the policy went into effect, while on vacation with his wife, Weber died. Shortly after Weber's death, Apex submitted its claim under the policy for the $10-million benefit. Protective then began a contestable-claim investigation, contending Weber's complete medical history was not disclosed, thereby voiding the policy. Protective thereafter refunded the premium Apex paid. Apex sued Protective asserting claims of breach of contract and bad faith in failing to investigate all bases supporting coverage and in making false promises that the claim would be paid. After review, the Alabama Supreme Court determined Protective was entitled to judgment as a matter of law on Apex's claim of breach of contract, and the trial court erred by submitting this claim to the jury for consideration. Accordingly, that portion of the trial court judgment was reversed. "Because Protective demonstrated that Weber made a material misrepresentation and Apex failed to introduce substantial evidence to the contrary, Protective was entitled to rescind the policy, which was a complete defense to Apex's claims of breach of contract. Thus, the trial court erred in denying Protective's motions for a judgment as a matter of law." View "Protective Life Insurance Company v. Apex Parks Group, LLC" on Justia Law
Hendrix v. United Healthcare Insurance Company of the River Valley
Kathleen Hendrix ("Hendrix"), as administratrix of the estate of Kenneth Morris Hendrix, deceased, appeals a circuit court judgment dismissing Hendrix's medical-malpractice wrongful-death claim against United Healthcare Insurance Company of the River Valley ("United"). Kenneth, who was covered by a health-insurance policy issued by United, died after United refused to pay for a course of medical treatment recommended by Kenneth's treating physician. The trial court determined that Hendrix's claim was preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), because the claim "relate[s] to" the ERISA-governed employee-benefit plan pursuant to which United had issued Kenneth's health-insurance policy. In October 2015, Kenneth was injured in an automobile accident. His physician recommended Kenneth be admitted to an inpatient-rehabilitation facility. Hendrix claimed United "imposed itself as [Kenneth's] health care provider, took control of [Kenneth's] medical care, and made a medical treatment decision that [Kenneth] should not receive further treatment, rehabilitation, and care at an inpatient facility." Instead, Hendrix contended United made the decision Kenneth should have been discharged to his home to receive a lower quality of care than had been ordered by his physicians. Kenneth died on October 25, 2015, due to a pulmonary thromboembolism, which, the complaint asserts, would not have occurred had United approved inpatient rehabilitation. The Alabama Supreme Court concurred with the circuit court that Hendrix's claim related to an ERISA-governed benefit plan, and thus preempted by the ERISA statute. View "Hendrix v. United Healthcare Insurance Company of the River Valley" on Justia Law
Mid-Century Insurance Company v. Watts
The Alabama Supreme Court granted Mid-Century Insurance Company permission to appeal the denial of its motion for a partial summary judgment in an action seeking underinsured-motorist benefits filed by Rodney Watts, as the personal representative of the estate of his wife Leiah Watts, deceased, and others (collectively, "the Watts plaintiffs"). In 2016, Leiah Watts, Caiden Watts, Jackson Watts, Faye Howard, Mary Adair, Evelyn Watts, Tammy McBurnett, Renee Stone, and Victoria Stone were traveling in a 2014 Ford Expedition sport-utility vehicle when it was struck by a vehicle driven by Wiley "Pete" Whitworth. The collision killed Leiah Watts, Faye Howard, Mary Adair, and Evelyn Watts. Tammy McBurnett, Renee Stone, Caiden Watts, Jackson Watts, and Victoria Stone suffered serious injuries in the collision. The Watts vehicle was insured by a policy of insurance issued by Farmers Insurance Exchange to Rodney Watts, underwritten by Mid-Century. Mid-Century contended that, because the policy allowed for the stacking of up to three UIM coverages, the maximum amount of UIM benefits available under the policy for the accident in this case was $300,000, based on $100,000 per accident. The Watts plaintiffs contended that each of the nine occupants of the Watts vehicle involved in the accident (or his/her personal representative) was entitled to $150,000 in UIM benefits ($50,000 per person limit of the occupied vehicle plus the per person limit of $50,000 for two additional coverages under the stacking provision of the policy). Thus, the total sought by Rodney in UIM benefits was $1,350,000 (9 x $150,000). The case was removed to federal district court, and the federal court granted Mid-Century's motion to dismiss in part, granting the motion as to fraud claims as to Farmers Insurance Exchange and Mid-Century. The court dismissed without prejudice claims of breach of contract and bad faith on ripeness grounds. The Alabama Supreme Court determined the Watts plaintiffs were unable to stack more than three coverages under the uninsured-motorist statute and insurance policy, and the fact that they could not do so did not render the coverage under the policy illusory. The Court reversed the trial court's order denying Mid-Century's motion for a partial summary judgment as to the UIM claim and remanded the case for further proceedings. View "Mid-Century Insurance Company v. Watts" on Justia Law
Nationwide Property and Casualty Insurance Company v. Steward
Aaron Kyle Steward sued Nationwide Property and Casualty Insurance Company ("Nationwide"), seeking uninsured-motorist ("UM") benefits after he was injured in an accident at a publicly owned and operated all-terrain-vehicle ("ATV") park. The circuit court entered summary judgment in Steward's favor, ruling that the ATV that collided with the one on which he was riding was an "uninsured motor vehicle" for purposes of Steward's automobile-insurance policies with Nationwide, and Nationwide appealed. Because the Alabama Supreme Court concluded that the roads on which the accident occurred were "public roads" under the policies, judgment was affirmed. View "Nationwide Property and Casualty Insurance Company v. Steward" on Justia Law
Ex parte Blue Cross & Blue Shield of Alabama.
After her claim for coverage under the Public Education Employees' Health Insurance Plan ("PEEHIP") was denied, Marilyn Player sued Blue Cross and Blue Shield of Alabama ("BCBS") at the Macon Circuit Court ("the trial court") asserting claims of breach of contract and bad faith. BCBS sought a writ of mandamus to direct the trial court to transfer Player's case to the Montgomery Circuit Court pursuant to section 16-25A-7(e), Ala. Code 1975. A complaint seeking judicial review of a decision of a PEEHIP claims administrator could be heard only by the Montgomery Circuit Court. Player argued that 16-25A-7(e) did not apply to her complaint because her claims, she contended, did not constitute an action for a dispute over the denial of benefits and her complaint could not be characterized as an appeal of any administrative action. Rather, the breach-of-contract and bad-faith claims, Player argued, were regular tort claims recognized by the common law of Alabama and therefore did not fall within the purview of 16-25A-7(e). The Alabama Supreme Court was not persuaded: "Player cannot avoid the legislature's exclusive-venue provision by recasting her claims using artful labels." The trial court exceeded its discretion in denying BCBS's motion for a change of venue from Macon County to Montgomery County. Despite Player's attempt to cast the issues in her complaint as regular tort claims, Player's breach-of-contract and bad-faith claims are, in essence, disputes over a final decision allegedly made by BCBS regarding Player's insulin medication. Section 16-25A-7(e) controlled in this action; therefore, venue was proper in Montgomery County. The Supreme Court granted the petition and issued the writ. The trial court was ordered to transfer the action to the Montgomery Circuit Court. View "Ex parte Blue Cross & Blue Shield of Alabama." on Justia Law
Crook v. Allstate Indemnity Company, et al.
Kevin Crook appealed summary judgment entered in favor of Allstate Indemnity Company ("Allstate Indemnity"), Allstate Insurance Company ("Allstate Insurance"), and The Barker Agency (hereinafter collectively referred to as "the defendants"). Crook owns lake-front property in Tuscaloosa County. The property consists of a house, a bathhouse, a garage, a deck, and a boat dock. In 2006, Crook, through The Barker Agency, obtained property insurance on the house and other structures from Allstate Indemnity. Allstate Indemnity issued a policy to Crook ("the policy") and provided uninterrupted insurance coverage of Crook's house from 2006 through 2015. On February 12, 2015, Allstate Indemnity conducted an inspection of the property for underwriting purposes. After the inspection, on February 23, 2015, The Barker Agency sent Crook a letter with the results, finding no "issues that impact [Crook's] current coverage, and you do not need to do anything further. ...our inspection... focused only on identifying certain types of hazards or conditions that might impact your future insurance coverage. It may not have identified some other hazards of conditions on your property." In April 2015, a storm damaged the deck and the boat dock. Ultimately, Crook sued defendants for breach of contract, bad-faith failure to pay a claim, negligent/wanton procurement of insurance, and estoppel, all relating to the policy's coverage of the storm damage. After review, the Alabama Supreme Court found no reversible error in the grant of summary judgment in favor of defendants and affirmed. View "Crook v. Allstate Indemnity Company, et al." on Justia Law
Allstate Insurance Company v. Hicks
This matter went before the Alabama Supreme Court on consolidated appeals stemming from an action filed by Nancy Hicks for injuries sustained in an automobile accident. Hicks appealed when the trial court denied her motion for a new trial. Allstate Insurance Company ("Allstate") cross-appealed, challenging the trial court's denial of its motion for a partial judgment as a matter of law on the issue of causation of Hicks's injuries. By refusing to allow the jury to consider the mortality table, the trial court hindered the jury's ability to determine the appropriate amount of damages to which Hicks was entitled in a trial in which the only issue was the amount of damages. Because the trial court erroneously determined that the mortality table could not be admitted into evidence, the trial court's denial of Hicks's motion for a new trial was reversed. Because of the Court's holding on this issue, it pretermitted discussion of Hicks's other argument in support of her request for a new trial, namely that the trial court erred by not giving the requested jury instructions on permanent injuries and on the use of mortality tables. Because Allstate did not properly preserve for appellate review its motion for a partial judgment as a matter of law of the issue of causation underlying Hicks's claim, the trial court's denial of that motion was affirmed. The matter was remanded for further proceedings. View "Allstate Insurance Company v. Hicks" on Justia Law
Turner v. State Farm Mutual Insurance Company
David Turner appealed the grant of summary judgment entered in favor of State Farm Mutual Insurance Company. In August 2017, Turner was on duty as a paramedic and was riding in the passenger seat of an ambulance while responding to an emergency call. While traversing an intersection, the ambulance collided with a vehicle being driven by Michael Norris. Turner suffered multiple injuries, including a broken leg. In November 2017, Turner sued Norris, asserting claims of negligence and "recklessness." Norris answered the complaint, denying that he had been negligent or reckless. Because the Alabama Supreme Court Held that State Farm was discharged from its obligation to pay Turner UIM benefits based on State Farm's payment of a "Lambert" advance and Turner's repudiation of his policy with State Farm, the Court pretermitted consideration of Turner's alternative argument regarding State Farm's failure to disclose the substance of its investigation of Turner's claim for UIM benefits, and expressed no opinion concerning that issue. The Court also expressed no opinion regarding any potential liability State Farm may or may not have to Turner in tort because Turner did not assert such a claim in this action. View "Turner v. State Farm Mutual Insurance Company" on Justia Law
Ex parte State Farm Fire & Casualty Co.
In 2015, Elizabeth Byars was visiting a residence in Huntsville, Alabama owned by Hannelore Sims ("Hannelore") when she was attacked by a pit bull kept by Hannelore's adult grandson Cody Sims ("Cody"), who also resided at the property. The pit bull was allegedly owned by Belinda Jones (whose relationship to Cody and Hannelore was not made clear from the trial court record). Byars sued Hannelore, Cody, and Jones seeking to recover damages for her injuries. Cody was served with notice of Byars's lawsuit, but he failed to answer the complaint. The trial court entered a default judgment against Cody, awarding Byars $200,000. Byars thereafter amended her complaint to assert a claim against State Farm. Specifically, Byars alleged that State Farm had issued a homeowner's insurance policy insuring Hannelore's property and that, because a judgment had been entered against Cody, Byars could assert a claim against State Farm under the direct-action statute. State Farm moved to dismiss, arguing that the direct- action statute did not allow Byars to simply amend her complaint to add State Farm as a defendant. Rather, State Farm argued, Byars was required to initiate a separate action to pursue any claim she might have against State Farm. State Farm petitioned the Alabama Supreme Court for mandamus relief when the trial court denied its motion. In denying State Farm's petition, the Supreme Court determined State Farm failed to meet its burden or establishing that it had no adequate remedy aside from a writ of mandamus. View "Ex parte State Farm Fire & Casualty Co." on Justia Law
Ex parte State Farm Fire & Casualty Company.
State Farm Fire and Casualty Company ("State Farm"), a defendant below, petitioned the Alabama Supreme Court for a writ of mandamus to challenge Clarke Circuit Court's failure to dismiss the underlying action or to enter a judgment in its favor on the claims of the plaintiffs, Samuel Boykin, Lucretia Boykin, Reginald Berry, and Ida Berry (collectively referred to as "the respondents"). Specifically, State Farm contended respondents' claims were barred by section 27-23-2, Ala. Code 1975 ("the direct-action statute). In denying the writ, the Supreme Court found it “never recognized an exception to the general rule that would permit interlocutory review of a trial court's denial of a motion to dismiss or for a judgment on the pleadings for cases that turn on whether the plaintiff has stated a cognizable claim under the applicable law. We will not make an exception here. Accordingly, the petition is denied.” View "Ex parte State Farm Fire & Casualty Company." on Justia Law