Justia Insurance Law Opinion Summaries

Articles Posted in Supreme Court of Virginia
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The Supreme Court affirmed the judgment of the circuit court holding that a settlement agreement between Plaintiff and her underinsured motorist carrier did not entitle the underinsured defendant (Defendant) to a statutory reduction of the jury verdict rendered against her pursuant to the offset provision of Va. Code 8.01-35.1, holding that the tortfeasor remains primarily responsible for fully compensating the plaintiff for the injury the tortfeasor has caused. Plaintiff sustained injuries when her vehicle was struck by Defendant's vehicle. Plaintiff sued Defendant, asking for compensatory and punitive damages. Prior to trial, Plaintiff settled her underinsured motorist (UIM) claims against her insurance provider. The jury returned a verdict awarding Plaintiff damages against Defendant. Defendant moved to reduce the verdict against her because of the amount paid to Plaintiff by Plaintiff's insurer. The circuit court denied the motion. The Supreme Court affirmed, holding that the circuit court did not err in refusing to reduce the judgment Plaintiff obtained against Defendant by the amount of the proceeds Plaintiff received from her UIM policy. View "Llewellyn v. White" on Justia Law

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In this equitable contribution action brought by Nationwide Mutual Fire Insurance Company and Nationwide Mutual Insurance Company (collectively, Nationwide) against Erie Insurance Exchange the Supreme Court vacated the final judgment of the circuit court granting Erie's demurrer and dismissing Nationwide's claim for equitable contribution, holding that the circuit court erred as a matter of law. In Nationwide Mutual Fire Insurance v. Erie Insurance Exchange, 293 Va. 331 (Nationwide I), the Supreme Court resolved an insurance coverage dispute between Nationwide and Erie. Thereafter, Nationwide brought this action seeking reimbursement for Erie's share of a monetary settlement that Nationwide had paid to a tort claimant while the case was on appeal. The circuit court sustained Erie's demurrer to the claim. The Supreme Court reversed, holding that the circuit court should have denied Erie's demurrer to the claim of equitable contribution based upon the coverage allocation that the Court had determined in Nationwide I. The Court remanded the case to the circuit court to enter an order awarding contribution to Nationwide consistent with the Court's allocation of coverage liability in Nationwide I and with the views expressed in this opinion. View "Nationwide Mut. Fire Insurance Co. v. Erie Insurance Exchange" on Justia Law

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In this insurance coverage dispute, the Supreme Court reversed the judgment of the circuit court ruling in favor of Doswell Truck Stop, LLC (DTS) on DTS's declaratory judgment action against James River Insurance Company and entered final judgment declaring that an auto exclusion precluded coverage of James Smith's injuries under the policy at issue, holding that the trial court erred in ruling in favor of DTS. Smith filed a personal injury lawsuit against DTS for injuries he allegedly suffered as a result of a tire explosion that occurred when DTS was repairing a tire on Smith's tractor-trailer. DTS filed an insurance claim with James River, which had issued a commercial general liability policy to DTS. James River denied coverage on the basis that DTS's claim was precluded by the auto exclusion. DTS then filed this action seeking a determination of whether the policy covered Smith's injury. The circuit court ruled in favor of DTS. The Supreme Court reversed, holding (1) the circuit court erred determining that the auto exclusion was ambiguous with respect to the meaning of "maintenance" of an auto; and (2) the circuit court erred in ruling that an independent basis existed for coverage under the policy. View "James River Insurance Co. v. Doswell Truck Stop, LLC" on Justia Law

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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

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The Supreme Court reversed the decision of the circuit court holding that EPC MD 15, LLC’s ability to control its subsidiary meant that, for insurance-coverage purposes, EPC acquired all of the subsidiary’s property under a coverage-extension provision in the commercial property policy issued by Erie Insurance Exchange, holding that the circuit court misinterpreted the coverage-extension provision in the policy. EPC was a named insurance on the policy issued by Erie. EPC claimed coverage for fire damages to a building owned by one of EPC’s subsidiaries, but the subsidiary was not a named insured, and no provision of the policy identified the subsidiary as an additional insured. The circuit court found that coverage existed for the loss and entered final judgment for EPC. The Supreme Court reversed, holding that the Erie policy did not cover the damaged property in this case. View "Erie Insurance Exchange v. EPC MD 15, LLC" on Justia Law

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The circuit court did not err when it ruled that Plaintiff, a retired firefighter, was not a disabled person entitled to receive health insurance benefits under the Virginia Line of Duty Death and Disability Act, Va. Code 9.1-400 et seq. Plaintiff was diagnosed with throat cancer after he retired from the fire department but did not experience any health problems while he worked as a firefighter. The circuit court concluded (1) under the plain reading of the Act, Plaintiff’s duties as a firefighter ceased as of his retirement; and (2) because Plaintiff became disabled after he retired, his claim for insurance coverage under the Act was not viable. The Supreme Court affirmed, holding that Plaintiff was not a “disabled person” under the Act because his incapacity did not prevent the “further performance” of his duties as a firefighter. Therefore, Plaintiff was not entitled to continued health insurance coverage under the Act. View "Jones v. Von Moll" on Justia Law

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The Supreme Court affirmed the State Corporation Commission’s (SCC) denial of claims filed by a group of Kentucky hospitals requesting reimbursement for legal fees and costs from Reciprocal of America (ROA), an insolvent insurer. On appeal, the Hospitals argued that certain agreements constituting an assumption reinsurance transaction provided a contractual basis for the claims requiring ROA to indemnify them for legal fees and costs incurred in certain litigation and that the SCC erred in concluding otherwise. The Supreme Court disagreed, holding that the SCC did not err in concluding that the governing contractual provisions did not obligate ROA to reimburse the Hospitals for legal fees an costs that they incurred in the legal proceedings. View "Appalachian Regional Healthcare v. Cunningham" on Justia Law

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The Supreme Court reversed the judgment of the circuit court concluding that McKinley Chiropractic Center, P.C. (McKinley) was entitled to judgment against Erie Insurance Company (Erie). Devonta Dodson was involved in a motor vehicle collision with Joann Hutson. Erie insured Hutson with liability coverage under an automobile insurance company. Dodson, who sought chiropractic care for her injuries arising from the collision, executed a document assigning to McKinley all insurance and/or litigation proceeds to which she may be entitled and all causes of action she might have against Erie. Dodson subsequently accepted $7,300 from Erie in return for Dodson’s agreement to release both Hutson and Erie from causes of action arising from the claimed legal liability of Hutson and Erie arising out of the accident. McKinley subsequently filed a warrant in debt against Erie. The district court rendered judgment for the chiropractic services provided to Dodson. The circuit court affirmed. The Supreme Court reversed, holding that, as a matter of law, McKinley did not have a right to sue Erie. View "Erie Insurance Co. v. McKinley Chiropractic Center, P.C." on Justia Law

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Two property insurers issued policies to a Harris Teeter grocery store. The insurers together paid claims for property damage resulting from the malfunctioning of a county sewer line. Exercising their subrogation rights, the insurers sued Arlington County alleging an inverse condemnation claim under Va. Const. art. I, section 11. The circuit court dismissed the case with prejudice. The Supreme Court affirmed in part, reversed in part, and remanded for further proceedings, holding (1) the circuit court did not err in concluding that the original complaint failed to state a viable legal claim for inverse condemnation; but (2) the court erred in denying the insurers leave to amend their complaint because the allegations in the proffered amended complaint, combined with the reasonable inferences arising from them, asserted a legally viable claim for inverse condemnation. Remanded. View "AGCS Marine Insurance Co. v. Arlington County" on Justia Law

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Ebenezer Manu filed a complaint against GEICO Casualty Company alleging that GEICO violated Va. Code Ann. 8.01-66.1 for its bad faith conduct in adjusting his uninsured motorist bodily injury claim. Specifically, Manu alleged that GEICO, his uninsured motorist (UM) carrier, violated its duty of good faith by refusing to pay its UM policy limits prior to Manu obtaining a judgment against the uninsured tortfeasor. GEICO filed a demurrer. The circuit court ultimately granted GEICO’s motion to compel and dismissed the complaint with prejudice, concluding that section 8.01-66.1(D)(1) did not provide Manu a remedy against GEICO. The Supreme Court affirmed, holding (1) section 8.01-66.1(D)(1) does not create a duty for UM carriers to settle a case prior to trial but, rather, creates a remedy for the conduct of UM carriers that refuse in bad faith to pay once the insured has obtained judgment; and (2) accordingly, Manu’s complaint failed to state a cognizable claim. View "Manu v. GEICO Casualty Co." on Justia Law