Articles Posted in Supreme Court of Virginia

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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

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Nationwide Mutual Fire Insurance Company and Nationwide Mutual Insurance Company (together, Nationwide) brought a claim for declaratory judgment requesting that the trial court determine the priority of five separate insurance policies provided by Nationwide and Erie Insurance Exchange (Erie). The trial court determined the priority of coverage as (1) Nationwide Business Auto Policy, $1 million; (2) Nationwide Commercial General Liability Policy, $1 million; (3) Nationwide Commercial Umbrella Policy, $1 million; (4) Erie Commercial Auto Policy, $1 million; and (5) Erie Business Catastrophe Liability Policy, $5 million. The Supreme Court reversed, holding that the order of priorities for the applicable insurance policies in this case was (1) Erie Auto Policy; (2) Nationwide Auto Policy; (3) Nationwide Umbrella Policy and Erie Umbrella Policy, pro rata. View "Nationwide Mutual Fire Insurance Co. v. Erie Insurance Exchange" on Justia Law

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A pretrial detainee asserted claims under 42 U.S.C. 1983 against guards and nurses at a regional jail. The jail authority had purchased a general liability insurance policy (the VaCorp Policy) from the Virginia Association of Counties Group Self Insurance Risk Pool (Risk Pool Association) and also elected to participate in a government-sponsored insurance program (the VaRISK Plan) managed by the Division of Risk Management (DRM). While the federal suit was pending, the detainee filed a declaratory judgment action against DRM and the Risk Pool Association seeking a determination of their respective liabilities for insuring the jail defendants. The Risk Pool Association and the DRM filed opposing third-party claims for declaratory relief. The detainee later settled with the jail defendants. The circuit court concluded (1) the VaRISK Plan was the sole primary coverage and that the DRM had the exclusive duty to defend the jail defendants, and (2) the Risk Pool Association had no duty to contribute toward the defense costs incurred by the jail defendants in the federal suit. The Supreme Court affirmed in part and reversed in part, holding (1) the VaCorp Policy and VaRISK Plan provided co-primary liability coverage to the jail defendants; and (2) VaRISK Plan’s $2 million coverage extension applicable to medical malpractice claims did not apply to the section 1983 civil rights claim alleging violations of federal constitutional law. Remanded. View "Commonwealth, Div. of Risk Mgmt. v. Va. Ass'n of Counties Group Self Ins. Risk Pool" on Justia Law