Justia Insurance Law Opinion Summaries

Articles Posted in Supreme Court of Virginia
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The Supreme Court reversed the decision of the circuit court finding that a condominium association's insurance provider waived subrogation against the tenant of an individual unit owner where the tenant was not a named or additional insured, holding that the circuit court erred.As a result of losses sustained from a fire to property managed by Chimney Hill Condominium Association, and consistent with its coverage obligations, Erie Insurance Exchange made payments for the benefit of the Association. Standing in the shoes of the Association, Erie then brought suit against Naomi Alba to recover the payments it made, alleging that Alba negligently caused the fire. Alba, who lived in the unit where the fire originated under a residential lease agreement, filed a third-party complaint against John Sailsman, the unit's owner, for indemnification. The circuit court granted Alba's motion for declaratory judgment, holding that Erie could not pursue subrogation against Alba. The Supreme Court reversed, holding that Alba was not an implied insured of the Association because no contractual relationship or agreement existed between the two parties to allocate risks and responsibilities and because the surrounding circumstances reflected the contrary intention of not absolving non-unit owners of responsibility for harm caused by their negligent acts. View "Erie Insurance Exchange v. Alba" on Justia Law

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The Supreme Court affirmed the judgment of the trial court declaring that the School the City of Richmond's School Board's UM/UIM motorist coverage was $1 million, as provided in the contract between the School Board and the Virginia Association of Counties Group Self-Insurance Risk Pool (VACORP), holding that the $1 million in UM/UIM coverage the School Board contracted for was the amount of available UM/UIM coverage.Maisia Young was injured while riding a school bus. Young filed suit against the School Board seeking damages for her personal injuries. The School Board was self-insured through a self-insurance risk pool managed by VACORP. Young filed a declaratory judgment action to determine the extent of the coverage available to the School Board under the UM/UIM provisions of its contract. VACORP argued that $50,000 was the maximum amount of coverage available, as set by statute. In response, Young argued that the statutes set a minimum, not a cap, and that the maximum available was what was specified in the contract. The circuit court agreed with Young. The Supreme Court affirmed, holding that the School Board's UM/UIM coverage was $1 million, as provided in the contract between the School Board and VACORP. View "VACORP v. Young" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court dismissing Joseph Corriveau's declaratory judgment action where Corriveau requested a determination that the uninsured motorist provision in his mother Tracey Ballagh's automobile insurance policy issued by State Farm Mutual Automobile Insurance Company provided coverage for his injuries arising from an assault that took place on his school bus, holding that no nexus existed between Corriveau’s injuries and the use of the school bus as a means of transportation.Corriveau, a special needs child, was abused while riding a school bus. The insurance policy in this case contained an uninsured motorist provision covering an insured's damages for bodily injuries that "arise out of the ownership, maintenance, or use" of the uninsured motor vehicle. The circuit court granted summary judgment for State Farm, finding that there was no causal connection between Corriveau's injuries and the use of the school bus as a vehicle used to transport children to school. The Supreme Court affirmed, holding that no causal connection existed between the assault and the employment of the school bus as a school bus. View "Corriveau v. State Farm Mutual Insurance Co." on Justia Law

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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