Justia Insurance Law Opinion Summaries

This case concerned defects in the execution of two life insurance annuity polices that the decedent purchased through National Western Life Insurance Co. Plaintiffs, the decedent’s wife and children, sued National Western seeking a declaration that the policies were void and a return of the premiums paid by the decedent. National Western filed a motion to dismiss because Plaintiffs failed to join a necessary party - the decedent’s brother, who was named under both policies as the sole beneficiary - even though National Western had already paid him. The district court denied the motion, ruling that the beneficiary at issue was not “required to be joined if feasible” under Fed. R. Civ. P. 19(a). The court then granted summary judgment for Plaintiffs. The First Circuit vacated the judgment of the district court, holding that the sole beneficiary of the annuities was required to be joined if feasible under rule 19(a). The court remanded the case to the district court to determine whether it was equitable for the case to proceed without him. View "Maldonado-Vinas v. National Western Life Insurance Co." on Justia Law

This appeal arose out of a property damage claim filed by the Hayes Family Trust with its insurer, State Farm Fire & Casualty. When the parties could not agree on the amount of loss, Hayes invoked an appraisal process provided by the policy to calculate the loss incurred. After Hayes sought the district court's assistance with the appointment of an umpire, the parties participated in the appraisal process, which resulted in a unanimous award. State Farm paid the balance of that award, and Hayes accepted payment. But despite State Farm's payment, at Hayes's request, the district court confirmed the award and entered judgment in favor of Hayes. Hayes promptly moved for an award of prejudgment interest, attorney's fees, and costs under a prevailing party statute. In response, State Farm moved to vacate or amend the judgment. Finding that the parties settled any dispute over the amount of loss, the court agreed with State Farm and vacated its order confirming the appraisal award and the judgment. Hayes appealed the order vacating judgment in an attempt to recover prejudgment interest, fees, and costs. Finding no reversible error, the Tenth Circuit affirmed. View "In re: Hayes Family Trust" on Justia Law

Sheldon Hathaway became embroiled in a stranger-originated-life-insurance (STOLI) scheme at the involving his neighbor, Jay Sullivan. Here, Intervenor Defendant-Appellant Windsor Securities, LLC (Windsor) loaned Defendant-Appellant the Sheldon Hathaway Family Trust (the Trust) $200,000 to finance the initial premium on a life insurance policy (the policy) for Hathaway. In exchange, Windsor “receive[d] a moderate return on [its] investment” if a trust repaid the loan. Alternatively, Windsor “foreclose[s] on the life insurance policy that was pledged as collateral” when a trust fails to do so. That’s what happened here. But before Windsor could profit from its investment, Plaintiff-Appellee PHL Variable Insurance Company (PHL) sought to rescind the policy based on alleged misrepresentations in Hathaway’s insurance application. The district court ultimately granted PHL’s motion for summary judgment on its rescission claim, and allowed And it allowed PHL to retain the premiums Windsor already paid. On appeal, Windsor and the Trust (collectively, the defendants) argued the district court erred in granting PHL’s motion for summary judgment because there was at least a genuine dispute of material fact as to whether PHL waived its right to rescind the policy. Alternatively, they argued the district court erred in granting summary judgment because, at a minimum, a genuine dispute of material fact existed as to: (1) whether the application contained a misrepresentation; and (2) whether PHL relied on that misrepresentation in issuing the policy. Finally, even assuming summary judgment was appropriate, defendants argued the district court lacked authority to allow PHL to retain the paid premiums. The Tenth Circuit affirmed, concluding no genuine dispute of material fact existed as to whether PHL waived its right to rescind the policy. Nor was there any genuine dispute of material fact as to whether the application contained a misrepresentation or whether PHL relied on that misrepresentation in issuing the policy. Lastly, the Court held the district court had authority to allow PHL to retain the paid premiums. View "PHL Variable Insurance v. Sheldon Hathaway Family Trust" on Justia Law

Liberty National Life Insurance Company petitioned the Alabama Supreme Court for a writ of certiorari to review the Court of Civil Appeals' decision: (1) holding, as a matter of first impression, that 27-14-3(f), Ala. Code 1975, required an insurable interest in a life-insurance policy to exist at a point other than the time at which the policy becomes effective; and (2) reversing the trial court's dismissal of the complaint filed by Misty Ann Barton, as administratrix of the estate of Benjamin H. Miller, Jr, in which Barton alleged that Liberty National was negligent in allowing Leanne Miller, Benjamin Jr.'s stepmother, to substitute herself as beneficiary of an insurance policy insuring the life of Benjamin Jr. The Court granted Liberty National's petition, and, affirmed in part and reversed in part the judgment of the Court of Civil Appeals. Barton alleged that Liberty National was negligent in allowing Leanne to name herself as beneficiary of an insurance policy that was owned by Benjamin Sr. at his death and, pursuant to the terms of the policy, payable to Benjamin Jr.'s estate. The Court found that the policy was not produced or viewed by the trial court, nor had any discovery ensued concerning ownership of the policy, and who exactly had the right to effect a beneficiary change. Accordingly, in viewing the allegations of Barton's complaint most strongly in Barton's favor, it appeared to the Supreme Court that Barton could, under certain circumstances, maintain a cause of action against Liberty National alleging negligence on its part in allowing Leanne, either as personal representative of Benjamin Sr.'s estate or individually, to substitute herself as beneficiary on the policy insuring Benjamin Jr.'s life. The Court affirmed that portion of the Court of Civil Appeals' opinion reversing the trial court's order dismissing Barton's complaint. The Court reversed the Court of Civil Appeals' judgment insofar as it interpreted section 27-14-3(f) to require an insurable interest in personal insurance to exist at any point beyond the time the policy of insurance becomes effective. View "Ex parte Liberty National Life Insurance Company." on Justia Law

Appellant, acting in the capacity as the executor of the estate of Marion Bingham, brought this lawsuit against Supervalu, Inc., alleging that Supervalu acted as an insurer of one of its subsidiaries and violated Mass. Gen. Laws ch. 176D and Mass. Gen. Laws ch. 93A by failing to promptly and equitably resolve prior litigation between the subsidiary and the State. Supervalu removed the action to federal court, arguing that it was not in the business of insurance and was thus not subject to regulation under Chapter 176D. The district court granted summary judgment in favor of Supervalu, ruling that Supervalu was not in the business of insurance. The First Circuit affirmed, holding that the district court did not err in concluding that Supervalu was not in the business of insurance. View "Bingham v. Supervalu, Inc." on Justia Law

Prior to his death and after consulting a lawyer about divorcing Wife, Husband changed the beneficiary on his term life insurance policy from Wife to Respondents, his parents and sister. Less than four months before Husband’s death, Wife petitioned for dissolution of marriage to Husband. Following Husband’s death, the district court dismissed the dissolution proceeding. Wife subsequently filed suit against Respondents, alleging that Husband’s transfer violated Minn. Stat. 518.58(1)(a), which prohibits the transfer of “marital assets” by a party who contemplates commencing a marriage dissolution. The district court granted summary judgment to Respondents. The court of appeals affirmed, holding that section 518.58(1)(a) did not apply to Wife’s claim because her dissolution proceeding abated upon Husband’s death and the statute applies only in current dissolution proceedings. The Supreme Court affirmed, holding that because the language of section 518.58(1)(a) limits the statute’s application to pending dissolution proceedings, the statute did not provide Wife, who was no longer a party to a marital dissolution proceeding, a remedy in this case. View "Nelson v. Nelson" on Justia Law

Marian Davis lost control of her vehicle and struck a vehicle driven by Amy Locke. At the time of the accident, Davis was insured by Safeco Insurance Company under a policy with a $100,000 per person coverage. Davis died from her injuries. Locke, who also sustained injuries, filed a claim for damages against Davis’s estate. Prior to trial, Safeco paid Locke $16,306 for her past medical expenses. After a trial, the jury awarded Locke $400,000 in compensation for her injuries. The Estate appealed, and Safeco intervened. The Supreme Court affirmed in part and vacated and remanded in part, holding that the district court (1) abused its discretion in denying the Estate’s motion to alter or amend the judgment because Locke was precluded from recovering against the Estate more than the $100,000 insurance limitation; and (2) did not abuse its discretion when it made findings and conclusions that effectively bound Safeco to a judgment in a case in which Safeco was not a named party, was not represented by counsel, and did not appear. View "Locke v. Estate of Davis" on Justia Law

Central United Life Insurance Co. (CULI) purchased Judith Gleason’s cancer benefit insurance policy prior to Gleason’s death from breast cancer. Gleason’s Estate submitted notice of potential claims under the policy to CULI. CULI paid certain claims but denied payment for claims submitted outside the policy limit. The Estate contested the denial of the untimely-filed claims. The district court granted partial summary judgment for the Estate, ruling that CULI owed payment for the untimely-filed claims, provided it was not prejudiced by the late notice. After a trial, the jury found that CULI had violated the Montana Unfair Trade Practices Act (UTPA) but did not award damages and therefore did not consider whether CULI acted with malice. The Supreme Court affirmed in part, reversed in part, and remanded, holding (1) the district court correctly applied the notice-prejudice rule; and (2) when an insurer is found to have violated the UTPA, a jury is not required to find compensatory damages beyond those for breach of the insurance contract before considering malice and punitive damages under the UTPA, and therefore, a new trial must be held on the issue of malice and punitive damages. View "Estate of Gleason v. Cent. United Life Ins. Co." on Justia Law

In 2009, claimant sought workers' compensation benefits for a work-related injury. Claimant had preexisting multilevel degenerative disc disease and a history of intermittent low back pain with some bilateral radiation to his legs. SAIF, the employer's workers' compensation insurer, accepted a claim for a lumbar strain. Claimant subsequently sought acceptance of a combined condition, which SAIF ultimately denied on the ground that the accepted injury was no longer the major contributing cause of the combined condition. The Workers' Compensation Board upheld SAIF's denial, and claimant sought judicial review in the Court of Appeals. On appeal to that court, claimant contended that, in determining the compensability of his claim, the board erroneously had framed the inquiry in terms of whether the accepted condition continued to be the major contributing cause of his disability or need for treatment. In claimant's view, the proper inquiry was whether his accidental injury continued to be the major contributing cause of his combined condition. Claimant contended that there was no evidence that that injury was no longer the major contributing cause of his disability or need for treatment. While judicial review was pending before the Court of Appeals, claimant died of causes unrelated to his workplace injury, without a surviving spouse or other beneficiary entitled to a death benefit. The Court of Appeals held that claimant's estate, through his personal representative, was not authorized to pursue the claim to final determination under ORS 656.218(3) on the grounds that: (1) the estate was not one of the "persons" described in 656.218(5); and (2) the phrase "unpaid balance of the award" in the second sentence of subsection (5) restricted an estate's entitlement to permanent partial disability benefits that were awarded before a worker's death. The Supreme Court reversed the appellate court: in the absence of persons who would have been entitled to receive death benefits if the injury causing a deceased worker's disability had been fatal, an award of permanent partial disability benefits that is finally determined after the worker's death pursuant to ORS 656.218(3) is payable to the worker's estate under ORS 656.218(5). The case was remanded for further proceedings. View "Sather v. SAIF" on Justia Law

Reverend Flesher participated in benefits plans administered by the Ministers and Missionaries Benefit Board (MMBB), a New York not‐for‐profit corporation. Flesher entered into the plans while married to Snow. Snow, also a reverend and MMBB policyholder, was listed as the primary beneficiary on both of Flesher’s plans. Snow’s father was the contingent beneficiary. When Flesher and Snow divorced in 2008 they signed a Marital Settlement Agreement; each agreed to relinquish rights to inherit from the other and was allowed to change the beneficiaries on their respective MMBB plans. Flesher, then domiciled in Colorado, died in 2011 without changing his beneficiaries. MMBB , unable to determine how to distribute the funds, and filed an interpleader suit. The district court discharged MMBB from liability, applied New York law, and held that Flesher’s estate was entitled to the funds. The Second Circuit certified to the New York Court of Appeals the question: whether a governing‐law provision that states that the contract will be governed by and construed in accordance with the laws of New York, in a contract not consummated pursuant to New York General Obligations Law 5‐1401, requires the application of New York Estates, Powers & Trusts Law 3‐5.1(b)(2), which may, in turn, require application of the law of another state. View "Ministers & Missionaries Benefit Bd. v. Snow" on Justia Law