Justia Insurance Law Opinion Summaries

In the early morning hours of April 11, 2008, Jeremy Rustad and Heidi Hanna were killed in a plane crash in McLean County. Rustad was piloting his Cessna aircraft and Hanna was a passenger when the plane crashed. The National Transportation Safety Board determined the probable causes of the accident were due to pilot error and pilot impairment due to alcohol. The estate published a notice to creditors of Rustad for three successive weeks beginning May 22, 2008, informing them they had three months to file claims. On September 24, 2008, Olson, as "co-personal representative of the estate of Heidi Hanna, deceased, caretaker of [B.H.], a minor, and temporary guardian of [B.H.], a minor," filed a claim against the estate asserting the estate was indebted to Hanna's estate and to Hanna's children. The estate "disallowed" Olson's claim. In early 2009, Olson filed this wrongful death and survival action against the estate. The estate moved for summary judgment dismissing the action. The estate argued Olson's claims were barred because she did not serve the personal representative in that capacity and the failure to present her claims in the probate action made them res judicata. The estate also argued Olson could not show Hanna was injured before Rustad died, and therefore, both the wrongful death and survivor claims were barred under the nonclaim provisions of the Probate Code. The district court rejected the estate's arguments that service of process was insufficient and that the action was barred by res judicata. The court concluded Olson presented no evidence to show Hanna died before Rustad, and dismissed the wrongful death and survival actions because they were barred by the nonclaim provisions of the Probate Code. The district court further noted Rustad had an aircraft insurance policy and the nonclaim provisions did not prevent Olson from recovering to the extent of insurance coverage available for the accident. The court ruled the language in the insurance policy unambiguously limited coverage under the circumstances to $103,000, and a judgment was entered in favor of Olson for $103,000. The Estate appealed; the Supreme Court, after review of the trial court record, affirmed. View "Olson v. Estate of Rustad" on Justia Law

Plaintiff, an insurance company, filed an equitable action in the U.S. district court for Rhode Island seeking a declaratory judgment that a life insurance policy was rescinded ab initio due to the fraudulent misrepresentations of Defendant, an irrevocable trust. Plaintiff also sought to retain the premium paid by the trust as an offset against the damages it had suffered in connection with the policy. The district court (1) found that Defendant, by and through its trustee, had made false representations to induce Plaintiff to issue the policy and that this fraud caused Plaintiff damages that would not be fully compensated by rescission alone; and (2) allowed Plaintiff to retain the policy premium paid by Defendant. The First Circuit Court of Appeals affirmed, holding that the district court (1) did not err, under Rhode Island law, in allowing Plaintiff to both rescind the policy and retain the premium; (2) did not err in finding that Plaintiff was a victim of a fraudulent insurance scheme; and (3) appropriately exercised its equity powers. View "PHL Variable Ins. Co. v. Bowie 2008 Irrevocable Trust " on Justia Law

Plaintiff, on behalf of herself and the Estate, challenged the district court's grant of summary judgment to Zenith on the Estate's breach of the insurance contract claim. After review and oral argument, the court certified questions to the Florida Supreme Court: (1) Does the estate have standing to bring its breach of contract claim against Zenith under the employer liability policy? (2) If so, does the provision in the employer liability policy which excludes from coverage "any obligation imposed by workers' compensation . . . law" operate to exclude coverage of the estate's claim against Zenith for the tort judgment? (3) If the estate's claim was not barred by the workers' compensation exclusion, does the release in the workers' compensation settlement agreement otherwise prohibit the estate's collection of the tort judgment? View "Morales v. Zenith Ins. Co." on Justia Law

Decedent died intestate as a result of a motor vehicle accident. Petitioner, the former spouse of Decedent, sought a share in the settlement proceeds from a wrongful death action based on her monthly receipt of payments from Decedent for a child support arrearage. The circuit court ruled that Petitioner was not entitled to a portion of the subject settlement funds because Petitioner could not demonstrate she was financially dependent on Decedent at the time of trial. The Supreme Court affirmed, holding that the trial court did not err in ruling that Petitioner was not entitled to a share of the wrongful death settlement proceeds, as Petitioner's receipt of monthly arrearage payments was not sufficient to demonstrate the statutory requirement of financial dependence. View "Ellis v. Swisher" on Justia Law

Brothers Thomas and Michael Tessier allegedly swindled brothers Frederick and Thaddeus Jakobiec and the estate of their mother out of millions of dollars. This lawsuit covered the Tessiers' theft of almost $100,000 in life insurance proceeds due to a trust benefitting Thaddeus. Thaddeus and various persons affiliated with the trust and estate (collectively, Plaintiffs) filed this action against Merrill Lynch, the company that issued the life insurance policy, claiming that Merrill Lynch made out the insurance proceeds check to the wrong trust entity in breach of the insurance contract, thus allowing the Tessiers to steal the money. The First Circuit Court of Appeals granted summary judgment for Merrill Lynch, concluding that even if Merrill Lynch did breach the contract, its breach was not the cause of Plaintiffs' losses because the Tessiers would have stolen the money even if the check had been made out correctly. The First Circuit Court of Appeals affirmed, holding (1) because the extensive groundwork laid by the Tessiers for their criminal scheme, they could have and would have stolen the insurance money regardless of how Merrill Lynch made out the check; and (2) therefore, the district court correctly granted summary judgment for Merrill Lynch. View "Jakobiec v. Merrill Lynch Life Ins. Co." on Justia Law

Nationwide Mutual Fire Insurance Company and State Farm Mutual Automobile Insurance Company filed a declaratory-judgment action in the federal district court seeking, among other things, a determination of the status of a settlement agreement they had reached with D.V.G., a minor, resolving her claims for coverage stemming from injuries she received in an automobile accident, following her death in a subsequent unrelated automobile accident. The federal district court ultimately concluded that the issue presented involved a question of Alabama law for which there was no clear controlling precedent, and it certified the following question to the Alabama Supreme Court: "Under Alabama law, is an insurance company bound to a settlement agreement negotiated on behalf of an injured minor, if that minor dies before the scheduling of a pro ami hearing which was intended by both sides to obtain approval of the settlement?" The Court answered in the affirmative: "an insurance company is bound to a settlement agreement negotiated on behalf of an injured minor, even if that minor dies before the scheduling of the court hearing that all parties agreed was necessary to obtain approval of the settlement agreement. In accordance with the parties' understanding, such a hearing is still required, and the minor's death does not render that hearing impossible." View "Nationwide Mutual Insurance Company v. Wood" on Justia Law

Brent Anderson purchased life insurance from Insurer and named three beneficiaries under the policy: (1) his then-wife, Lucia, (2) his parents, and (3) his sister. Brent and Lucia subsequently divorced. Later that year, Mont. Code Ann. 72-2-814 became effective. The statute provides that a divorce revokes "any revocable disposition or appointment of property made by a divorced individual to the individual's former spouse in a governing instrument." Brent died several years later without having changed his designation of Lucia as primary beneficiary under the life insurance policy. Insurer filed an interpleader action to determine the rightful beneficiary under Brent's policy. The district court ruled in favor of Lucia based in part on the fact that section 72-2-814 became effective after Brent and Lucia's divorce. The Supreme Court accepted a certified question from the U.S. court of appeals and answered that section 72-2-814 applies to a divorce that pre-dates the statute's enactment. View "Thrivent Fin. for Lutherans v. Andronescu" on Justia Law

In 2005, Applicant Michael Benson made an application to Leader Life for a life insurance policy, naming his wife Shannon, as Beneficiary. The application asked if the applicant had ever been treated for liver disease, had any medical or surgical treatment in the last five years or any departure from good health and whether or not the applicant had ever had an alcohol or drug problem. Applicant answered yes to the departure from good health question and told the insurance company that he had a blood clot in his leg 2003. Applicant answered no to the Liver disease question and no to the alcohol question. Leaders Life accepted his answers and issued the underlying policy in this action. In 2006, Applicant was on foot, pushing a stalled car out of the street when he was struck by another vehicle which eventually resulted in his death. His wife filed for benefits under the policy. Leaders investigated the claim. They received the hospital records pertaining to his death, which also noted his blood alcohol at his time of death, although the owner of the car testified that he smelled no alcohol on the applicant. After reviewing the records, Leaders Life's underwriter concluded that Applicant falsified his answers on his application and rescinded the policy due to Applicant's alcoholism. Certiorari was granted to review the Court of Civil Appeals opinion that reversed and remanding the case following a jury verdict in Applicant's favor. Leaders Life appealed the trial court and won on appellate review. After its review, the Supreme Court found that at trial, Leaders Life made clear that they believed there were material misrepresentations made by Applicant, and that he attempted to deceive them. However, the trier of fact, the jury did not find that such a misrepresentation had been made. They decided in favor of the beneficiary, and awarded her actual and in punitive damages. The Supreme Court declined substitute its judgment for that of the jury under the case law presented by this suit. Accordingly, the Court reinstated the trial court's judgment and vacated the appellate court's opinion. View "Benson v. Leaders Life Insurance Co." on Justia Law

Defendants Robert Christy, Christy & Tessier, P.A., Debra Johnson, and Kathy Tremblay, appealed a superior court decision that rescinded a professional liability policy issued by Plaintiff Great American Insurance Company (GAIC), to the law firm of Christy & Tessier, P.A. Robert Christy (Christy) and Thomas Tessier (Tessier) were partners in the firm, practicing together for over forty-five years. In 1987, Frederick Jakobiec, M.D. (Jakobiec) retained Tessier to draft a will for him. In 2001, Jakobiec's mother, Beatrice Jakobiec (Beatrice), died intestate. Her two heirs were Jakobiec and his brother, Thaddeus Jakobiec (Thaddeus). Jakobiec asked Tessier, who was Beatrice's nephew, to handle the probate administration for his mother's estate. From 2002 through 2005, Tessier created false affidavits and powers of attorney, which he used to gain unauthorized access to estate accounts and assets belonging to Jakobiec and Thaddeus. Litigation ensued; two months after Tessier and Jakobiec entered into the settlement agreement, Christy executed a renewal application for professional liability coverage on behalf of the law firm. Question 6(a) on the renewal application asked: "After inquiry, is any lawyer aware of any claim, incident, act, error or omission in the last year that could result in a professional liability claim against any attorney of the Firm or a predecessor firm?" Christy's answer on behalf of the firm was "No." The trial court found that Christy's negative answer to the question in the renewal application was false "since Tessier at least knew of Dr. Jakobiec's claim against him in 2006." On appeal, the defendants argued that rescission was improper because: (1) Christy's answer to question 6(a) on the renewal application was objectively true; (2) rescission of the policy or denial of coverage would be substantially unfair to Christy and the other innocent insureds who neither knew nor could have known of Tessier's fraud; and (3) the alleged misrepresentation was made on a renewal application as opposed to an initial policy application. GAIC argued that rescission as to all insureds is the sole appropriate remedy given the material misrepresentations in the law firm's renewal application. Upon review, the Supreme Court held that the trial court erred as a matter of law in ruling that Tessier's knowledge is imputed to Christy and the other defendants thereby voiding the policy ab initio. The Court made no ruling, however, as to whether any of the defendants' conduct would result in non-coverage under the policy and remanded for further proceedings. View "Great American Insurance Company v. Christy" on Justia Law

This appeal came before the Supreme Court from a declaratory judgment action brought by Farm Bureau Mutual Insurance Company of Idaho (Farm Bureau). Farm Bureau brought suit in response to a claim for insurance benefits filed by the personal representatives of the estate of a deceased policyholder (the Estate). Farm Bureau requested a judgment declaring that the Estate was not an "insured" under the decedent's insurance policy and was therefore not entitled to payment of wrongful death damages under the Policy's underinsured motorist coverage. The district court granted the Estate's motion for summary judgment, determining that Idaho's wrongful death statute, entitled the insured's Estate to recover damages for wrongful death and that the Policy provided coverage for those damages. Farm Bureau appealed. Upon review, the Supreme Court reversed: as to the Estate, the Court determined that under the plain language of the wrongful death statute, the Estate was not legally entitled to recover damages for itself, but only to bring an action on behalf of the heirs to recover their damages. "The Estate stepped into [the decedent's] shoes for those claims, and Farm Bureau made those payments to the Estate. Farm Bureau's payment of these legitimate claims under the insurance contract does not constitute a change of position or an admission that coverage exists for other claims. We hold that these payments do not prevent Farm Bureau from arguing that it is not required to pay the Estate for damages that [the decedent] was not legally entitled to recover." View "Farm Bureau v. Estate of Eisenman" on Justia Law