Justia Insurance Law Opinion Summaries

The issue before the Supreme Court in this was the denial of attorney fees under Idaho Code section 41-1839 on the ground that the insured's proof of loss was insufficient under the statute because it did not provide the insurer with the legal theory upon which coverage was later determined to exist. Upon review of the matter, the Supreme Court vacated the judgment because a proof of loss need not include an analysis of the proper theory of coverage under the insurance policy. View "Estate of Benjamin Holland v. Metropolitan Property & Casualty Ins." on Justia Law

The Supreme Court granted certiorari to the Court of Appeals in "Glass v. Gates" to answer whether the definition of "any motor vehicle" in OCGA 33-24-51(a) continued to be the broader definition of the term provided for in prior case law, notwithstanding the 2002 passage of OCGA 36-92-1. As inmates at the Troup County Correctional facility, Jonathan Glass and Tony Smith were operating tractors when Smith's tractor got stuck in a ditch. Donrell Gates, Glass' detail supervisor, instructed the men to attach a chain to the tractors so Glass could use his tractor to pull Smith's from the ditch. As Glass did so, Smith engaged his tractor's bush hog, causing a rock to take flight and pierce Glass' throat. Glass bled profusely and died later that day. Plaintiffs, Glass' minor son and the executor of his estate, brought a wrongful death and survivor action against Troup County and Gates. The county sought summary judgment, claiming plaintiffs' claims were barred by sovereign immunity. The County asserted that by revising OCGA 33-24-51 (b) in 2002 (effective 2005), the legislature demonstrated its intent to apply the more narrow definition of "motor vehicle" found in OCGA 36-92-1 (6) in determining whether a local government waived sovereign immunity by purchasing liability insurance on a motor vehicle. The trial court agreed and granted summary judgment in favor of the County, concluding that the county did not waive sovereign immunity because neither a tractor nor a bush hog could be deemed a "motor vehicle" under OCGA 36-92-1. The Court of Appeals reversed, holding that the broader definition of "motor vehicle" should have been applied under 33-24-51, and that therefore, the County waived its sovereign immunity as long as it purchased insurance for the tractor and bush hog used by Smith. The Supreme Court agreed with the Court of Appeals' reasoning, and affirmed by answering the appellate court's original question in the affirmative. View "Gates v. Glass" on Justia Law

Sandra Emas owned a life insurance policy issued by ReliaStar. The policy named her estate as the beneficiary. When Emas died intestate, she left her son, Jaysen McCleary, as her only heir. McCleary was appointed the administrator of his mother's estate. McCleary later filed for personal bankruptcy. McCleary, as the administrator of the estate, subsequently filed suit against ReliaStar, alleging that ReliaStar had wrongfully refused to pay the estate benefits under Emas's insurance policy. ReliaStar moved for summary judgment, arguing that Emas's interest in any cause of action against ReliaStar passed immediately to McCleary upon her death. The district court granted summary judgment in favor of ReliaStar. The Eighth Circuit Court of Appeals affirmed, holding (1) the estate was functionally closed, and McCleary could not bring a suit on behalf of a closed estate; and (2) there was not an issue of fact as to whether McCleary sold the estate's interest in his bankruptcy proceedings, as McCleary had the authority to sell the estate's interest in its claims against ReliaStar. View "McCleary v. Reliastar Life Ins. Co." on Justia Law

In this case, the Supreme Court was asked to decide whether the decedent Robert Daniel George, who was struck and killed by an uninsured motorist in 2006, qualified as an insured under an insurance policy provided by Harleysville Worcester Insurance Company, which policy was procured by The Cormack-Routhier Agency, Inc. Plaintiffs Pamela A. Riel and Glenn N. George, as co-administrators of the decedent’s estate, and Pamela A. Riel, on behalf of her and the decedent’s minor daughter, Kara George, brought a complaint against Defendants Harleysville and Cormack for declaratory and other relief, but a Superior Court justice granted summary judgment in favor of the defendants. Plaintiffs appealed, arguing that the trial justice erred in dismissing their claims against Harleysville because a genuine issue of material fact existed with respect to whether the decedent should be considered a named insured under the policy. Plaintiffs further asserted that the trial justice erred in dismissing their claims against Cormack because, even if they failed to establish that the decedent was a named insured, they still were entitled to pursue their claims against Cormack for failing to procure adequate coverage. After considering the parties' written and oral submissions and reviewing the record, the Court affirmed the judgment of the Superior Court. View "Riel v. Harleysville Worcester Ins. Co." on Justia Law

Defendant Paul Wentzlaff, an insurance agent, stole thousands of dollars from Harvey Severson, an elderly man who asked Defendant to help manage his financial affairs. Plaintiff Donald Hass, as personal representative for Severson’s estate, sued Defendant and two insurance companies who appointed Defendant as an agent, North American Company for Life and Health Insurance (North American) and Allianz Life Insurance of North America (Allianz). Hass and North American each moved for summary judgment and Allianz joined North American’s motion. After a hearing, the circuit court denied Plaintiff's motion and granted the insurance companies’ motion. Plaintiff appealed, arguing that the insurance companies were vicariously liable for Defendant's acts. Based on undisputed material facts on the record in this case, the Supreme Court found that Defendant Wentzlaff was not acting within the scope of his employment when he stole money from Severson, and thus, as a matter of law, North American and Allianz were not vicariously liable for his acts. The Court affirmed the circuit court's grant of summary judgment in favor of the insurance companies. View "Hass v. Wentzlaff" on Justia Law

As part of a retention package, the bank purchased a split dollar life policy for plaintiff's trust with cash value of more than $662,000. The bank paid part of the premiums and had a senior interest in the policy to the extent of those premiums. To safeguard this interest, the trust assigned the policy to the bank as collateral. The bank paid $421,890 of the premiums. The trust interest was about $240,000. In 2009, the bank failed and was placed under FDIC receivership. The Insurer surrendered the entire cash value of the policy to the FDIC. The trustee demanded return of the value of the policy; the insurer refused. The trustee first contacted the FDIC receiver after expiration of the 90-day period for claims under the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1821(d)(13)(D), although he received notice 12 days before expiration of the period. The district court dismissed for lack of jurisdiction. The Seventh Circuit affirmed. It would be possible for a claim to arise so close to the bar date as to deprive a claimant of due process, but this case did not present that situation.

Insured held a life insurance policy issued as part of a federal employee benefit plan. When Insured divorced from his first wife, the divorce decree and property settlement required Insured (1) to maintain the life insurance policy, and (2) to designate the first wife and their grandchildren as equal beneficiaries. Subsequently, Insured remarried, designated his second wife as the sole beneficiary to the life insurance policy, and increased the insurance coverage. Insured and second wife later divorced. When Insured died, the second wife remained the sole beneficiary on the life insurance policy. The first wife and grandchildren filed suit, asserting equitable claims over the life insurance proceeds. The trial court granted summary judgment to the second wife, determining that federal employee benefit law preempted the equitable state law claims and that the policy proceeds accordingly belonged to the second wife. The Supreme Court reversed, holding that the Federal Employees' Group Life Insurance Act did not preempt the equitable claims and that the first wife and grandchildren were entitled to a constructive trust over at least a portion of the proceeds. Remanded.

Tracy Stanfield was injured in 1992. A settlement relating to his injuries resulted in an annuity providing periodic payments to Stanfield from Metropolitan Life Insurance Company (MetLife). Stanfield assigned certain annuity payments, and the assignee in turn assigned them to J. G. Wentworth S.S.C. Limited Partnership (Wentworth). Stanfield later caused MetLife to ignore the assignments to Wentworth. Wentworth filed an action in a Pennsylvania state court and obtained a judgment against Stanfield. Wentworth then filed a motion for a judgment against MetLife for the same amount. A Pennsylvania court granted the motion. Soon thereafter, Stanfield's mother Mildred filed a petition in an Oklahoma district court to be appointed guardian of her son's estate. MetLife filed an interpleader action in a Pennsylvania federal district court and named Wentworth and Mildred in her capacity as guardian of her son's estate as defendants. Mildred asked attorney Loyde Warren to accept service of process on her behalf, and he agreed. Stanfield signed Warren's contingency fee agreement; Warren then engaged local counsel in Pennsylvania. At the settlement conference the parties agreed that Wentworth's judgment would be withdrawn; payments would be paid from Stanfield's annuity payments to Wentworth; the annuity assignment was rescinded; and future annuity payments from MetLife to Stanfield, as guardian, would be made payable in care of Warren. In 2009, Warren filed a motion in the open and continuing guardianship case before the Oklahoma district court for approval of both the 2001 contract for legal representation and the payment of legal fees made pursuant to that contract. Mildred objected and among her arguments, she maintained that a contingency fee for successfully defending a client from a judgment was improper, and that the fee agreement was unenforceable because it had not been approved by the guardianship court. The district court denied Warren's motion, "[b]ecause the application was not filed prior to payment of the fee and was not filed until nearly eight years after the contract was executed." The Court of Civil Appeals affirmed, and Warren appealed. Upon review, the Supreme Court held that (1) the district court possessed jurisdiction to adjudicate a guardianship proceeding a motion seeking court approval of a lawyer's contingent fee contract; (2) the guardian's failure to obtain court approval of a contingent fee agreement prior to payment pursuant to that agreement is not, by itself, a legally sufficient reason for a court to deny a motion to approve the agreement; and (3) the mere passage of time between creation of a contingent fee agreement and when it is presented to a court for approval in an open and continuing guardianship proceeding is not a legally sufficient reason to deny approval of that agreement.

Judy Maretta, as the named beneficiary of a Federal Employees' Group Life Insurance (FEGLI) policy, received FEGLI benefits upon the death of her ex-husband. Jacqueline Hillman, the widow of the deceased, filed an action against Maretta, claiming that pursuant to Va. Code Ann. 20-111.1(D), Maretta was liable to her for the death benefits received. Maretta claimed that the state law was preempted by 5 U.S.C. 8705 and 8705 because the state statutes granted FEGLI benefits to someone other than the named beneficiary in violation of FEGLIA's terms. The circuit court concluded that section 20-111.1(D) was not preempted by FEGLIA and entered judgment against Maretta. The Supreme Court reversed and entered judgment for Maretta, holding that because Congress intended for FEGLI benefits to be paid and to belong to a designated beneficiary, FEGLIA preempts section 20-111.1(D).

Petitioner-Appellant Lyle Hollingsworth, as personal representative of the Estate of Audrey Hollingsworth, appeals from a district court judgment determining the distribution of insurance proceeds. Jerry Hollingsworth, Petitioner's brother had lived in a house he shared with their mother Audrey and continued to live there after her death. The house was insured under a farm and ranch policy issued by Nodak Mutual Insurance Company (Nodak) which listed Jerry Hollingsworth as the primary insured, with Audrey Hollingsworth listed as an additional insured. After Audrey Hollingsworth's death, the Estate was listed as the additional insured. The house was destroyed by fire in 2006. Nodak issued several checks made payable to Jerry Hollingsworth and the Estate for the loss. Disputes arose over the various heirs' rights in the insurance proceeds, and Lyle Hollingsworth, as personal representative of the Estate, began proceedings in the informal probate requesting that the district court order a division of the insurance proceeds. Following an evidentiary hearing, the district court issued its findings of fact, conclusions of law, and order for judgment directing division of various components of the insurance proceeds between Jerry Hollingsworth and the Estate. The court concluded that the portion of the insurance proceeds paid for loss of the dwelling should be divided on the basis of the relative percentage value of Jerry Hollingsworth's life estate and the Estate's remainder interest, as calculated by actuarial tables. Finding that there was an "unsupervised probate" of the case, it could not be appealed without a Rule 54(b) certification. Because the district court's judgment resolved some but not all of the disputed between the parties in this case, the disbursement of the insurance proceeds was not a final, appealable judgment. The Supreme Court determined it did not have jurisdiction to hear the case further, and dismissed the appeal.