Justia Insurance Law Opinion Summaries

Plaintiff filed a complaint against State Farm in state court alleging claims of breach of contract, bad faith, and fraud. The court must decide whether an insured's claim against his insurer for breach of contract was barred by the insurance policy's one-year limitation to suit, or whether the court must reform the insurance policy to include a two-year limitation to suit, pursuant to Ga. Comp. R. & Regs. 120-2-20-.02. In making that determination, the court must address whether Rule 120-2-20-.02, a regulation promulgated recently by the Georgia Insurance Commissioner, was valid under Georgia law. Because this appeal presented questions of state law that have not yet been addressed by the Georgia appellate courts, the court certified two questions to the Supreme Court of Georgia.

This appeal involved an insurance dispute related to plaintiff's purchase of an Allstate landlord insurance policy from Edwards, a Georgia corporation, for a property plaintiff owned in Georgia. Plaintiff, a Georgia resident, sued Allstate, an Illinois corporation, in Georgia state court alleging that Allstate breached its insurance contract with plaintiff and acted in bad faith when it denied plaintiff's claim for water damage. Plaintiff then filed a second state court suit against Allstate and Edwards alleging that Allstate again breached its insurance contract with plaintiff and acted in bad faith when it denied plaintiff's claim for fire damage, and that Edwards breached its fiduciary duty to plaintiff when it failed to procure appropriate insurance coverage for plaintiff. Allstate removed both cases to federal court based on diversity jurisdiction. The district court denied plaintiff's motion to remand the second case to Georgia state court and the two cases were subsequently consolidated. Plaintiff appealed the denial of his motion to remand the second case against Allstate and Edwards, and the adverse summary judgment in both cases. The court held that the district court erred in concluding that Edwards was fraudulently joined and the fire damage case was remanded to state court. The court affirmed summary judgment in favor of Allstate in the water damage case where the district court properly concluded that plaintiff's property was not covered under the policy.

This case stemmed from a controversy between the insured and their insurer over whether the insurer breached its obligations under a commercial general liability insurance policy that the insureds had with the insurer at the time of the accident. The coverage dispute arose out of a personal injury lawsuit filed against the insured by an injured homeowner. Because the case involved unanswered questions of Florida law that were central to the appeal and because these questions were determinative of the cause in this case and there were no controlling precedents from the Supreme Court of Florida, the court certified these questions for resolution.

This case arose when plaintiff, who was exposed to various chemicals during his employment with defendant and subsequently became legally blind in both eyes, sought workers compensation benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901-950. At issue was which date - the date on which disability occurred, or the date one which the injured employee was awarded benefits for such disability - determined the maximum weekly rate of compensation for a permanently totally disabled employee who was "newly awarded compensation." The court applied long-standing principles of statutory construction and found that the maximum weekly rate of compensation was governed by the rate in effect at the time of the award. Therefore, the court reversed the decision of the district court and remanded for calculation of the sum to be paid.

This case involved a dispute over the proper interpretation under Georgia law of a real property insurance contract between plaintiff and defendant. The insurance policy provided coverage for "direct physical loss of or damage to" a building plaintiff owned in the Buckhead area of Atlanta. At issue was whether the Georgia courts would hold that the State Farm Mutual Automobile Insurance Company v. Mabry rule extended to standard insurance contracts for buildings. Because this was an important unsettled question of state law, and there was no controlling precedent from the Georgia state courts, the court certified the question to the Supreme Court of Georgia.

Trailer Bridge appealed the district court's grant of summary judgment in favor of Illinois National on Trailer Bridge's complaint, alleging that Illinois National failed to defend Trailer Bridge in an underlying antitrust action and thereby breached its commercial general liability insurance policy issued to Trailer Bridge for the year July 2004 to July 2005. The central issue on appeal was whether the CEO's statement triggered the duty to defend under the "personal and advertising injury" provision in the policy. After review and oral argument, the court held that the district court did not err in granting summary judgment for Illinois National for the reasons set forth in the district court's order, which the court adopted as its own. In particular, the court agreed with the district court's rejection of Trailer Bridge's argument that the CEO's statement deployed the advertising idea of "another." The court rejected Trailer Bridge's contention that the use of a co-defendant's idea could qualify as an "offense" under the policy. The underlying plaintiffs sought only antitrust damages; they did not seek to impose any legal obligations upon the insured to pay them damages "because of . . . advertising injury." No facts were alleged in the underlying complaint on the basis of which the underlying plaintiffs might have recovered damages "because of . . advertising injury"; and the underlying plaintiffs could not have recovered such damages because the allegedly misappropriated "advertising idea" was not that of the underlying plaintiffs, but rather was alleged to have been the advertising idea of other parties altogether.

This case concerned the termination of an employee, plaintiff, in the wake of an investigation into the disappearance of approximately $58,000 from a branch of Washington Mutual Bank (defendant). Plaintiff asserted that defendant unlawfully asked him to submit to a polygraph test and unlawfully failed to notify plaintiff of his right to continue his employer-provided health insurance for a period after his termination. The court held that because defendant requested plaintiff to submit to a polygraph test in connection with an "ongoing investigation" of a specific incident in which defendant had a "reasonable suspicion" that plaintiff was involved, the district court did not err in granting summary judgment for defendant on plaintiff's Employee Polygraph Protection Act (EPPA), 29 U.S.C. 2002(1), claim. The court held, however, that the district court erred in granting summary judgment for defendant on plaintiff's improper notice claim under the Consolidated Omnibus Budget Reconciliation Act (COBRA) 29 U.S.C. 1163(2), 1166, where the court should have considered the claims on the merits because it was timely filed. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings.

Defendant and her husband (Duckworths) purchased two automobile policies and one motorcycle insurance policy from plaintiff (State Farm) where all three insurance contracts contained "anti-stacking" provisions that precluded recovery of uninsured motorist benefits under any policy other than that covering the damaged vehicles. The Duckworths subsequently moved to Florida, where the husband was struck and killed by an uninsured motorist while driving the motorcycle covered under the Maryland policy. State Farm consequently brought this action in the district court, seeking a declaratory judgment that it had satisfied its contractual obligations to the husband's estate. At issue before the district court was the applicability of the public policy exception to Florida's choice of law rule in disputes over contract terms. The district court declared that State Farm had satisfied its contractual obligations to the husband's estate and dismissed defendant's counterclaims. Taking into account all of the undisputed facts, and assuming that defendant informed a State Farm representative that the Duckworths' move from Maryland to Florida would be "permanent," the court held that State Farm still did not receive reasonable notice sufficient to trigger the public policy exception. The court held that, even if defendant informed the representative as alleged, her later actions overwhelmingly indicated to State Farm that the Duckworths' move was not necessarily permanent and that, consequently Maryland law would continue to govern the Duckworths' policies. Therefore, the issue of fact upon which defendant's appeal rested was immaterial and, as State Farm was deprived of reasonable notice, judgment as a matter of law was proper.

This case arose when plaintiffs filed a nationwide consumer class action against Life of the South Insurance Company (Life of the South). At issue was whether Life of the South had a right to enforce against plaintiffs the arbitration clause in the loan agreement, between plaintiffs and the car dealership where they purchased their vehicle, where the loan agreement lead plaintiffs to enter into a separate credit life insurance contract with Life of the South. The court held that the loan agreement did not show, on its face or elsewhere, an intent to allow anyone other than plaintiffs, the car dealership, and Chase Manhattan, and the assignees of the dealership of Chase Manhattan, to compel arbitration of a dispute and Life of the South was none of those. The court also held that because the only claims plaintiffs asserted were based on the terms of their credit life insurance policy with Life of the South, which did not contain an arbitration clause, equitable estoppel did not allow Life of the South to compel plaintiffs to arbitrate. Accordingly, the court affirmed the district court's denial of Life of the South's motion to compel arbitration.

Plaintiff was employed full time with Able Body Temporary Services, Inc. (Able Body), a labor broker in the business of furnishing its day-laborer employees to clients on a temporary basis. Able Body supplied its client, Federal Marine Terminals, Inc. (FMT), with day-laborers, including plaintiff, for longshore services. Plaintiff was subsequently injured on the job and received benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901 et seq. Plaintiff, seeking to supplement his workers' compensation benefits, brought this negligence action against FMT, claiming that the negligence of FMT's employees caused his injury. At issue was whether the district court erred in holding that FMT was plaintiff's employer and that section 905(a) of the LHWCA precluded his negligence claim. The court held that because all the elements necessary for a borrowed-employment relationship were satisfied in light of the undisputed evidence, FMT was plaintiff's borrowing employer for purposes of the LHWCA and consequently, plaintiff's negligence claim was barred by section 905(a). Therefore, the judgment of the district court was affirmed.