Justia Insurance Law Opinion Summaries

For twenty years, Defendants, various entities of OneBeacon American Insurance Company (collectively, “OneBeacon”), had a program known as Multiple Line Excess Cover (“MLEC Program”) under which OneBeacon entered into reinsurance contracts (“MLEC Agreements”) with various reinsurers. Employers Insurance Company of Wausau, National Casualty Company, and Swiss Reinsurance America Corporation (“Swiss Re”) participated as reinsurers in the MLEC Program. Some of the MLEC Agreements Wausau entered into with OneBeacon were practically identical to OneBeacon’s MLEC Agreements with Swiss Re. In 2007, OneBeacon demanded arbitration with Swiss Re seeking reinsurance recovery for losses arising out of claims against OneBeacon by policyholders. The arbitration panel decided in favor of Swiss Re. In 2012, OneBeacon demanded arbitration with Wausau and National Casualty for, according to Wausau, the same claims OneBeacon arbitrated and lost against Swiss Re. Wausau and National Casualty petitioned for a declaratory judgment that the prior arbitration award between OneBeacon and Swiss Re had preclusive effect on the arbitration pending between OneBeacon and Wausau. The district court denied the petition. The First Circuit Court of Appeals affirmed, holding that judicial confirmation of an arbitration award “does not warrant deviation from the general rule that the preclusive effect of a prior arbitration is a matter for the arbitrator to decide.” View "Nat'l Cas. Co. v. OneBeacon Am. Ins. Co." on Justia Law

Plaintiff, a school, was sued by two of the school's donors who sought a return of a monetary gift to the school, claiming that the gift had been induced by misrepresentations. The case settled, and Plaintiff sought defense costs and indemnity under a directors and officers liability insurance policy issued by Defendant. The district court granted summary judgment for Defendant based on a provision in the policy excluding from coverage any losses involving any matter disclosed in connection with "Note 8" of the school's financial statement. Note 8 set forth a description of the gift. Plaintiff appealed. The First Circuit Court of Appeals affirmed, holding that because the language of the policy clearly excluded coverage "in any way involving" the disputed gift, Plaintiff had no reasonable expectation of coverage. View "Clark Sch. for Creative Learning, Inc. v. Philadelphia Indem. Ins. Co." on Justia Law

Defendant was insured under three homeowners' policies issued to his parents (the Zamskys) by Plaintiff. Each policy covered a separate parcel of residential real estate owned by the Zamskys and required Plaintiff to defend and indemnify the insureds against claims stemming from bodily injury caused by a covered occurrence. One exclusion to the policy, the UL exclusion, pretermitted coverage for injuries arising out of a premises owned by an insured but not itself an "insured location." This case involved an fire that occurred on a piece of real estate owned by the Zamskys that was not insured by Plaintiff. An individual injured in the fire sued Defendant for bodily injuries. Plaintiff subsequently brought this declaratory judgment action seeking a declaration that the UL exclusions pretermitted its obligation to defend Defendant in the negligence suit or to indemnify him against any damage award. The district court held that the UL exclusion did not apply and that Plaintiff owed Defendant a duty to defend. The First Circuit Court of Appeals affirmed, holding that because the occurrence at issue here did not arise out of a condition of the premises, the district court did not err in determining that the UL exclusion did not apply. View "Vt. Mut. Ins. Co. v. Zamsky" on Justia Law

Plaintiff sued the servicer of his loan (Bank) in a putative class action, asserting that the Bank's requirement that he maintain flood insurance coverage in an amount sufficient to cover the replacement value of his home breached the terms of his mortgage contract. The mortgage was insured by the Federal Housing Administration (FHA). Specifically, Defendant contended that the Bank, under a covenant of the mortgage contract, could not require more than the federally mandated minimum flood insurance. The covenant was a standard uniform covenant prescribed by the FHA pursuant to federal law. The district court dismissed the complaint for failure to state a claim. The judgment of dismissal was affirmed by an equally divided en banc First Circuit Court of Appeals, holding that Plaintiff failed to state a claim for breach of contract, as (1) the Bank's reading of the contract was correct and Plaintiff's was incorrect; (2) Plaintiff could not avoid dismissal on the grounds that his specific understanding or the actions of the parties created an ambiguity; and (3) the United States' position articulated in its amicus brief, which stated that Plaintiff's interpretation of the contract was incorrect, reinforced the Court's conclusion. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law

Plaintiff's property was insured by a standard flood insurance policy (SFIP) issued by Allstate Insurance Company, a private insurer participating in the National Flood Insurance Program (NFIP). Allstate issued Plaintiff's SFIP on behalf of FEMA, the federal agency that administers the NFIP. After Plaintiff's property was damaged by a flood, Allstate paid him for some but not all claims. Plaintiff sued Allstate for the alleged remaining unpaid covered losses, and the district court entered judgment in favor of Plaintiff. The First Circuit Court of Appeals reversed and remanded with directions to enter summary judgment in favor of Allstate, holding that Plaintiff's failure to comply with the SFIP's requirement that he file a proof of loss as to all damages sought barred recovery under his policy for those damages and required dismissal. View "DeCosta v. Allstate Ins. Co." on Justia Law

Appellant was placed on disability leave from work. Appellant was covered under a long term disability (LTD) policy that her employer obtained from Medical Group Insurance Services (MGIS). The policy was written by Sun Life Assurance Company (Sun Life). After leaving her job, Appellant filed a claim with MGIS seeing long term disability benefits. Sun Life denied Appellant's request for benefits. Appellant filed an action against Sun Life, asserting various state law claims. The federal district court dismissed the action based on ERISA preemption. Appellant then amended her complaint to add ERISA claims and asked the district court to apply de novo review in its evaluation of her ERISA claims. The court denied the motion and granted summary judgment for Sun Life, concluding that Sun Life's decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA's requirements. The First Circuit Court of Appeals vacated the judgment, holding (1) the safe harbor exception to ERISA did not apply to the policy covering Appellant, and therefore, Appellant's state law claims were preempted; but (2) the benefits denial was subject to a de novo review, rather than the highly deferential "arbitrary and capricious" review prescribed for certain ERISA benefits decisions. Remanded. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

Puerto Rico law operated to cause hundreds of thousands of motor vehicle owners to pay twice for liability insurance. Commonwealth law declared motor vehicle owners to be entitled to a refund of the excess premiums paid, but large amounts of unclaimed refunds accumulated. The Commonwealth subsequently placed the unclaimed refunds with its Treasury Secretary with the condition that, if not claimed within five years, the funds escheated to the Commonwealth without notice to the vehicle owners. In Garcia-Rubiera II, the First Circuit Court of Appeals held that the Commonwealth's failure to notify vehicle owners of their reimbursement rights violated their procedural due process rights. On remand, the district court ordered the Commonwealth to notify vehicle owners of their reimbursement rights, to publish notices in two newspapers alerting the owners of their rights, and to give owners a 120-day grace period for them to claim reimbursement. The First Circuit again remanded for the district court to craft with "the benefit of further guidance" an injunction that more fittingly remedied the Commonwealth's constitutional violations and ordered no duplicate premiums to escheat to the Commonwealth until it established and complied with a reimbursement procedure meeting the requirements of due process. View "Garcia-Rubiera v. Fortuno" on Justia Law

The Knowles owned rental property in Clinton, Massachusetts that was mortgaged with Fidelity Co-operative Bank (Fidelity) and insured by Nova Casualty Company (Nova). In 2008, a tropical storm brought heavy rain that caused substantial damage to the interior of the Knowles' building. The Town of Clinton ordered the building to be closed. Because the Knowles could not afford to make repairs to the building, it remained vacant. The Knowles submitted a claim for reimbursement for the water damage with Nova, which denied the claim. The building was later vandalized, causing further damage. Nova also refused coverage on this damage. The Knowles subsequently defaulted on their mortgage. In 2010, Fidelity, individually and as assignee of the Knowles, filed a complaint against Nova seeking a declaration that the physical losses suffered by the property and the loss of business income to the Knowles was covered by their all-risk insurance policy. The district court granted summary judgment for Nova. The First Circuit Court of Appeals reversed, holding that the water damage was covered under the policy because the policy's coverage extended to both damage "caused by" or "resulting from" rain as well as damage resulting from the entry of "surface water." Remanded. View "Fidelity Coop. Bank v. Nova Cas. Co." on Justia Law

Plaintiff was withdrawing money from an ATM when Tortfeasor struck her with his car. Tortfeasor was insured under a policy written by Insurer to a limit of $100,000 for bodily injury to one person. Plaintiff and several of her family members brought this action against Tortfeasor and his brother, the named insured on the policy, (collectively, Tortfeasor) and Insurer. The district court originally entered judgment ordering Insurer and Tortfeasor to pay one-and-a-half million dollars to Plaintiffs. Insurer paid into court $75,000, the remainder of its policy limit. The district court later amended its judgment, holding Tortfeasor and Insurer liable for six million dollars in damages. Plaintiffs then unsuccessfully sought to compel Insurer to pay postjudgment interest on the full judgment. The First Circuit Court of Appeals reversed the deniial of Plaintiff's request for postjudgment interest, holding that Insurer was responsible for postjudgment interest from the date of entry of the original judgment and the date of the deposit of the policy limit. View "Vazquez-Filippetti v. Cooperativa de Seguros Multiples de P.R." on Justia Law

Doctor, a licensed podiatrist, was driving alone in her husband's vehicle when she was injured in a collision caused by an underinsured motorist. Doctor sought payment from Peerless Indemnity Insurance Co. and Peerless Insurance Co. (collectively, Peerless), who issued business owner's and excess/umbrella policies to Doctor's podiatric practice (Lake Region). Peerless sought a declaratory judgment in federal district court that it had no duty to pay for Doctor's injuries or damages. The district court granted summary judgment for Peerless. The First Circuit Court of Appeals affirmed, holding that Maine's uninsured/underinsured motorist statute did not apply to the Peerless policies issued to Lake Region, thus precluding Doctor's recovery from Peerless. View "Peerless Indem. Ins. Co. v. Frost " on Justia Law