Justia Insurance Law Opinion Summaries

Plaintiff sued three defendants in Louisiana state court, alleging that there was an enterprise between all three defendants to misappropriate funds using a Texas bill review company's under-calculation of recommended payments to hospitals. Defendants subsequently appealed the judgment of the district court holding that the local controversy exception to federal court jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), applied to this class action suit filed by plaintiffs and remanding this case to Louisiana state court. The court held that, based on its conclusion that plaintiff failed in its burden to establish that the sole local defendant formed a significant basis of the claims of the potential class, the court vacated the remand order and directed that the case be reinstated on the district court's docket.

Plaintiffs (Insured) filed a class action claiming violations of the Texas Insurance Code, alleging insurance discrimination in the non-standard insurance market, which served lower income individuals and those drivers with less than ideal driving records. Defendants (Insurance Companies) each moved to dismiss the case based on the "local controversy" and "home state" mandatory abstention provisions of the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The court concluded that the underlying case presented questions of Texas state law regarding insurance policies issued for automobiles in the state of Texas by Texas County Mutuals to Texas citizens. The Insured's case did not appear to be national litigation, so the spirit and intent of CAFA were not fulfilled. Therefore, the court held that the district court properly applied the "local controversy" and "home state" mandatory abstention provisions of CAFA diversity jurisdiction.

Jefferson Block submitted a claim under the London OPA Insurance Policy for Offshore Facilities (OPA Policy) for indemnification of the removal costs it incurred in responding to a pipeline leak. Underwriters denied the claim and Jefferson filed suit against Underwriters in district court, alleging that Underwriters wrongfully refused to indemnify it for oil pollution removal costs. The court held that the district court erred when it refused to apply the contra-insurer rule where the OPA Policy was ambiguous with respect to the issue of coverage for Jefferson Block's 16-inch pipeline and extrinsic evidence in the record did not conclusively resolve this ambiguity. Therefore, the court held that, since Jefferson Block offered a reasonable interpretation of the policy and did not completely draft the ambiguous provisions of the OPA Policy, the contra-insurer rule should apply and the ambiguity should be resolved in favor of the insured, Jefferson Block.

Plaintiffs filed suit in district court against the United States, alleging negligence in record-keeping and the administration of a certain life insurance policy. Plaintiffs subsequently appealed from the district court's order granting the United States' motion to dismiss for lack of subject matter jurisdiction. The court held that plaintiffs did exhaust its administrative remedies, but its claim arose out of a misrepresentation and was barred by the Federal Tort Claims Act (FTCA), 28 U.S.C. 2671.

This case arose when an ocean-going tanker collided with a barge that was being towed on the Mississippi River, which resulted in the barge splitting in half and spilling its cargo of oil into the river. Following the filing of numerous lawsuits, including personal injury claims by the crew members and class actions by fishermen, the primary insurer filed an interpleader action, depositing its policy limits with the court. At issue was the allocations of the interpleader funds as well as the district court's finding that the maritime insurance policy's liability limit included defense costs. The court affirmed the district court's decision that defense costs eroded policy limits but was persuaded that its orders allocating court-held funds among claimants were tentative and produced no appealable order.

This case arose from an oil spill in the Mississippi River when an ocean-going tanker struck a barge that was being towed. Appellants (Excess Insurers) appealed the district court's decision requiring them to pay prejudgment interest on the funds deposited into the court's registry in an interpleader action. The Excess Insurers argued that the district court erred by: (1) finding that coverage under the excess policy was triggered by the primary insurer's filing of an interpleader complaint; (2) holding that a marine insurer that filed an interpleader action and deposited the policy limits with the court was obligated to pay legal interest in excess of the policy limits; and (3) applying the incorrect interest rate and awarding interest from the incorrect date. The court held that because the Excess Insurers' liability had not been triggered at the time the Excess Insurers filed their interpleader complaint, the district court erred in finding that they unreasonably delayed in depositing the policy limit into the court's registry and holding them liable for prejudgment interest. Therefore, the court reversed the judgment and did not reach the remaining issues.

This case arose when Associates First Capital Corporation (Associates) purchased integrated risk policies from Certain Underwriters of Lloyd's of London (Lloyd's), the primary insurer, and nine excess insurers. Pursuant to the integrated risk policies, Citigroup, Inc. (Citigroup), as successor-in-interest to Associates, timely notified the insurers of two actions filed within the policy period and made claims for coverage. Initially, all of the insurers denied coverage, but later, Lloyd's settled with Citigroup. After the parties filed motions for summary judgment, the district court dismissed Citigroup's claims for coverage. The court affirmed the denial of coverage and held that the plain language of the insurers' policies (Federal, Steadfast, S.R., and St. Paul) dictated that their coverage did not attach when Citigroup settled with Lloyd's and that Citigroup's claim against another insurer (Twin City) was time barred.

This suit arose out of a dispute between a ship repair contractor, barge owner, and insurance company over the terms of a ship repair service contract and a maritime insurance policy. The contractor appealed from the district court's ruling that that the contractor breached its contractual obligation to procure insurance coverage for the barge owner and that it was contractually obligated to defend and indemnify the barge owner against damages ensuing from a workplace injury that occurred while the barge was being repaired. The barge owner cross-appealed from the district court's ruling that it was not entitled to additional insured coverage under the contractor's insurance policy. The court affirmed the district court's holding that there was a written agreement between the contractor and the barge owner which obligated the contractor to defend, indemnify, and procure insurance for the barge owner. The court also affirmed the district court's holding that the barge owner, which was not named in the policy, was not an additional insured under the policy. The court held, however, that the district court made no ruling regarding attorney's fees and therefore, the court remanded to the district court for a determination of the barge owner's entitlement, if any, to attorney's fees.

Appellants, Peachtree Construction, Ltd. (Peachtree) and Great American Insurance Company (Great American), which was Peachtree's excess liability insurer, appealed the district court's grant of summary judgment in favor of Appellee, Colony Insurance Company (Colony), which was the primary liability insurer to Peachtree and Peachtree's subcontractor (CrossRoads). Great American also appealed the lower court's Fed. R. Civ. P. 12(b)(6) dismissal of its complaint in intervention. At issue was whether, under Texas law, an insurer's duty to indemnify an insured was subordinate to the insurer's duty to defend that insured and whether an excess liability insurer could maintain a subrogation claim against a primary liability insurer after the insured had been fully indemnified. The court held that, in light of D.R. Horton-Texas, Ltd. v. Market Int'l Ins. Co., the district court's summary judgment for Colony was both premature and incorrect where the proffered evidence was more that sufficient to raise a question of fact concerning the existence of a "causal connection relation" between CrossRoads' subcontracted work and the accident in the underlying suit. The court also held that Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co. did not control Great American's contractual subrogation claim against Colony and therefore, the court vacated the district court's Rule 12(b)(6) order that dismissed Great American's complaint in intervention.

The Estate of Mable Dean Bradley (Estate) filed suit against defendants, excess insurers, in federal district court seeking recovery for defendants' alleged bad faith failure to indemnify the Mariner defendants in an underlying state lawsuit and settlement. At issue was whether the district court properly denied the Estate's motion for summary judgment against both insurers, finding as a matter of law that defendants' respective policies did not require them to defend or indemnify Mariner in the lawsuit. The court held that because the actual facts giving rise to liability in the underlying suit occurred outside of defendants' policies, neither excess insurer had a duty to indemnify Mariner for the judgment or settlement in the underlying state suit. Therefore, there could be no breach of denying coverage. The Estate's bad faith action failed as a matter of law. Accordingly, summary judgment was affirmed.