Justia Insurance Law Opinion Summaries

Appellant appealed the district court's summary judgment on her ERISA, 29 U.S.C. 1132(a)(1)(B), claim to recover denied health care benefits and the magistrate judge's decision to limit discovery. At issue was the scope of admissible evidence and permissible discovery in an ERISA action to recover benefits under section 1132(a)(1)(B). The court held that the district court too narrowly defined the scope of discovery where appellant sought to discover evidence that would indicate whether the administrative record was complete, whether Blue Cross complied with ERISA's procedural requirements, and whether Blue Cross previously afforded coverage claims related to the jaw, teeth, or mouth. The court concluded that appellant's discovery request was at least reasonably calculated to lead to the discovery of some admissible evidence and that the district court's abuse of discretion prejudiced appellant's ability to demonstrate that Blue Cross failed to comply with ERISA's procedural requirements. Accordingly, the court vacated and remanded for further proceedings.

Appellants filed suit against nine pilots and their spouses asserting claims for equitable relief under 29 U.S.C. 1132(a)(3) of ERISA where appellants alleged that the pilots and their spouses obtained "sham" divorces for the purpose of obtaining lump sum pension distributions from the Continental Pilots Retirement Plan. At issue was whether ERISA, 29 U.S.C. 1056(d)(1), allowed a retirement plan administrator to seek restitution of benefits that were paid to a plan participant's ex-spouse pursuant to a domestic relations order such as a divorce decree, if the administrator subsequently determined that the domestic relations order was based on a "sham" divorce. The court agreed with the district court's holding that subsection 1056(d)(3)(D)(i) did not authorize an administrator to consider or investigate the subjective intentions or good faith underlying a divorce. Therefore, the court affirmed the district court's dismissal of appellants' claims.

Consolidated Graphics defendants sought to recover the cost of defending a suit against them and indemnity for an adverse judgment against them in that suit from two insurers. At issue was whether the primary insurer or an excess insurer had a duty to defend and indemnify the Consolidated Graphics defendants in an underlying tort suit. The court held that the district court did not err in holding that the primary insurer had no duty to defend the Consolidated Graphics defendants in the underlying litigation and therefore, the excess insurer had no duty to defend the primary insurer's policy limits. The court also held that the Consolidated Graphics defendants could not establish a basis for coverage and therefore, the primary insurer and excess insurer were not obligated to indemnify them. The court also held that the district court's grant of the primary insurer's motion to amend its pleadings on the same day that court entered final judgment in the case did not alter the summary judgment evidence in the record or the arguments in the motion. Accordingly, any error in that regard was harmless.

This case involved the construction and application of a combined professional and general liability insurance policy issued by appellant to appellee where appellee requested a defense from appellant under the policy for a civil lawsuit. In that underlying suit, plaintiff alleged that while her mother was terminally ill, she consented to appellee's harvesting of some of her mother's organs and tissues after her mother's death and consented to the harvesting because appellee was a non-profit corporation. Appellee, instead, transferred the tissues to a for-profit company, which sold the tissues to hospitals at a profit. Appellee subsequently sought coverage under its general liability insurance with appellant and appellant denied coverage because the conduct alleged was outside the scope of the insurance policy's coverage. The court certified the following questions to the Supreme Court of Texas: (1) "Does the insurance policy provision for coverage of 'personal injury,' defined therein as 'bodily injury, sickness, or disease including death resulting therefrom sustained by any person,' include coverage for mental anguish, unrelated to physical damage to or disease of the plaintiff's body?" (2) "Does the insurance policy provision for coverage of 'property damage,' defined therein as 'physical injury to or destruction of tangible property, including consequential loss of use thereof, or loss of use of tangible property which has not been physically injured or destroyed,' include coverage for the underlying plaintiff's loss of use of her deceased mother's tissues, organs, bones, and body parts?"

This case involved a coverage dispute between St. Paul Fire & Marine Insurance Company ("St. Paul") and its insured where the insured wrote a recommendation letter for a former employee who later injured a patient. St. Paul appealed the district court's judgment, in which the court concluded that the commercial general liability policy issued by St. Paul covered the insured's claim for the damages he was required to pay in a misrepresentation lawsuit. The court held that there was no coverage under the policy for the amounts at issue and therefore, reversed the district court's judgment and remanded for entry of judgment in favor of St. Paul.

Plaintiffs brought an enforcement suit against defendants under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1001-1461. At issue was whether the district court properly granted summary judgment in favor of defendants, concluding that defendants' practice of offering discounted telephone services to employees and retirees ("Concession") was not a pension plan in whole or in part. The court affirmed summary judgment and held that the district court did not err in holding that Concession was one plan, at least as it regarded to all retirees; in refusing to examine the out-of-region retiree Concession in isolation; in concluding that although Concession did provide income to some retirees, such income was incidental to the benefit, and was not designed for the purpose of paying retirement income; and in holding that Concession did not result in a deferral of income.

New York Marine & General Insurance Company ("NYMAGIC") and Union Fire Insurance Company of Pittsburgh, Pennsylvania ("NUFIC-PA") were both insuring Bayou Steel Corporation ("Bayou") when an employee of Bayou's Illinois stevedoring contractor, Kindra Marine Terminal ("Kindra"), was injured during Kindra's unloading of Bayou's steel bundles from a vessel belonging to Memco Barge Lines ("Memco"). Memco had contracted with Bayou to haul the cargo for Bayou by barge from Louisiana to Illinois. At issue was whether Kindra was Bayou's contractor or subcontractor for purposes of the provision in NYMAGIC's policy that excluded coverage of Bayou's liability for bodily injury incurred by employees of Bayou's subcontractors but did not exclude coverage of such injuries incurred by Bayou's contractors. The court held that, because Bayou was the principal party, paying party, and not the prime contractor, performance party, under both its barge transportation agreement with Memco and its offloading agreement with Kindra, there was no way for Kindra to have been a subcontractor of Bayou within the intendment of NYMAGIC's policy's exclusion of coverage. Kindra contracted directly with Bayou, not with some contractor of Bayou, to offload Bayou's cargo, so Kindra was Bayou's contractor. Accordingly, NYMAGIC's coverage exclusion did not apply to the employee's injuries because he was the employee of a contractor of Bayou.

Maryland Casualty Company ("Maryland") sued Acceptance Indemnity Insurance Company ("Acceptance") when Acceptance refused to defend and indemnify its insured in an underlying lawsuit where Maryland and Acceptance had insurance policies with insured. At issue was whether the district court's order denying Acceptance's motion for a new trial was proper where Acceptance alleged issues concerning the jury's conclusions, jury charge, and subrogation. The court held that Midcontinent Insurance Co. v. Liberty Mutual Insurance Co. did not bar Maryland's recovery where Acceptance absolutely refused to defend and indemnify its insured, Maryland's insurance policy created a right of contractual subrogation, and its settlements with the underlying lawsuit preserved its right to seek reimbursement from Acceptance for those indemnification costs. The court also held that the district court did not abuse its discretion in excluding Acceptance's proffered jury instruction and that there was evidence on the record to support the jury's verdict.

Plaintiff, Barden Mississippi Gaming LLC ("Barden"), brought a declaratory judgment action against defendants, Great Northern Insurance Company ("Great Northern") and Top Line Seating, Inc. ("Top Line"), where in an earlier appeal brought by Barden, the court concluded that under the terms of an insurance policy between the parties, Great Northern had a duty to defend Barden in a tort suit brought by an individual who had been injured on the premises of Barden's casino through the use of a stool sold by Top Line. At issue was whether Barden was entitled to indemnification from Great Northern and Top Line for the underlying judgment in the prior case. Also at issue was whether Barden was entitled to recovery of attorneys' fees and costs incurred in pursuing the present declaratory judgment action. The court held that under the insurance policy between the parties, Great Northern and Top Line were not obligated to indemnify Barden for the judgment in the prior case where the jury in that case determined that Top Line was not 100% negligent. The court also held that Barden was not entitled to recover attorneys' fees and costs where Barden failed to establish any possible basis for its claim.

Plaintiffs sued Allstate Indemnity Company ("Allstate") to recover additional insurance payments for damage to their home resulting from Hurricane Katrina. At issue was whether plaintiffs' witness was properly excluded and whether additional penalties against Allstate should have been awarded. Also at issue was whether the provisions in plaintiffs' homeowners policy was misconstrued and consequently plaintiffs were awarded too little. The court affirmed judgment and held that the district court properly excluded the report and testimony of plaintiffs' expert witness; awarded plaintiffs an additional amount in wind damage; concluded that the terms of the Extended Limits Endorsement and the Additional Living Expenses provisions did not apply to plaintiffs; concluded that plaintiffs were not entitled to Louisiana Revised Statute 22:1220 damages; concluded that the 2003 version of Louisiana Revised Statute 22:658 applied to plaintiffs' claim; awarded penalties on plaintiffs' wind damage claims; and found that Allstate was not liable for penalties on plaintiffs' contents claim.