Justia Insurance Law Opinion Summaries

Since enacting a program for black-lung benefits in 1969, known as the Black Lung Benefits Act,83 Stat. 742, Congress has repeatedly amended the claim-filing process, sometimes making it harder for miners and survivors to obtain benefits, sometimes making it easier. The most recent adjustment, part of the 2010 Patient Protection and Affordable Care Act, reinstated a presumption that deceased workers who had worked for at least 15 years in underground coal mines and had developed a totally disabling respiratory or pulmonary impairment were presumed to be totally disabled by pneumoconiosis and to have died from it. The presumption is rebuttable. The Act also reinstated automatic benefits to any survivor of a miner who had been awarded benefits on a claim filed during his lifetime, 124 Stat. at 260. Groves, a miner for 29 years, filed a claim for benefits in 2006 and died four months later. An ALJ denied his widow benefits. The law changed while her appeal was pending. The Benefits Review Board concluded that the new law covered this claim. The Sixth Circuit affirmed. View "Vision Processing, LLC v. Groves" on Justia Law

Forrest Construction was the named insured on a commercial general liability policy with Cincinnati Insurance. In 2004, Forrest was hired toconstruct a home for the Laughlins. A dispute arose over the amount owed and Forrest filed suit. The Laughlins counter-sued based on alleged defects in the workmanship of the construction, particularly the foundation. Forrest notified Cincinnati Insurance of the counter-complaint and requested defense. Cincinnati Insurance based its denial on an exclusion in the policy for work done by the insured its position that the underlying complaint did not allege damage caused by a subcontractor, thereby rendering the subcontractor exception to the “your work” exclusion inapplicable. Forrest sued, alleging breach of contract, bad-faith denial, and violation of the Tennessee Consumer Protection Act. The district court found that Cincinnati Insurance had breached its contract. The Sixth Circuit affirmed, holding that Cincinnati Insurance was given sufficient notice of the facts giving rise to its obligation to defend and that, under Tennessee law, “property damage” occurs when one component (here, the faulty foundation) of a finished product (the house) damages another component. View "Forrest Constr., Inc. v. Cincinnati Ins. Co." on Justia Law

In 2009 Universal demanded payment from Allstate for medical services that Universal allegedly rendered to 36 persons claiming coverage under Allstate insurance policies. Allstate denied payment, contending that Universal had not, in fact, rendered any services to those persons. Universal filed suit asserting claims for reimbursement, for defamation, and for tortious interference with business relationships. In November 2009, Allstate served Universal with interrogatories and document requests. Universal failed to respond for more than two months, so Allstate filed a motion to compel. In May 2010, the magistrate judge granted Allstate’s motion and ordered Universal to “provide full and complete responses” no later than June 7, 2010. Again Universal did not respond by the deadline or by an extended deadline. Universal finally responded on October 6, but its responses were incomplete. After Universal failed to supplement or to Allstate’s efforts to depose employees, Allstate filed a second motion to dismiss, which was granted. The Sixth Circuit affirmed, noting that Allstate’s repeated motions, and the court’s own orders, were not enough to compel Universal to do what the Rules required. “Universal’s conduct violated the rules of civil procedure and common courtesy alike” View "Universal Health Grp. v. Allstate Ins. Co." on Justia Law

In 1992 Navistar attempted to reduce its costs for retired employee health and life insurance benefits. Navistar’s retirement benefit plan is a registered employee health benefit plan under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 and Navistar is both plan administrator and fiduciary. In 1993, the district court entered judgment in a class action challenging the change, adopting an agreement between the parties and retaining jurisdiction. The Agreement established the Retiree Health Benefit and Life Insurance Plan. The Plan established the Health Benefit Program Summary Plan Description, which contains a description of the health benefits and is furnished to all beneficiaries. The Agreement divides health benefits into two plans: Plan 2 for those eligible for Medicare and Plan 1 for those who are not eligible. A prescription drug benefit was provided under the Agreement, identical for both Plan 1 and Plan 2. When Navistar moved to substitute Medicare Part D into the Plan, class members claimed violation of the Agreement. The district court ordered Navistar to reinstate, retroactively, the prescription drug benefit that was in effect before Navistar made the unilateral substitution. The Sixth Circuit affirmed,View "Shy v. Navistar Int'l Corp." on Justia Law

Plaintiffs are five pension funds operated by the State of Ohio for public employees that invested hundreds of millions of dollars in 308 mortgage-backed securities (MBS) between 2005 and 2008, all of which received a “AAA” or equivalent credit rating from one of the three major credit-rating agencies. The value of MBS collapsed during this period, leaving the Funds with estimated losses of $457 million. The Funds sued under Ohio’s “blue sky” laws and a common-law theory of negligent misrepresentation, alleging that the Agencies’ ratings were false and misleading and that the Funds’ reasonable reliance on those ratings caused their losses. The district court dismissed. The Sixth Circuit affirmed. Even if a credit rating can serve as an actionable misrepresentation, the Agencies owed no duty to the Funds and the Funds’ allegations of bad business practices did not establish a reasonable inference of wrongdoing View "OH Police & Fire Pension Fund v. Standard & Poor's Fin. Servs., LLC" on Justia Law

Lesley and Fogg presented the Benistar 419 Plan to the Ouwingas, their accountant, and their attorney, providing a legal opinion that contributions were tax-deductible and that the Ouwingas could take money out tax-free. The Ouwingas made substantial contributions, which were used to purchase John Hancock life insurance policies. In 2003, Lesley and Fogg told the Ouwingas that the IRS had changed the rules; that the Ouwingas would need to contribute additional money; and that, while this might signal closing of the “loophole,” there was no concern about tax benefits already claimed. In 2006, the Ouwingas decided to transfer out of the Plans. John Hancock again advised that there would be no taxable consequences and that the Plan met IRS requirements for tax deductible treatment. The Ouwingas signed a purported liability release. In 2008, the IRS notified the Ouwingas that it was disallowing deductions, deeming the Plan an “abusive tax shelter.” The Ouwingas filed a class action against Benistar Defendants, John Hancock entities, lawyers, Lesley, and Fogg, alleging conspiracy to defraud (RICO, 18 U.S.C. 1962(c), (d)), negligent misrepresentation, fraudulent misrepresentation, unjust enrichment, breach of fiduciary duty, breach of contract, and violations of consumer protection laws. The district court dismissed. The Sixth Circuit reversed, View "Ouwinga v. Benistar 419 Plan Servs., Inc." on Justia Law

Goodyear announced in 2003 that it would restate its earnings for some prior years. The next day, shareholders filed class-action lawsuits against Goodyear and several of its officers and directors. The SEC also commenced an investigation. Eventually, the lawsuits were dismissed and the investigation terminated. Goodyear incurred $30 million of legal and accounting costs and sought recovery from two of its insurers. After several years of litigation, Goodyear released its claim against National Union in exchange for payment of $10 million, but the excess policy with Federal states that coverage attaches only after National Union pays out the full amount of its liability limit, which was $15 million rather than the $10 million that National Union paid. The district court granted summary judgment to Federal. The Sixth Circuit affirmed, rejecting arguments based on Ohio’s “public policy favoring settlements,” and that the settlement did not prejudice Federal in any way. View "Goodyear Tire & Rubber Co. v. Nat'l Union Fire Ins. Co." on Justia Law

In 2000 an “incident” occurred on the ice of a professional hockey game in Switzerland between Miller and McKim. McKim was injured. Swiss courts filed criminal charges against Miller. McKim’s insurer and hockey club filed suit against Miller, and two civil judgments were entered against Miller. Miller left Switzerland before the judgments were finalized and informed his hockey team and its insurer (Winterthur) that he no longer had the financial means to defend the litigation. In 2005, a document was submitted to Miller in Michigan from Winterthur that acknowledged its responsibility for the costs of criminal and civil judgments and proceedings pending in Zurich and previous attorneys’ fees. In 2010, McKim’s team and insurer submitted demands for payment to Miller from the Swiss judgment. Miller, claiming reliance, submitted the demands to Winterthur, which declined to pay the judgments in full. Miller brought suit in Michigan, seeking contractual damages and enforcement of the terms of the 2005 document. The district court granted Winterthur’s motion to dismiss for lack of personal jurisdiction. The Sixth Circuit affirmed. Miller had established a basis for personal jurisdiction under Michigan’s long-arm statute, but the requirements of constitutional due process were not met. View "Miller v. AXA Winterthur Ins. Co." on Justia Law

In a 2009 opinion, the Sixth Circuit held that, in a 1998 collective bargaining agreement, CNH agreed to provide health-care benefits to retirees and their spouses for life, but rejected the suggestion that the scope of this commitment in the context of healthcare benefits, as opposed to pension benefits, meant that CNH could make no changes to the healthcare benefits provided to retirees. The court remanded for a determination of reasonableness with respect to CNH’s proposed changes to its retiree healthcare benefits, under which retirees, previously able to choose any doctor without suffering a financial penalty, would be put into a managed-care plan. The court listed three considerations: Does the modified plan provide benefits “reasonably commensurate” with the old plan? Are the proposed changes “reasonable in light of changes in health care”? And are the benefits “roughly consistent with the kinds of benefits provided to current employees”? On remand, the district court granted CNH summary judgment without reaching the reasonableness question or creating a factual record from which the determination could be made on appeal. The Sixth Circuit again remanded.View "Reese v. CNH America LLC" on Justia Law

Adams worked in coal mines for 17 years, leaving A & E Coal in 1988, after 12 years, because he was having difficulty breathing. He has not worked since. Adams also smoked cigarettes for about 25 years, averaging a pack a day before quitting in 1998 or 1999. Adams filed his first claim for benefits under the Black Lung Benefits Act 30 U.S.C. 901 in 1988. His claim was denied: He did not prove that his pneumoconiosis was caused in part by his coal-mine work, or that his pneumoconiosis totally disabled him. In 2007, Adams filed a second claim. Two pulmonologists agreed that he was completely disabled, but disagreed on what lung diseases Adams had, and on what caused them. An Administrative Law Judge awarded benefits, finding that Adams had pneumoconiosis, that the disease was caused by Adams’s exposure to coal dust during his coal-mine employment, and that he was totally disabled because of the disease. The Benefits Review Board and the Third Circuit affirmed. Although the ALJ was not required to look at the preamble to the regulations to assess the doctors’ credibility, he was entitled to do so. View "A & E Coal Co. v. Adams" on Justia Law