Justia Insurance Law Opinion Summaries

Auto Owners Insurance Company (Auto Owners) appealed an order granting summary judgment in favor of appellee and awarding her $124,500, the face value of the insurance policy sold to her by Auto Owners. Because Schubert owned a one-half interest in the dwelling covered by the policy, which was completely destroyed by fire, Auto Owners offered to pay her half of the policy value. Auto Owners cited a provision within the policy which limited recovery to "[no] more than the insurable interest the insured had in the covered property at the time of the loss." The district court declared this provision void as contrary to the public policy expressed in the Missouri valued policy statute, Mo. Rev. Stat. 379.140, and alternatively found its language ambiguous so as to allow appellee to recover the face value of the insurance policy. The court agreed with the district court's conclusions as to both points and affirmed the judgment. The court also held that, after initially questioning its jurisdiction over the matter, the case satisfied the $75,000 amount-in-controversy requirement and jurisdiction was proper.

3M Company sued Inspired Technologies, Inc. (ITI) for allegedly unfair and false advertising, in violation of the Lanham Act, 15 U.S.C. 1051, et seq., and the Minnesota Uniform Deceptive Trade Practices Act (MDPTA), Minnesota Statutes 325D.43-325D.48, alleging that ITI engaged in an advertising campaign for its Frog Tape product that depicted 3M Tape as performing poorly in certain respects. ITI tendered a defense of the lawsuit to its liability-insurance carrier, AMCO Insurance Company (AMCO), and the lawsuit ultimately settled. Following the settlement, AMCO filed the instant declaratory judgment action against ITI, seeking a declaration that it did not owe ITI any duty to defend or indemnify because the insurance policy's knowledge-of-false exclusion excluded the 3M suit from coverage. The court found that the two interrogatory answers upon which the district court relied did not reflect that 3M alleged ITI's knowledge of falsity as to all the purportedly unfair advertising. Consequently, the court held that AMCO failed to satisfy its burden of demonstrating, as a matter of law, that every claim in 3M's complaint fell clearly outside the policy's coverage. Accordingly, because 3M alleged at least one arguably coverable claim, AMCO owed ITI a duty under Minnesota law to defend the entire suit and therefore, the district court's grant of summary judgment was reversed and remanded.

Appellants challenged the denial of their claim for benefits arising from an underinsured motorists (UIM) policy issued by appellee. Appellants appealed the adverse grant of summary judgment and the denial of their request for certification of a question of law to the North Dakota Supreme Court. The court held that the negligent driver's excess-liability policy was relevant to determining the underinsured status of his vehicle. Thus, as a matter of law, the negligent driver's vehicle was not underinsured and appellants were not entitled to coverage under the UIM endorsement. The court also declined to certify the question where the case had been decided by summary judgment. Accordingly, the court affirmed the judgment of the district court.

Appellants sued appellee seeking insurance coverage for damages resulting from a pipe rupture in appellants' refrigerated warehouse. Appellants appealed the district court's grant of appellee's motion for summary judgment on appellants' first coverage theory and the dismissal of appellants' vexatious refusal to pay claim. Appellants also raised several claims of error with respect to the second theory of coverage submitted to the jury, including a claim of instructional error. The court held that the district court erred in adopting the restrictive definition of "collapse" discussed by the Missouri Court of Appeals in Williams v. State Farm Fire & Cas. Co., Eaglestein v. Pac. Nat'l Fire Ins. Co., and Heintz v. U.S. Fid. & Guar. Co., because none of those cases addressed the meaning of the term "collapse" when used in conjunction with the expansive definition of the term "buildings" used in this policy. As a result, the district court erred in granting appellee's motion for summary judgment. The court also held that the district court erred when it determined the weight of ice on the refrigerated pipes did not constitute a specified cause of loss under the terms of the policy. The court further held that it was unnecessary to address the claims appellants appealed with respect to alleged trial errors because the only theory of coverage submitted to the jury was appellants' "weight of ice" coverage claim and appellants were entitled to partial summary judgment on the issue of liability under that theory. The court finally affirmed the district court's grant of summary judgment on the vexatious refusal to pay claim where the district court correctly determined that appellee could insist upon a judicial determination of certain questions without being penalized for a vexatious refusal to pay claim.

This case involved a dispute between Companion Property (Companion) and Casualty Insurance Company and Triple H Debris Removal, Inc. (Triple H) over the cancellation of a workers' compensation insurance policy based on an unpaid premium. The case was tried to a jury and the jury returned a verdict in favor of Companion. On appeal, Triple H claimed that the district court erred in denying its motion to take judicial notice of an agency relationship, that the district court erred in denying Triple H's motion for a directed verdict, that the district court erred in instructing the jury, and that the jury's verdict and the district court's order in favor of Companion were not supported by sufficient evidence. The court held that due to the nature of the summary judgment proceedings and the district court's cautionary belief that the agency issue remained a litigated issue for the jury's determination, the district court did not abuse its discretion in denying Triple H's motion to take judicial notice. The court also held that the district court properly instructed the jury concerning the issues of agency, breach of contract, and ambiguity of contract and that any error, if present, was harmless. The court further held that the evidence was sufficient for the jury to find that Companion properly canceled Policy Two and that Triple H failed to raise a bona fide dispute as to the premium owed. Accordingly, the judgment of the district court was affirmed.

Appellant sued Prudential Financial, Inc., for breach of contract, contending that Prudential, which issued a group long-term disability insurance policy to his employer, breached the policy by denying his claim for disability benefits. At issue was whether the district court properly granted Prudential's motion for summary judgment. The court affirmed summary judgment and held that Prudential's prompt subsequent request for raw data in lieu of an independent medical examination was reasonable as a matter of law.

Plaintiff appealed from the district court's dismissal of his claim for benefits under ERISA, 29 U.S.C. 1001 et seq., where the district court held that he failed to exhaust his administrative remedies. The court held that because plaintiff sought either current or future benefits, the plan provided an administrative procedure for his claim. The facts alleged in plaintiff's complaint showed neither futility nor the lack of an administrative remedy and therefore, the court concluded that he was required to exhaust his administrative remedies under the plan before he could bring a civil action in federal court.

After defendant denied plaintiff's claim for long-term disability benefits (LTD benefits), where plaintiff suffered from fibromyalgia, plaintiff filed a complaint against defendant pursuant to ERISA, 29 U.S.C. 1000 et seq. At issue was whether the district court properly granted summary judgment in plaintiff's favor finding that defendant had abused its discretion in denying benefits to plaintiff. The court held that the district court improperly determined that defendant abused its discretion when it ultimately denied the LTD benefits claim. Based on the record, there was more than a scintilla of evidence supporting defendant's conclusion that plaintiff's condition did not render him "disabled" under the policy's any occupation definition and defendant's decision was supported by substantial evidence, where a reasonable person could have reached a similar decision. The court also held that the fact that defendant operated under a structural conflict of interest, as both plan administrator and insurer, did not warrant a finding that defendant abused its discretion in denying plaintiff's claim. Accordingly, the court reversed summary judgment and remanded for further proceedings.

Appellant, the named beneficiary of an accident benefits plan that her husband obtained through his employer, brought suit under ERISA, 29 U.S.C. 1001 et seq., alleging that the plan administrator, Metropolitan Life Insurance (Metlife), abused its discretion in determining that her husband was intoxicated at the time of the accident and denying coverage. At issue was whether the district court properly granted summary judgment to Metlife because Metlife's interpretation of the relevant policies was arbitrary and capricious and not supported by substantial evidence. The court held that Metlife did not abuse its discretion as plan administrator when it denied benefits based on the general exclusion for intoxication that appeared in the certificate of insurance. The court also held that the toxicology report, which concluded that the husband's blood alcohol level was above the state limit, constituted evidence that a reasonable mind might accept as adequate to support a conclusion and therefore, satisfied the substantial evidence standard. The court also held that because it agreed with the district court's conclusion that the denial of benefits was justified in light of the intoxication conclusion, it need not address Metlife's assertion that the husband's death was not accidental because it was reasonably foreseeable or, alternatively, the result of intentional self-inflicted injury. Accordingly, summary judgment was affirmed.

This case involved a type of insurance fraud known as "Stranger Originated Life Insurance" (STOLI), "whereby," as plaintiff described, "high face amount insurance polices insuring senior citizens are obtained for the benefit of investors with no insurable interest in the life of the insured." At issue was whether the district court erred in applying the procured-by-fraud exception to the general rule that "rescission required the return of unearned premiums." The court held that, based on Minnesota Supreme Court precedents, the court affirmed the district court's decision recognizing plaintiff's right under the Minnesota law to retain the premiums paid on a fraudulently procured insurance policy. Accordingly, the judgment of the district court was affirmed.