Justia Insurance Law Opinion Summaries

Plaintiffs sued Atlas Van Lines, Inc. ("Atlas") and Pickens Kane Moving & Storage Co. ("Pickens") for carrier liability under the Carmack Amendment to recover damages plaintiff paid to its insureds after the insureds' shipment of household goods were destroyed by a fire while in transit. Pickens was the receiving carrier and the goods were destroyed in the custody of Atlas. At issue was whether the district court properly interpreted sections 14706(f) and 14706(b) of the Carmack Amendment when apportioning the replacement value of household goods and apportioning costs. The court held that the district court properly apportioned the damages as it did under section 14706(f)(2), (3) to limit Atlas' liability to the tariff amount of $5.00 per pound in the absence of a declared value. The court also held that the district court did not abuse its discretion in apportioning costs where Atlas had custody of the shipment when it was destroyed and was liable to Pickens.

United States Fidelity & Guaranty Co. ("Insurer") filed a federal action against Lee Investments, LLC ("Employer") seeking rescission of a workers' compensation policy and related relief on account of the Employer's alleged misrepresentations when Employer's employee injured herself while assembling a water slide at Employer's California waterpark. At issue was whether a federal district court had subject matter jurisdiction over an insurance company's diversity action seeking rescission of a workers' compensation policy and if so, whether it was required to dismiss the case because exclusive jurisdiction was vested by state law in a state workers' compensation agency. The court held that a federal district court had subject matter jurisdiction where the parties were diverse and the amount of controversy exceeded $75,000 and where the action did not arise under California's workers' compensation laws, Insurer filed an original claim in federal court, and Employer failed to demonstrate fraud or collusion. The court also held that the California's Workers' Compensation Appeals Board did not have exclusive jurisdiction to hear Insurer's claims. Therefore, the district court properly exercised jurisdiction, correctly addressed the law, acted well within its discretion in making innumerable litigation decisions, and did not err in granting certification.