Justia Insurance Law Opinion Summaries

Articles Posted in US Court of Appeals for the Eighth Circuit
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The Eighth Circuit reversed and remanded the district court's grant of the insurer's motion to dismiss, concluding that the policy is ambiguous as to whether the directors-and-officers-liability policy required an insurer to indemnify and defend a company and its chief executive officer against claims brought by investors. Therefore, the district court erred in finding that the policy unambiguously excluded coverage.In this case, the policy is reasonably open to at least two different constructions: the first is that Endorsement 11 deleted and replaced original D with new D, and then Endorsement 13 replaced new D with nothing. Another is the one adopted by the district court, which is that Endorsements 11 and 13 together replaced original D with new D. The court explained that, with one reasonable construction potentially covering contractual-liability claims and the other excluding them, the policy is ambiguous. Applying Missouri law, the court construed the ambiguity against the insurer. View "Verto Medical Solutions, LLC v. Allied World Specialty Insurance Co." on Justia Law

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The Eighth Circuit reversed the district court's grant of summary judgment to Selective in an action brought by Selective, seeking a declaration that a subcontractor's policy did not require it to defend or indemnify CSC General. CSC entered into a subcontract that required it to be an "additional insured" on Glosson's general liability policy, and Glosson's policy was with Selective.In this case, Glosson damaged the parking lot through its handling of the cement (adding too much water) before it hardened. Thus, the damage was caused, at least in part, by handling of the cement, not handling of real property. Therefore, the court concluded that CSC is an additional insured for the property damage Glosson caused. The court also concluded that the district court erred in looking beyond the denial letter in focusing at length on five coverage issues not stated in Selective's coverage denial. The court explained that the district court did not properly apply North Dakota's estoppel law on insurance coverage. Finally, the court concluded that summary judgment was not appropriate on the bad faith claim. Accordingly, the court remanded for further proceedings. View "Selective Way Insurance Co. v. CSC General Contractors, Inc." on Justia Law

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American Modern Home filed suit against defendants for insurance fraud after a fire destroyed their home, and the jury found in favor of defendants.The Eighth Circuit reversed, concluding that the district court did not err by refusing to admit evidence of one of the defendant's three prior convictions for sex offenses because they were highly probative on credibility. Furthermore, the danger of unfair prejudice, undue delay, and confusion did not substantially outweigh the probative value of the evidence. In view of the uncertainty in Missouri law, the court concluded that the district court did not abuse its discretion in its instruction about the meaning of "material" in cases regarding misrepresentations about the fire's cause or a proof of loss. The court also concluded that the district court did not abuse its discretion in giving a supplemental instruction on vexatious refusal to pay in response to a jury question, and the district court did not err in excluding expert testimony on the grounds it was untimely disclosed and cumulative. Accordingly, the court remanded for a new trial. View "American Modern Home Insurance Co. v. Thomas" on Justia Law

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After plaintiff admitted to using fentanyl at work, he was terminated from his position as a certified nurse anesthetist at Mid-Missouri. Plaintiff then submitted claims for short- and long-term disability benefits to Kansas City Life, which issued disability insurance policies to Mid-Missouri as part of its employee benefit plan.The Eighth Circuit affirmed the the district court's conclusion that Kansas City Life had abused its discretion in denying plaintiff benefits under the Employee Income Security Act of 1974 (ERISA). The court concluded that Kansas City Life's denial of benefits is not supported by substantial evidence where reasonable minds could not reconcile Kansas City Life's position that plaintiff was unable to safely administer anesthesia on October 6, 2017, with its position that he had safely administered anesthesia while under the influence of fentanyl during the time period between his relapse and termination. Therefore, the evidence that plaintiff made no medical errors and did not seek treatment until after he was terminated, as well as the fact that the record does not disclose his exact date of disability, could not support Kansas City Life's conclusion that plaintiff was not disabled before his insurance coverage ended. View "Bernard v. Kansas City Life Insurance Co." on Justia Law

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Plaintiff sought life and accidental death benefits under her brother's insurance plan after he died in a single-vehicle crash. Unum Life paid plaintiff life insurance benefits, but denied her claim for accidental death benefits. Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA).The Eighth Circuit reversed the district court's grant of summary judgment for plaintiff, concluding that the administrator's decision was supported by substantial evidence. The court explained that the evidence is sufficient to support a reasonable finding that the brother's speeding and improper passing contributed to the crash; the crime exclusion applies to "accidental losses;" and Unum Life's interpretation of the "crime" exclusion was reasonable because the brother's conduct constituted a crime under Missouri law. In this case, the brother was driving more than twice the legal speed limit and passing vehicles in a no-passing zone on a two-lane road in icy road conditions. Furthermore, Missouri's classification of improper passing and speeding as misdemeanor offenses reinforces the reasonableness of Unum Life's determination. View "Boyer v. Schneider Electric Holdings, Inc." on Justia Law

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The school district filed suit against ACE, seeking a declaratory judgment stating that the school district's legal liability insurance policy provided coverage for a teacher's retaliatory discharge lawsuit filed against the school district and the principal of Pine Bluff High School. The school district argued that coverage existed for the underlying lawsuit or, alternatively, ACE waived all defenses to coverage and was estopped from claiming no coverage.The Eighth Circuit affirmed the district court's grant of summary judgment in favor of ACE, holding that the single claim provision unambiguously applies and that neither the 2015 Policy nor the 2016 Policy provide coverage for the school district's claim based on the teacher's September 22, 2016 lawsuit. The court applied Arkansas law and held that the doctrines of waiver and estoppel are inapplicable here. View "Pine Bluff School District v. Ace American Insurance Co." on Justia Law

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Plaintiff filed suit against Safeco after the insurance company denied her underinsured motorist insurance (UIM) coverage. The district court granted summary judgment to Safeco.The Eighth Circuit affirmed, holding that this case does not involve a set-off within a policy but stacking of separate policies; the anti-stacking provision in the policy unambiguously limits the total of plaintiff's UIM coverage to the highest applicable limit; and Safeco's coverage is not illusory. Therefore, Safeco's anti-stacking provision does not preclude Safeco's excess coverage from ever applying—it simply prevents plaintiff from stacking coverage from different policies when she has already received the highest applicable limit of UIM coverage. View "Johnson v. Safeco Insurance Company of Illinois" on Justia Law

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Tile Shop Holdings settled multiple lawsuits with its shareholders and then sought indemnification under its directors-and-officers insurance policies. Allied World, Tile Shop's excess insurer, denied coverage.The Eighth Circuit held that Allied is neither liable for the losses from the prior acts it has excluded in its own policy nor those excluded under the primary policy. Under the first prior-acts exclusion, Tile Shop's wrongful acts started well before August 20, 2012, the policy's retroactive date, which made any losses from them excludable under the relation-back clause. View "Tile Shop Holdings, Inc. v. Allied World National Assurance Co." on Justia Law

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After Federal issued a Financial Institution Bond to COR, COR paid $2,080,000 to settle claims by investors that a former COR registered representative had conspired with others to defraud investors by carrying out a "pump-and-dump" scheme in a risky penny-stock called VGTel. COR then filed a claim with its liability insurer for VGTel and other settlement payments, which it later settled for $3,625,000 above the policy's deductible. COR also filed a claim under Federal's Bond to recover its losses for the VGTel settlements. Federal denied coverage and filed a declaratory judgment action.The Eighth Circuit agreed with the district court that Auto Lenders Acceptance Corp. v. Gentilini Ford, Inc., 854 A.2d 378 (N.J. 2004), stands for the proposition that, under New Jersey law, COR's payments to settle third-party liability claims based on an employee's dishonest acts directed at the third parties were not a direct loss under Insuring Clause 1.B of the Bond. Furthermore, the district court did not err in dismissing COR's Clause 1.D counterclaim because COR failed to show that admissible evidence would be available at trial to prove that the employee personally committed a covered dishonest act. Accordingly, the court affirmed the district court's judgment. View "Federal Insurance Co. v. Axos Clearing LLC" on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Meridian in an action brought by Meridian seeking a declaration that it has no obligation to provide underinsured motorist (UIM) benefits to either Lois Schmitt-Selken or the Estate of Donald Selken for injuries or damages arising out of a motor vehicle accident occurring while Lois was a passenger in husband Donald Selken's car.The court held that, under the unambiguous policy language, the "owned-but-not-insured" exclusion in the Meridian policy bars Lois's claim for UIM benefits for the accident occurring while she was a passenger in her husband's vehicle. In this case, Lois's argument that the definition of "you" requires joint ownership of a vehicle before the exclusion applies is neither a reasonable interpretation of the policy language, nor consistent with the purpose of an "owned-but-not-insured" exclusion. View "Meridian Security Insurance Co. v. Schmitt-Selken" on Justia Law