Justia Insurance Law Opinion Summaries

In this case, Allied Professionals Insurance Company (APIC) sought to compel arbitration in a dispute with NCMIC Insurance Company (NCMIC). The dispute arose after a patient sued Charlotte Erdmann, a massage therapist insured by APIC, for injuries sustained during a massage. Erdmann's employer, Valley Chiropractic Clinic, was insured by NCMIC. NCMIC declined to defend or indemnify Erdmann and instead filed a declaratory judgment action seeking a declaration that it was not obligated to cover Erdmann or, alternatively, that its coverage was secondary to APIC's. The patient settled with Erdmann and Valley, leaving the question of whether NCMIC or APIC was responsible for Erdmann's $1.6 million settlement.The United States District Court for the District of Minnesota denied APIC's motion to compel arbitration. The court concluded that Minnesota law did not support APIC's argument for direct-benefits estoppel, which would have allowed APIC to compel NCMIC to arbitrate based on a clause in APIC's policy with Erdmann. The district court found that NCMIC did not seek or obtain direct benefits from the APIC-Erdmann policy and thus could not be compelled to arbitrate under the doctrine of direct-benefits estoppel.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The appellate court held that Minnesota law would likely adopt a limited version of direct-benefits estoppel, which only applies when a nonsignatory directly benefits from the contract containing the arbitration clause. The court found that NCMIC did not directly benefit from the APIC-Erdmann policy and therefore could not be compelled to arbitrate. The court also noted that neither the Eighth Circuit nor the Minnesota Supreme Court had applied direct-benefits estoppel in a similar fact pattern, where a signatory sought to compel a nonsignatory to arbitrate. Thus, the judgment of the district court was affirmed. View "United States v. Osorio" on Justia Law

Martin Brauner transmitted HPV to M.O. through sexual activity in Brauner’s GEICO-insured automobile. M.O. threatened to sue Brauner for negligence and demanded $1,000,000 from GEICO, which denied the claim and sought a federal court declaration that the policy did not cover M.O.’s injuries. Brauner and M.O. settled the threatened lawsuit, agreeing that M.O. would collect only from GEICO if an arbitrator found Brauner negligent. The arbitrator awarded M.O. $5,200,000, which M.O. sought to confirm in Missouri state court. The Supreme Court of Missouri vacated the confirmation and remanded the case to allow GEICO to intervene.The United States District Court for the District of Kansas initially handled the case but transferred it to the United States District Court for the Western District of Missouri due to lack of personal jurisdiction over M.O. The district court granted GEICO’s motion for summary judgment, ruling that the policy required bodily injury to arise out of the use of the automobile, and that sexual activity in an automobile did not constitute “use” under Kansas insurance law. Brauner and M.O. appealed.The United States Court of Appeals for the Eighth Circuit reviewed the grant of summary judgment de novo. The court affirmed the district court’s decision, holding that the insurance policy unambiguously required bodily injury to arise out of the ownership, maintenance, or use of the automobile. The court found that sexual activity in an automobile did not meet this requirement, as the automobile was merely the situs of the injury and not causally connected to the negligent act. Therefore, M.O.’s injuries were not covered under the policy. View "GEICO General Insurance Co. v. M.O." on Justia Law

Daniel Graff purchased a life insurance policy from Brighthouse Life Insurance Company for his father, with Graff as the beneficiary. Over the years, Graff paid more in premiums than the policy's death benefit. He sued Brighthouse, claiming the policy violated Minnesota's Readability of Insurance Policies Act (RIPA) and the implied covenant of good faith and fair dealing, and also sought recovery for unjust enrichment. Brighthouse removed the case to federal court, which dismissed Graff's claims for failing to state a claim.The United States District Court for the District of Minnesota dismissed Graff's complaint with prejudice. The court found that the RIPA did not provide a private cause of action, the implied-covenant claim was untimely, and Graff could not recover under unjust enrichment because a valid contract governed the parties' relationship.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's dismissal. The appellate court held that the RIPA does not create a private cause of action, as enforcement authority is vested exclusively in the Minnesota Commissioner of Commerce. The court also determined that Graff's implied-covenant claim could not proceed because it was based on a statute that does not provide a private remedy. Lastly, the court upheld the dismissal of the unjust enrichment claim, noting that equitable remedies are unavailable when a valid contract governs the parties' rights, and Brighthouse was entitled to the premiums under the policy. View "Daniel Graff v. Brighthouse Life Ins. Co." on Justia Law

A joint state and federal criminal investigation, "Operation Back Cracker," uncovered a scheme where Minnesota healthcare providers, primarily chiropractors, recruited car accident victims and fraudulently billed auto insurers for their treatment. In related civil settlements, some providers agreed not to bill certain insurance companies, including Illinois Farmers Insurance Company, for any treatment provided to their insureds. Plaintiffs, representing a class of insured individuals, sued Farmers, alleging that these no-bill agreements violated the Minnesota No-Fault Automobile Insurance Act.The United States District Court for the District of Minnesota granted summary judgment to the plaintiffs' injunctive class, enjoining Farmers from entering into or enforcing the no-bill agreements. The court found that these agreements effectively provided managed care services and set preestablished limitations on medical expense benefits, both of which are prohibited under the No-Fault Act. Farmers appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and vacated the injunction. The court held that the no-bill agreements did not constitute managed care services as defined by the No-Fault Act because they excluded, rather than used, the providers under contract with Farmers. Additionally, the court found that the agreements did not place preestablished limitations on medical expense benefits since they did not limit reimbursement for reasonable expenses incurred by insureds. The court concluded that an insurer does not violate the No-Fault Act by enforcing a no-bill agreement against a provider, as long as it does not refuse to reimburse an insured who has incurred a qualifying expense. The case was remanded for further proceedings consistent with this opinion. View "Taqueria El Primo LLC v. IL Farmers Insurance Co." on Justia Law

Kelsey Weyer applied for long-term disability benefits under a policy issued by Reliance Standard Life Insurance Company through her employer. Weyer suffers from multiple medical conditions, including chronic fatigue syndrome, Lyme disease, migraines, neurocognitive disorder, and others. The policy defines "Totally Disabled" differently for the first twenty-four months and thereafter. Initially, it means being unable to perform the duties of one's regular occupation, and after twenty-four months, it means being unable to perform any occupation. Reliance Standard initially approved Weyer’s claim and paid benefits for twenty-four months but later terminated them, arguing she could perform sedentary jobs and that her anxiety and depression contributed to her disability.The United States District Court for the District of Minnesota reviewed the case and ruled in favor of Weyer. The court found that the evidence did not support Reliance Standard’s claim that Weyer’s mental health issues contributed to her inability to work. It also held that Weyer was totally disabled under the policy’s "Any Occupation" standard, based on evidence from Weyer’s physicians and independent reviews.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court’s decision, finding no clear error in its determination that Weyer was totally disabled and that her physical conditions alone rendered her unable to work. The appellate court also agreed that the mental health disorders did not contribute to her total disability under the policy’s terms. The court applied a "but-for" causation standard, concluding that Weyer’s physical conditions independently caused her total disability, thus the mental health limitation clause did not apply. The court affirmed the district court’s judgment in favor of Weyer. View "Weyer v. Reliance Standard Life Insurance Company" on Justia Law

Kalvin Earl Richardson purchased a house in St. Louis County, Missouri, through a Post Third Sale Offering, a process for selling tax-delinquent properties that have not been sold in three consecutive annual tax-collection auctions. Richardson then applied for homeowner insurance from Nationwide Mutual Insurance Company, stating on the application that the property was not purchased at a public auction. After a fire damaged the house, Nationwide refused to pay the claim, asserting that Richardson had misrepresented the purchase method. Nationwide sued, claiming the policy was void due to this misrepresentation.The United States District Court for the Eastern District of Missouri granted summary judgment in favor of Nationwide. The court ruled that the Post Third Sale Offering constituted a public auction and that Richardson's contrary statement on the insurance application was a material misrepresentation, rendering the insurance policy void ab initio.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The appellate court found that the term "public auction" was not clearly defined in Nationwide's insurance application and that the Post Third Sale Offering did not meet the ordinary understanding of a public auction, which typically involves competitive bidding. The court noted that Missouri statutes and case law emphasize competition among bidders as a key element of a public auction, which was absent in the Post Third Sale Offering. Consequently, the court held that Nationwide did not meet its burden to prove that Richardson's representation was false in fact. The Eighth Circuit reversed the district court's summary judgment and remanded the case for further proceedings. View "Nationwide Mutual Insurance Company v. Richardson" on Justia Law

The case revolves around James "Tim" Norman, who was convicted of conspiring to commit murder for hire and murder for hire, as well as conspiring to commit mail and wire fraud. Norman had orchestrated the murder of his nephew, Andre Montgomery, and attempted to cash in on a fraudulent life insurance policy on his life. The insurance policy was set up without Montgomery's knowledge and would have resulted in a $450,000 payout upon Montgomery's death.The case was initially heard in the United States District Court for the Eastern District of Missouri. Norman appealed the decision, challenging several of the district court's trial rulings. He argued that two potential witnesses, Carroll and Yaghnam, had waived their Fifth Amendment privilege against self-incrimination and should have been compelled to testify. The district court found that their claims of privilege were valid.The case was then reviewed by the United States Court of Appeals for the Eighth Circuit. The court affirmed the district court's decision, finding no abuse of discretion in the lower court's rulings. The court held that Carroll and Yaghnam's claims of privilege were valid and that they faced real danger by testifying. The court also found that the district court did not abuse its discretion by refusing to compel Yaghnam to appear and assert his Fifth Amendment privilege in person, as Norman had failed to serve a subpoena. The court further held that the district court did not abuse its discretion by admitting hearsay texts from Montgomery and an out-of-court statement from Carroll. Finally, the court found no abuse of discretion in the district court's use of demonstrative exhibits to summarize evidence. View "United States v. Norman" on Justia Law

The case revolves around an insurance dispute between the Bradshaw Family Trust Inc., operating as Hunton Office Supply Inc. (Hunton), and Twin City Fire Insurance Company (Twin City). In June 2019, Hunton renewed a business owner’s policy on its office supply store building, which included a building replacement cost of $1,378,000. In April 2020, the building sustained wind damage from a storm. Hunton sought an insurance payout for the building’s repairs, but Twin City only paid a fraction of what was expected. A dispute arose surrounding the effective date of proposed policy changes, leading Hunton to sue Twin City.Twin City moved for summary judgment in the United States District Court for the Eastern District of Arkansas, arguing that it did not breach the insurance contract. The district court granted Twin City’s motion for summary judgment. Hunton appealed the decision, arguing that the policy endorsement was invalid because there was no meeting of the minds, the endorsement was never delivered to him, and the extent of the insurance agent's authority was a material fact question precluding summary judgment.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that the insurance agent had apparent authority to bind Hunton to the policy endorsement. It also concluded that based on the record, the only reasonable conclusion was that Hunton intended the policy changes to take effect immediately. Lastly, the court ruled that under Arkansas law, Hunton did not have to receive or sign the endorsement because it had requested the policy change. View "Bradshaw Family Trust Inc. v. Twin City Fire Insurance Co." on Justia Law

James and Levi Garrett, a father and son farming duo in South Dakota, were found guilty by a jury of making false statements in connection with federal crop insurance. The Garretts had participated in a federal crop insurance program, administrated by Crop Risk Services (CRS) and backed by the Risk Management Agency of the United States Department of Agriculture (USDA). They had obtained insurance for sunflower crops in 2018, and James had obtained insurance for a corn crop in 2019. The Garretts were accused of falsely certifying the number of acres of sunflowers and corn they planted in 2018 and 2019 respectively, and subsequently reporting harvest losses to CRS.The case went to trial in October 2022. The jury heard from several witnesses and examined dozens of exhibits. At the conclusion of the trial, James was convicted on two counts of making a false statement in connection with insurance for sunflower and corn crops, and Levi was convicted on one count of making a false statement in connection with insurance for a sunflower crop. The Garretts moved for judgment of acquittal, and in the alternative, a new trial, arguing there was insufficient evidence to support their convictions. The district court denied their motion.The Garretts appealed to the United States Court of Appeals for the Eighth Circuit, challenging the district court’s evidentiary rulings and its denial of their post-trial motions. They argued that the district court erred in admitting certain evidence and excluding others, and that there was insufficient evidence to support their convictions. The Court of Appeals affirmed the judgment of the district court, concluding that the trial record supported the jury verdict and that the district court did not err in its evidentiary rulings or in denying the Garretts' post-trial motions. View "United States v. Garrett" on Justia Law

In October 2018, Molitor Equipment, LLC purchased two tractors from Deere & Company. These tractors were a transitional model and did not include engine compartment fire shields as standard equipment, which were included in the subsequent 2019 model. A year after purchase, both tractors caught fire in separate incidents. Molitor had an insurance policy with SECURA Insurance Company, who paid Molitor's claim and then pursued Molitor's warranty claims against Deere. SECURA claimed the tractors were defective and unreasonably dangerous due to the absence of the fire shields and that Deere's warranty obligated them to remedy the problem or refund the purchase prices.Deere moved to dismiss the claims, arguing that its warranty only covered manufacturing defects, not design defects. The district court granted Deere's motion, dismissing SECURA's breach of warranty claim to the extent it was based on a design defect theory. The case proceeded on a manufacturing defect theory. At the close of discovery, both parties moved for summary judgment. Deere argued that since the tractors conformed to their intended design, there was no manufacturing defect. The district court granted Deere's motion, holding that SECURA could not establish its breach of warranty claim because Deere's warranty covers defects only in "materials or workmanship."On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court's decisions. The appellate court agreed with the district court's interpretation of Deere's warranty, concluding that it did not cover design defects. The court also agreed that SECURA could not establish a breach of warranty claim based on a manufacturing defect, as the tractors conformed to their intended design. Therefore, the court affirmed the district court's dismissal of SECURA's design defect claim and its grant of summary judgment to Deere on the manufacturing defect claim. View "Secura Insurance Company v. Deere & Company" on Justia Law