Justia Insurance Law Opinion Summaries

Olmsted Medical Center (“Olmsted”) provides preventive, primary, and specialty healthcare in southeastern Minnesota. Olmsted purchased a business property insurance policy from Continental Casualty Company (“Continental”) for the period from January 1, 2020, to January 1, 2021. The “Coverage” section of the policy states that it “insures against risks of direct physical loss of or damage to property and/or interests described herein at” Olmsted’s premises. Olmsted submitted a claim for losses it sustained due to the COVID-19 pandemic under the insurance policy it held with Continental. Continental denied the claim two days later. Olmsted filed suit in Minnesota state court, alleging Continental breached the insurance contract when it refused to pay the claim. Olmsted requested damages and declaratory relief. After Olmsted filed its amended complaint, Continental filed a motion to dismiss. Continental argued, among other things, that Olmsted’s allegations did not implicate a “direct physical loss of or damage to” property; therefore, its claim for coverage did not fall within the policy’s language under any of the above provisions.   The Eighth Circuit affirmed. The court explained that although SARS-CoV-2 may have a “physical” element, it does not have a physical effect on real or personal property. Moreover, the business-interruption provision, however, expressly limits coverage to the “length of time as would be required . . . to rebuild, repair or replace” the affected property. Due to the fact that SARS-CoV-2 does not have an effect on the underlying property, the court did not see how to square Olmsted’s broader interpretation of the provision with the express time limitation. View "Olmsted Medical Center v. Continental Casualty Company" on Justia Law

Zurich American Insurance Company (“Defendant”) insured St. Joe Minerals Corporation (“St. Joe”) and its sole shareholder Fluor Corporation (“Plaintiff”) from 1981 to 1985. St. Joe operated a lead smelting plant in Herculaneum, Missouri. Residents of the town sued Fluor and St. Joe in the early 2000s, claiming that they had been injured by the plant’s release of lead and other toxins.Defendant agreed to defend the companies and paid out $9.87 million. Defendant also contributed more than $25 million to a settlement between St. Joe and the remaining plaintiffs. Plaintiff went to trial, lost in a jury trial, and then settled the claims for $300 million.Defendant filed for declaratory judgment against Plaintiff, who filed a counterclaim alleging bad faith failure to settle. The district court granted summary judgment to Defendant, concluding that the policy limited Defendant’s liability on a per-occurrence basis and that the $3.5 million per-occurrence limit had been exhausted by Defendant’s initial payments. The court also concluded that Defendant did not act in bad faith when it elected not to settle the claims against Plaintiff.The Eighth Circuit reversed the district court’s policy-limits determination and remanded for further proceedings. The court found that an endorsement modified the limits of liability for comprehensive general liability, including bodily injury liability, to be on a per-claim basis. View "Fluor Corporation v. Zurich American Insurance Co." on Justia Law

National Union Fire Insurance Co. of Pittsburgh (National Union) filed suit to obtain a declaration that it owed no payment to Cargill, Inc. under the employee theft clause of the insurance policy held by Cargill. Cargill counterclaimed for breach of contract. The district court granted judgment on the pleadings for Cargill, ruling that Cargill had suffered a covered loss resulting directly from an employee’s theft. National Union appealed.   The Eighth Circuit affirmed and held that the district court did not err by concluding there were no disputes as to any material facts that precluded granting Cargill’s Rule 12(c) motion. Further, the court wrote that Cargill’s insurance policy provided coverage for employee “theft,” which was defined in the policy as “the unlawful taking of property to the deprivation of the Insured.” Additionally, the insured’s loss must have resulted “directly from” employee theft to be covered by the policy. Finally, the court concluded that the date of Cargill’s notice letter was the appropriate date to begin calculating prejudgment interest. View "National Union v. Cargill" on Justia Law

Plaintiff appealed the district court’s order upholding a decision by the Commissioner of the Social Security Administration denying her disability insurance benefits and supplemental security income. She argued that the Commissioner’s decision was not supported by substantial evidence. Plaintiff contends that the ALJ failed to sufficiently articulate his rationale for rejecting Plaintiff’s treating physician’s opinion, rendering the ALJ’s decision legally erroneous and unsupported by substantial evidence on the record as a whole.   The Eighth Circuit affirmed. The court held that ALJ was justified in finding the physician’s opinion unpersuasive. The opinion’s bare, formulaic conclusion presumptively warranted little evidentiary weight “because it was rendered on a check-box and fill-in-the-blank form.” The physician checked some boxes and left blank the short-answer section asking what objective medical findings supported his assessment. The ALJ also found the checkbox form “unsupported and highly inconsistent” with the record because the physician’s conservative treatment plan, other medical opinions, and Plaintiff’s own descriptions of her activities contradict the checkbox assessment. View "Vickie Nolen v. Kilolo Kijakazi" on Justia Law

Lindenwood Female College (Lindenwood) asserted class action claims against its casualty insurer, Zurich American Insurance Company (Zurich), alleging a wrongful denial of coverage for COVID-19 business interruption at its Missouri and Illinois properties. The district court granted Zurich’s motion to dismiss, finding no plausible allegation of coverage.   The Eighth Circuit affirmed. The court concluded that Lindenwood’s argument fails to identify an ambiguity. The court explained that in its view, no lay person—no reasonable insured—could look at the policy as a whole and fail to appreciate that the state-specific endorsements are intended to apply in the respective states. The references to Louisiana and other states are not mere titles; they serve to establish the structure of the policy as a whole. And it would simply make no sense to define a contamination exclusion with express reference to viral contamination in the main body of the policy only to wholly eliminate that same exclusion nationwide in a later endorsement that references an individual state. View "Lindenwood Female College v. Zurich American Insurance Co." on Justia Law

Martinique Properties, LLC filed a complaint against Certain Underwriters at Lloyd’s, London (Underwriters), seeking to vacate an arbitration award. The district court dismissed the complaint for failure to state a claim for vacatur. Martinique Properties appealed. Martinique Properties argues that the appraisal award must be vacated because the appraisers “used figures and measurements which are contrary to the actual conditions of the Property” and failed to “consider certain buildings” and certain portions of a damaged roof when determining the appraisal award. These alleged errors, Martinique Properties argues, show that the appraisers were either “guilty of misconduct” or “so imperfectly executed” their powers that “a mutual, final, and definite award . . . was not made,” two of the four grounds for vacating an award under the FAA.   The Eighth Circuit affirmed. The court found that Martinique Properties has alleged only factual errors that challenge the merits of the appraisal award, and the court has no authority to reconsider the merits of an arbitration award, even when the parties allege that the award rests on factual errors. Accordingly, the appraisers’ use of certain figures and measurements in calculating the amount of loss here, and their alleged failure to consider particular buildings and portions of roof damage, even if incorrect, are not sufficient for vacatur under the FAA. View "Martinique Properties, LLC v. Certain Underwriters at Lloyd's of London" on Justia Law

Plaintiffs are three skiers who purchased an Ikon Pass for the 2019–20 ski season. Each pass provided purchasers with unlimited ski access at participating Ikon resorts in North America. Along with their Ikon Pass, Plaintiffs purchased an optional Ski Pass Preserver insurance policy from Arch. After Plaintiffs purchased their passes, state and local governments issued orders, colloquially called “stay-at-home orders,” to prevent the spread of COVID-19. In response to these orders, ski resorts throughout North America closed with approximately one-third of the ski season remaining. Plaintiffs sought reimbursement for the loss of their ski pass benefits under the policy based on the Season Pass Interruption coverage. Arch denied their claims. The company took the position that the stay-at-home orders were not quarantines under the policy, later posting a “blanket denial” for such claims on its website. Plaintiffs filed one master consolidated class action complaint on behalf of themselves and a nationwide putative class of individuals who purchased the Ski Pass Preserver policy for the 2019–20 ski season. The district court concluded that Plaintiffs did not plausibly allege a covered loss because the term “quarantined,” as used in the policy, did not encompass stay-at-home orders that merely limited travel and activities.   The Eighth Circuit affirmed. The court explained that the ordinary person at the time the Ski Pass Preserver policy was purchased would have understood “quarantined” to mean the compulsory isolation of the insured. Reading the policy as a whole, this is the only reasonable construction, and the court agreed with the district court that the policy language is unambiguous. View "Mark Rossi v. Arch Insurance Company" on Justia Law

Plaintiff sued Minnesota Life Insurance Company and Securian Life Insurance Company, alleging that their denial of her claim for life insurance benefits violated the Employee Retirement Income Security Act (“ERISA”). The district court dismissed her complaint under the Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.   The Eighth Circuit affirmed. The court concluded that the district court properly dismissed Plaintiff’s Section 1132(a)(3) claim. First, her contention that Minnesota Life and Securian failed to notify her husband of his conversion right does not amount to a breach of fiduciary duty because the terms of her husband’s policy did not require notice, and Plaintiff points to no provision of ERISA that would require such notice. Second, her assertion that Minnesota Life and Securian misrepresented that her husband’s conversion window would be extended rests on a misreading of the February 24 letter; Minnesota Life and Securian made no such representation. View "Kristina Powell v. Minnesota Life Insurance Co." on Justia Law

After her husband died of a heroin overdose, Plaintiff sought accidental death benefits under an employer-sponsored benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA). The plan’s insurer, Symetra Life Insurance Company, denied her claim, and Plaintiff sued. The district court granted summary judgment in Plaintiff’s favor. Symetra appealed, arguing that Plaintiff’s suit is barred by her failure to exhaust internal review procedures and that her husband’s death otherwise falls under an exclusion to coverage.   The Eighth Circuit affirmed. Symetra contends that the exclusion applies to Plaintiff’s husband’s death because he “purposely” used heroin. But just because the act of using an illegal substance is purposeful does not mean that an injury stemming from that act, including a fatal overdose, was too. Symetra also maintains that Plaintiff’s husband, as a “longtime drug user,” was surely aware of the risks of using heroin and that his “generalized knowledge” of such risks is sufficient for his death to fall under the “intentionally self-inflicted injury” exclusion. The court reasoned that even assuming Symetra’s characterization of Plaintiff’s husband’s drug use is accurate, the argument attempts to replace an exclusion that applies only to “intentionally self-inflicted” injuries with one that also includes injuries resulting from reckless, or even negligent, conduct. The court wrote that the plain language of Symetra’s “intentionally self-inflicted injury” exclusion does not apply to unintended injuries like Plaintiff’s husband’s heroin overdose. Thus, Symetra’s denial of Plaintiff’s claim for accidental death benefits based on that exclusion was erroneous. View "Terri Yates v. Symetra Life Insurance Company" on Justia Law

Several homeowners hired contractors to repair damage to their homes. The homeowners assigned to the contractors their rights under their insurance policies with State Farm & Casualty Co. State Farm refused to pay. The contractors sued. State Farm moved for summary judgment, arguing the assignments were invalid under Nebraska law. The district court granted the motion.   The Eighth Circuit affirmed. The court explained that the parties disagree on whether the terms are sufficient to create a valid assignment of rights. The court held that without a description of the services to be provided and a definite price, these terms are left “to be determined in the future,” and thus, there is no mutuality of obligation. Although the written language is insufficient to create an enforceable assignment, this conclusion, by itself, does not resolve this case. The contractors argued that their oral arrangements cure any deficiencies that may exist in the written agreements. The court concluded that it cannot conclude that the assignments here are invalid as a matter of law simply because the written “vital terms” were not as definite as they could have been. View "R.A.D. Services LLC v. State Farm Fire & Casualty Co." on Justia Law