Justia Insurance Law Opinion Summaries

Alissa's Flowers filed suit against State Farm, alleging that it had overpaid its premiums to State Farm in light of its significantly lower exposure rate due to COVID-19. State Farm moved to dismiss the amended complaint, arguing that Missouri law required that Alissa's Flowers bring its claims before the director of the Missouri Department of Insurance.The Eighth Circuit affirmed the district court's dismissal of the complaint, concluding that the administrative review process set forth in Mo. Rev. Stat. 379.348 applies in the commercial insurance context and to plaintiff's claims in this case. The court explained that the district court properly determined that Alissa's Flowers was required to exhaust administrative remedies because the claims, in essence, constitute a challenge to State Farm's rates, rating plan, rating system and underwriting rules. Finally, the complaint should not have been dismissed for lack of subject matter jurisdiction, but rather for lack of authority to grant relief. View "Alissa's Flowers, Inc. v. State Farm Fire & Casualty Co." on Justia Law

In 2015, Elite sued Legacy for breach of contract. Attorney Bredahl received a $5,000 check from Legacy. On December 30, 2015, and February 26, 2016, he appeared on behalf of Legacy in the Elite suit. Bredahl did not respond to discovery, resulting in an order banning Legacy from putting on evidence at trial. Legacy later retained Hankey Law but neither Legacy nor any defense counsel attended the March 2017 trial. Elite won a $1 million judgment. Elite and Legacy settled the suit for $575,000 in 2018.In October 2017, ALPS issued an insurance policy to Bredahl with loss inclusion starting October 1, 2016. In January 2018, Legacy notified ALPS of a potential claim. Legacy sued Bredahl in April 2019. Bredahl notified ALPS, which indicated that it would defend that suit subject to a complete reservation of rights, then sought a declaratory judgment that the Policy did not apply to the Legacy suit.The district court held that ALPS had no duty to indemnify or defend Bredahl. The Eighth Circuit affirmed. The Policy does not apply to the Legacy suit if the “Insured” knew or reasonably should have known, as of the October 1, 2017 effective date, that his conduct during the Elite suit might be the basis for a “demand for money” against him. Before that date, Bredahl knew of acts or omissions in the Elite suit and reasonably should have known Legacy might bring a claim against him, View "ALPS Property & Casualty Insurance Co. v. Legacy Steel Building, Inc." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of plaintiffs in an action brought against their insurance company, seeking payment of the policy limit in full on the claim for the second of two fires that destroyed their house. Because the plain language of the Total Loss Valuation provision, the context of the rest of the policy, and Minnesota's background common-law principles all support plaintiffs' result-based interpretation, the court concluded that the second fire alone caused a total loss. Therefore, plaintiffs were entitled to the full policy limits over and above what the insurer had paid for damages caused by the first fire. View "Shaw v. Farm Bureau Property & Casualty Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Allstate and dismissal of plaintiff's bad faith claim. The court concluded that the district court's discovery and progression rulings, even if erroneous, did not prejudice plaintiff because her jury award establishes that Allstate acted reasonably in its valuation and negotiation of her insurance claim. In this case, it cannot be said Allstate was unreasonable in its valuation or unjustified in its refusal to pay policy limits, and thus Allstate did not act in bad faith as a matter of law. View "Tilghman v. Allstate Property & Casualty Insurance Co." on Justia Law

In a previous opinion, the district court affirmed a $34.3 million jury verdict in favor of the class represented by plaintiff and reversed the district court's denial of prejudgment interest. The court then remanded the matter for the district court to reconsider plaintiff's motion for prejudgment interest. State Farm appealed.The Eighth Circuit affirmed the district court's award of prejudgment interest, concluding that plaintiff was entitled to prejudgment interest at the 4% rate contained in the contract, and the district court did not err in calculating the amount of interest due and awarding plaintiff $4,521,674 in prejudgment interest. View "Vogt v. State Farm Life Insurance Co." on Justia Law

Under Minnesota law, when the insurance policy in question refers disputes as to amount of loss to an appraiser, when the question presented by the dispute involves separating loss due to a covered event from a property's preexisting condition, the question of what caused the loss is one for the appraiser to resolve.The Eighth Circuit affirmed the district court's grant of Condor's motion to compel an appraisal. In this case, Condor filed a claim for benefits with its insurer, Axis. Condor then demanded an appraisal because the parties could not agree on the amount of loss. After Axis filed suit for a declaratory judgment that there was no coverage and that the parties' coverage dispute precluded appraisal, Condor filed a motion to compel one, which the district court granted. View "Axis Surplus Insurance Co. v. Condor Corp." on Justia Law

After a tractor manufactured by CNH caught fire, Floyd filed suit against CNH in federal court under a theory of product liability, claiming that its insureds owned the tractor and other property on the tractor, both of which were damaged in the fire, and that Floyd was subrogated to its insureds' claims against CNH because Floyd had paid its insureds' claim for the damage. The district court dismissed the case for lack of subject matter jurisdiction under 28 U.S.C. 1332.The Eighth Circuit affirmed and concluded that section 1332's amount-in-controversy requirement was not satisfied in this case. The court concluded that the Iowa Supreme Court would hold that the economic-loss doctrine permits recovery only for the other property and not for the product itself. Accordingly, the Iowa Supreme Court would bar recovery in tort for damage that a defective product causes to itself, even if the plaintiff also seeks recovery for damage to other property. Here, Floyd's recovery is limited as a matter of law to the alleged $22,787.81 in damage to property other than the tractor. The court denied the motion to certify a question of law to the Iowa Supreme Court and upheld the district court's dismissal based on lack of subject matter jurisdiction. View "Floyd County Mutual Insurance Ass'n v. CNH Industrial America LLC" on Justia Law

Avenoso, a maintenance supervisor, had long-term disability insurance under a Reliance policy, governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The policy provided two years of benefits if the claimant showed that he was unable to perform the material duties of his current occupation and provided continued benefits if the claimant showed that he was unable to perform the material duties of any occupation. Avenoso left his job due to lower-back pain and underwent back surgery. Reliance approved two years of benefits. At the end of the two years, Reliance informed Avenoso that it would discontinue benefits because Avenoso had not shown that he was unable to perform the material duties of any occupation.Avenoso had an MRI; the results appeared relatively mild. Avenoso sent Reliance a note from his physician, recommending that Avenoso “avoid lifting, bending and prolonged sitting” due to his lower back condition. He was receiving Social Security disability benefits. Following a “functional-capacity evaluation,” a physical therapist concluded Avenoso did not demonstrate an ability to tolerate an 8-hour workday. An independent medical evaluation concluded that Avenoso retained sedentary-work capacity and was “able to work 8 hours a day but was engaging in “symptom magnification.” A vocational-rehabilitation specialist identified five “viable sedentary occupational alternatives” consistent with Avenoso’s physical capacities. The Eighth Circuit affirmed summary judgment in favor of Avenoso. The district court’s finding that Avenoso lacks sedentary-work capacity was not clearly erroneous. View "Avenoso v. Reliance Standard Life Insurance Co" on Justia Law

Plaintiff filed a class action complaint against Farm Bureau, alleging breach of contract and seeking a declaratory judgment. Plaintiff's breach of contract claim was based, in part, on an alleged violation of Arkansas Insurance Rule and Regulation 43, which he claimed was incorporated into the policy. The district court granted Farm Bureau's motion to dismiss for failure to state a claim. Plaintiff then filed a motion to clarify whether the order also disposed of the common law breach of contract theory, which the district court dismissed.The Eighth Circuit agreed that the Arkansas regulation that Farm Bureau allegedly violated is not incorporated into plaintiff's policy, and thus he cannot use it as the basis for a breach of contract claim. However, because plaintiff also states a breach of contract claim based on the policy language, the court reversed in part. In this case, plaintiff alleges that "a 9% reduction on a used vehicle is not typical and does not reflect market realities," and that dealers' actual practice is not to inflate prices above market value because of the "intense competition in the context of internet pricing and comparison shopping." The court explained that, if this is true, then Farm Bureau did not consider the truck's fair market value. Rather, it considered an artificially lower value, in breach of its contractual duty and thus plaintiff stated a claim for breach of contract based on the policy language. Finally, the court denied plaintiff's motion to certify questions of law to the Arkansas Supreme Court. View "Smith v. Southern Farm Bureau Casualty Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's judgment holding that Safeco was not liable for coverage for a claim stemming from an accident involving an uninsured driver. In this case, the insured was killed when her motorcycle collided with a car driven by the uninsured driver. The court concluded that the district court did not err in determining that coverage for the accident was excluded under the insurance policy's motorcycle exclusion. Therefore, the policy unambiguously excluded coverage for the insured's accident. View "Safeco Insurance Co. of Illinois v. Palazzolo" on Justia Law