Justia Insurance Law Opinion Summaries

Articles Posted in US Court of Appeals for the Fifth Circuit
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After a subcontractor (Capsco) was held liable, in state court, to a company (Ground Control) with which it had contracted for what the latter had expended for labor and materials on a construction project, the subcontractor's liability insurers (Greenwich) successfully sought a declaration in federal court that it did not owe a duty to indemnify. Applying Alabama law, the Fifth Circuit affirmed, holding that Capsco's obligation was to pay the party with whom it contracted for its work; because of the failure of either party to get a certificate of responsibility, any right to recovery in the litigation shifted from contract to quantum meruit; and thus Capsco was obligated to pay the reasonable value of the services Ground Control provided, rather than for property damage or loss of its use. Finally, the court denied Ground Control's motion to vacate the district court's judgment and dismiss the case without prejudice. View "Greenwich Insurance Co. v. Capsco Industries, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's judgment in an action where the insurance company denied the policyholder's claims under a directors and officers liability policy. The district court held that the insured had learned of a related claim when the previous year's policy was in effect. Therefore, under clear policy provisions, the first policy was the one to cover all of the claims. The court affirmed and held that the 2015 claims arising from lawsuits that were related to the others brought in 2014 were governed by the earlier policy. Therefore, the absence of timely notice meant the claims were properly denied. For the same reasons, the court held that there was no relief to Worldlink under the Texas Prompt Payment Claim. View "ADI Worldlink, LLC v. RSUI Indemnity Co." on Justia Law

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The Fifth Circuit affirmed the district court's grant of summary judgment for Travelers in an action brought by the insured, alleging contractual and statutory violations arising from the denial of her commercial property insurance claim. The court agreed with the district court that all of Travelers's limitations defenses were raised at a pragmatically sufficient time and that the insured was not prejudiced in her ability to respond. The court held that the insured's injury was inherently discoverable and the court need not reach the question of whether it was objectively verifiable. Therefore, the discovery rule was unavailable in this case. The court held that, because the insured's causes of action accrued on November 13, 2013, her January 25, 2016 suit was untimely. View "Smith v. Travelers Casualty Insurance Co." on Justia Law

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The Fifth Circuit considered an issue of first impression under Mississippi insurance law: may an insurer rely on a consent-to-settle exclusion in an insurance policy to deny coverage of a claim made by an unnamed additional insured under that policy? The court held that absent evidence that the unnamed insured knew or should have known of the exclusion, the insurer may not enforce its contractual right to deny coverage because it had not consented to the settlement. In this case, there was no evidence that Atlantic attempted to inform plaintiff of the policy terms, and indeed there was testimony that policy was not released to Pearl River County Employees as a matter of county policy. Accordingly, the court affirmed the district court's denial of Atlantic's motion for summary judgment. View "Netto v. Atlantic Specialty Insurance, Co." on Justia Law

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The district court granted summary judgment to Cincinnati in an insurance coverage dispute action, concluding that the insured's intentional decision to drive while intoxicated meant that the collision was not an "accident" under Texas law. The Fifth Circuit reversed, holding that, as a matter of plain meaning and common usage, the term "accident" plainly includes the drunk driving collision that gave rise to this dispute. The court rejected Cincinnati's arguments to the contrary and held that Texas Supreme Court precedent did not command a different result. Accordingly, the court remanded for further consideration. View "Frederking v. Cincinnati Insurance Co." on Justia Law

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Appellants challenged the approval of a global settlement between the receiver for Stanford International Bank and related entities, and various insurance company underwriters, who issued policies providing coverage for fidelity breaches, professional indemnity, directors and officers protection, and excess losses. The Fifth Circuit vacated the district court's order approving the settlement and bar orders, holding that the district court lacked authority to approve the receiver's settlement to the extent it nullified the coinsureds' claims to the policy proceeds without an alternative compensation scheme; released claims the estate did not possess; and barred suits that could not result in judgments against proceeds of the underwriters' policies or other receivership assets. Accordingly, the court remanded for further proceedings. View "SEC v. Stanford International Bank, Ltd." on Justia Law

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42 U.S.C. 4072, which provides for original exclusive jurisdiction in district court and a one-year limitations period, is applicable to actions against Write-Your-Own (WYO) carriers. WYO are private insurers which issue flood insurance policies underwritten by the Government in their own names as part of the National Flood Insurance Program created by the National Flood Insurance Act. The Fifth Circuit affirmed the district court's grant of summary judgment for the insured, holding that this WYO action did not arrive in federal court within one-year of the insured's claim denial and was therefore time-barred under section 4072. View "Ekhlassi v. National Lloyds Insurance Co." on Justia Law

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Mississippi Code 83-11-101(1) and 83-11-103(c)(vi) of Mississippi's Uninsured Motorist Act are not repugnant. Section 83-11-101(1) requires that automobile insurers provide UM coverage to the extent the insured is "legally entitled to recover" and section 83-11-103(c)(vi) defines "uninsured motor vehicle," as used in the UM Act, to include a vehicle "owned or operated by a person protected by immunity under the Mississippi Tort Claims Act." In this case, the Fifth Circuit held that the insured was not legally entitled to recover from the fireman, the fire department, or the city, and thus was not legally entitled to recover UM benefits from State Farm. Accordingly, the court vacated the district court's grant of summary judgment for the insured and rendered judgment for State Farm. View "McGlothin v. State Farm Mutual Insurance Co." on Justia Law

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After DNA evidence exonerated Phillip Bivens, Bobby Ray Dixon, and Larry Ruffin, who spent a collective 83 years in prison for the rape and murder of a woman in Forrest County, their estates filed a civil rights law suit against the County. At issue in this appeal was whether two of the County's law enforcement liability policies require the insurers to defend the civil rights suit. The Fifth Circuit affirmed the district court's holding that there is a duty to defend, because the policies are triggered when injuries occur during the policy period, even though the wrongful acts that caused the injuries occurred before the policy period. In this case, the provisions of the Travelers and Scottsdale policies cover bodily injuries occurring during the policy period, and the estates' complaint alleges those injuries during the relevant time periods. Therefore, both insurers have a duty to defend the County and its officers. View "Travelers Indemnity Co. v. Mitchell" on Justia Law

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Plaintiff filed suit against Allstate and its agent for breach of contract after Allstate refused to pay a claim for flood damage. The Fifth Circuit affirmed the district court's judgment in favor of Allstate, holding that the district court did not err in granting summary judgment on the breach of contract claim because the claim was time-barred. The court also held that the district court did not abuse its discretion in denying petitioner's Federal Rule of Civil Procedure 59(e) motion. View "Cohen v. Allstate Insurance Co." on Justia Law