Articles Posted in US Court of Appeals for the Fifth Circuit

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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

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After insurers denied McDonnel's claim, McDonnel initiated a declaratory and breach of contract action. The Fifth Circuit affirmed the district court's dismissal of the action in favor of arbitration and held that the insurance policy's conformity provision did not negate the agreement to arbitrate. The court held that the state statute, La. Rev. Stat. Ann. 22:868, was preempted by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and thus the statute did not and could not apply to McDonnel's policy. Consequently, there was no conflict between the policy and the state statute. Therefore, the court held that the conformity provision was not triggered, and its inapplicability leads only to the conclusion that the arbitration provision survives, undiminished by state law. View "McDonnel Group, LLC v. Great Lakes Insurance SE" on Justia Law

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Underwriters filed suit against FloaTEC, claiming that they were subrogated to Chevron's right to sue FloaTEC for damages caused by tendon failures of a floating oil-drilling platform. The Fifth Circuit affirmed the district court's dismissal of Underwriters' claims with prejudice, holding that the district court correctly ruled on FloaTEC's motion to dismiss before addressing any issue concerning the arbitrability of Underwriters' claims. The court also held that the district court correctly found that FloaTEC was an "Other Assured" under the policy and could thus invoke the subrogation waiver. View "Lloyd's Syndicate 457 v. FloaTEC, LLC" on Justia Law

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The Fifth Circuit affirmed the district court's judgment in favor of Principal in an action brought by plaintiff, alleging that Principal abused its discretion by denying her benefits. The court held that Principal's benefits denial was supported by substantial evidence. The court held that, at bottom, there was no abuse of discretion in Principal's reliance on its own treating physicians' reports detailing an absence of plaintiff's impairments. The court also held that, although Principal had a structural conflict of interest that it both evaluates and pays claims, this factor had little weight in light of the extensive investigation that Principal conducted. View "Foster v. Principal Life Insurance Co." on Justia Law