Justia Insurance Law Opinion Summaries
Articles Posted in US Court of Appeals for the First Circuit
Johnson v. Johnson
In this appeal concerning whether a settlement contract under Rhode Island law was formed after a personal injury lawsuit was filed the First Circuit certified to the Rhode Island Supreme Court the question of what is the definition of 'civil action' in R.I. Gen. Laws 27-7-2.2.Horace Johnson was the driver and Carlton Johnson was the sole passenger in a car accident. The accident occurred in Rhode Island. Both men were seriously injured. Horace was insured by Arbella Mutual Insurance Company. Arbella accepted Carlton's demand to settle for the policy limit of $100,000. Thereafter, Carlton filed a lawsuit against Horace, Arbella, and other defendants. A federal district court granted summary judgment for Defendants. The district court rejected Carlton's argument that Rhode Island's Rejected Settlement Offer Interest Statute, section 27-7-2.2, applied to the case. Carlton appealed, arguing that the statute rendered the settlement contract unenforceable because Arbella failed to accept his settlement offer within the timetable set forth by the statute. At issue was whether the court correctly determined that the statute's "[i]n any civil action" language requires that a legal proceeding in court needs to be underway to trigger the statute's application. The First Circuit certified to the Rhode Island Supreme Court a question concerning the definition of "civil action." View "Johnson v. Johnson" on Justia Law
Capitol Specialty Insurance Corp. v. Higgins
In this insurance dispute, the First Circuit affirmed the judgment of the district court ruling for Plaintiff on her action brought under Mass. Gen. Laws ch. 93A and ch. 176D and awarding trebled damages in the amount of $5.4 million but reversed and remanded for calculation of prejudgment interest based on actual damages and not the treble damages figure of $5.4 million, holding that Plaintiff's measure of damages was her "actual damages" because there was no "judgment" in her case.Plaintiff, who was injured in a car accident at age twenty after drinking at a nightclub, sued the nightclub's insurer (Defendant), alleging that Defendant violated chapters 93A and 176D. The federal district court ruled for Plaintiff and assessed actual damages of $1.8 million against Defendant. The court then trebled the award after concluding that Defendant's violations were willful. The First Circuit affirmed on the whole but reversed as to the calculation of prejudgment interest, holding that the district court did not err in finding Defendant's violation of chapter 93A and 176D but erred when it calculated prejudgment interest on the trebled damages award instead of the single damages award. View "Capitol Specialty Insurance Corp. v. Higgins" on Justia Law
Arruda v. Zurich American Insurance Co.
In this insurance dispute, the First Circuit directed entry of summary judgment for Zurich American Insurance Company, holding that Zurich's decision to deny the insured's claim was supported by substantial evidence.Denise Arruda filed a claim for death benefits following the death of her husband, Joseph Arruda, in a car accident. Zurich denied the claim, concluding that Joseph's death was not within the coverage clause of the policy because the death was not independent of all other causes and that it was caused or contributed to by his pre-existing health conditions. Denise brought this action under 29 U.S.C. 1132(a)(1)(B) alleging that Zurich violated ERISA by denying the insurance benefits. The district court entered summary judgment in favor of Denise, concluding that substantial evidence did not support Zurich's decision. The First Circuit reversed, holding that Zurich's conclusion that Joseph's death was caused or contributed to by pre-existing medical conditions was not arbitrary or capricious and was supported by substantial evidence. View "Arruda v. Zurich American Insurance Co." on Justia Law
Martinez v. Sun Life Assurance Co. of Canada
The First Circuit affirmed the judgment of the district court in favor of Sun Life Assurance Company of Canada finding that Sun Life properly permitted an offset of Appellant's benefits under tis employer-sponsored long-term disability insurance policy (the Plan) by the amount of Appellant's service-connection disability compensation (Veterans' Benefits), holding that the district court did not err.Specifically, the First Circuit held (1) Appellant's Veterans' Benefits fell squarely within the definition of "Compulsory Benefit Act or Law"; (2) that the district court did not err by concluding as a matter of law that Veterans' Benefits unambiguously qualify as a form of "Other Income Benefit" covered by the Plan's offset provision; and (3) the district court did not err by rejecting as a matter of law Appellant's assertion that Sun Life's offset determination was motivated, at least in part, by Appellant's military service in violation of the Uniformed Services Employment and Reemployment Rights Act. View "Martinez v. Sun Life Assurance Co. of Canada" on Justia Law
River Farm Realty Trust v. Farm Family Casualty Insurance Co.
The First Circuit affirmed the judgment of the district court granting summary judgment for Insurer and dismissing Insured's complaint alleging breach of contract and violations of Massachusetts General Laws chapters 93A and 176D, holding that Insured failed to produce evidence in support of its assertions.In the complaint, Insured claimed that Insurer breached the parties' contract and violated chapters 93A and 176D in the way that Insurer handled Insured's claim for residential property damage. The district court granted summary judgment in favor of Insurer. The First Circuit affirmed, holding (1) the district court did not err in concluding that no reasonable jury could find that Insurer had violated chapter 176D; and (2) there was no breach of the contract. View "River Farm Realty Trust v. Farm Family Casualty Insurance Co." on Justia Law
Bearbones, Inc. v. Peerless Indemnity Insurance Co.
In this insurance dispute, the First Circuit remanded the case for additional factfinding, holding that where the record was conflicted as to whether there was complete diversity of citizenship when the action was commenced, remand was required.Appellants were two affiliated insureds who owned and operated a commercial bakery in Pittsfield, Massachusetts. Appellee, their insurer, had in effect a commercial business insurance policy covering the bakery. When a pipe erupted in the bakery, causing covered losses, the parties were unable to settle the ensuing insurance claims. Appellants commenced a civil action against Appellee in the United States District Court for the District of Massachusetts, invoking federal diversity jurisdiction and alleging that complete diversity existed between the parties. The magistrate judge ultimately granted Appellee's motion for summary judgment. The First Circuit noted a jurisdictional hurdle and remanded the case, holding that remand was required for the district court to determine whether there was complete diversity between the parties at the time the action was commenced. View "Bearbones, Inc. v. Peerless Indemnity Insurance Co." on Justia Law
UBS Financial Services Inc. v. XL Specialty Insurance Co.
The First Circuit affirmed the judgment of the district court granting summary judgment in favor of Insurers in this action brought by Appellants claiming that Insurers' refusal to cover certain legal disputes constituted a breach of their insurance contract, holding that the clear and unambiguous language of the specific litigation exclusion barred coverage of the disputed litigation matters.Appellants filed suit against their primary insurance provider and their secondary insurance providers alleging that Insurers breached their contractual duty to reimburse Appellants for defense costs incurred in connection with the disputed matters. The primary insurer argued that the legal disputes fell under a "specific litigation exclusion" clause in the insurance policy that excepted from coverage claims related to prior matters specified therein. The district court granted summary judgment for Insurers, holding that the prior and disputed matters were sufficiently related such that the exclusion clause applied. The First Circuit affirmed, holding that the specific litigation exclusion barred coverage of the disputed matters because they all involved facts, circumstances, or situations alleged in the prior matters. View "UBS Financial Services Inc. v. XL Specialty Insurance Co." on Justia Law
Sterngold Dental, LLC v. HDI Global Insurance Co.
The First Circuit affirmed the judgment of the district court dismissing Plaintiff's action alleging that Defendant, an insurance company, had breached its duty to defend and indemnify Plaintiff against a third-party's claim, holding that Defendant had no duty to defend or indemnify Plaintiff with respect to the third-party's claim.At issue was whether the scope of a so-called intellectual property exclusion to the personal and advertising injury coverage under a commercial general liability policy issued by Defendant to Plaintiff excluded the advertising injury in this case from coverage. The First Circuit held that the advertising injury alleged in the third-party's complaint arose out of the claimed infringement of the third-party's trademark, and therefore, the policy excluded the injury from the scope of coverage. View "Sterngold Dental, LLC v. HDI Global Insurance Co." on Justia Law
Zurich American Insurance Co. v. Electricity Maine, LLC
The First Circuit affirmed the judgment of the district court granting summary judgment for Insured on Insurer's complaint seeking a declaratory judgment that it had no duty to defend Insured against an underlying class action alleging that Insured had engaged in misconduct that resulted in customers receiving higher bills than Insured had represented that they would be, holding that summary judgment was properly granted.The complaint sought class-wide damages for a variety of Maine common law claims and for claims under the federal Rackeeter Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962, 1964; and the Maine Unfair Trade Practices Act, Me. Rev. Stat. Ann. tit. 5, 207. In its complaint, Insurer argued that the complaint in the underlying action failed to allege that Insurer engaged in conduct that qualified as an "occurrence" or that caused any "bodily injury" under the relevant policy. The district court entered judgment for Insured. The First Circuit affirmed, holding that there was no genuine issue of material fact in dispute and that the district court's conclusions were correct as a matter of law. View "Zurich American Insurance Co. v. Electricity Maine, LLC" on Justia Law
Ezell v. Lexington Insurance Co.
The First Circuit affirmed the district court's dismissal of Appellants' claims in this putative class action against Lexington Insurance Company and other insurers alleging fraudulent misrepresentation and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961 et seq., holding that the facts Appellants pleaded demonstrated the absence of any circumstances constituting fraud.Appellants entered into structured settlement agreements with Lexington Insurance Company pursuant to which Lexington agreed that Appellants would receive specific periodic payments from annuities that Lexington would purchase. Appellants later brought this action alleging that Lexington and other affiliated insurers misrepresented the amount Appellants would receive from the settlements. The district court dismissed Appellants' claims with prejudice. The First Circuit affirmed, holding that Appellants failed to state with particularity the circumstances constituting fraud under Fed. R. Civ. P. 9(b). View "Ezell v. Lexington Insurance Co." on Justia Law