Justia Insurance Law Opinion Summaries

The First Circuit affirmed the district court's grant of summary judgment to AXIS Reinsurance Company (AXIS) on Plaintiffs' complaint seeking to enforce a directors and officers insurance policy with AXIS, holding that the district court did not err in granting summary judgment in favor of AXIS and in denying Plaintiffs' motion for partial summary judgment.Plaintiffs were BioChemics, Inc., a pharmaceutical company based in Massachusetts, and John Masiz, its president and chief executive officer. Plaintiffs sought damages for what they claimed was AXIS's breach, under the relevant policy, of its duty to defend them in connection with an investigation conducted by the Securities and Exchange Commission against BioChemics and its officers. In its motion for summary judgment, AXIS argued that it did not breach its duty to defend under the policy because Plaintiffs were seeking to enforce that duty in relation to a claim that was first made before the policy took effect and thus was not covered by the policy. The district court granted the motion. The First Circuit affirmed, holding that the district court did not err in granting summary judgment to AXIS. View "Biochemics, Inc. v. Axis Reinsurance Co." on Justia Law

The First Circuit affirmed the judgment of the district court concluding that the actions of Defendant, a claims-management firm, did not constitute unfair claims settlement practices under Mass. Gen. Laws ch. 176D, holding that Plaintiff failed to show that the district court either misapplied applicable law or clearly erred in finding the facts.Plaintiff won a multi-million dollar jury verdict for wrongful death and conscious pain and suffering against a nursing home. Thereafter, Plaintiff brought this suit alleging that Defendant’s actions, both pre- and post-verdict, violated Chapter 176D. The district court entered a take-nothing judgment, concluding that Defendant’s actions did not constitute unfair claims settlement practices. The First Circuit affirmed, holding that the district court did not err in concluding that Defendant did not violate Chapter 176D. View "Calandro v. Sedgwick Claims Management Services, Inc." on Justia Law

The First Circuit affirmed the district court’s grant of summary judgment in favor of a Church on its lawsuit seeking a declaratory judgment that its claim filed pursuant to its property insurance policy with an Insurance Company was improperly denied, holding that ambiguities in the policy resulted in coverage for the collapse of a ceiling in one section of the church.The Insurance Company denied the Church’s claim, citing the “faulty construction” exclusion in the policy. In its complaint, the church argued that the collapse was caused by hidden decay such that the “additional coverage - collapse” provision applied. The First Circuit affirmed, holding that the meaning of “decay” was ambiguous and that ambiguity must be resolved in the Church’s favor. View "Easthampton Congregational Church v. Church Mutual Insurance Co." on Justia Law

The First Circuit affirmed the district court’s grant of summary judgment in favor of Liberty Mutual Insurance Corporation on Brendan Kelly’s claim that Liberty was bound to provide uninsured motorist coverage for his benefit, holding that no uninsured motorist coverage was provided under the policy.The insurance contract was an umbrella policy issued to Kelly’s employer and the named insured and was issued in New Hampshire. The named insured rejected uninsured motorist coverage in writing, but the writing was not incorporated into the policy. Kelly argued that that the lack of an explicit reference to the named insured’s written rejection rendered that rejection inoperative against an additional insured like himself, and that provision of uninsured motorist coverage was therefore required under state law. The First Circuit disagreed, holding that Kelly’s position was not implicit in the statute. View "Kelly v. Liberty Insurance Corp." on Justia Law

The First Circuit affirmed the decision of the district court ruling that Scottsdale Insurance Company (Scottsdale) breached its duty to defend the Wellesley Advisory Reality Fund, I, LLC (WARF) in a prior action and awarding damages, holding that there was no error or abuse of discretion in the proceedings below.In 2014, Appellees in the instant case brought suit against WARF, acting in their capacity as representatives of the Board of Trustees for the Plumbers and Pipefitters Local 51 Pension and Annuity Funds (the Funds). Default judgment was entered against WARF, and WARF assigned the Funds its rights in WARF’s insurance policy with Scottsdale, which had refused to defend WARF. Scottsdale later brought an action against Appellees seeking a declaration that it did not owe WARF a duty to defend or indemnify under certain exclusions in the policy. The district court ultimately concluded that the the exceptions in the insurer’s policies did not relieve Scottsdale of its duty to defend WARF in the prior action, awarding the Funds the full limits of the insurance policy plus post-judgment interest. The First Circuit affirmed, holding that there was no basis for excusing Scottsdale from its duty to defend or from which to relieve Scottsdale of its obligation to pay the policy limit. View "Scottsdale Insurance Co. v. Byrne" on Justia Law

In this declaratory judgment action filed by a professional liability insurer seeking to establish that it had no duty to defend its insured in two state court proceedings, the First Circuit affirmed the judgment of the district court granting the declaratory judgment for the insurer, holding that the district court correctly determined that the claims against the insured in both lawsuits fell outside the professional liability coverage provided by the insurance policy.The insured, a physician, was the defendant in two civil suits filed in state courts in Maine and Maryland. The insured’s ex-wife claimed that the insured used his status as a doctor to obtain her medical records during their deteriorating marriage so that he could harass and embarrass her. The district court concluded that the insurer had no duty to defend the insured in either lawsuit. The First Circuit affirmed after a close review of the policy at issue, holding that the insurer had no duty to defend the insured in either the Maryland or the Maine proceedings. View "Medical Mutual Insurance Co. of Maine v. Burka" on Justia Law

The First Circuit vacated the district court’s grant of Liberty Mutual Insurance Company’s summary judgment motion in this case alleging that Liberty breached Plaintiff’s contractual rights by wrongfully denying his request for coverage under an insurance policy, holding that the district court’s reasoning in granting Liberty’s motion for summary judgment was flawed.Plaintiff argued in his complaint that Liberty improperly denied his coverage request under the Directors and Officers insurance policy that Liberty had issued to a Puerto Rico hospital where Plaintiff served as the medical director. The district court concluded that, under the policy, the “Claim” that would give rise to the “Loss” for which Plaintiff sought coverage should be “deemed first made” before the policy took effect and, therefore, was not covered by the policy. The First Circuit vacated the district court’s order granting Liberty’s summary judgment motion, holding that the “Claim” for which Plaintiff sought coverage from Liberty was not “first made” prior to the beginning of the policy at issue, and the district court wrongly construed the policy in concluding otherwise. View "Jimenez-Castaner v. Liberty Mutual Insurance Co." on Justia Law

The First Circuit affirmed the district court’s denial of Plaintiffs’ motion for reconsideration of the district court’s grant of summary judgment dismissing all of their claims against various insurance companies and certain of those companies’ employees under 42 U.S.C. 1981 and Puerto Rico law. The complaint alleged that Defendants unlawfully interfered with Plaintiffs’ right to “make or enforce” existing and prospective contracts with Defendants’ insureds or third-party claimants. The district court granted summary judgment on all claims against Defendants. The First Circuit affirmed, largely on waiver grounds, holding (1) Plaintiffs expressly waived certain issues on appeal by failing to raise them in their opening brief; and (2) Plaintiffs’ remaining claims on appeal were unavailing. View "Best Auto Repair Shop, Inc. v. Universal Insurance Group" on Justia Law

This case was once again before the First Circuit after the court certified to the Massachusetts Supreme Judicial Court (SJC) some state-law questions arising from this diversity-based declaratory-judgment action governed by Massachusetts substantive law. The case was brought by Mount Vernon Fire Insurance Company, the employment-practices liability insurer of VisionAid, Inc., seeking a declaratory judgment that it had no duty to prosecute VisionAid’s embezzlement counterclaim in litigation brought against VisionAid alleging age discrimination. The federal district court ruled that Mount Vernon did not have to foot the bill for VisionAid’s affirmative counterclaim. On appeal, the First Circuit certified three questions to the SJC, two on the duty-to-defend issue and one on a conflict-of-interest issue, which was the only question left for the court to decide in the instant appeal. At issue was whether a conflict of interest existed between the parties that permitted VisionAid to choose the attorney to defend the suit brought against it by the ex-employee, with Mount Vernon paying for that defense. The First Circuit answered in the negative, holding that the presence of the embezzlement counterclaim did not generate a conflict of interest entitling VisionAid to separate counsel to defend against the ex-employee’s suit at Mount Vernon’s expense. View "Mount Vernon Fire Insurance Co v. VisionAid, Inc." on Justia Law

The First Circuit affirmed in part and reversed in part a district court order dismissing claims brought by Ironshore Specialty Insurance Company, the entity that paid the clean-up costs after a large military vessel spilled over 11,000 gallons of fuel next to Boston Harbor, against American Overseas Marine Company, LLC (AMSEA) and the United States. Ironshore sought cleanup costs and damages under the Oil Pollution Act (OPA) of 1990, a declaratory judgment finding AMSEA and the United States to be strictly liable under the OPA, and damages sounding in general admiralty and maritime law as a result of AMSEA’s and the United States’ alleged negligence. The district court dismissed all claims. The First Circuit (1) affirmed the dismissal of all of Ironshore’s claims against AMSEA; (2) affirmed the district court’s dismissal of Ironshore’s OPA claims against the United States; but (3) reversed the district court’s dismissal of Ironshore’s general admiralty and maritime negligence claims brought against the United States under the Suits in Admiralty Act because these claims were not foreclosed by the OPA. View "Ironshore Specialty Insurance Co. v. United States" on Justia Law