Justia Insurance Law Opinion Summaries

Articles Posted in US Court of Appeals for the Fourth Circuit

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Applying North Carolina law, the Fourth Circuit reversed the district court's judgment in favor of Penn National, holding that the district court erred by applying the prior publication exclusions to eliminate Penn National's duty to defend Beach Mart in the underlying lawsuit. In this case, a prior publication exclusion, like the one here, will not bar coverage for offensive publications made during the policy period which differ in substance from those published before commencement of coverage. Furthermore, because the prior publication exclusions could not eliminate Beach Mart's duty to defend, the district court erred in dismissing Beach Mart's counterclaims. Accordingly, the court remanded with instructions. View "Pennsylvania National Mutual Casualty Insurance Co. v. Beach Mart, Inc." on Justia Law

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Gateway filed suit to collect a $900,000 judgment from a contractor's liability insurer, Illinois Union. The Fourth Circuit held that the district court had diversity jurisdiction over the case and rightly refused to remand to state court. On the merits, the court held that Gateway's argument that Illinois waived certain defenses by failing to promptly inform Gateway of its coverage denial under Virginia Code section 38.2-2226 failed, because Illinois Union had not denied coverage because of the contractor's breach. In this case, the relevant policy covered only claims reported to the insurer during the policy period, and the policy expired 19 months before Illinois Union learned about Gateway's claim. Therefore, the court affirmed the district court's grant of summary judgment for Illinois Union. View "Gateway Residences at Exchange, LLC v. Illinois Union Insurance Co." on Justia Law

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The Fourth Circuit affirmed the district court's decision to vacate an arbitration award that the Farm won against a private insurance company that sold federal crop insurance policies to the Farm. The court held that, despite the strong presumption in favor of confirming arbitration awards pursuant to the Federal Arbitration Act (FAA), the insurance company met its heavy burden to prove that the arbitrator exceeded her powers by awarding extra-contractual damages, contrary to both the policy and binding authority from the Federal Crop Insurance Corporation (FCIC). In this case, the arbitrator exceeded her powers by both interpreting the policy herself without obtaining an FCIC interpretation for the disputed policy provisions, and awarding extra-contractual damages, which the FCIC has conclusively stated in multiple Final Agency Determinations could not be awarded in arbitration and can only be sought through judicial review. View "Williamson Farm v. Diversified Crop Insurance Services" on Justia Law

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A Reinsurance Participation Agreement (RPA) executed by AUCRA and Minnieland was an insurance contract under Virginia law. The Fourth Circuit held that the district court did not violate the court's prior mandate by looking at the EquityComp program as a whole; the RPA and insurance policies constituted an integrated transaction and must be read as one contract; and the integrated contract was a contract of insurance under Virginia Code 38.2–312. Finally, the court noted that it was not the first to determine that the program marketed by Applied Underwriters was insurance. View "Minnieland Private Day School v. Applied Underwriters Captive Risk Assurance Co." on Justia Law

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The Fourth Circuit affirmed the district court's grant of summary judgment to Hartford Life in an action brought under the Employee Retirement Income Security Act (ERISA). Plaintiff filed suit seeking a continuation of the long-term disability benefits that Hartford Life had terminated based on its conclusion that plaintiff was no longer "disabled," as that term was used in the plan. The court affirmed the district court's conclusion that Hartford Life, not Hartford Fire, determined that plaintiff was no longer eligible for long-term disability benefits, and Hartford Life's decision to terminate his long-term disability benefits was not an unreasonable exercise of discretion. In this case, the record demonstrated that plaintiff received a fair and thorough consideration of his claim and Hartford Life's conclusion was reasonably supported by the available evidence where, among other things, video surveillance evidence showed plaintiff walking at a quick pace and moving without observable bracing or support. View "Griffin v. Hartford Life & Accident Insurance Co." on Justia Law

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The Fourth Circuit affirmed the district court's grant of summary judgment for the insurance company that insured Steven Gordon. After Steven died, his wife filed suit seeking the full coverage amount for the insurance policy he had been paying for through his company. The court held that no reasonable jury could find that either of the CIGNA Defendants had a fiduciary duty toward the Gordons with respect to soliciting supporting materials for coverage beyond the guaranteed issue amount or notifying new employees that they had not completed the evidence of insurability requirement; even assuming without deciding, that the cause of action for breach of trust by a fiduciary under the Employee Retirement Income Security Act (ERISA) was cognizable, her claim would fail because there was no evidence that the CIGNA Defendants knowingly participated in any breach; and the district court did not err by granting summary judgment before allowing plaintiff to conduct discovery. View "Gordon v. Cigna Corp." on Justia Law

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Purnell hired Plaintiffs (Gabarette and Castillo) as independent contractors to deliver furniture in Virginia. Because it was a last-minute request, Plaintiffs did not have a vehicle available, so Purnell permitted them to use a truck that Purnell had rented from Penske. Driving to their destination, Plaintiffs stopped on the side of the interstate so Castillo could check on the security of the furniture load. Another driver struck the rented truck, killing Castillo and injuring Gabarette. Purnell’s motor vehicle insurance policy, issued by Wausau, included an uninsured/underinsured motorists (UIM) endorsement required by Virginia law, with coverage limited “to those autos shown as covered autos.” For UIM coverage—as opposed to liability coverage—the policy restricted coverage to “Owned Autos Only” and listed three vehicles on the “Schedule of Covered Autos You Own,” not including the rented Penske truck. The Declarations Pages provided that Wausau would “pay in accordance with the Virginia Uninsured Motorists Law, all sums the insured is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.” For UIM purposes, an insured party is “[a]nyone . . . occupying a covered auto.” The UIM endorsement defines “covered auto” as “a motor vehicle, or a temporary substitute, with respect to which the bodily injury or property damage liability coverage of the policy applies.” The district court granted Wausau summary judgment regarding UIM coverage. The Fourth Circuit affirmed, based on the plain language of the policy. View "Levine v. Employers Insurance Co. of Wausau" on Justia Law

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At issue in this appeal was whether claims in an underlying personal injury suit against two contractors were covered under policies issued by Amerisure, in which the contractors were additional insureds. The Fourth Circuit affirmed the district court's judgment that Amerisure improperly relied on a policy exclusion to avoid its duty to defend, and that Amerisure was liable under the terms of its policies to pay the full cost of the settlement plus prejudgment interest. The court vacated the district court's judgment with respect to defense fees and costs, and held that Amerisure was liable for the full amount of those fees and costs because Continental did not have an independent duty to defend in the underlying lawsuit. View "Continental Casualty Co. v. Amerisure Insurance Co." on Justia Law

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At issue in this appeal was whether claims in an underlying personal injury suit against two contractors were covered under policies issued by Amerisure, in which the contractors were additional insureds. The Fourth Circuit affirmed the district court's judgment that Amerisure improperly relied on a policy exclusion to avoid its duty to defend, and that Amerisure was liable under the terms of its policies to pay the full cost of the settlement plus prejudgment interest. The court vacated the district court's judgment with respect to defense fees and costs, and held that Amerisure was liable for the full amount of those fees and costs because Continental did not have an independent duty to defend in the underlying lawsuit. View "Continental Casualty Co. v. Amerisure Insurance Co." on Justia Law

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The Fourth Circuit held that the main questions at issue in this appeal —concerning both the scope and limit of the Insurers' duties to defend and indemnify WECCO—were answered over a decade ago in In re Wallace & Gale Co., 385 F.3d 820, 833–34 (4th Cir. 2004). The court denied WECCO's request to either consider these questions anew or certify them to the Maryland Court of Appeals. Therefore, the court affirmed the district court's judgment and rejected WECCO's challenges to the district court's interpretation of the completed-operations hazard to apply to bodily injury stemming from an individual's exposure to asbestos during a WECCO operation that was completed at the time the insurance policy took effect, regardless of whether such operation was ongoing when the individual was first exposed; decision to place the burden on WECCO to prove that an asbestos related bodily injury claim was not subject to a policy's aggregate limit; determination that St. Paul properly classified certain claims as "completed operations" claims; declaration that the aggregate limits of St. Paul's policies had been exhausted; and conclusion, in the alternative, that most of WECCO's breach-of-contract claims were time-barred. View "The Walter E. Campbell Co. v. United States Fire Insurance Co." on Justia Law