Justia Insurance Law Opinion Summaries

AEI filed a declaratory judgment action alleging that Lincoln was barred from challenging the validity of a life insurance policy because the two‐year contestability period had lapsed. The district court granted AEI's motion for summary judgment. The Second Circuit held that the contract did not contain a choice-of-law provision and thus New York conflict-of-law rules governed the dispute. The court held that, because those rules instructed the courts to look to the "center of gravity" of the events at issue to determine which state's substantive law applied, and the center of gravity in this case was New York, New York's substantive law applied. In this case, applying New York's substantive incontestability law barred Lincolnʹs challenges to the policy. View "AEI Life, LLC v. Lincoln Benefit Life Co." on Justia Law

At issue in this case was whether the record contained sufficient evidence to support the jury's verdict that a continuing course of conduct tolled the statute of limitations, Connecticut General Statutes 52‐577. The Second Circuit certified the following question to the Connecticut Supreme Court: Is the trial evidence legally sufficient to support the jury's finding that the statute of limitations was tolled at least through October 21, 2010, rendering the Insurer's claim timely? View "Evanston Insurance Co. v. William Kramer & Associates, LLC" on Justia Law

The Second Circuit held that the district court erred in its interpretation of the contracts under the court's prior precedent and therefore, the court vacated the original judgment and remanded to the district court for reconsideration of the contracts employing standard principles of contract interpretation. The appeal stemmed from a dispute between Century and Global over the extent to which Global was obligated to reinsure Century pursuant to certain reinsurance certificates. The court held that the district court's determination that the contract was unambiguous was premised on an erroneous interpretation of New York state law. The court explained that the district court should construe each reinsurance policy solely in light of its language and, to the extent helpful, specific context. View "Global Reinsurance Corporation of America v. Century Indemnity Co." on Justia Law

Plaintiffs filed a putative class action, alleging that defendants (insurance providers, banks, and credit card companies) targeted credit card holders with fraudulent solicitations for illegal accidental disability and medical expense insurance policies. Plaintiffs were among the cardholders who purchased those policies, which plaintiffs allege were void ab initio because they violated New York insurance law. Although plaintiffs did not suffer qualifying losses or make claims for coverage, they argued that they are nevertheless entitled to reimbursement of the premiums and fees they paid defendants, plus enhanced damages, based on quasi‐contract, civil fraud, and statutory claims. The district court dismissed the suit, reasoning that plaintiffs could not establish the injury‐in‐fact element of Article III standing. The court concluded the policies were not void ab initio because under a New York savings statute, plaintiffs would have received coverage had they filed claims for qualifying losses, N.Y. Ins. Law 3103. The Second Circuit vacated, stating that an Article III court must resolve the threshold jurisdictional standing inquiry before it addresses the claim's merits. The district court’s analysis conflated the requirement for an injury in fact with the underlying validity of plaintiffs’ arguments, and engaged a question of New York state law that the state courts have yet to answer. View "DuBuisson v. Stonebridge Life Insurance Co." on Justia Law

The Second Circuit held that the district court properly denied an insurance company's motion to rescind a life insurance policy on the basis of misrepresentations made by the deceased when applying for the policy. The district court properly relied on Pinette v. Assurance Co. of America, 52 F.3d 407 (2d Cir. 1995), and FDIC v. Great American Insurance Co., 607 F.3d 288 (2d Cir. 2010), the court's most recent decisions on when, under Connecticut law, an insurer may rescind a policy because of an insured's misrepresentation. The court held that the district court correctly identified Pinette and Great American Insurance Co. as setting the controlling standards in this case and did not err in applying the facts of this case to the controlling standards. View "Principal National Life Insurance Co. v. Coassin" on Justia Law

In the underlying case, employees of SAIC, the lead contractor on New York's CityTime project, were convicted of conspiring to obtain bribes and kickbacks from one of SAIC's subcontractors. Federal, the insurer of SAIC, petitioned for mandamus relief to challenge the district court's denial of its application for restitution under the Crime Victims' Rights Act (CVRA), 18 U.S.C. 3771. The Second Circuit denied the petition and held that, assuming Federal could overcome various procedural obstacles, its petition would nonetheless fail on the merits because the district court did not abuse its discretion when it concluded that SAIC's own criminal conduct precluded it—and, by extension, Federal—from obtaining restitution. The court vacated the district court's order summarily dismissing Federal's petition in an SAIC employee's forfeiture proceedings, holding that the district court failed to make adequate factual findings regarding whether SAIC's allegedly unclean hands should bar it from obtaining an equitable remedy, and if such a remedy remained available, whether the property was traceable to bribes and kickbacks actually obtained at SAIC's expense. Accordingly, the court remanded for further proceedings. View "Federal Insurance Co. v. United States" on Justia Law

The Second Circuit reversed the district court's judgment declaring that Citizens was obligated to defend and, if necessary, indemnify Risen Foods under a businessowners policy and an umbrella policy in an underlying suit for damages arising out of a motor vehicle accident. The court held that Risen Foods' vehicle was not covered by either policy. NGM Insurance Co. v. Blakely Pumping, Inc., 593 F.3d 150 (2d Cir. 2010), was controlling in this case where the operative language of the endorsement in NGM was identical to the operative language in the endorsement added to the Citizens businessowners policy in the pending case. Here, the Risen Foods vehicle was not a "covered auto" under the policies. View "Citizens Insurance Co. v. Risen Foods, LLC" on Justia Law

The Second Circuit reversed the district court's judgment declaring that Citizens was obligated to defend and, if necessary, indemnify Risen Foods under a businessowners policy and an umbrella policy in an underlying suit for damages arising out of a motor vehicle accident. The court held that Risen Foods' vehicle was not covered by either policy. NGM Insurance Co. v. Blakely Pumping, Inc., 593 F.3d 150 (2d Cir. 2010), was controlling in this case where the operative language of the endorsement in NGM was identical to the operative language in the endorsement added to the Citizens businessowners policy in the pending case. Here, the Risen Foods vehicle was not a "covered auto" under the policies. View "Citizens Insurance Co. v. Risen Foods, LLC" on Justia Law

Plaintiff, as assignees of its customers against the insurer, appealed the district court's grant of summary judgment for the insurer. Plaintiff alleged that the insurer failed to pay sufficient funds to fulfill its obligations to return damaged vehicles to pre‐accident condition, and engaged in deceptive practices in claims processing. The Second Circuit held that the district court erred in part in granting summary judgment to the insurer on plaintiff's breach of contract claims, because the insurer failed to show its entitlement to judgment for costs relating to labor hours, parts, labor rates, electronic database access, and hazardous waste removal charges, and the absence of genuine disputes of material fact on these issues. The district court erred in granting summary judgment to the insurer on plaintiff's New York General Business Law 349 claims, because there was a question of material fact regarding plaintiff's claim that the insurer engaged in deceptive practices concerning its labor rates payments and that claim was not precluded by N.Y. Ins. Law 2601. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Nick's Garage, Inc. v. Progressive Casualty Insurance Co." on Justia Law

Olin, a large chemical manufacturing company, filed suit against its insurers, including OneBeacon, seeking indemnification for environmental contamination at its manufacturing sites. On appeal, OneBeacon challenged two judgments entered pursuant to Federal Rule of Civil Procedure 54(b) in favor of Olin, awarding it over $80 million in indemnification costs. The Second Circuit held that, because it was not disputed that the damages at each site far exceed OneBeacon's attachment point of $300,000 when apportioned to a single policy year, OneBeacon's policies have been triggered. The court affirmed the denial of summary judgment with respect to the McIntosh site; affirmed the district court's ruling as to the special verdict form; vacated and remanded for entry of a new damages judgment on the basis of the methodology dictated by In re Viking Pump, Inc., 52 N.E.3d 1144 (N.Y. 2016); remanded for further proceedings on the prior insurance provision issue; and remanded as to the issue of prejudgment interest. In regard to Olin's cross-appeal, the court affirmed and held that summary judgment in its favor on Olin's Chapter 93A claim was proper because Olin's Chapter 93A claim was barred by the applicable statute of limitations. View "Olin Corp. v. OneBeacon American Insurance Co." on Justia Law