Justia Insurance Law Opinion Summaries

The United States and four states sued DISH Network, LLC (“DISH”) for violations of the Telephone Consumer Protection Act (“TCPA”). DISH submitted a claim for defense and indemnity to its insurer, National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”). National Union denied the claim and filed suit in Colorado federal court seeking a declaration that it had no duty to defend or indemnify DISH in the underlying TCPA lawsuit. The district court granted summary judgment to National Union, relying on the Tenth Circuit's decision in ACE American Insurance Co. v. DISH Network, LLC, 883 F.3d 881 (10th Cir. 2018). Finding no reversible error, the Tenth Circuit affirmed the district court's judgment. Further, the Court affirmed the district court’s denial of DISH’s request for further discovery under Federal Rule of Civil Procedure 56(d). And we deny DISH’s motion to certify a question of state law to the Colorado Supreme Court. View "National Union Fire Insurance v. Dish Network" on Justia Law

The issue on appeal in this case stemmed from an insurance claim filed by Bonbeck Parker, LLC and BonBeck HL, LC (collectively, BonBeck) for hail damage. The Travelers Indemnity Company of America (Travelers) acknowledged that some of the claimed damage to BonBeck’s property was caused by a covered hailstorm, but argued the remaining damage was caused by uncovered events such as wear and tear. BonBeck requested an appraisal to determine how much damage occurred, but Travelers refused this request unless BonBeck agreed the appraisers would not decide whether the hailstorm in fact caused the disputed damage. When BonBeck rejected this condition, Travelers filed suit, seeking a declaration that the appraisal procedure in BonBeck’s policy did not allow appraisers to decide the causation issue. The district court disagreed, ruling that the relevant policy language allowed appraisers to decide causation. After the appraisal occurred, the district court granted summary judgment to BonBeck on its breach of contract counterclaim, concluding that Travelers breached the policy’s appraisal provision. Travelers appealed. Applying Colorado law, the Tenth Circuit Court of Appeals affirmed: the disputed policy provision allowed either party to request an appraisal on “the amount of loss,” a phrase with an ordinary meaning in the insurance context that unambiguously encompassed causation disputes like the one here. "And contrary to Travelers’ view, giving effect to this meaning aligns both with other related policy language and with the appraisal provision’s purpose of avoiding costly litigation. For these reasons, the district court appropriately allowed the appraisers to resolve the parties’ causation dispute and granted summary judgment for BonBeck on its breach of contract claim." View "BonBeck Parker, et al. v. Travelers Indemnity" on Justia Law

Reliance Standard Life Insurance (“Reliance”) appealed district court’s orders: (1) concluding that Reliance wrongly denied David Carlile’s claim for long-term disability benefits; (2) refusing to remand the case and instead ordering an award of benefits; (3) awarding attorney fees and costs to Carlile; and (4) denying Reliance’s motion to amend or alter judgment. After reviewing the policy at issue here, the Tenth Circuit determined the relevant policy language was ambiguous and therefore construed it in Carlile’s favor, and in favor of coverage. Furthermore, the Court concluded the district court did not err in refusing to remand the case back to Reliance or in awarding attorney fees and costs to Carlile. View "Carlile v. Reliance Standard Life Ins." on Justia Law

In 2013, a fire caused the Sinclair Wyoming Refining Company to restrict operations for several months. It filed a claim with its eighteen insurers, including Infrassure, Ltd., which collectively provided Sinclair coverage for business interruption losses under an all-risk insurance policy. In 2015, after twenty months of claim adjustment, Sinclair and the other seventeen insurers settled the claim. But Infrassure did not agree with the settlement value and eventually exercised its right under the policy to have Sinclair’s covered loss calculated by a panel of three appraisers. The panel valued the loss at $60,365,508, with Infrassure liable for $4,527,413. Infrassure, still unsatisfied, sought to invalidate the award in district court, arguing that the appraisers relied improperly on the settlement amount rather than independently valuing the loss. The district court rejected this theory and confirmed the award, holding Infrassure failed to show any actionable misconduct on behalf of the appraisers. After review, the Tenth Circuit agreed the record revealed nothing warranting setting aside the appraisal award, and therefore affirmed. View "Sinclair Wyoming v. Infrassure" on Justia Law

The parents of a teenage girl (L.M.) sued Premera Blue Cross under the Employee Retirement Income Security Act (ERISA), claiming improper denial of medical benefits. L.M. experienced mental illness since she was a young girl. L.M. was eventually placed in Eva Carlston Academy, where she obtained long-term psychiatric residential treatment. For this treatment, the parents submitted a claim to Premera under the ERISA plan’s coverage for psychiatric residential treatment. Premera denied the claim ten days into L.M.’s stay. But Premera agreed to cover the first eleven days of L.M.’s treatment, explaining the temporary coverage as a "courtesy." The parents appealed the denial of subsequent coverage, and Premera affirmed the denial based on a physician's medical opinion. The parents filed a claim for reimbursement of over $80,000 in out-of-pocket expenses for L.M.’s residential treatment at the Academy. Both parties moved for summary judgment, and the district court granted summary judgment to Premera based on two conclusions: (1) Premera’s decision was subject to the arbitrary-and- capricious standard of review; and (2) Premera had not acted arbitrarily or capriciously in determining that L.M.’s residential treatment was medically unnecessary. The district court granted summary judgment to Premera, and the parents appealed. After review, the Tenth Circuit concluded the district court erred by applying the arbitrary-and-capricious standard and in concluding Premera had properly applied its criteria for medical necessity. Given these conclusions, the Court reversed and remanded the matter back to the district court for de novo reevaluation of the parents’ claim. View "M. v. Premera Blue Cross" on Justia Law

Colorado Center Development, LLC, the owner of certain property in Denver, Colorado, hired J.E. Dunn Construction Company to construct an office building (the Project). Colorado Center purchased from Defendant Liberty Mutual Fire Insurance Company a Builder’s Risk insurance policy (the Policy). The Policy provided protection against “direct physical loss or damage caused by a covered peril to ‘buildings or structures’ while in the course of construction, erection, or fabrication.” J.E. Dunn hired plaintiff Rocky Mountain Prestress, LLC (RMP) as a subcontractor to perform work including “engineer[ing], supply[ing,] and install[ing] all precast concrete components, connections, and erections aids” and “[s]upply[ing] and install[ing] grout and/or patching of all connections required by the engineering for the structural integrity of the precast.” Because of “potential concerns that arose at another project” relating to “sinking pillars/columns,” J.E. Dunn requested RMP to retain a third-party engineering firm to investigate “potential structural issues” with RMP’s work on the Project. The engineering firm concluded that the Project required “repairs to insufficiently grouted joints between precast concrete column and pilaster elements” at 264 locations throughout the structure. The engineering firm began its investigation in August 2016, and the final grouting repair work was completed in February 2017. In the meantime, in November 2016, RMP submitted a claim to Liberty seeking coverage under the Policy. The district court granted summary judgment in favor of the insurance company on three independent grounds: (1) RMP had not shown that the claimed loss was fortuitous; (2) the claimed loss did not constitute “direct physical loss or damage” as required for coverage under the policy; and (3) even if there might otherwise have been coverage, the claimed loss fell within the policy’s exclusion for defective workmanship. After review, the Tenth Circuit affirmed the district court’s decision based on the defective-workmanship exclusion. View "Rocky Mountain Presstress v. Liberty Mutual Fire Insurance" on Justia Law

In 2014, Liberty Life Assurance Company of Boston rejected the claim for long-term disability benefits by plaintiff-appellee Michael Ellis. As part of its employee-benefit plan, Comcast Corporation, for whom Ellis worked in Colorado from 1994 until 2012, had obtained from Liberty in 2005 a Group Disability Income Policy (the Policy). Ellis sought review of Liberty’s denial of benefits in the United States District Court for the District of Colorado under the Employee Retirement Income Security Act of 1974 (ERISA). The district court, reviewing the denial de novo, ruled that Liberty’s denial was not supported by a preponderance of the evidence. Liberty appealed, contending the court should have reviewed its decision under an abuse-of-discretion standard but that it should prevail even under a de novo standard. Ellis defended the district court’s choice of a de novo standard but argued he should prevail under either standard of review. The Tenth Circuit determined a plan administrator’s denial of benefits was ordinarily reviewed by the court de novo; but if the policy gave the administrator discretion to interpret the plan and award benefits, judicial review was for abuse of discretion. The Policy at issue provided that it was governed by the law of Pennsylvania, which was where Comcast was incorporated and has its principal place of business. Among its terms was one that gave Liberty discretion in resolving claims for benefits. A Colorado statute enacted in 2008, however, forbade such grants of discretion in insurance policies. The parties disputed whether the statute applied to the Policy under Colorado law, and whether Colorado law governed. The Tenth Circuit held that in this dispute the law of Pennsylvania was controlling. Liberty’s denial of benefits was therefore properly reviewed for abuse of discretion. Under that standard the denial had to be upheld. View "Ellis v. Liberty Life Assurance Co" on Justia Law

Progressive Northwestern Insurance filed suit to obtain a declaratory judgment that it had not violated any duty to its insureds in the defense of a wrongful-death suit. The underlying suit had been brought in 2013 by Gabriel Gant against Justin Birk; his parents, Edward and Linda; and the Birks’ family company, Birk Oil. The suit alleged that Justin had negligently killed Kathyrn Gant (Gabriel’s wife) in a car accident; that his parents were liable because they had negligently entrusted the vehicle to him; and that Birk Oil was liable under the doctrine of respondeat superior because Justin was driving the vehicle incidental to his employment by the company. Gant’s attorneys estimated damages of many million dollars, which far exceeded defendants’ insurance coverage. Defendants had assets from which Gant could have collected additional money on a judgment against them, but his attorneys apparently thought that a better way to collect a large judgment would be if defendants had a claim against Progressive for not representing them properly and exposing them to a judgment far exceeding their insurance coverage. Accordingly, shortly before trial Gant entered into an agreement with the Birks in which Gant promised not to execute any judgment against the Birks, and in exchange the Birks assigned to Gant their rights to the policy limits under the Progressive and corporate insurance policies, and any claims the Birks had against Progressive for breach of contract, negligence, or bad faith. After a bench trial, Gant was awarded $6.7 million in damages. Progressive then brought this declaratory-judgment action and Gant counterclaimed, arguing that Progressive: (1) breached its duty to discover and disclose the corporate insurance policy; (2) was negligent in hiring attorney Kevin McMaster to defend the suit; and (3) was vicariously liable for McMaster’s conduct. The district court granted summary judgment in favor of Progressive on its claim and the counterclaims. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Progressive Northwestern Ins v. Gant" on Justia Law

The insured, Brenda Sandoval, submitted a claim to her insurer, Unum Life Insurance Company of America, which initially paid benefits but then terminated them. The termination of benefits led Sandoval to sue Unum for: (1) a common-law tort (bad faith breach of insurance contract); (2) a statutory tort (unreasonable conduct under Colo. Rev. Stat. sec. 10-3-1115 to 1116); and (3) breach of contract. The district court granted Unum’s motion for partial summary judgment on the tort claims. The contract claim went to trial, where the jury rendered a verdict for Sandoval. The district court later denied Unum’s motion for judgment as a matter of law. Sandoval appealed the grant of Unum’s motion for partial summary judgment, and Unum cross-appealed the denial of its motion for judgment as a matter of law. After review, the Tenth Circuit affirmed the award of partial summary judgment on the tort claims because Unum conducted a reasonable investigation. On the contract claim, the Court also affirmed the denial of Unum’s motion for judgment as a matter of law: the policy contained two alternative tests for a disability, and the evidence permitted a reasonable finding that Sandoval had satisfied at least one of these definitions. View "Sandoval v. UNUM Life Insurance" on Justia Law

RW Trucking pumped fracking water from frac tanks at oil-well sites and hauled it away for disposal. Jason Metz worked as a driver for RW Trucking. When his trailer reached capacity, Metz turned off the pump and disengaged the hose. According to Metz, he then left a ticket in the truck of another well-site worker, David Garza. Metz testified that as he began walking back to his truck’s cab from its passenger side, and about sixty feet from the frac tanks, he flicked his lighter to light a cigarette. This ignited fumes and caused a flash fire that injured Garza (as well as Metz and another nearby RW Trucking employee). In this appeal and cross-appeal, the issue presented for the Tenth Circuit's review was which of two insurers’ insurance policies covered bodily injuries. Carolina Casualty Insurance Company and Burlington Insurance Company had earlier issued policies to RW Trucking. By design, the two policies dovetailed each other’s coverage. Each insurer contended that the other was solely liable to indemnify the insureds, RW Trucking and Metz, for damages arising from Garza’s bodily injuries suffered in the fire. After Burlington and Carolina jointly settled Garza’s claims, with each reserving its rights against the other, Carolina filed this declaratory-judgment action, contending that it had no duty to defend or indemnify RW Trucking or Metz, and seeking reimbursement of its paid portion of Garza’s settlement. On cross motions for summary judgment, the district court ruled: (1) that Carolina owed a duty to defend but not a duty to indemnify; (2) Burlington owed a duty to indemnify (and so implicitly, also a duty to defend); (3) that Carolina paid its share of the settlement as a volunteer, disabling itself from recovering its portion of the settlement payment from Burlington; and (4) that Carolina owed Burlington for half the total defense costs. After review, the Tenth Circuit reversed the district court as to the duty-to-defend and voluntary-payment issues, and affirmed on the duty-to-indemnify issue. The Court remanded with the instruction that the district court vacate its judgment granting Burlington reimbursement of half its defense costs. View "Carolina Casualty Ins. Co. v. Burlington Ins. Co." on Justia Law