Justia Insurance Law Opinion Summaries

Crown Energy Company ("Crown") brought suit against Mid-Continent Casualty Company ("Mid-Continent") seeking declaratory judgment that two commercial general liability policies issued to Crown provided coverage for claims of property damage brought against Crown in a separate action. The claims arose out of seismic activity allegedly caused by Crown's use of waste water disposal wells in its oil and gas operations. Mid-Continent filed a counterclaim, seeking declaratory judgment that the claims were not covered under the policies because the seismic activity did not constitute an "occurrence" and that the claims fell within a pollution exclusion to the policies. The trial court granted summary judgment in favor of Crown. Mid-Continent appealed, and the Court of Civil Appeals affirmed the trial court's judgment. After its review, the Oklahoma Supreme Court found that the seismic activity did constitute an occurrence under the policies, and that the pollution exclusion did not bar coverage. The Court of Civil Appeals’ judgment was reversed and the trial court affirmed. View "Crown Energy Co. v. Mid-Continent Casualty Co." on Justia Law

Mecosta County Medical Center, d/b/a Spectrum Health Big Rapids (and others) sued Metropolitan Group Property and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company at the Kent Circuit Court, seeking personal protection insurance (PIP) benefits related to a single-car crash involving Jacob Myers. Myers co-owned the vehicle involved in the crash with his girlfriend; his girlfriend’s grandmother had purchased a no-fault insurance policy on the vehicle through Metropolitan Group. Myers assigned plaintiffs his right to collect PIP benefits in the amount of his treatment bills. After the assignment, Myers sued Metropolitan Group and State Farm at the Wayne Circuit Court for PIP benefits related to other costs arising from the crash. Plaintiffs sued defendants at the Kent Court to recover on the assigned claim. Defendants moved for summary judgment against Myers at the Wayne Court. State Farm argued that because Myers did not live with the State Farm policyholders he was not covered by their policy. Metropolitan Group asserted that Myers was not entitled to coverage because he did not personally maintain coverage on the vehicle. The Wayne Court granted both motions and dismissed Myers’s PIP claim with prejudice. Myers did not appeal. While defendants’ motions were pending with the Wayne Court, Metropolitan Group also moved for summary judgment at the Kent Court on the same basis as its motion in the Wayne Court. However, the Wayne Court granted defendants’ motions before the Kent Court considered Metropolitan Group’s motion. After the Wayne Court granted summary judgment for defendants, defendants filed additional motions for summary judgment at the Kent Court, arguing plaintiffs’ claims were barred under the doctrines of res judicata and collateral estoppel because the Wayne Court had concluded that Myers was ineligible for PIP benefits. The Kent Court granted the motion, holding that plaintiffs’ claims were barred by res judicata and collateral estoppel. Plaintiffs appealed, and the Court of Appeals reversed in a split, unpublished opinion. The appellate majority held that an assignee was not bound by a judgment against an assignor in an action commenced after the assignment occurred. The Michigan Supreme Court affirmed, finding that plaintiffs were not in privity with Myers with respect to the judgment entered subsequently to the assignment, and therefore, plaintiffs could not be bound by that judgment under the doctrines of res judicata and collateral estoppel. View "Mecosta County Medical Center v. Metropolitan Group Property, et al." on Justia Law

Plaintiff-Appellant XL Insurance America, Inc. (“XL”), as subrogee of Boh Bros. Construction Co., L.L.C. (“Boh Bros.”), challenged the district court’s summary judgment in favor of Defendant-Appellee Turn Services, L.L.C. (“Turn”).   On appeal, Turn devotes significant ink to its contention that Boh Bros.’s responsibility for repairing the dolphin does not equate to a proprietary interest in it.   The Ninth Circuit vacated and remanded. The court held that Robins Dry Dock is not implicated by the $1.2 million that XL paid Boh Bros. to cover the repairs. The court explained that for nearly a century, Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927), has limited plaintiffs’ ability to recover “purely economic claims . . . in a maritime negligence suit.”1 “[A]bsent physical injury to a proprietary interest”—or one of a few other limited exceptions—plaintiffs asserting such claims are out of luck. The court explained the “spectre of runaway recovery lies at the heart of the Robins Dry Dock rubric.”   Further, the court concluded that it is clear that the doctrine would be inapplicable here if XL had paid the money directly to Plains because Plains had a proprietary interest in the damaged dolphin. That the money passes through the hands of an intermediary—here, Boh Bros.—is irrelevant to the concerns animating Robins Dry Dock. View "XL Insurance America v. Turn Services" on Justia Law

Appellants alleged that Respondents, Berkshire Hathaway Homestate Insurance Company (Berkshire), Cypress Insurance Company (Cypress), Zenith Insurance Company (Zenith), and others conspired to “hack” a third-party computer system. At the direction of the insurance-company Respondents, allegedly copied thousands of electronic litigation files, which had been uploaded to the system by workers’ compensation and personal injury attorneys and their clients (including Appellants), and transmitted the copies to insurers and insurance defense law firms. Appellants first sued respondents in federal district court on various causes of action, including invasion of privacy.   The Second Appellate District, affirmed and agreed with the trial court that Appellants failed to state a claim. The court concluded that Appellants failed to allege any actionable injury because: (1) they did not allege damage or disruption to the computer system, as required by Intel; and (2) they did not allege injury to the copied files or their asserted property interests therein. The trial court properly sustained Respondents’ demurrers to Appellants’ trespass-to-chattels claim, because Appellants failed to allege any actionable injury to a property interest, whether in the HQSU system or in the files copied from it. In response to Appellants’ unfounded warnings that affirmance will leave future victims of hacking without any effective remedy. Having abandoned a privacy claim during their federal litigation, Appellants effectively attempted, both in the trial court and on appeal, to repackage an alleged invasion of privacy as a trespass to chattels. Because Appellants failed to plead facts satisfying the latter tort’s element of injury to a property interest, the trial court properly sustained respondents’ demurrers. View "Casillas v. Berkshire Hathaway Homestate Insurance Co." on Justia Law

Pursuant to an arbitration award, American Home paid workers’ compensation benefits to an employee injured in 2008. American did not file a notice before the arbitration that, pursuant to Iowa Code 85.21, it was paying the claim subject to a potential coverage issue. By 2013, American paid all the benefits owed under the arbitration award. In 2016, the employee sought to reopen the case. American then filed a section 85.21 notice seeking reimbursement of benefits paid to the employee, claiming that on the date of injury Liberty Mutual was providing the employer with workers’ compensation coverage.The workers’ compensation commissioner concluded that in order to be entitled to reimbursement, American was required to file section 85.21 notice before the arbitration proceeding and could not, years later, seek to be reimbursed. The district court reversed, reasoning that section 85.21 gave the commissioner broad power to order reimbursement, not time-limited in the statute. The court of appeals, agreeing with the commissioner, reversed. The Iowa Supreme Court agreed. The commissioner may require that insurance carriers obtain a section 85.21 reimbursement order before an evidentiary hearing in order to seek indemnity or contribution from another carrier. The procedural question is not controlled by the substantive provisions of section 85.21. The commissioner has simply established a rule of procedure for handling section 85.21 claims. View "American Home Assurance v. Liberty Mutual Fire Insurance Co." on Justia Law

Plaintiff, a law firm with offices in Dallas, Texas and Atlanta, Georgia, sued to recover lost income and expenses incurred as a result of the COVID-19 pandemic under an insurance policy issued by The Cincinnati Insurance Company. The district court dismissed Plaintiff’s claims and the Fifth Circuit affirmed.   The court explained that under the policy a “Covered Cause of Loss” is a “direct ‘loss’ unless the loss is excluded or limited in this Coverage Part,” and “loss” is an “accidental physical loss or accidental physical damage.” So, to recover under any of the three forms of coverage, there must be a physical loss or physical damage to the Plaintiff’s property. Here, there was no Covered Cause of Loss as there was no underlying physical loss or damage to insured property. Plaintiff was not deprived of its property nor was there a tangible alteration to its property, so there was no underlying “direct ‘loss’” to trigger coverage. View "Ferrer & Poirot v. Cincinnati Ins Company" on Justia Law

Saltz, a plastic surgeon, was sued by a former patient for releasing her photographs to a news outlet. Saltz submitted his legal defense to his malpractice insurance provider, UMIA, which initially defended Saltz but sought a declaratory judgment, claiming that Saltz lacked insurance coverage for the former patient’s claims. The district court found that Saltz was not covered under the plain language of the policy and dismissed his claim for waiver and his request for punitive damages but denied UMIA’s motion for judgment as a matter of law and allowed Saltz’s promissory estoppel and breach of the duty of good faith claims. Over UMIA’s objections, the court also allowed evidence from a settlement negotiation to be presented to the jury, which found in favor of Saltz on both claims.The Utah Supreme Court affirmed in part, reversed in part, and remanded for further proceedings on Saltz’s requests for punitive damages and for attorney fees incurred on appeal. The district court properly allowed Saltz’s claims for promissory estoppel and breach of the duty of good faith to go to the jury; the court was correct to deny UMIA’s motion for a new trial on the claim for breach of the duty of good faith. The court upheld the admission of evidence from the settlement talks. The district court erred in dismissing Saltz’s claims for waiver and for punitive damages. View "UMIA Insurance, Inc. v. Saltz" on Justia Law

A Surety on a $50,000 bail bond appeals from an order denying its motion to set aside a summary judgment entered on the bond. Surety contends the summary judgment entered on the bail bond is voidable and must be vacated because it was not filed within 90 days after the appearance period expired as required by Penal 2 Code section 1306, subdivision (c).   The trial court concluded the Surety was estopped from arguing the reinstatement order was void. As Surety’s challenge to the summary judgment was based on the invalidity of the reinstatement order, the court concluded that the challenge must fail.   The Fifth Appellate District agreed with Surety’s contention that the trial court lacked the authority to reinstate the bond after the appearance period expired. However, the trial court correctly decided that Surety’s conduct estopped it from raising the invalidity of the reinstatement order as a basis for vacating the summary judgment. Here, Surety (1) had prior notice that a reinstatement order would be entered, (2) gave its written consent to the reinstatement, (3) paid a $50 reinstatement fee a few days after the reinstatement order, and (4) benefited when the forfeited $50,000 bail bond was reinstated. Furthermore, the trial court relied on Surety’s consent when it vacated the forfeiture and reinstated the bail bond. The court concluded such circumstances estop Surety from arguing the reinstatement order was invalid. Because the invalidity of the reinstatement order is a necessary condition to Surety’s argument that the summary judgment is voidable. View "P. v. Accredited Surety and Casualty Co." on Justia Law

The First Circuit certified to the Massachusetts Supreme Judicial Court (SJC) a question regarding whether Massachusetts recognizes a common-law duty for insurers to cover costs incurred by an insured party to prevent imminent covered loss.Ken's Foods incurred extensive losses from an accidental discharge at one of its processing facilities caused wastewater to enter Georgia waterways. Ken's Foods filed a claim with Steadfast Insurance Company seeking clean-up expenses and business losses resulting from a "pollution event" that cause a "suspension of operations." When Steadfast refused to reimburse Ken's Foods for the cost of its prevention efforts Ken's Foods sued in Massachusetts federal court. At issue was whether Ken's Foods could recover from Steadfast the costs it incurred to avoid suspending its operations after the pollution discharge. The district court granted summary judgment for Steadfast. The First Circuit concluded that certification was necessary and certified to the SJC the issue. View "Ken's Foods, Inc. v. Steadfast Insurance Co." on Justia Law

Plaintiffs, a group of restaurants, filed claims through their respective insurance policies seeking coverage for losses and expenses related to the COVID-19 pandemic. Insurers denied Plaintiffs' claims and, upon Plaintiff's filing suit, the district court granted the insurance companies' motion for summary judgment.On appeal to the Eighth Circuit, the court held that under either Kansas or Missouri law, Plaintiffs' claims fail. Under both states' laws, there is a "physical loss or damage" which requires some form of "physical alteration" to the insured's property. Here, Plaintiffs did not prove that the presence of COVID-19 resulted in any physical alteration to their property. The court also rejected Plaintiffs' argument that their claims were covered under the "Limited Extension for Food-Borne Illness," finding that this claim also required a showing that there was a "direct physical loss of or damage to property," which Plaintiffs did not allege. View "Planet Sub Holdings, Inc. v. State Auto Property & Casualty" on Justia Law