Justia Insurance Law Opinion Summaries

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Insurer in this insurance dispute, holding that summary judgment was properly granted.Insured, which operated a bar and restaurant, made a claim under its commercial property insurance policy for business interruption coverage for the period it closed its business in response to the order of the West Virginia Governor that bars and restaurants shut down in response to the COVID-19 pandemic. Insurer denied the claim. The Supreme Court affirmed, holding (1) the language "direct physical loss of or damage to Covered Property" requires a physical aspect to the property loss before coverage is triggered; and (2) Insured's claim failed under the provision that required actual damage to nearby property. View "Jesse’s Embers, LLC v. Western Agricultural Insurance Co." on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of an Insurer in this insurance dispute, holding that the mere loss of use of business property did not constitute "direct physical loss of or damage to property" to trigger coverage in this case.Insured, which operated a private golf and country club, made a claim under its all-risk commercial property insurance policy for income it lost during the time it temporarily closed its facilities in compliance with the Governor's 2020 proclamation restricting in-person services at bars and restaurants in response to the COVID-19 pandemic. Insurer denied the claim, and Insured sued. The district court granted Insurer's motion for summary judgment. The Supreme Court affirmed, holding that the mere loss of use of business property does not constitute “direct physical loss of or damage to property” to trigger coverage under the business interruption endorsement to an all-risk commercial property insurance policy like the one at issue in this case. View "Wakonda Club v. Selective Insurance Co. of America" on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court concluding that the insurance policies of three restaurants (Plaintiffs), which suffered reductions in revenues during the COVID-19 pandemic and the resulting government restrictions on public gatherings, did not unambiguously cover Plaintiffs' losses, holding that there was no error.Plaintiffs brought a declaratory judgment action to determine the scope of their policies. The superior court granted judgment against Plaintiffs, finding that there was no "direct physical loss or damage" resulting from the COVID-19 virus. The Supreme Judicial Court affirmed, holding that Plaintiffs' claims were properly dismissed. View "Verveine Corp. v. Strathmore Insurance Co." on Justia Law

Plaintiff, a Hollywood restaurant, maintained a business interruption insurance policy through Defendant.  In response to COVID-19, the Governor, Mayor of Los Angeles, and several public health agencies ordered Plaintiff to close its restaurant, resulting in the loss of all its business. Plaintiff filed a claim with Defendant insurance company, which was denied based on the grounds that the policy only covered “direct physical loss of or damage to” the property, and expressly excluded coverage for losses resulting from a government order and losses caused by or resulting from a virus. Plaintiff appealed after Defendant's demurrer was sustained without leave to amend.   The California Court of Appeal affirmed the dismissal and held that Plaintiffs cannot establish a breach of contract.  At issue is whether the clause’s requirement can be construed to cover the pandemic-related closure. The court held that under California law a business interruption policy that covers physical loss and damages does not provide coverage for losses incurred by reason of the COVID-19 pandemic. Moreover, the court explained that the fact that loss and damage requirements are sometimes found in exclusionary provisions does not change the plain meaning of the terms. The court noted that even if Plaintiff could bring itself within the coverage clause, the virus exclusion would bar coverage. View "Musso & Frank Grill v. Mitsui Sumitomo Ins. USA" on Justia Law

Vista Health Plan, Inc., a small health insurance company in Texas, was assessed risk-adjustment fees that exceeded its premium revenue, causing the company to cease operations. The company and its parent, Vista Service Corporation, (collectively, Vista) sued HHS, HHS Secretary, the Centers for Medicare and Medicaid Services (CMS), and CMS Administrator Seema Verma (collectively, the HHS Defendants), challenging the risk-adjustment program and two rules promulgated pursuant to the program.The Fifth Circuit explained that determining whether the district court’s “final judgment” was truly an appealable judgment is necessary to establish whether the court has jurisdiction. The court explained that it has recognized an exception to the general rule and determined it had jurisdiction “when the agency would be unable to later appeal the issue that is the subject of the remand order,” such as when “all that is left for remand is a ministerial accounting.”Here, though the district court denied summary judgment as to Vista’s procedural due process claim, the court then explicitly entered a “Final Judgment” stating “nothing remains to resolve ... the case is hereby CLOSED”— suggesting the court “end[ed] the litigation on the merits.” The court held that the district court, in denying summary judgment on Vista’s procedural due process claim and then remanding it for further proceedings, did not yet fully dispose of the case., Thus, there was no appealable final judgment, and the court lacks jurisdiction to reach the substance of Vista’s appeal. View "Vista Health Plan v. HHS" on Justia Law

A fire erupted at a cannabidiol oil extraction factory, leased and operated by JDBC Holdings, Inc, d/b/a The CBD Factories (“JDBC”). JDBC filed a claim for insurance coverage with Kinsale Insurance Company (“Kinsale”)., Kinsale filed a suit in the U.S. District Court for the Northern District of West Virginia alleging that it was not bound to provide coverage. The district court denied Kinsale’s motion for summary judgment, granted in part JDBC’s motion for partial summary judgment, and declared that Kinsale was bound to provide coverage. The district court certified its Order as a final judgment pursuant to Fed. R. Civ. P. 54(b) and stayed JDBC’s counterclaims for breach of contract and bad faith pending appeal.The Fourth Circuit held that it lacked jurisdiction to consider the appeal because the district court’s order was not a final decision. The court reasoned that though the district court resolved the key question of whether Kinsale was liable for providing coverage for the damage at the JDBC facility, “the order does not embody the essential elements of a money judgment because the court has not found all of the facts necessary to compute the amount of damages due.”Further, the court found that even if the district court’s order was a final judgment, the district court abused its discretion in concluding that there was no just reason for the delay to certify the partial summary judgment order for the court’s review. Therefore, the court dismissed the appeal and remanded the matter for further proceedings. View "Kinsale Insurance Company v. JDBC Holdings, Inc." on Justia Law

The Supreme Court reversed in part and affirmed in part the decision of the district court granting summary judgment for Meritain Health, Inc., and dismissing David Peterson's claims against Meritain, holding that there were genuine issues of material fact as to some of Peterson's claims.Peterson, an insured under a hospital's health benefit plan, brought this action against the hospital and Meritain Health, Inc., the third-party administrator of the plan, alleging several claims arising from the denial of his claims for health insurance coverage. The district court granted Meritain's motion for summary judgment. The Supreme Court reversed in part and remanded the case, holding that there were genuine issues of material fact regarding Peteron's breach of contract claim, his third-party beneficiary claim, and his claim for breach of the covenant of good faith and fair dealing. View "Peterson v. Meritain Health, Inc." on Justia Law

In 2000, governmental entities filed a class action against lead paint manufacturers. Following remand, the plaintiffs filed an amended complaint alleging representative public nuisance on behalf of the People, claiming that the presence of lead in paint and coatings in and around California homes and buildings has created a massive public health crisis. The trial court found ConAgra, NL, and Sherwin-Williams jointly and severally liable and ordered the establishment of a fund for the abatement of lead paint in pre-1978 homes in the 10 jurisdictions represented in the case. Following another remand, after the California Supreme Court denied review and the U.S. Supreme Court denied certiorari, the trial court recalculated the amount to be paid into the abatement fund as $401,122,482.Underwriters at Lloyd’s London and other insurers sought a determination that they had no coverage obligation to ConAgra. The trial court determined that ConAgra, as successor to paint manufacturer W.P. Fuller, was not entitled to indemnity from its insurers for its payment to the abatement fund due to Insurance Code section 533, which provides that insurers are not liable for losses caused by a willful act of the insured. The court of appeal affirmed. Fuller had actual knowledge of the harms associated with lead paint when it promoted lead paint for interior residential use, which establishes the willful act required to trigger section 533 prohibition against insurance coverage. View "Certain Underwriters at Lloyd's London. v. Conagra Grocery Products Co." on Justia Law

DENC, Inc. ("DENC") sued Philadelphia Indemnity Insurance Company ("Philadelphia"), claiming breach of contract and violations of the North Carolina’s Unfair and Deceptive Trade Practices Act (“UDTPA”) based on Philadelphia's refusal to cover DENC's claim for collapse damage. The district court found Philadelphia improperly denied coverage and therefore breached the terms of the insurance policy and violated the UDTPA. However, the district court declined to award treble damages because DENC didn’t show that Philadelphia’s UDTPA violation proximately caused any injury. Both parties appealed.The Fourth Circuit affirmed on all liability issues, finding that the district court did not err in applying the appropriate standards. However, the Fourth Circuit reversed the district court's denial of treble damage to DENC, holding that the district court erred in assessing proximate cause under the UDTPA.Under N.C. Gen. Stat. Sec. 75-16, a court must award treble damages if a defendant violates the UDTPA. However, damages are limited to those proximately caused by the defendant's violation. Here, the Fourth Circuit agreed with the district court that Philadelphia's denial letter was deceptive; however, the district court erred when it engaged in a separate proximate cause analysis. The Fourth Circuit found that the denial letter was aggravating conduct that accompanied the breach, requiring treble damages. View "DENC, LLC v. Philadelphia Indemnity Ins." on Justia Law

The Supreme Court reversed the judgment of the circuit court granting summary judgment in favor of Plaintiffs - Christine Brehm and Amber Hess - in these suits for declarations of coverage against Progressive Max Insurance Company, holding that the circuit court erred in its grant of summary judgment.Plaintiffs were passengers in a Toyota Camry, a rental vehicle operated by Susan Bindernagel, when another driver crashed into the Camry. Bindernagel's insurer, Progressive, denied underinsured motorist (UIM) coverage because the rental vehicle was not a "covered auto" under the policy. The circuit court found that because Plaintiffs had been Bindernagel's guest passengers in the rental car when the crash occurred they were entitled to UIM coverage. The Supreme Court reversed, holding that neither the clear statutory language nor the terms of the insurance policy specifically provided for UIM coverage to those in Plaintiffs' position. View "Progressive Max Insurance Co. v. Brehm" on Justia Law