Justia Insurance Law Opinion Summaries

The Indian Health Service (IHS), operates direct healthcare facilities and funds Contract Health Services (CHS) programs for persons of American Indian descent, 25 U.S.C. 1603(5), (12). Under 25 U.S.C. 5301, tribes may manage and staff their own IHS facilities, contract with private insurers for tribal coverage, and operate their own CHS programs. IHS health programs are “the payer of last resort.” Medicare, Medicaid, or private insurance must pay before IHS reimbursement is available. The 2003 Medicare Prescription Drug Improvement Act authorized HHS to demand Medicare pricing from hospitals providing services to tribes through CHS programs, 42 U.S.C. 1395cc. The Tribe, which administers a CHS program, contracted with BCBSM for healthcare coverage. The Sixth Circuit previously reversed the dismissal of the Tribe’s lawsuit based on BCBSM’s alleged failure to insist on “Medicare-like rates” for care authorized by the Tribe’s CHS program and provided by Medicare-participating hospitals. On remand, the district court granted BCBSM summary judgment, concluding that the Tribe’s payments for CHS care through BCBSM's plans were not eligible for Medicare-like rates. The district court interpreted federal regulations as limiting the requirement of Medicare-like rates to payments for care that was authorized by CHS, provided by Medicare-participating hospitals, and directly paid for with CHS funds. The Sixth Circuit reversed. On remand, the district court must first address whether the Tribe’s CHS program authorized the care for which they assert they were entitled to Medicare-like rates. If the CHS program authorized this care, the court should then consider BCBSM’s alternative arguments. View "Saginaw Chippewa Indian Tribe of Michigan v. Blue Cross Blue Shield of Michigan" on Justia Law

United Talent Agency (UTA) purchased business insurance policies through two insurance companies. UTA filed suit against both companies after they denied property insurance coverage for economic losses related to the COVID-19 pandemic. The trial court sustained the insurers' demurrer claiming UTA failed to state facts sufficient to constitute a viable cause of action.The Second Appellate District affirmed, rejecting both of UTA's arguments on appeal. First, UTA claimed that the danger posed by the COVID-19 gave rise to the closure orders and other restrictions, which, in turn, caused UTA to suffer physical loss because these restrictions limited the company's use of and operations at its insured locations. The court explained that temporary loss of use of a property due to pandemic-related closure orders, does not alone constitute direct physical loss or damage.Second, UTA claims that the physical presence of COVID-19 virus constitutes physical damage. The court held that the mere presence of a virus or other contaminant, without evidence of required remediation, does not rise to the level of physical loss or damage. Thus, the court affirmed the trial court's order sustaining the insurance companies' demurrer. View "United Talent Agency v. Vigilant Insurance Co." on Justia Law

Plaintiffs’ sought coverage for losses and expenses during the COVID-19 pandemic. The district court granted the insurers’ motion to dismiss.   The Eighth Circuit affirmed the district court’s ruling granting Defendant summary judgment. The court held that the primary rule for contract interpretation is to ascertain and effectuate the parties' intent. In cases where the insurance policy language is unambiguous, the court will enforce the contract as written and will give each term its ordinary meaning. Here, the contract at issue provides coverage for “direct physical loss of or damage to property.” Neither business alleges COVID-19 was physically present on its premises or that anything physical happened to its properties. The parties’ dispute regarding whether the policies’ Virus Exclusion applies is irrelevant because the Plaintiffs’ failed to show any direct physical loss of or damage to their property. View "Monday Restaurants v. Intrepid Insurance Company" on Justia Law

In this insurance coverage dispute, Plaintiff, an insured company, sought to sidestep its insurer by collecting a $22 million claim from ten insurance brokers and reinsurers. The district court dismissed Plaintiff’s claims for breach of contract and declaratory judgment.   The D.C. Circuit affirmed the district court’s dismissal. The court held that Plaintiff failed to plead facts to establish a contractual relationship with reinsurers. Plaintiff’s evidence of the reinsurance binders did not create a contractual relationship between Plaintiff and reinsurers. Further, the court held that summary judgment for reinsurers was proper; finding that Plaintiff’s claims of implied contract, promissory estoppel, and unjust enrichment are wholly unsupported by record evidence. The court further held that the “economic loss doctrine” bars Plaintiff’s claims against the other defendants. The economic loss doctrine prohibits claims of negligence where, as here, a claimant seeks to recover purely economic losses. View "Vantage Commodities Financial Services v. Assured Risk Transfer PCC" on Justia Law

In this wrongful death and survival action brought against an automobile insurer, the Supreme Court reversed the judgment of the court of appeals reversing the trial court's judgment in favor of the insurer as to Plaintiff's negligence and gross negligence claims, holding that the court of appeals erred.An insured motorist was involved in a single car accident. The motorist's husband later arrived and began taking photos, but while he was engaged in that activity on the side of the road, he was struck by another vehicle and killed. Plaintiff, the motorist, brought this action alleging that the insurer had instructed her to take the photos and that her husband was complying with that instruction when the other driver hit him. Thus, Plaintiff argued, the insurer proximately caused her husband's death. The trial court granted summary judgment for the insurer on the negligence and gross negligence claims. The court of appeals reversed. The Supreme Court reversed, holding that Defendant did not have a duty to exercise reasonable care in providing post-accident guidance so as not to increase the risk of harm to its insured. View "Elephant Insurance Co., LLC v. Kenyon" on Justia Law

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