Justia Insurance Law Opinion Summaries

Soto, a former Disney employee, alleged that Disney improperly denied her severance benefits upon her termination for physical illness that rendered her unable to work. Soto, a longtime employee had experienced a severe stroke and other medical problems, which left her unable to work. Disney formally terminated Soto’s employment, paid Soto sick pay, short-term illness benefits, and long-term disability benefits but did not pay her severance benefits. She filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132(a)(1)(B); (a)(3), alleging that the Plan Administrator improperly determined that she did not experience a qualifying “Layoff” as required for severance benefits.The Second Circuit affirmed the dismissal of her case. Her complaint does not plausibly allege that the interpretation of “Layoff” and resulting denial of severance benefits to Soto were arbitrary and capricious. The Plan Administrator had reasoned bases, relating to taxation, for its interpretation of “Layoff” and consequent denial of severance benefits. The court noted an IRS regulation that defines an “involuntary” “termination of employment” as one arising from “the independent exercise of the unilateral authority of the [employer] to terminate to [employee’s] services, . . . where the [employee] was willing and able to continue performing services.” View "Soto v. Disney Severance Pay Plan" on Justia Law

CP and Cimarex entered into the Master Service Agreement (MSA). Cimarex hired CP to work at Cimarex’s Oklahoma oil well. CP assigned Trent, an employee of one of its subcontractors, to work at the well. A flash fire occurred at the well. Trent was severely burned Trent sued Cimarex and CP. Cimarex and its insurers settled with Trent for $4.5 million. The Texas Oilfield Anti-Indemnity Act (TOAIA) voids indemnity agreements that pertain to wells for oil, gas, or water or to mineral mines unless the indemnity agreement is supported by liability insurance. The MSA's mutual indemnity provision required Cimarex and CP to indemnify each other; CP was obligated to obtain a minimum of $1 million in commercial general liability insurance and $2 million in excess liability insurance, Cimarex was required to obtain $1 million in general liability insurance and $25 million in excess liability insurance. CP obtained more coverage than the minimum required by the MSA, but its policy limited indemnity coverage. Cimarex sought indemnity from CP, which paid Cimarex $3 million, but refused to indemnify Cimarex for the remaining $1.5 million.The Fifth Circuit affirmed summary judgment for CP. TOAIA contemplates that mutual indemnity obligations will be enforceable only up to the limits of insurance each party has agreed to provide in equal amounts to the other party as indemnitee. CP did not breach the MSA because CP was only required to indemnify Cimarex up to $3 million. View "Cimarex Energy Co. v. CP Well Testing L.L.C." on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Depositors Insurance Company in its declaratory judgment action to determine any obligation it had relative to Patrick Sandidge pursuant to Ridley v. Guaranty National Insurance Co., 951 P.2d 987 (Mont. 1997), holding that the district court did not err.Specifically, the Supreme Court held that the district court (1) did not err by holding a hearing on the parties' cross-motions for summary judgment; (2) did not err by holding that Depositors had standing to bring a declaratory action pursuant to Ridley; (3) did not err by granting Depositors' motion for summary judgment; and (4) did not abuse its discretion by denying Sandidge attorney fees and costs. View "Depositors Insurance Co. v. Sandidge" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the circuit court's grant of summary judgment in favor of State Farm Mutual Automobile Insurance Company and instead granting summary judgment in favor of Elliot Brey, holding that Wis. Stat. 632.32(2)(d) does not bar an insurer from requiring that an insured sustain bodily injury or death in order to trigger underinsured (UIM) coverage under an automobile liability insurance policy.The circuit court determined (1) the State Farm automobile liability insurance policy issued to Brey's mother and her husband did not provide uninsured motorist (UIM) coverage to Brey for the death of his father in an automobile accident because Brey was an insured under the policy but his father was not; and (2) Brey could not recover under the policy because he did not sustain bodily injury. The court of appeals reversed, concluding that sections 632.32(1) and (2)(d) bar an insurer from limiting UIM coverage to only those insureds who sustain bodily injury or death. The Supreme Court reversed, holding that section 632.32(2)(d) does not require insurers to extend UIM coverage to an insured for bodily injury or death suffered by a person who was not insured under the policy. View "Brey v. State Farm Mutual Automobile Insurance Co." on Justia Law

Dorothy Wright and her grandchildren (collectively, the “Decedents”) were killed when their vehicle was struck by a stolen vehicle that was being chased by College Park Police Department officers. At the time of the accident, the City of College Park had an insurance policy provided by Atlantic Specialty Insurance Company (“Atlantic”), which provided coverage for negligent acts involving the City’s motor vehicles up to $5,000,000 but also included immunity endorsements which said that Atlantic had no duty to pay damages “unless the defenses of sovereign and governmental immunity are inapplicable.” Plaintiffs filed suit against the City, raising claims of negligence and recklessness resulting in the wrongful deaths of the three Decedents, to which the City raised sovereign immunity as a defense. Plaintiffs claimed the insurance policy limit was $5,000,000 for the three deaths, while Atlantic contended the policy limit was capped at $700,000 under the relevant statutory scheme and the terms of the City’s policy. As the parties agreed, pursuant to OCGA 36-92-2 (a)(3), the sovereign immunity of local government entities was automatically waived up to $700,000 in this instance, regardless of whether the City had a liability insurance policy. Atlantic intervened in the case to litigate the limit of the insurance policy. The trial court ruled that the policy limit is $5,000,000, and the Court of Appeals affirmed. The Georgia Supreme Court then granted Atlantic’s petition for certiorari to decide whether the City’s insurance policy waived the City’s sovereign immunity under OCGA 36-92-2 (d)(3). The Supreme Court concluded the Court of Appeals incorrectly ruled that the City’s insurance policy increased the sovereign immunity waiver notwithstanding the immunity endorsements, which expressly precluded coverage when a sovereign immunity defense applies. Judgment was therefore reversed. View "Atlantic Specialty Insurance Co. v. City of College Park, et al." on Justia Law

In 2013, Vercellino was injured in an accident while riding on an ATV operated by his friend, Kenney. Both were minors. Vercellino was a covered dependent on his mother’s insurance plan. The plan is self-funded, so ERISA, 29 U.S.C. 1001, preempted state law. The Insurer paid nearly $600,000 in medical expenses and did not exercise its right to seek recovery in subrogation from Kenney or Kenney’s parents during the applicable statutory period, nor did Vercellino’s mother ever file suit to recover medical expenses from the Kenneys. In 2019, Vercellino, then an adult, filed suit against the Kenneys seeking general damages and sought declaratory judgment that the Insurer would have no right of reimbursement from any proceeds recovered in that litigation. The Insurer counterclaimed, seeking declaratory judgment that it would be entitled to recover up to the full amount it paid for Vercellino’s medical expenses from any judgment or settlement Vercellino obtained.The Eighth Circuit affirmed summary judgment for the Insurer. The plain language of the plan at issue here is unambiguous: the Insurer is entitled to seek reimbursement for medical expenses arising out of the ATV accident paid on Vercellino’s behalf from any judgment or settlement he receives in his litigation with Kenney. View "Vercellino v. Optum Insight, Inc." on Justia Law

Gardineer was involved in an automobile accident. She sued the other driver, Lynette Hill, and the vehicle owner, Dennis Hill (Lynette’s father-in-law). Dennis had both a primary insurance policy and an umbrella policy with ANPAC. After Dennis’s death, the parties reached a settlement wherein ANPAC paid Gardineer the policy limit of Dennis’s automobile insurance policy. Gardineer reserved the right to assert that ANPAC had a duty to indemnify Hill under Dennis’s umbrellas policy for Hill’s liability. ANPAC sought a declaration that it had no duty to indemnify Hill under the umbrella policy.The Ninth Circuit affirmed summary judgment in favor of ANPAC. The umbrella policy, by its plain and unambiguous terms, did not provide coverage for Lynettel’s liability arising from her use of Dennis’s vehicle. The term “insured” meant Dennis, his wife, and any “relative” – defined as a related person living in the household. Lynette did not reside in Dennis’s household; she was not a “relative” and not an “insured” under the policy. View "American National Property & Casualty Co. v. Gardineer" on Justia Law

This case arose from a claim for underinsured motorist (UIM) benefits by Plaintiff-Appellant Melinda Eckard (insured) against her insurer, Defendant-Appellee State Farm Mutual Automobile Insurance Company (State Farm). On summary judgment, the district court held that Eckard’s suit was time barred by Colorado Revised Statutes section13-80-107.5(1)(b). The Tenth Circuit reversed, finding the district court granted summary judgment to State Farm because it incorrectly found as a matter of law that Eckard “received payment of the settlement” when her lawyer received the settlement agreement and check on October 11, 2019. As was explained, Eckard actually “received payment of the settlement” when she executed the settlement agreement and authorized the check on November 7, 2019. As a result, section 13-80-107.5(1)(b) did not bar Eckard’s UIM claim against State Farm. View "Eckard v. State Farm Mutual Automobile" on Justia Law

In this insurance coverage dispute presenting two certified questions from the United States Court of Appeals for the Fifth Circuit the Supreme Court held that the Northfield exception to the "eight-corners rule" is permissible under Texas law. See Northfield Insurance Co. v. Loving Home Care, Inc., 363 F,3d 523 (5th Cir. 2004).Plaintiff brought the underlying suit alleging that Insured negligently drilled an irrigation well, damaging Plaintiff's land. Insured demanded a defense from its two liability insurers, BITCO General Insurance Corp., which defended under a reservation of rights, and Monroe Guaranty Insurance Company, which refused to defend. BITCO sued Monroe seeking a declaration that Monroe owed a defense to Plaintiff. The certified questions in this case related to the subsidiary issue of whether Texas law permits consideration of stipulated extrinsic evidence to determine whether the duty to defend exists when the plaintiff's pleading is silent about a potentially dispositive coverage fact. The Supreme Court held (1) the Northfield exception is permissible provided that the extrinsic evidence meets three conditions; and (2) the stipulation offered in this case may not be considered because it overlaps with the merits of liability. View "Monroe Guaranty Insurance Co. v. Bitco General Insurance Corp." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the judgment of the district court concluding that an automobile-liability insurance policy required the insurer to defend and indemnify the insured against claims for damages arising from an accident involving the use of a "golf cart," holding that the insurer had no duty to indemnify the insured.Plaintiff, acting as next friend of her minor daughter, sued the the Pharr-San Juan-Alamo Independent School District and its employee, alleging that her daughter was severely injured after being thrown from a golf cart. The School District, which had obtained automobile-liability insurance from the Texas Political Subdivisions Property/Casualty Joint Self Insurance Fund, requested that the Insurance Fund provide a defense against Plaintiff's claims and indemnify the School District against liability. The Insurance Fund then brought this suit seeking a declaratory judgment that it had no duty to defend the School District. The trial court entered summary judgment in favor of the School District. The court of appeals reversed. The Supreme Court affirmed, holding that the Insurance Fund had no duty to defend the School District because the term "golf cart" did not refer to a "covered auto" as that term was used in the policy. View "Pharr-San Juan-Alamo Independent School District v. Texas Political Subdivisions Property/Casualty Joint Self Insurance Fund" on Justia Law