Justia Insurance Law Opinion Summaries

Vitamin Energy is the defendant in 5-hour Energy’s 2019 lawsuit under the Lanham Act for trademark infringement, false designation of origin, false advertising, and trademark dilution; 5-hour also made claims under Michigan law for trademark infringement, indirect trademark infringement, and unfair competition. Vitamin Energy was insured by Evanston. In a declaratory judgment action, the district court decided Evanston had no duty to defend. The Third Circuit vacated. Pennsylvania law imposes on insurers a broad duty to defend lawsuits brought against those they insure. An insured’s burden to establish its insurer’s duty to defend is light, and Vitamin Energy has carried it. The policy excludes coverage for Advertising Injury, defined as an injury “arising out of oral or written publication of material that libels or slanders.” While some allegations of the complaint involve disparagement, others do not. An underlying complaint need only contain at least one allegation that falls within the scope of the policy’s coverage for the duty to defend to be triggered. The duty to defend is broader than the duty to indemnify. Similarly, exclusions for suits based on “Intellectual Property,” “Incorrect Description,” “Failure to Conform,” and “Knowing” actions do not defeat the duty to defend. View "Vitamin Energy LLC v. Evanston Insurance Co" on Justia Law

Taleetha Fuentes filed a worker's compensation complaint against her employer Cavco Industries and Cavco’s surety, Sentry Casualty Company (collectively, Defendants). Fuentes filed her complaint in July 2019, and the Defendants denied the claim. During discovery, the Defendants filed a motion to compel in October 2019, which was granted. Following no response from Fuentes, the Defendants filed a motion for sanctions, and Fuentes again did not respond. On December 19, 2019, the full Idaho Industrial Commission issued an Order Dismissing Complaint, citing Industrial Commission Judicial Rule of Procedure (JRP) 12(B). Five months later, in May 2020, Fuentes responded to the initial discovery requests and moved to retain the case on the active calendar, but her filing and motion were returned “unfiled” as explained in an email from the assigned Referee. Fuentes also moved for reconsideration of the dismissal and filed a petition to vacate the order of dismissal under JRP 15. The Commission denied both motions. The Idaho Supreme Court determined the Commission acted in excess of its powers when it misapplied JRP12(B) in the initial dismissal order, and in applying JRP 16 to Fuentes' case. Accordingly, the Court reversed the Commission’s decision to dismiss Fuentes’ case, and vacated the order. The case was remanded for further proceedings. View "Fuentes v. Cavco Industries, Inc." on Justia Law

In this insurance dispute, the Supreme Court reversed in part and affirmed in part the judgment of the district court granting the cross-motion for partial summary judgment in favor of Plaintiffs and New West Health Services and denying Allied World Assurance Company's motion for partial summary judgment, holding that the district court erred in part.Dana Rolan, who serious injuries in an automobile accident, had health insurance through New West. New West denied coverage because the tortfeasor's liability insurance paid $100,000 of Rolan's medical expenses. Rolan filed a class action complaint alleging that New West violated its made-whole obligations. New West tendered the defense to its insurer, Allied. The district court certified the class and held New West liable for monetary losses. Plaintiffs and New West subsequently entered into a settlement. Allied opposed the district court's ensuing motion for final judgment, arguing that the proposed settlement amount was not covered by Allied. The district court approved the settlement between New West and Plaintiffs. The Supreme Court held that the district court (1) erred in holding that Allied was estopped from asserting a $1 million "each Claim" limit of liability under the policy; and (2) correctly concluded that Allied's "Loss" provision did not preclude Allied's indemnity obligation of the class's damages. View "Rolan v. New West Health Services" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Allstate and dismissal of plaintiff's bad faith claim. The court concluded that the district court's discovery and progression rulings, even if erroneous, did not prejudice plaintiff because her jury award establishes that Allstate acted reasonably in its valuation and negotiation of her insurance claim. In this case, it cannot be said Allstate was unreasonable in its valuation or unjustified in its refusal to pay policy limits, and thus Allstate did not act in bad faith as a matter of law. View "Tilghman v. Allstate Property & Casualty Insurance Co." on Justia Law

Westmoreland owned a Cobb, California dwelling that was insured for fire loss, with a coverage limit of $372,000. The “open policy” provided up to 125 percent of the limit for “Extended Replacement Cost” coverage ($465,000) for repairing, rebuilding, or replacing the dwelling after a fire. In 2015, the Cobb house was destroyed when the Valley Fire swept through Lake County. The estimated cost to rebuild or replace that dwelling at the Cobb location was $422,676. The Insurer paid Westmoreland $372,000, the actual cash value of the lost dwelling. Westmoreland built a replacement home at a different location for no more than $372,000, then demanded an additional $50,676–the difference between the actual cash value amount and the estimated cost to rebuild at the Cobb location.Insurance Code 2051.5(c) provided that, where a “total loss” of an insured structure occurs, the insurer cannot limit or deny payment of the replacement costs if the insured “decides to rebuild or replace the property at a location other than the insured premises,” and in such cases, “the measure of indemnity shall be based upon the replacement cost of the insured property and shall not be based upon the cost to repair, rebuild, or replace” at the other selected location.The court of appeal directed the dismissal of Westmoreland’s suit. Neither section 2051.5 nor the insurance contract requires the Insurer to indemnify Westmoreland for replacement costs that they did not actually incur. View "Westmoreland v. Fire Insurance Exchange" on Justia Law

The Second Circuit affirmed the district court's denial of Global's request for a declaratory judgment that the policy limits of the reinsurance certificates capped Global's reinsurance obligations with respect to both losses and expenses. In this case, Global issued ten facultative reinsurance certificates to Century pursuant to which Global agreed to indemnify Century for losses and litigation expenses that Century might incur in connection with the liability policies it had issued to Caterpillar.The court held that the certificates' policy limits are not inclusive of defense costs and, in so holding, recognized that its prior decisions in Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910 (2d Cir. 1990), and Unigard Security Insurance Co. v. North River Insurance Co., 4 F.3d 1049 (2d Cir. 1993), which concerned matters of New York law, have been undermined by an intervening decision of the New York Court of Appeals and no longer constitute the law of the circuit. Applying ordinary rules of contract interpretation, the court agreed with the district court that the reinsurance certificates' follow-form clauses require Global to pay its proportionate share of Century's defense costs in excess of the certificates' liability limits. The court's conclusion was based on the certificates' unambiguous language as well as the testimony of Century's experts confirming that a strong presumption of concurrency prevailed in the reinsurance market at the time the certificates were issued. View "Global Reinsurance Corporation of America v. Century Indemnity Co." on Justia Law

Plaintiff, which owns and operates a fine arts gallery and dealership in New York City, sought coverage under three provisions of an insurance policy issued by Sentinel for losses and extra expenses incurred when it suspended its operations in accordance with government restrictions on non-essential businesses during the COVID-19 pandemic. After Sentinel denied coverage, plaintiff filed suit in district court.The Second Circuit affirmed the district court's dismissal of plaintiff's claims for breach of contract and declaratory judgment with prejudice. The court concluded that, under New York law, the policy provisions that plaintiff invokes provide coverage only where the insured suspends its operations because its property or property in its immediate area suffered physical damage. In this case, plaintiff does not plausibly allege such physical damage and thus it is not entitled to coverage under the policy. The court denied plaintiff's alternative request to certify a proposed question to the New York Court of Appeals and considered plaintiff's remaining arguments, finding them to be without merit. View "10012 Holdings, Inc. v. Sentinel Insurance Co." on Justia Law

The Supreme Judicial Court affirmed the summary judgment entered in the business and consumer court in favor of UIG, Inc. on Yankee Pride Transportation and Logistics, Inc.'s claims of negligence, breach of contract, and breach of fiduciary duty, holding that there was no genuine issue of material fact as to causation.On appeal, Yankee Pride argued that it had an implied contract with UIG based on the parties' relationship and that UIG breached that contract by failing to make timely efforts to renew Yankee Pride's policy. The Supreme Judicial Court disagreed, holding that Yankee Pride's failure to offer competent evidence of causation precluded a prima facie showing on any of its claims, whether they sounded in contract, tort, or breach of fiduciary duty. View "Yankee Pride Transportation & Logistics, Inc. v. UIG, Inc." on Justia Law

In August 2016, Plaintiff Maribel Ronquillo was in an automobile collision. According to her complaint, Ronquillo was rear-ended by defendant Jesse Williams, who was operating a vehicle owned by an EcoClean employee and towing an EcoClean trailer. Ronquillo suffered serious physical injuries and incurred around $250,000 in medical expenses. At the time of the accident, Ronquillo did not have health insurance, so she entered into a medical finance lien agreement with Injury Finance. Under the terms of that agreement, Injury Finance purchased Ronquillo’s accounts receivable from her healthcare providers at a predetermined, discounted contractual rate, which allowed Ronquillo to receive prompt medical care. Ronquillo remained contractually obligated to repay Injury Finance for “all charges billed by the [medical] [p]roviders” regardless of the result of any litigation. Ronquillo and her husband filed suit alleging negligence and loss of consortium against Williams and asserting a respondeat superior claim against EcoClean. As part of discovery, Defendants subpoenaed Injury Finance, seeking information and documents pertaining to Injury Finance’s accounts receivable purchase rates, provider contracts, and business operations and methodologies. When Injury Finance did not respond to the subpoena, Defendants filed a motion to compel production, which the district court granted. Defendants also filed a “motion for determination of a question of law pursuant to C.R.C.P. 56(h) that Injury Finance . . . is not a collateral source[]” subject to the pre-verdict evidentiary component of the collateral source rule. This interlocutory appeal to the Colorado Supreme Court raised the narrow question of whether a medical finance company was a collateral source for purposes of the pre-verdict evidentiary component of Colorado’s collateral source rule. The Supreme Court agreed with the district court that Injury Finance was not a collateral source, "Collateral sources must confer a 'benefit,' as defined in section 10-1-135(2)(a), C.R.S. (2021), onto the injured party. ... Ronquillo has not received a benefit from Injury Finance for purposes of the collateral source rule because her arrangement with Injury Finance does not reduce her financial obligations." The Court expressed no opinion on whether the disputed evidence could be excluded under other evidentiary rules such as CRE 401 and 403. View "Ronquillo v. EcoClean" on Justia Law

After a RealPage, Inc. employee clicked a fake link in a seemingly innocuous email and provided login information for RealPage's account with Stripe, Inc., a third party payment processor, phishers stole the login credentials and used them to divert millions of dollars in rent payments from tenants intended for RealPage's property manager clients. RealPage and Stripe recovered some of the stolen funds but lost about $6 million. RealPage reimbursed its clients and filed claims under its commercial crime insurance policies for the stolen funds, but its primary insurer denied coverage.The Fifth Circuit affirmed the district court's grant of summary judgment in favor of the insurer, concluding that the funds RealPage lost were not covered losses because RealPage never "held" them. Therefore, the insurer was within its rights to deny coverage of the stolen funds intended for RealPage's property manager clients. Furthermore, because the insurer's coverage was not exhausted, Beazley Insurance was also within its rights to deny coverage under RealPage's excess policy. Finally, because RealPage is not entitled to coverage under the policies at issue, its arguments that the insurer breached Chapter 541 and 542 of the Texas Insurance Code by not timely paying its claims are similarly without merit. View "Realpage, Inc. v. National Union Fire Insurance Co. of Pittsburgh" on Justia Law