Justia Insurance Law Opinion Summaries

The Supreme Court accepted certified questions from the United States Court of Appeals for the Ninth Circuit in this arbitration dispute, holding that direct benefits estoppel cannot be invoked in a garnishment action to bind the judgment creditor to the terms of the contract because applying the doctrine in this context would contravene Arizona's statutory garnishment scheme.Specifically, the Court answered that in a garnishment action by a judgment creditor against the judgment debtor's insurer claiming that coverage is owed under an insurance policy where the judgment creditor is not proceeding on an assignment of rights, the insurer cannot invoke the doctrine of direct benefits estoppel to bind the judgment creditor to the terms of the insurance contract. View "Benson v. Casa De Capri Enterprises, LLC" on Justia Law

The Supreme Court affirmed the judgment of the circuit court denying Plaintiffs' declaratory judgment action against State Farm seeking payment of $2 million under Florida's uninsured motorist (UM) statute, holding that Florida law did not require State Farm to provide UM coverage.State Farm denied Plaintiffs UM coverage under their personal liability umbrella insurance policy after a motorcycle accident with an uninsured vehicle in South Dakota because the policy did not include UM coverage. Thereafter, Plaintiffs, who resided in Florida at the time of the accident, filed this declaratory action. The circuit court concluded that Florida law applied to the dispute, that State Farm did not violate Florida's UM statute, and that Plaintiffs were not entitled to UM coverage. The Supreme Court affirmed, holding that Florida law did not require State Farm to provide UM coverage. View "Payne v. State Farm Fire & Casualty Co." on Justia Law

The First Circuit affirmed the decision of the district court granting summary judgment for Defendants in this personal injury action, holding that the district court properly granted summary judgment as to all claims.This case arose from a car accident in Rhode Island involving Horace Johnson, the driver, and Carlton Johnson, a passenger. Carlton and his mother sued to recover damages for Carlton's injuries. The district court granted summary judgment for Defendants - Horace, his insurer, and the company from which Horace had leased the vehicle. The First Circuit ultimately certified to the Rhode Island Supreme Court a question regarding the definition of "civil action" in Rhode Island's Rejected Settlement Offer Interest Statute, R.I. Gen. Laws 27-7-2.2. After the Rhode Island Supreme Court supplied its answer, this Court affirmed the district court's judgment in its entirety, holding that the district court (1) correctly concluded that section 27-7-2.2 was inapplicable; (2) properly concluded that an enforceable settlement agreement existed; and (3) was right to grant summary judgment as to Carlton's insurer bad faith claims. View "Johnson v. Johnson" on Justia Law

William Greenwood was in the business of salvaging valuable materials from old buildings. Greenwood was insured by Mesa Underwriters Specialty Insurance Company through a policy sold by Dixie Specialty Insurance. Greenwood was later sued by adjoining building owners who complained he had damaged their property, and Mesa denied coverage based, in part, on a policy exclusion for demolition work. Greenwood later brought suit against his insurers alleging breach of contract and bad-faith denial of coverage. Greenwood averred that his business was actually “deconstruction” rather than demolition, but the trial court granted summary judgment to the insurers. Finding no reversible error in that judgment, the Mississippi Supreme Court affirmed the trial court. View "Estate of Greenwood v. Montpelier US Insurance Company, et al." on Justia Law

BP retained the Responders (O’Brien’s and NRC) for nearly $2 billion to assist with the cleanup of the Deepwater Horizon oil spill. Thousands of the Responders' workers filed personal injury lawsuits against BP, which were consolidated and organized into “pleading bundles.” The B3 bundle included “all claims for personal injury and/or medical monitoring for exposure or other injury occurring after the explosion and fire of April 20, 2010.” In 2012, BP entered the “Medical Settlement” on the B3 claims with a defined settlement class. The opt-out deadline closed in October 2012. The Medical Settlement created a new type of claim for latent injuries, BackEnd Litigation Option (BELO) claims. After the settlement, plaintiffs could bring opt-out B3 claims if they did not participate in the settlement, and BELO claims if they were class members who alleged latent injuries and followed the approved process. Responders were aware of the settlement before the district court approved it but neither Responder had control over the negotiations, nor did either approve the settlement.In 2017, BP sought indemnification for 2,000 BELO claims by employees of the Responders. The Fifth Circuit held that BP was an additional insured up to the minimum amount required by its contract with O’Brien’s; the insurance policies maintained by O’Brien’s cannot be combined to satisfy the minimum amount. O’Brien’s is not required to indemnify BP because BP materially breached its indemnification provision with respect to the BELO claims. View "O'Brien's Response Management, L.L.C. v. BP Exploration & Production, Inc." on Justia Law

Braylon Jordan swallowed small magnets when he was two years old. The magnets shredded his internal organs and necessitated surgery to remove most of his intestines, leaving him severely disabled. At issue in this appeal is whether there is insurance coverage for M&O's defense and for a partial settlement of the Jordans' claims.The Fifth Circuit concluded that, because no claim arising from Braylon Jordan's injuries was timely made against M&O during Evanston's policy period, Evanston is not obligated to provide M&O costs of its defense or coverage for the partial settlement between the Jordans and its then-CEO Craig Zucker. Accordingly, the court affirmed the district court's judgment that Evanston was not obligated to indemnify Zucker. However, the court reversed the district court's denial of Evanston's motion for summary judgment and rendered judgment in Evanston's favor. View "Jordan v. Evanston Insurance Co." on Justia Law

Through a bankruptcy proceeding, Bristol became the successor-in-interest to Haven, an accredited mental-health and substance-abuse treatment center that regularly serviced patients insured by Cigna. Bristol alleged that Cigna violated the Employee Retirement Income Security Act of 1974 (ERISA) and state law by denying Haven’s claims for reimbursement for services provided. Haven was out-of-network for Cigna’s insureds. The district court dismissed Bristol’s ERISA claim, as an assignee of a healthcare provider, for lack of derivative standing, or lack of authority to bring a claim under ERISA, 29 U.S.C. 1132(a)(1)(B).The Ninth Circuit reversed. Under ERISA, a non-participant health provider cannot bring claims for benefits on its own behalf but must do so derivatively, relying on its patients’ assignments of their benefits claims. Other assignees also may have derivative standing if extending standing would align with the goal of ERISA. Refusing to allow derivative standing for Bristol would create serious perverse incentives that would undermine the goal of ERISA. Denying derivative standing to health care providers would harm participants or beneficiaries because it would discourage providers from becoming assignees and possibly from helping beneficiaries who were unable to pay up-front. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law

The Eleventh Circuit affirmed the district court's order granting summary judgment in part in favor of defendants and holding that James River has a duty to defend the insureds: Ultratec, MST, and Ultratec's employee. The underlying action stemmed from a pyrotechnic explosion at a work place that killed two employees and injured others. The employees filed suit against Ultratec, Ultratec's employee, and MST. James River is Ultratec entities' insurer.The court concluded that it has jurisdiction over the appeal despite its lack of finality because of its injunctive qualities. The court applied Alabama's contract interpretation principles and case law before applying that law to the insurance policy at issue, holding that James River has a duty to defend defendants because the employer's liability exclusion in the policy is ambiguous. The court explained that, because the exclusion did not unambiguously exclude coverage, James River had a duty to defend the insureds. View "James River Insurance Co. v. Ultratec Special Effects Inc." on Justia Law

In response to the COVID-19 pandemic, Kentucky temporarily (for about six weeks) barred healthcare corporations like Estes, which operates two dental clinics from providing nonemergency care. Estes lost substantial income as a result. Estes’ property insurance policy required Cincinnati Insurance to pay Estes for lost business income that results from a “direct” “physical loss” to its dental offices.The Sixth Circuit affirmed the dismissal of Estes’ suit against Cincinnati, noting that circuit courts have uniformly interpreted this “physical loss” language not to cover similar pandemic-related claims under the laws of many other states. The court concluded that Kentucky’s highest court would agree with those decisions. The phrase “physical loss” would convey to the “average person” that a property owner has been tangibly deprived of the property or that the property has been tangibly destroyed. COVID-19 and the government shutdown orders caused only intangible or economic harm. View "Estes v. Cincinnati Insurance Co." on Justia Law

Ikia Pope and Brandi Powell were in a motor vehicle collision. Pope left the scene of the collision. Powell alleged Pope drove a vehicle owned by third parties who gave permission for Pope to drive the vehicle. Progressive Direct Insurance Company insured the vehicle driven by Pope. Powell made bodily injury and property damage claims with Progressive Direct Insurance Company (insurer). Powell asserted she was entitled to treble property damages. Progressive sought a declaratory judgment for the purpose of adjudicating whether its insurance policy excluded treble damages pursuant to 47 O.S.2011, section 10-103. Progressive filed a motion for summary judgment, and the court concluded the treble damages provided by 47 O.S. 2011, section 10-103 were punitive in nature, and excluded by a clause excluding punitive damages. Powell appealed the subsequent consent judgment which was based, in part, upon the trial court's adjudication of the treble damages issue. The Oklahoma Supreme Court retained the appeal sua sponte, concurring with the district court that the statutory treble damages in 47 O.S.2011, section 10-103 were punitive in nature, and punitive damages were expressly excluded by the policy. View "Progressive Direct Ins. Co. v. Pope" on Justia Law