Justia Insurance Law Opinion Summaries

The Supreme Court affirmed the order of the superior court denying Defendant's motion to vacate entry of default, holding that the hearing justice did not abuse her discretion in denying Defendant's motion.Plaintiff was injured in a motorcycle accident. Plaintiff brought this complaint against Defendant alleging that he was insured by virtue of his contract with Defendant and that the denial of his uninsured motorist claims was unreasonable and made in bad faith. When Defendant failed timely to answer the complaint, default entered against Defendant. Defendant moved to vacate default, arguing that it had never been Plaintiff's insurer. The hearing justice denied the motion, finding that Defendant had not met the applicable standards to vacate default under Rule 55(c) of the Superior Court Rules of Civil Procedure. The Supreme Court affirmed, holding that Defendant failed to show good cause to excuse its failure to plead or defend. View "Ferris v. Progressive Casualty Insurance Co." on Justia Law

In a previous opinion, the district court affirmed a $34.3 million jury verdict in favor of the class represented by plaintiff and reversed the district court's denial of prejudgment interest. The court then remanded the matter for the district court to reconsider plaintiff's motion for prejudgment interest. State Farm appealed.The Eighth Circuit affirmed the district court's award of prejudgment interest, concluding that plaintiff was entitled to prejudgment interest at the 4% rate contained in the contract, and the district court did not err in calculating the amount of interest due and awarding plaintiff $4,521,674 in prejudgment interest. View "Vogt v. State Farm Life Insurance Co." on Justia Law

In 2003, Shupe was an Executive Sous Chef for Hyatt when he began experiencing symptoms of osteomyelitis, an infection in his spinal cord. He was 37 years old. After rounds of antibiotics and surgery, he was unable to maintain his employment and left his position in July 2004 due to pain from chronic osteomyelitis, degenerative disc disease in the lumbar spine, and spinal stenosis that was so severe that he could not stand for an extended period of time. Hyatt’s long-term disability plan, a “qualified” plan under the Employee Retirement Income Security Act of 1974, paid Shupe disability benefit for 11 years. Hartford then terminated his benefits, finding that there were alternative occupations that Shupe could physically perform, was qualified for, and pay greater than 60% of his prior salary, so that he did not meet the plan’s definition of “disabled.”The district court rejected Shupe’s 29 U.S.C. 1132(a)(1)(B) suit on summary judgment. The Fourth Circuit reversed, in favor of Shupe. His post-termination evaluations, coupled with Shupe’s contemporaneous medical history, all uniformly conclude that Shupe was incapable of full-time sedentary employment. Hartford’s assessment was an “outlier.” View "Shupe v. Hartford Life & Accident Insurance Co." on Justia Law

Under Minnesota law, when the insurance policy in question refers disputes as to amount of loss to an appraiser, when the question presented by the dispute involves separating loss due to a covered event from a property's preexisting condition, the question of what caused the loss is one for the appraiser to resolve.The Eighth Circuit affirmed the district court's grant of Condor's motion to compel an appraisal. In this case, Condor filed a claim for benefits with its insurer, Axis. Condor then demanded an appraisal because the parties could not agree on the amount of loss. After Axis filed suit for a declaratory judgment that there was no coverage and that the parties' coverage dispute precluded appraisal, Condor filed a motion to compel one, which the district court granted. View "Axis Surplus Insurance Co. v. Condor Corp." on Justia Law

Hodroj, a passenger, was injured in a single-car collision. The driver was insured by CSAA. Hodroj’s attorney wrote to CSAA offering that Hodroj would settle his claim for bodily injuries in exchange for payment of the driver’s insurance policy limits if CSAA provided a sworn declaration confirming the policy limits and delivered a check within 21 days of acceptance. CSAA could condition its acceptance on Hodroj signing a written release of all bodily injury claims. CSAA responded: “We accept ... [and] are tendering ... $100,000[.]” Enclosed were a sworn declaration attesting to the policy limits, and a written release to be signed by Hodroj. A $100,000 check was sent separately, providing that it should not be presented until the release was signed. Hodroj reneged on the settlement because the release included a release of claims for property damage. Hodroj sued the driver. CSAA sued Hodroj for breach of contract.The court of appeal affirmed judgment in favor of CSAA. An objective observer would conclude that the parties intended to settle Hodroj’s bodily injury claim for the policy limits. That the proposed document contained terms materially different from what had been agreed did not change the binding effect of the agreement. Hodroj was not obliged to sign a release that was inconsistent with what he agreed to but a proposal that does not accurately reflect the agreement does not unwind the entire deal. Hodroj breached the contract by filing suit. View "CSAA Insurance Exchange v. Hodroj" on Justia Law

After a tractor manufactured by CNH caught fire, Floyd filed suit against CNH in federal court under a theory of product liability, claiming that its insureds owned the tractor and other property on the tractor, both of which were damaged in the fire, and that Floyd was subrogated to its insureds' claims against CNH because Floyd had paid its insureds' claim for the damage. The district court dismissed the case for lack of subject matter jurisdiction under 28 U.S.C. 1332.The Eighth Circuit affirmed and concluded that section 1332's amount-in-controversy requirement was not satisfied in this case. The court concluded that the Iowa Supreme Court would hold that the economic-loss doctrine permits recovery only for the other property and not for the product itself. Accordingly, the Iowa Supreme Court would bar recovery in tort for damage that a defective product causes to itself, even if the plaintiff also seeks recovery for damage to other property. Here, Floyd's recovery is limited as a matter of law to the alleged $22,787.81 in damage to property other than the tractor. The court denied the motion to certify a question of law to the Iowa Supreme Court and upheld the district court's dismissal based on lack of subject matter jurisdiction. View "Floyd County Mutual Insurance Ass'n v. CNH Industrial America LLC" on Justia Law

Avenoso, a maintenance supervisor, had long-term disability insurance under a Reliance policy, governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The policy provided two years of benefits if the claimant showed that he was unable to perform the material duties of his current occupation and provided continued benefits if the claimant showed that he was unable to perform the material duties of any occupation. Avenoso left his job due to lower-back pain and underwent back surgery. Reliance approved two years of benefits. At the end of the two years, Reliance informed Avenoso that it would discontinue benefits because Avenoso had not shown that he was unable to perform the material duties of any occupation.Avenoso had an MRI; the results appeared relatively mild. Avenoso sent Reliance a note from his physician, recommending that Avenoso “avoid lifting, bending and prolonged sitting” due to his lower back condition. He was receiving Social Security disability benefits. Following a “functional-capacity evaluation,” a physical therapist concluded Avenoso did not demonstrate an ability to tolerate an 8-hour workday. An independent medical evaluation concluded that Avenoso retained sedentary-work capacity and was “able to work 8 hours a day but was engaging in “symptom magnification.” A vocational-rehabilitation specialist identified five “viable sedentary occupational alternatives” consistent with Avenoso’s physical capacities. The Eighth Circuit affirmed summary judgment in favor of Avenoso. The district court’s finding that Avenoso lacks sedentary-work capacity was not clearly erroneous. View "Avenoso v. Reliance Standard Life Insurance Co" on Justia Law

The Supreme Court affirmed the rulings of the district court that the State was covered by an insurance policy it had with National Indemnity Company (National) for claims made against the State for injury and death resulting from asbestos exposure but reversed the district court's rulings regarding qualifying "occurrences" under the policy, holding that remand was required for further consideration of these issues.This insurance dispute followed litigation between the State and claimants who alleged that they were harmed by the State's failure to warn them of the hazards of asbestos exposure over years of mining and milling operations in Libby, Montana. National insured the State against general liability from 1973-1975. National filed this action seeking determinations that it had no obligation to defend the State or to cover the claims. The State concluded that National breached its duty to defend the State but disagreed with the district court's determination of the number of "occurrences" eligible for coverage under the policy, holding that remand was required for further factual findings. View "National Indemnity Co. v. State" on Justia Law

National American Insurance Company ("NAICO") brought suit against New Dominion, LLC, seeking a declaratory judgment that four consecutive commercial general liability policies it issued to New Dominion did not provide coverage for bodily injury and property damage claims asserted in a number of separate lawsuits ("the Earthquake Lawsuits"). These claims allegedly arose out of seismic activity caused by New Dominion's oil and gas operations. New Dominion filed a counterclaim alleging breach of contract, seeking defense and indemnity, and asserting equitable claims for estoppel and reformation. The trial court bifurcated the issues pleaded, conducted separate bench trials for the contract interpretation questions and the equitable claims. Following the first bench trial, the court issued a declaratory judgment holding that the Total Pollution Exclusions and the Subsidence and Earth Movement Exclusions in the commercial general liability policies clearly and unambiguously precluded coverage for the claims asserted in the Earthquake Lawsuits. Following the second trial, the court estopped NAICO from denying claims for bodily injury during one of the four policy periods but denied all other equitable claims. Both parties appealed, raising "a litany" of issues with the trial court's orders. The Oklahoma Supreme Court joined the cases and held: (1) the Total Pollution Exclusions did not clearly and unambiguously preclude coverage; (2) the Subsidence and Earth Movement Exclusions clearly and unambiguously precluded coverage; and (3) there was no basis for New Dominion's estoppel or reformation claims. View "National American Ins. Co. v. New Dominion" on Justia Law

The Court of Appeals reversed the decision of the Appellate Division reversing Supreme Court's order granting summary judgment to Bear, Stearns & Co. Inc. and Bear Stearns Securities Corp. (collectively, Bear Stearns) in this action brought by Bear Stearns' successor companies alleging that its insurers (Insurers) had breached insurance contracts, holding that the $140 million disgorgement for which Bear Stearns sought coverage was not a "payment" within the meaning of the relevant policy.When the Securities and Exchange Commission (SEC) censured Bear Stearns for securities law violations, Bear Stearns agreed to a $160 million disgorgement payment and a $90 million payment for civil money penalties. Both payments were to be deposited in a fund to compensate mutual fund investors allegedly harmed by Bear Stearns' improper trading practices. Bear Stearns transferred the payments to the SEC. Plaintiffs then brought this action against Insurers seeking coverage under a "wrongful act" liability for the disgorged funds. Supreme Court granted summary judgment to Bear Stearns. The Appellate Division reversed, concluding that Bear Stearns was not entitled to coverage for the SEC disgorgement payment. The Court of Appeals reversed, holding that Insurers failed to establish that the $140 million disgorgement payment clearly and unambiguously fell within the policy exclusion for "penalties imposed by law." View "J.P. Morgan Securities Inc. v. Vigilant Insurance Co." on Justia Law