Justia Insurance Law Opinion Summaries

The Supreme Judicial Court affirmed the superior court's judge's denial of Plaintiff's motion for a preliminary injunction, holding that the judge did not commit an abuse of discretion in denying Plaintiff's motion.Plaintiff, a professor at Harvard University, was indicted on two counts of making false statements to a government agency. Plaintiff made. Written request for indemnification and advance payment of his legal fees and expenses pursuant to Harvard's indemnification policy, which provides for the indemnification of qualified persons against liabilities and expenses incurred in connection with, inter alia, the defense of criminal proceedings the person may be threatened with by reason of serving in a "covered role." Harvard denied indemnification. Thereafter, Plaintiff brought this action asserting several claims with respect to the failure to provide indemnification. Plaintiff also filed a motion seeking a preliminary injunction requiring Harvard to provide advancement of his legal fees and expenses. A superior court judge denied the motion. The Supreme Judicial Court affirmed, holding that the motion judge did not abuse her discretion in concluding that Plaintiff did not establish a likelihood of success on the merits of his claims seeking advancement of fees and expenses. View "Lieber v. President & Fellows of Harvard College" on Justia Law

Appellees, Rite Aid Corporation, Rite Aid Hdqtrs. Corp., and Rite Aid of Maryland, Inc. (collectively, “Rite Aid”), held a general liability insurance policy underwritten by defendany Chubb, Limited ("Chubb"). Rite Aid and others were defendants in multi-district litigation before the United States District Court for the Northern District of Ohio (the “MDL Opioid Lawsuits”). Plaintiffs in that suit filed over a thousand suits in the MDL Opioid Lawsuits against companies in the pharmaceutical supply chain for their roles in the national opioid crisis. Certain suits were bellwether suits - including the complaints of Summit and Cuyahoga Counties in Ohio (“the Counties”) which were at issue here. The question this case presented for the Delaware Supreme Court was whether insurance policies covering lawsuits “for” or “because of” personal injury required insurers to defend their insureds when the plaintiffs in the underlying suits expressly disavowed claims for personal injury and sought only their own economic damages. The Superior Court decided that Rite Aid’s insurance carriers were required to defend it against lawsuits filed by two Ohio counties to recover opioid-epidemic-related economic damages. As the court held, the lawsuits sought damages “for” or “because of” personal injury because there was arguably a causal connection between the counties’ economic damages and the injuries to their citizens from the opioid epidemic. The Supreme Court reversed, finding the plaintiffs, governmental entities, sought to recover only their own economic damages, specifically disclaiming recovery for personal injury or any specific treatment damages. Thus, the carriers did not have a duty to defend Rite Aid under the governing insurance policy. View "ACE American Insurance Company v. Rite Aid Corporation" on Justia Law

Ingham, Jackson, and Calhoun County, Michigan (collectively, the Counties) filed an action alleging that they had a right to receive a decade’s worth of surplus contributions (surplus equity) made to the Michigan County Road Commission Self-Insurance Pool (the Pool). The Counties believed they were the successors in interest to their dissolved road commissions and, as such, were entitled to the surplus equity that the commissions might have received had they not been dissolved and withdrawn from the Pool. Jackson County made one other argument: because its road commission never formally withdrew from the Pool, the county said it had a right to receive surplus equity on the same terms as any current member. The Pool disagreed, contending the Counties had no right to surplus equity because the documents governing the Pool’s operations and its contracts with its various members provided the Pool with discretion in distributing surplus equity. This included, the Pool contended, the power to exclude former members should a distribution be made. The Court of Appeals sided with the Counties, holding that the Counties were the successors in interest to their dissolved road commissions and, as a matter of public policy, the Counties had a right to receive surplus equity for fiscal years in which their road commissions were members of the Pool. The Court of Appeals also determined that the dissolution of the Jackson County Road Commission did not disqualify Jackson County from membership in the Pool, and therefore, the county could receive surplus equity regardless of any public-policy considerations. The Michigan Supreme Court reversed. The Court agreed with the Pool that the Counties did not have a contractual right to receive surplus equity and that such an arrangement was not contrary to public policy. For Jackson County, the Court held that the dissolution of its county road commission did not transfer membership in the Pool from the road commission to the county itself, so the Pool could exclude Jackson County from post-dissolution distributions. View "County Of Ingham v. Michigan County Road Commission Self-Insurance Pool" on Justia Law

TBB filed suit seeking to recoup losses stemming from the limitations on the operations of nonessential businesses during the COVID-19 pandemic through its commercial property insurance policy which covers business interruption losses caused by "direct physical loss of or damage to property."The Fifth Circuit concluded that the suspension of dine-in services during the COVID-19 pandemic is not a direct physical loss of or damage to property. Applying Texas law, the court concluded that the district court correctly determined that TBB's losses are not covered by either the business income and extra expense coverage (BI/EE) or the restaurant extension endorsement (REE) provision. Without coverage, the court need not address whether any policy exclusions also apply. In regard to TBB's extra-contractual claims, the court concluded that they were properly dismissed as abandoned. Finally, the court found no err in the district court's decision to deny TBB leave to amend. Accordingly, the court affirmed the district court's grant of judgment on the pleadings in favor of the insurer. View "Terry Black's Barbecue, LLC v. State Automobile Mutual Insurance Co." on Justia Law

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