Justia Insurance Law Opinion Summaries

This appeal presented an issue of first impression for the Court of Appeals: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic? After review of the specific insurance policy that California Mutual Insurance Company (California Mutual) issued to The Inns by the Sea (Inns) for its five lodging facilities, the Court determined Inns could not recover from California Mutual for its lost business income resulting from the COVID-19 pandemic. Further, Inns did not identify any manner in which it could amend its complaint to state a claim for coverage. Accordingly, the Court affirmed the trial court’s order sustaining California Mutual’s demurrer without leave to amend. View "The Inns by the Sea v. Cal. Mutual Ins. Co." on Justia Law

The Supreme Court held in this case that the circuit court had the power to enter an order precluding a party to a West Virginia lawsuit from instituting or prosecuting collateral litigation in a sister state.This lawsuit was brought by a pharmaceutical distributor against the insurance companies that provided it with liability insurance. At issue on appeal was the West Virginia circuit court's "anti-suit injunction" prohibiting the insurance companies from pursuing parallel litigation against the distributor in California. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court clearly had the authority to enter an anti-suit injunction; but (2) an anti-suit injunction was not narrowly tailored to protect the court's authority while respecting the sister state court, necessitating remand. View "St. Paul Fire & Marine Insurance Co. v. AmerisourceBergen Drug Corp." on Justia Law

Anderson, the lead plaintiff in a putative class action against her life insurance provider, Wilco, alleged that in 2011-2016, the company breached the terms of her universal life insurance policy by increasing her monthly rate for impermissible reasons. Her policy provides for a “guaranteed maximum monthly cost of insurance rate” and a “current monthly cost of insurance rate.” The guaranteed rate is calculated “based on” Anderson’s “age, sex, and premium class.” The current rate, by contrast, “will be determined by the Company” but cannot exceed the guaranteed rate. As a typical universal life insurance policy, Anderson’s policy was a hybrid investment vehicle and life insurance policy. As her policy aged, Wilco began to increase Anderson’s current rate sharply; her policy’s accumulation value (essentially the investment earnings from which Anderson could cover her monthly payments) was wiped out, and Anderson failed to make the monthly payments out-of-pocket. Her policy lapsed, and Anderson sued.The Eleventh Circuit affirmed the dismissal of her complaint. The policy gave Wilco discretion to set Anderson’s current rate as long as that rate was less than the guaranteed rate and unambiguously gave Wilco discretion to set Anderson’s current monthly rate. View "Anderson v. Wilco Life Insurance Co." on Justia Law

The primary issue in this case was whether imposing sales tax on in-state lessors of business equipment to a title insurer violated Article XIII, section 28(f) of the California Constitution. The California Department of Tax and Fee Administration (Department) contended it did not because the lessor, not the title insurer/lessee, was the taxpayer. In the Department’s view, whether the lessee reimburses the lessor for its sales tax obligation was strictly a matter of contract and did not implicate the constitutional limit on taxing insurers. Conversely, First American Title Insurance Company (First American) pointed out that in equipment leases not involving an insurer, the state assesses a use tax, not a sales tax. But where, as here, the lessee is constitutionally exempt from paying use tax, Regulation 1660(c)(1) solved that problem by providing that the sales tax applied instead. First American argued that as a result, Regulation 1660(c)(1) imposed a de facto use tax on title insurers in violation of Article XIII, section 28(f). The trial court agreed with First American and ordered the Department to “remove, strike out and otherwise give no force or effect to that portion of Regulation 1660(c)” providing that when the lessee is not subject to use tax, the sales tax applies. The Court of Appeal reversed: “Article XIII, section 28(f) does not prohibit a sales tax whose legal incidence is on a lessor, even though the economic burden of the tax is ultimately borne by the title insurer/lessee.” View "First American Title Insurance Co. v. Cal. Dept. of Tax and Fee Admin." on Justia Law

Guzman applied for an Allstate life insurance policy in 2017. In his application, Guzman disclosed his history of seizures but denied using tobacco or nicotine products. After receiving some of Guzman’s medical records and the results of his blood and urine tests, Allstate issued him a $250,000 policy at a “Standard Non-Tobacco” annual premium rate. Guzman, then 28 years old, died in 2019, after suffering a seizure at work. Allstate began a contestable-claims investigation and obtained additional medical records, most of which described Guzman as a smoker. Two underwriting referrals determined that Guzman would not have been issued the same policy as a smoker. Allstate informed Gusman’s wife, Mirna, that it was rescinding the contract and gave her a $433 premium refund.Mirna sued Allstate for breach of contract and violations of the Texas Deceptive Trade Practice–Consumer Protection Act, and the Texas Insurance Code. Mirna denied that her husband was a smoker and submitted an affidavit from Guzman’s sister, Martha. The district court granted Allstate summary judgment. The Fifth Circuit reversed. Mirna’s and Martha’s affidavits are competent summary judgment evidence. Though self-serving, their testimony created a genuine dispute of material fact. Allstate’s evidence was insufficient to carry its summary judgment burden. The medical records were inconsistent and Allstate has not identified definitively the sources of the medical records information. View "Guzman v. Allstate Assurance Co." on Justia Law

The Supreme Court reversed in part and affirmed in part the judgment of the district court concluding that Appellant was not entitled to underinsured motorist (UIM) and medical payment (MP) coverages under his automobile policy with USAA Casualty Insurance Company, holding that the court erred in part.The district court granted summary judgment for USAA on both coverages. The Supreme Court reversed in part, holding (1) as to the UIM coverage, the district court erred by interpreting the contract and determining its terms were not contrary to public policy; and (2) as to the MP coverage, the district court properly granted summary judgment in favor of USAA. View "Goss v. USAA Casualty Insurance Co." on Justia Law

To combat the spread of COVID-19, the Ohio government ordered child-care programs to shut down for around two months beginning in March 2020. As a result, Dakota Girls and the other plaintiffs could not use their facilities for their intended purpose—as private preschools. They sued their insurer, the Philadelphia Indemnity, citing policy provisions concerning business and personal property, business income, civil-authority orders, and (communicable disease and water-borne pathogens. The suit sought damages for breach of contract and the insurer’s alleged bad faith.The Sixth Circuit affirmed the dismissal of the suit, citing the plain language of the policies. A loss of use is not the same as a physical loss. Reading the communicable-disease coverage to not require an actual illness at the premises, therefore, would engender serious inconsistency within the policy. The court declined to consider the policy’s “virus exception.” Dakota Girls has never shown that it had coverage, much less that Philadelphia’s agents knew it had coverage or that coverage was so obvious it could not have been reasonably denied. View "Dakota Girls, LLC v. Philadelphia Indemnity Insurance Co." on Justia Law

A hospital must provide “necessary stabilizing treatment” for any person in an “emergency medical condition,” 42 U.S.C. 1395dd(b), Health & Saf. Code 1317(a). California’s Knox-Keene Act (section 1340) requires that the patient's health insurance plan reimburse the hospital for providing “emergency services and care.” If the hospital and plan do not have an existing contract, the plan must pay the “reasonable and customary value." If a plan without a contract pays reimbursement that the hospital believes is below the “reasonable and customary value,” the hospital may sue the plan in quantum meruit for the shortfall.The court of appeal held that a hospital may not additionally sue for the tort of intentionally paying an amount that is less than what a jury might later determine is the “reasonable and customary value” of the services, and thereby obtain punitive damages, nor may the hospital sue for injunctive relief under California’s unfair competition law to enjoin the plan from paying too little in possible future claims. In the quantum meruit claim, a trial court properly instructs the jury that the “reasonable value” of emergency medical services is “the price that a hypothetical willing buyer would pay a hypothetical willing seller for the services, [when] neither [is] under compulsion to buy or sell, and both hav[e] full knowledge of all pertinent facts.” Rejecting challenges to several evidentiary rulings, the court affirmed the jury’s verdict finding that the plan paid the suing hospital the reasonable and customary value of its emergency medical services. View "Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc." on Justia Law

Letgolts and Plattner (plaintiffs) remodeled their home in 2008. The contractor, Pinchevskiy, did some demolition and then walked away, causing extensive damage to the home. The plaintiffs retained attorney Marks, who sued Pinchevskiy, the plaintiffs’ home insurer, and their insurance agent who allegedly inaccurately advised the plaintiffs that their existing homeowners' policy would cover possible property damage by Pinchevskiy. The complaint detailed property damage but did not mention personal injury. Marks withdrew from the case in 2012. The plaintiffs retained Pierce, who secured a default judgment against Pinchevskiy in 2015; his insurer, National, filed for liquidation before Pierce could collect on the judgment. Pinchevskiy was bankrupt.The plaintiffs sued Pierce for negligent delay in seeking recovery from National. Pierce’s lawyers argued the plaintiffs could never have prevailed against National because Pinchevskiy’s policy did not cover construction defects. The court entered judgment for Pierce. The court of appeal affirmed, rejecting the plaintiffs’ attempt to assert a personal injury claim based on Plattner’s alleged 2008 fall from temporary stairs installed by Pinchevskiy. National’s policy did cover personal injuries but the tardy, uncorroborated claim was at odds with the detailed lists of problems given to the insurer years before. Pursuing insurance money from National was a lost cause from the start, so whether Pierce committed malpractice did not matter, View "Letgolts v. David H. Pierce & Associates PC" on Justia Law

The United States and four states sued DISH Network, LLC (“DISH”) for violations of the Telephone Consumer Protection Act (“TCPA”). DISH submitted a claim for defense and indemnity to its insurer, National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”). National Union denied the claim and filed suit in Colorado federal court seeking a declaration that it had no duty to defend or indemnify DISH in the underlying TCPA lawsuit. The district court granted summary judgment to National Union, relying on the Tenth Circuit's decision in ACE American Insurance Co. v. DISH Network, LLC, 883 F.3d 881 (10th Cir. 2018). Finding no reversible error, the Tenth Circuit affirmed the district court's judgment. Further, the Court affirmed the district court’s denial of DISH’s request for further discovery under Federal Rule of Civil Procedure 56(d). And we deny DISH’s motion to certify a question of state law to the Colorado Supreme Court. View "National Union Fire Insurance v. Dish Network" on Justia Law