Justia Insurance Law Opinion Summaries

The Supreme Judicial Court affirmed the order of a single justice denying Petitioner's petition for extraordinary relief pursuant to Mass. Gen. Laws ch. 211, 3 and under the doctrine of present execution, holding that Petitioner failed to demonstrate an appropriate occasion for exercise of the extraordinary power of general superintendence.Respondent filed a complaint against Petitioner, her insurer, alleging, among other things, that Petitioner violated Mass. Gen. Laws ch. 93A and Mass. Gen. Laws ch. 176D (count three). The district court granted summary judgment for Respondent on all counts except for count three. Petitioner brought this petition arguing that requiring it to go forward on count three compelled it to engage in frivolous litigation. The single justice denied relief. The Supreme Judicial Court affirmed, holding that relief was not appropriate under the facts of this case. View "Liberty Mutual Insurance Co. v. Salaman" on Justia Law

After a jury trial, Noranda Aluminum Holding Corporation, an aluminum-products manufacturer, won a judgment against its insurance companies for more than $28 million. The Delaware Supreme Court affirmed, and the Superior Court awarded Noranda post-judgment interest at 6 percent (the same rate as pre-judgment interest) because that was the legal rate in effect when the insurance liability first arose. On appeal, Noranda argued the Superior Court should have used an interest rate of 7.5 percent, which was the legal rate on the date judgment was entered. To this, the Supreme Court agreed, holding that, in 6 Del. C. section 2301(a)'s final sentence, the judgment entered by the Superior Court in Noranda’s favor “shall, from the date of the judgment, bear post-judgment interest of 5% over the Federal Reserve discount rate[.]” Because the Federal Reserve discount rate was 2.5 percent on October 17, 2019, the date the Superior Court entered judgment, the Supreme Court reversed and remanded with instructions to award Noranda post-judgment interest at 7.5 percent. View "Noranda Aluminum Holding Corporation v. XL Insurance America, Inc." on Justia Law

The Supreme Judicial Court affirmed the decision of the appellate division of the Workers' Compensation Board affirming the decision of an administrative law judge (ALJ) granting Plaintiff's petition for award of compensation, holding that an employee is not required to give notice of his occupational disease claim to his former employer's insurer when the employer no longer exists.Nearly twenty years after retiring from his employment Plaintiff underwent surgery for lung cancer and was later diagnosed with asbestosis. Plaintiff filed five petitions for award of compensation, each alleging a different date of injury and naming and different employer and insurer pairing. The ALJ (1) found that Plaintiff's last injurious exposure to asbestos occurred when he was working for Auburn Sheet Metal, which was insured by Maine Employers' Mutual Insurance Company (MEMIC) but no longer existed, and (2) granted Plaintiff's petition for an award of compensation. The appellate division concluded that Plaintiff was not required to provide notice to MEMIC. The Supreme Court affirmed, holding that the appellate division did not err in concluding that the workers' compensation statute does not impose on an injured employee whose employer no longer exists the duty to give notice to the insurer. View "Desgrosseilliers v. Auburn Sheet Metal" on Justia Law

First Baptist retained Skyline to provide emergency remediation services to address wind damage to First Baptist’s real estate. Skyline then received the right to collect any proceeds from First Baptist's insurance policy with Church Mutual. Church Mutual subsequently disputed coverage in part and Skyline filed suit to recover the value of services provided to First Baptist but not paid by Church Mutual.The Fourth Circuit affirmed the district court's dismissal of Skyline's claims because they were barred by the applicable North Carolina statute of limitations. The court found that the applicable statute of limitations is three years from the date of loss, and agreed that Skyline's claims for declaratory judgment and breach of contract are time barred because Skyline brought this action in November 2019, more than three years after the time of loss; October 2016. The court denied as moot Church Mutual's motion to strike part of Skyline's reply brief. View "Skyline Restoration, Inc. v. Church Mutual Insurance Co." on Justia Law

The Fifth Circuit concluded that Arch, the issuer of a commercial general liability policy, has a duty to defend a highway construction project's general contractor. In this case, the developer's claims against the project's general contractor implicate defective construction of the project's drainage systems; Archer Western constructed those drainage systems; and Archer Western's commercial general liability insurer (Arch) owes a duty to defend the general contractor (CTHC) in its underlying litigation with the developer. Accordingly, the court reversed the district court's judgment to the contrary. View "Zurich American Insurance Co. v. Arch Insurance Co." on Justia Law

Plaintiff State Farm Mutual Automobile Insurance Company (State Farm) filed an Insurance Fraud Protection Act (IFPA) action alleging defendants Sonny Rubin, M.D., Sonny Rubin, M.D., Inc., and Newport Institute of Minimally Invasive Surgery (collectively, defendants) fraudulently billed insurers for various services performed in connection with epidural steroid injections. A month prior, however, another insurer, Allstate, filed a separate IFPA lawsuit against the same defendants, alleging they were perpetrating a similar fraud on Allstate. The trial court sustained defendants’ demurrer to State Farm’s complaint under the IFPA’s first-to-file rule, finding it alleged the same fraud as Allstate’s complaint. State Farm appealed, arguing its complaint alleged a distinct fraud. After review, the Court of Appeal agreed the demurrer was incorrectly sustained, but for another reason. The Court found the trial court and both parties only focused on whether the two complaints alleged the same fraudulent scheme, but in this matter of first impression, the Court found the IFPA’s first-to-file rule required an additional inquiry. "Courts must also review the specific insurer-victims underlying each complaint’s request for penalties. If each complaint seeks penalties for false insurance claims relating to different groups of insurer-victims, the first-to-file rule does not apply. A subsequent complaint is only barred under the first-to-file rule if the prior complaint alleges the same fraud and seeks penalties arising from the false claims, submitted to the same insurer-victims." Judgment was reversed and the matter remanded for further proceedings. View "California ex rel. State Farm Mutual Automobile Ins. Co. v. Rubin" on Justia Law

The Supreme Court affirmed the decision of the district court granting summary judgment in favor of State Farm Mutual Automobile Insurance Company and dismissing Plaintiffs' claim alleging that they were entitled to uninsured motor vehicle (UIM) benefits after they were injured in an automobile accident caused by another driver, holding that State Farm was entitled to judgment as a matter of law.After their accident, Plaintiffs filed claims with State Farm for full UIM benefits of $100,000 after settling with the tortfeasor's insurance company. When State Farm did not respond, Plaintiffs brought suit, asserting breach of contract, bad faith in delaying and denying payment for the benefits, and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment for State Farm. The Supreme Court affirmed, holding that under the unambiguous language of the State Farm insurance policy, Plaintiffs were not entitled to UIM benefits and were not entitled to relief on their claims. View "Bergantino v. State Farm Mutual Automobile Insurance Co." on Justia Law

The Georgia Supreme Court granted certiorari review to consider whether the Court of Appeals erred in reversing a trial court’s order confirming an arbitration award against Interstate National Dealer Services, Inc. (“INDS”), in favor of Southern Mountain Adventures, LLC (“Dealer”), and Adventure Motorsports Reinsurance Ltd. (“Reinsurer”). The dispute arose from the parties’ contractual relationship pursuant to which Dealer sold motorsports vehicle service contracts, which were underwritten and administered by INDS, to Dealer’s retail customers, and Reinsurer held funds in reserve to pay covered repair claims. The Supreme Court concluded the Court of Appeals erred in reversing the confirmation of the award because the arbitrator manifestly disregarded the law in rendering the award. In Case No. S21G0015, the Supreme Court reversed the Court of Appeals’ decision reversing the order confirming the arbitration award on that basis, and remanded for resolution of INDS’s argument that the arbitrator overstepped his authority in making the award. In Case No. S21G0008, the Supreme Court vacated the Court of Appeals’ decision dismissing as moot Dealer and Reinsurer’s appeal of the trial court’s failure to enforce a delayed-payment penalty provided in the arbitration award, and remanded for reconsideration of that issue. View "Adventure Motorsports Reinsurance, Ltd., et al. v. Interstate National Dealer Services, Inc." on Justia Law

The insured's intended beneficiaries filed suit for breach of contract and violations of the Texas Insurance Code and Texas Prompt Payment of Claims Act in Texas court after the insurer denied coverage. After removal to federal court, the district court granted summary judgment in favor of the insurer.The Fifth Circuit reversed, concluding that the parties' arguments and the record presented to the district court at summary judgment reveal a genuine dispute as to whether the insured's application was amended. In this case, plaintiffs point to more than enough evidence in the record to raise a genuine dispute of fact as to whether there was a meeting of the minds to amend the application. Furthermore, because the district court's grant of summary judgment on plaintiffs' statutory, extracontractual claims was based on the conclusion that the insurer had legitimately denied plaintiffs' claim for benefits, the grant of summary judgment on the statutory, extra-contractual claims must also be reversed. Accordingly, the court remanded for further proceedings. View "Pham v. TransAmerica Premier Life Insurance Co." on Justia Law

Mashallah sells handcrafted jewelry at its Chicago store. Ranalli’s operates a bar and restaurant. Both purchased West Bend all-risk commercial property insurance policies. In March 2020, in response to the COVID-19 pandemic, Illinois Governor Pritzker ordered all individuals to stay at home except to perform specified “essential activities” and ordered “non-essential” businesses to cease all but minimum operations. Restaurants were considered essential businesses and permitted to sell food solely for off-premises consumption. Ranalli’s was restricted to filling takeout and delivery orders. Mashallah was not classified as an essential business and had to cease its retail activities. Both businesses sustained heavy financial losses. Their West Bend policies are materially identical. West Bend agreed to pay for actual business income lost and necessary extra expenses incurred if they were caused by “direct physical loss of or damage to” the businesses’ properties. Both policies contain virus exclusions. West Bend denied their claims.The Seventh Circuit affirmed the dismissal of contract and bad faith claims and a claim that West Bend’s retention of full premiums—despite decreased risks occasioned by the reduction in insureds’ business operations—constituted unjust enrichment, requiring rebates. The virus exclusions barred coverage for the purported losses and expenses and the businesses failed to allege viable legal bases for rebate of premiums. View "Mashallah, Inc v. West Bend Mutual Insurance Co." on Justia Law