Justia Insurance Law Opinion Summaries

The Fifth Circuit reversed the district court's grant of summary judgment in favor of Twin City in an action brought by HMI, alleging that Twin City had breached its duty to indemnify. HMI provides various accounting and financial services for Greg and Kathy Geib. The district court interpreted the policy as not covering settlement payments made after limitations for the underlying negligent conduct had expired.The court concluded that the district court erred for two reasons: first, the district court did not account for the policy's definition of the term "claim," instead treating it as synonymous with "cause of action;" and second, the district court interpreted the phrase "legally liable to pay" to mean effectively that HMI actually lost or would have lost had the Geibs filed suit. With these two clarifications, the court concluded that HMI's settlement payment constitutes a loss because it is an amount that HMI is legally liable—through contract—to pay to the Geibs as a result of the demand letter. Furthermore, the fact that the Geibs never filed their threatened suit and that the limitations period had seemingly run does not change that. Finally, the court rejected Twin City's two alternative arguments. View "HM International, LLC v. Twin City Fire Insurance Co." on Justia Law

The Supreme Court vacated the determination of the court of appeals that R. Scott National, Inc. (RSN) was an "agent" of Pacific Life Insurance Company (Pacific Life) based on Utah Code 31A-1-301(88)(b), and therefore granting partial summary judgment to Plaintiffs on their claim that Pacific Life should be held liable for RSN's alleged misdeeds, holding that remand was required.The district court granted summary judgment to Pacific Life, concluding that nothing RSN did was within the actual or apparent authority Pacific Life granted RSN. The court of appeals reversed and granted partial summary judgment for Plaintiffs, holding that RSN was Pacific Life's agent and that RSN's actions fell within the scope of authority Pacific Life had granted RSN. The Supreme Court vacated the judgment below, holding that the court of appeals (1) erred in ruling that section 31A-1-301(88)(b) made RSN an agent of Pacific Life and in injecting respondeat superior principles into Utah Code 31A-23a-405(2); and (2) Plaintiffs were entitled to the entry of partial summary judgment on the issue of RSN's apparent authority from Pacific Life. View "Drew v. Pacific Life Insurance Co." on Justia Law

The U.S. Appeals Court for the Ninth Circuit certified several questions of law to the Washington Supreme Court. When the homeowner failed to insure his property, the mortgage servicer purchased insurance to cover the property pursuant to the mortgage agreement - known as “force placed insurance” or “lender placed insurance.” The policy was underwritten by the insurers and passed through a broker to the mortgage servicer. The homeowner claimed that these parties participated in an unlawful kickback scheme that artificially inflated the premiums. In Washington, insurers must generally file their rates and receive approval from the Office of the Insurance Commissioner (OIC) before selling insurance. Once the rates are filed and approved by the governing agency, the rates were “per se reasonable” and claims that run squarely against these rates had to be dismissed (known as the "filed rate doctrine”). While the filed rate doctrine historically applied to shield entities that file rates, the Washington Court was asked whether the filed rate doctrine also applied to bar suit against intermediaries who did not file rates: the mortgage servicer (Nationstar Mortgage LLC) and broker (Harwood Service Company) who participated in the procurement of the policy from the insurers. If the filed rate doctrine applied to these intermediaries, the Supreme Court was then asked to determine whether damages would be barred under Washington's only case applying the doctrine, McCarthy Fin., Inc. v. Premera, 1347 P.3d 872 (2015). The Washington Supreme Court held that the filed rate doctrine had to also apply to bar suit against intermediaries where awarding damages or other relief would squarely attack the filed rate. In light of this holding, the Court returned the second question pertaining to damages to the Ninth Circuit to first revisit and apply McCarthy to the specific allegations of the appellant-homeonwer's outstanding claims. View "Alpert v. Nationstar Mortg., LLC" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of a utility-locating service, USIC, in an action brought by Spire, a gas company, and its insurers, seeking full indemnification from USIC, as well as a declaratory judgment that USIC would be liable for all future settlements as well, without regard to fault. The court held that, under Missouri's anti-indemnification law, Mo. Rev. Stat. Sec. 433.100.1, Spire could not use the parties' contract to seek indemnification for its own negligence or wrongdoing. The court explained that, even if Spire is right that "construction work" does not ordinarily include marking and flagging the location of gas lines, it makes no difference here because Missouri has adopted a broader definition of "construction work." View "Spire Missouri, Inc. v. USIC Locating Services, LLC" on Justia Law

The Supreme Court held that Defendant, which terminated one of the life insurance policies at issue in this case because the policy owner had failed to make a payment, had no right to terminate the policies without complying with the newly codified statutory protections against termination.In 2013, protections to shield consumers from losing life insurance coverage because of a missed premium payment went into effect. The protections were codified in Cal. Ins. Code 10113.71 and 10113.72. Thereafter, Defendant terminated the subject life insurance policy. Plaintiffs brought this action arguing that Defendant had no right to terminate the policies, which predated sections 10113.71 and 10113.72, without complying with the sections. The court of appeal concluded that the newly codified statutory protections against termination did not apply because they appeared to affect only policies issued or delivered after the sections' effective date. The Supreme Court reversed, holding that sections 10113.71 and 10113.72 apply to all life insurance policies in force when these two sections went into effect, regardless of when the policies were originally issued. View "McHugh v. Protective Life Insurance Co." on Justia Law

The bankruptcy trustee sued Cornerstone on the insured's behalf, alleging that Cornerstone breached its duty to defend the insured by failing to timely file an answer to a complaint filed against him. The insurance policy was in effect when the insured's car collided with another vehicle.The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Cornerstone on the trustee's claim because Cornerstone had no duty to defend when the insured did not strictly comply with a condition precedent to coverage. In this case, the insured was required to strictly comply with the policy provision mandating that he promptly forward the legal papers he received to Cornerstone, but he failed to do so. Furthermore, the actions of the claims representative did not waive the policy's requirement that the insured promptly forward any legal papers to Cornerstone, nor did they estop Cornerstone from denying coverage based on noncompliance. View "Dowden v. Cornerstone National Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Westfield Insurance in an action seeking a declaratory judgment that it owed no obligations to Advanced Auto, Advanced Auto's employee, or their insurer, Carolina Casualty. The court agreed with the district court that neither the employee nor Advanced Auto was an "insured" under the policy that Westfield Insurance issued to Westfield Insurance's insured, Worldwide. In this case, when Worldwide turned over the truck to McNeilus, Worldwide had no control over who was driving the truck until McNeilus finished its work and returned the truck to Worldwide. View "Westfield Insurance Co. v. Carolina Casualty Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's finding that Selective denied insurance coverage in bad faith and the district court's award of taxable costs and prejudgment interest. In this case, Selective sought a declaration of no coverage for the insured's hailstorm-damaged property, alleging fraud by misrepresentation and breach of contract. The insured counterclaimed and later added a claim for bad faith denial of benefits under Minn. Stat. 604.18, which would entitle him to taxable costs. A jury found in favor of the insured and a panel of appraisers assessed damages. The court concluded that the district court did not err in allowing the insured's section 604.18 claim to proceed; there was no error in awarding taxable costs under section 604.18, subdivision 2(a), based on the district court's determination that no reasonable insurer would have relied on any of Selective's proposed bases to deny defendant's hail claim for fraud; and there was no error in the district court's award of prejudgment interest. View "Selective Insurance Company of South Carolina v. Sela" on Justia Law

In 2006, Moore, an Indiana-based insurance broker, advised Mathis, an Alabama surgeon, to replace his Standard disability insurance policy with a MetLife disability-insurance policy with higher limits that had occupational disability coverage, like the Standard policy. The MetLife policy did not actually provide occupational disability coverage but provided total disability coverage only if Mathis was not gainfully employed and provided residual disability coverage only under various limitations. Mathis became disabled in 2017. Neck and arm problems prevented him from performing some of his duties. He underwent surgery but could no longer work at his usual level; his income decreased. He left his practice in March 2018 and began working for a device manufacturer in a nonsurgical capacity. MetLife paid Mathis residual disability benefits, April-August 2017, then determined he was not entitled to residual disability benefits. The policy lapsed.Mathis sued Moore and Source Brokerage for negligent procurement and brought a breach of contract claim against MetLife. The Seventh Circuit affirmed the dismissal of the claims, applying Alabama law, rather than Indiana law. Mathis’s contributory negligence in failing to read the new policy and the Alabama statute of limitations barred the negligence claims. The court rejected the contract claim because Mathis failed to comply with his contractual obligation to submit proof of loss for any period after September 2017. View "Mathis v. Metropolitan Life Insurance Co" on Justia Law

Plaintiffs filed suit against OSIC after OSIC denied their claim seeking coverage under plaintiffs' policy for damage caused by a hailstorm. The district court ultimately granted OSIC summary judgment.The Fifth Circuit certified the following questions to the Supreme Court of Texas: (1) Whether the concurrent cause doctrine applies where there is any non-covered damage, including "wear and tear" to an insured property, but such damage does not directly cause the particular loss eventually experienced by plaintiffs; (2) If so, whether plaintiffs alleging that their loss was entirely caused by a single, covered peril bear the burden of attributing losses between that peril and other, non-covered or excluded perils that plaintiffs contend did not cause the particular loss; and (3) If so, whether plaintiffs can meet that burden with evidence indicating that the covered peril caused the entirety of the loss (that is, by implicitly attributing one hundred percent of the loss to that peril). View "Frymire Home Services, Inc. v. Ohio Security Insurance Co." on Justia Law