Justia Insurance Law Opinion Summaries

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Continental in an action brought by Millard Gutter, alleging that Continental breached insurance policies issued to third parties. The court concluded that Millard Gutter lacked authority to determine the scope of the loss or damage sustained by Midwest Screw or Dr. Schroeder. In this case, the authorization terms are clear and no reasonable person would construe them to assign Midwest Screw's and Dr. Schroeder's claims to Millard Gutter or to otherwise grant Millard Gutter the right to determine the scope of damages or loss. Rather, the plain language of the authorizations permits Millard Gutter only to seek payment from defendants and to negotiate the terms of those payments with defendants. View "Millard Gutter Co. v. Continental Casualty Co." on Justia Law

After obtaining a default judgment in state court against defunct entities, six plaintiffs filed this coverage action to collect on that judgment from the entities' insurer. Although the Fifth Circuit disagreed with the district court's determination that plaintiffs lacked standing to sue the insurer without either an adversarial judgment against the entities or a valid assignment from the entities, the court agreed with the district court that plaintiffs' claims against the entities fell outside the scope of the entities' liability insurance coverage. Accordingly, the court affirmed the district court's grant of summary judgment in favor of Cincinnati. Finally, the court concluded that the district court did not abuse its discretion in denying intervenor's motion to intervene. View "Turner v. Cincinnati Insurance Co." on Justia Law

The Mundens own ranching property in Bannock County, Idaho. They purchased 768 acres in 2012 and 660 acres in 2014 and purchased title insurance for the first purchase through Stewart and for the second purchase through Chicago Title. The property contains a gravel road. A 2019 ordinance amended a 2006 ordinance that closed specified snowmobile trails, including that gravel road, to motor vehicles except snowmobiles and snow-trail-grooming equipment during winter months. The 2019 ordinance deleted the December-to-April closure, giving the County Public Works Director the discretion to determine when to close specified snowmobile trails, and increased the maximum fine for violations. The Mundens sought an injunction. The county asserted that the road had been listed as a public road on county maps since 1963 and that the Mundens purchased their property expressly subject to easements and rights of way apparent or of record.The Mundens filed a federal complaint, seeking declaratory relief, indemnification, and damages. The district court granted the insurance companies summary judgment. The Ninth Circuit reversed as to Chicago Title, finding that the county road map is a “public record” within the meaning of its policy so that coverage applied. Stewart has no duty to indemnify or defend; its policy disclaims coverage for damages “aris[ing] by reason of . . . [r]ight, title and interest of the public in and to those portions of the above-described premises falling within the bounds of roads or highways.” View "Munden v. Stewart Title Guaranty Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the order and declaratory judgment of the superior court in favor of Defendant in this personal injury action, holding that, under the circumstances, Defendant was not entitled to collect underinsured benefits.Defendant was a North Carolina resident who sought to collect underinsured motor vehicle coverage benefits from Plaintiff, her North Carolina insurer, after she was injured while traveling in Alabama in a car owned and operated by a Tennessee resident and insured by a Tennessee insurer. Plaintiff denied the claim and initiated a declaratory judgment action seeking a ruling establishing that the UIM coverage of its politics did not apply to Defendant's injuries. The trial court concluded that Defendant was not entitled to coverage under the UIM provision of her insurance contract. The court of appeals affirmed. The Supreme Court reversed, holding that because the amount of the stacked UIM coverage limits exceeded the sum of the applicable bodily injury coverage limits, the Tennessee driver's car was an "underinsured motor vehicle" as defined under North Carolina's Financial Responsibility Act for the purposes of giving effect to Defendant's contract with Plaintiff. View "N.C. Farm Bureau Mutual Insurance Co. v. Lunsford" on Justia Law

UnitedHealthcare Medicare Advantage insurers challenged the Overpayment Rule, promulgated by the Centers for Medicare and Medicaid Services (CMS) under 42 U.S.C. 1301-1320d-8, 1395-1395hhh, in an effort to trim costs. The Rule requires that, if an insurer learns that a diagnosis submitted to CMS for payment lacks support in the beneficiary’s medical record, the insurer must refund that payment within 60 days. UnitedHealth claims that the Overpayment Rule is subject to a principle of “actuarial equivalence,” and fails to comply. Two health plans that pay the same percentage of medical expenses are said to have benefits that are actuarially equivalent.The D.C. Circuit rejected the challenge. Actuarial equivalence does not apply to the Overpayment Rule or the statutory overpayment-refund obligation under which it was promulgated. Reference to actuarial equivalence appears in a different statutory subchapter from the requirement to refund overpayments; neither provision cross-references the other. The actuarial-equivalence requirement and the overpayment-refund obligation serve different ends. The actuarial-equivalence provision requires CMS to model a demographically and medically analogous beneficiary population in traditional Medicare to determine the prospective lump-sum payments to Medicare Advantage insurers. The Overpayment Rule, in contrast, applies after the fact to require Medicare Advantage insurers to refund any payment increment they obtained based on a diagnosis they know lacks support in their beneficiaries’ medical records. View "UnitedHealthcare Insurance Co v. Becerra" on Justia Law

Plaintiffs filed a claim on their homeowners' insurance policy with Travelers after a fire at their home. Travelers made some early payments; plaintiffs asserted that much more was owed; the parties agreed to an appraisal; the appraisal award came in closer to plaintiffs' view of the damages; and Travelers paid the additional amount.The Fifth Circuit held that the payment of the appraisal award prevents a plaintiff from continuing to pursue a breach of contract claim against an insurer. The court also held that an insurer can be liable under the Texas Prompt Payment of Claims Act for failing to timely pay the full damages it owed even though it timely made sizeable payments in response to the claim. The court explained that payment and acceptance of an appraisal award means there is nothing left for a breach of contract claim seeking those same damages. But a plaintiff may still have a claim under the prompt payment law after it accepts an appraisal award. Furthermore, the Supreme Court of Texas recently held that even a preappraisal payment that seemed reasonable at the time does not bar a prompt-payment claim if it does not "roughly correspond" to the amount ultimately owed. See Hinojos v. State Farm Lloyds, 619 S.W.3d 651, 658 (Tex. 2021).In this case, the court affirmed the dismissal of the contract claims where there is no evidence that Travelers failed to pay any amounts due and plaintiffs failed to explain why the amount paid was insufficient. However, in light of Hinojos, the court concluded that Travelers' preappraisal payment is not a defense to liability under the Texas Prompt Payment of Claims Act. Therefore, plaintiffs' claim seeking interest for late payment of dwelling coverage must be remanded. View "Randel v. Travelers Lloyds of Texas Insurance Co." on Justia Law

At issue before the Mississippi Supreme Court in this interlocutory appeal was whether the trial court erred by finding cause to grant a 120-day extension of time to serve process on Progressive Gulf Insurance Company. Plaintiffs, Jaswinder Kaur, Harvinder Singh, Karanveer Kamboj, and Gurdev Kamboj, were occupants of a vehicle that was involved in a collision with a vehicle operated by Mary Orebo and owned by Cassandra Mann. Plaintiffs’ vehicle had uninsured-motorist coverage provided by Progressive Gulf Insurance Company. Each Plaintiff filed a separate suit against all three Defendants on the eve of the expiration of the three-year statute of limitations. Progressive contended that difficulty locating other Defendants, the owner and driver of the vehicle, was not adequate cause. After review, the Supreme Court concluded the circuit court did not abuse its discretion in that decision. However, all parties agreed that the circuit court erred by refusing to dismiss the suits of three of the Plaintiffs who failed to seek extensions of time to serve process on Progressive before the end of the original 120-day period. View "Progressive Gulf Insurance Company v. Kaur, et al." on Justia Law

Plaintiffs, domestic entities, entered into an insurance contract providing coverage for a Texas townhome complex that they own and operate. The Policy was underwritten by Lloyd’s, members of a foreign organization, and contains a mandatory arbitration provision, providing that the seat of the Arbitration shall be in New York and the Arbitration Tribunal shall apply the law of New York. In 2017, Hurricane Harvey caused an estimated $5,660,000 in damages to the townhome complex. A third-party claims administrator for Lloyd’s concluded that the Policy’s deductible was $3,600,000.Plaintiffs filed a complaint in the Western District of Washington asserting breach of contract, failure to communicate policy changes, and unfair claims handling practices in violation of Washington law, asserting that the deductible should be $600,000. Lloyd’s moved to compel arbitration and stay proceedings, arguing that the Policy’s arbitration provision falls within the scope of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Plaintiffs did not contest that the arbitration provision falls within the Convention’s scope but argued the provision is unenforceable because Washington law specifically prohibits the enforcement of arbitration clauses in insurance contracts. Plaintiffs cited the McCarran-Ferguson Act, 15 U.S.C. 1011–15, which provides that state insurance law preempts conflicting federal law. On interlocutory review, the Ninth Circuit upheld an order granting Lloyd’s motion. Article II, Section 3 of the Convention is self-executing, and therefore is not an “Act of Congress” subject to reverse-preemption under the McCarran-Ferguson Act. View "CLMS Management Services Limited Partnership v, Amwins Brokerage of Georgia" on Justia Law

The Second Circuit affirmed the district court's judgment sustaining the final determination of Hartford Life with respect to plaintiff's disability benefits under the terms of the long term disability plan.The court held that California Insurance Code 10110.6(a) applies only to the claims of California residents. It does not apply to plaintiff because he was a New York resident at all relevant times. The court also held that "full and fair review" under the Employee Retirement Income Security Act's (ERISA) claims-procedure regulations does not require the claims administrator to produce documents developed or considered during the appeal from the initial determination while the claim is still under review and before a final benefits determination. Therefore, plaintiff cannot establish that Hartford Life did not provide his claim a full and fair review. In this case, the district court correctly reviewed Hartford Life's determination under the arbitrary-and-capricious standard and correctly concluded that the final determination was reasonable and supported by substantial evidence in the record. View "Mayer v. Ringler Associates Inc. and Af." on Justia Law

Maryam Hedayati appealed the grant of summary judgment in favor of Interinsurance Exchange of the Automobile Club (Auto Club or the Club) on Hedayati’s breach of good faith and fair dealing claim. Hedayati suffered catastrophic injuries in October 2012 when Auto Club’s insured ran a red light and struck her in a pedestrian crosswalk. The insured driver immediately notified Auto Club of the accident and authorized the Club to disclose his policy limits ($25,000); he also informed Auto Club he had no other insurance or assets. Auto Club’s policy with its insured required him to relinquish to the Club his right to negotiate settlement of potential tort claims falling within the policy. When he inquired about a release, Auto Club inaccurately told its insured driver Hedayati was not willing to sign one. Despite repeated requests during settlement negotiations from Hedayati’s attorney, Auto Club initially declined to disclose the insured’s policy limits; eventually it acquiesced, but Auto Club still declined to provide written proof of those limits, which the Club knew was common practice to facilitate a settlement. Auto Club then withheld from Hedayati’s counsel the insured’s written declaration which indicated he had no other insurance, which the Club had confirmed, and the insured’s statements that he had no assets. Auto Club also, despite multiple requests from Hedayati’s lawyer, failed to provide a copy of its insured’s policy which Hedayati’s lawyer needed to verify its terms. Hedayati’s counsel had demanded a hard copy of the policy as a settlement condition. Auto Club ultimately failed to settle the matter within its $25,000 policy limits. Hedayati subsequently obtained a $26 million judgment against the insured driver, along with assignment of the insured’s claim against the Club for breach of the covenant of good faith and fair dealing implicit in its policy with him. The trial court concluded the evidence presented by Hedayati was insufficient as a matter of law. After its de novo review, the Court of Appeal disagreed with the trial court’s evaluation of the evidence. It therefore reversed the summary judgment ruling and remanded for further proceedings. View "Hedayati v. Interinsurance Exchange of the Auto. Club" on Justia Law