Justia Insurance Law Opinion Summaries

Todd McLaughlin was riding his bicycle on a Seattle street when the door of a parked vehicle opened right into him. McLaughlin fell, suffered injuries, and sought insurance coverage for various losses, including his medical expenses. McLaughlin’s insurance policy covered those expenses if McLaughlin was a “pedestrian” at the time of the accident. McLaughlin argued a bicyclist was a pedestrian, relying on the definition of “pedestrian” found in the Washington laws governing casualty insurance. The trial court held a bicyclist was not a pedestrian, reasoning that the plain meaning of "pedestrian" excluded bicyclists. The Court of Appeals affirmed, relying largely on its view that the Washington statute defined pedestrian for purposes of casualty insurance, excluded bicyclists. The Washington Supreme Court reversed. The Washington legislature defined “pedestrian” for purposes of casualty insurance in Washington broadly in RCW 48.22.005(11). The Supreme Court found that definition included bicyclists and applied to the insurance contract at issue here. "Even if we were to hold otherwise, at the very least, the undefined term 'pedestrian' in the insurance contract at issue must be considered ambiguous in light of the various definitions of 'pedestrian' discussed in this opinion. Being ambiguous, we must construe the insurance term favorably to the insured. Accordingly, we reverse the Court of Appeals and remand for further proceedings." View "McLaughlin v. Travelers Commercial Ins. Co." on Justia Law

In this insurance dispute arising from an employee's death, the Supreme Court remanded the determination that the employer's insurer providing underinsured motorist coverage and workers' compensation insurance was entitled to a lien on a portion of settlement proceeds received by the estate, holding that, given a lack of factual findings, there was no way to evaluate whether the court clearly erred in its assessment of the various factors impacting an equitable allocation.Charles Luze died in a work-related accident. His employer paid his wife, Jeanette Luze, workers' compensation benefits. Jeanette, as the representative of Charles's estate, then brought suit against the negligent driver and settled the claim. The estate also settled a claim against the New FB's insurer providing underinsured motorist coverage, Zurich American Insurance Company, which was also New FB's workers' compensation carrier. The circuit court determined that Zurich was entitled to a statutory workers' compensation lien on fifty percent of the settlement proceeds received by the estate and was able to subrogate against its own settlement payment of underinsured benefits. The Supreme Court remanded in part, holding (1) this Court was unable meaningfully to review the circuit court's allocation determination; and (2) the circuit court properly allowed Zurich to subrogate against the amount it paid in underinsured motorist benefits. View "Luze v. New FB Co." on Justia Law

In January 2020, summary judgment was entered in favor of defendant State Farm Mutual Automobile Insurance Co. (State Farm) against its insured, plaintiff Eric Thurston. In 2012, Thurston first obtained automobile liability insurance through State Farm. On June 9, 2016, Thurston was injured in an automobile accident. At that time, Thurston had three separate, six-month term, insurance policies with State Farm, with separate UM coverage on each, for which Thurston paid three separate premiums. The accident vehicle had $25,000 in UM coverage and the other two vehicles each had $50,000 in UM coverage. After determining that Thurston's medical expenses from the accident exceeded the at-fault driver's policy limits, State Farm initially paid Thurston $25,000 in UM benefits under the policy for the vehicle involved in the accident. State Farm eventually paid Thurston another $25,000 under a second policy, for a total of $50,000 in paid UM benefits. While Thurston's injuries exceeded that amount, State Farm refused further payment. Thurston brought claims against State Farm, Janis Yearout (Agent), and Yearout Insurance Agency (Agency) for fraud, breach of contract, bad faith, and failure to procure appropriate coverage. In April 2019, Thurston filed his third amended petition arguing, in part, that State Farm expressly provided for stacking when it continued to charge and accept full premiums on multiple policies without advising that the policies no longer stacked. In support, Thurston submitted his deposition testimony that he did not recall receiving notice of changes in policy language after the 2014 statutory amendment. Thurston alleged that his claims were also supported by State Farm's internal claim documents, which described the policy for the accident vehicle as "stacking" with another. The question before the Oklahoma Supreme Court was whether State Farm expressly provided for stacking of uninsured motorist policies, pursuant to 36 O.S. Supp. 2014, section 3636(B), by charging and accepting separate premiums for uninsured motorist coverage on separate policies. The Supreme Court found State Farm's charging separate UM premiums for vehicles on separate policies did not fall within section 3636's exception of expressly providing for stacking of UM coverage. Because State Farm did not take action to expressly provide for stacking of UM coverage, they were entitled to judgment as a matter of law. The district court's order granting summary judgment was affirmed. View "Thurston v. State Farm Mutual Automobile Ins. Co." on Justia Law

Tile Shop Holdings settled multiple lawsuits with its shareholders and then sought indemnification under its directors-and-officers insurance policies. Allied World, Tile Shop's excess insurer, denied coverage.The Eighth Circuit held that Allied is neither liable for the losses from the prior acts it has excluded in its own policy nor those excluded under the primary policy. Under the first prior-acts exclusion, Tile Shop's wrongful acts started well before August 20, 2012, the policy's retroactive date, which made any losses from them excludable under the relation-back clause. View "Tile Shop Holdings, Inc. v. Allied World National Assurance Co." on Justia Law

After Federal issued a Financial Institution Bond to COR, COR paid $2,080,000 to settle claims by investors that a former COR registered representative had conspired with others to defraud investors by carrying out a "pump-and-dump" scheme in a risky penny-stock called VGTel. COR then filed a claim with its liability insurer for VGTel and other settlement payments, which it later settled for $3,625,000 above the policy's deductible. COR also filed a claim under Federal's Bond to recover its losses for the VGTel settlements. Federal denied coverage and filed a declaratory judgment action.The Eighth Circuit agreed with the district court that Auto Lenders Acceptance Corp. v. Gentilini Ford, Inc., 854 A.2d 378 (N.J. 2004), stands for the proposition that, under New Jersey law, COR's payments to settle third-party liability claims based on an employee's dishonest acts directed at the third parties were not a direct loss under Insuring Clause 1.B of the Bond. Furthermore, the district court did not err in dismissing COR's Clause 1.D counterclaim because COR failed to show that admissible evidence would be available at trial to prove that the employee personally committed a covered dishonest act. Accordingly, the court affirmed the district court's judgment. View "Federal Insurance Co. v. Axos Clearing LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the trial court's grant of summary judgment for an insurance agent on Plaintiffs' claim that the insurance agent negligently failed to procure excess uninsured motorist coverage in accordance with Plaintiffs' instructions, holding that Tenn. Code Ann. 56-7-135(b) applies to create a rebuttable presumption in actions against an insurance agent for negligent failure to procure an insurance policy as directed.In granting summary judgment for the insurance agent, the trial court concluded that Plaintiffs had failed to rebut the statutory presumption that they had accepted the provided coverage, which did not include excess uninsured motorist coverage. The court of appeals reversed, determining that the rebuttable presumption in section 56-7-135(b) does not apply to actions against an insurance agent. The Supreme Court reversed, holding (1) the rebuttable presumption articulated in section 56-7-135(b) applies to actions against an insurance agent by insureds under the insurance policy for negligent failure to procure an insurance policy as directed; and (2) Plaintiffs failed to rebut the statutory presumption in this case. View "Parveen v. ACG South Insurance Agency, LLC" on Justia Law

The jury in this case was presented with two options: find the tractor driver 100 percent liable for the motorcycle riders’ injuries or not liable at all. Neither party requested a comparative-negligence instruction. And none was given. The jury found the tractor driver liable, but only awarded the motorcycle riders a fraction of their uncontested damages. Both parties filed posttrial motions: the motorcycle riders sought more damages; the tractor driver requested a new trial. The trial court granted a new trial, agreeing with the tractor driver that the jury had rendered a “compromise verdict.” At the second trial, the jury found in favor of the tractor driver. The motorcycle riders appealed, arguing the trial court erred by granting a new trial following the first verdict. The Mississippi Supreme Court determined the trial court did not abuse its discretion: the record supported the trial judge’s finding the jury had reached a compromise verdict in the first trial. Therefore, the Court affirmed the trial court's judgment. View "Richards v. Wilson" on Justia Law

Kent backed up a grain truck that was owned by his father, Sheldon, to an auger that was being used to move grain to a transport truck. A tractor powered the auger by means of a power take-off shaft. Kent, attempting to open the truck’s gate, wanted to get extra leverage and stepped onto the auger. The auger’s protective shield had been removed. Kent’s foot was exposed to the turning shaft. In the ensuing accident, Kent lost his leg below the knee. Kent settled a negligence action against Sheldon and received $1.9 million from insurers.Kent reserved his right to pursue additional coverage under the auto policy that covered the truck. State Farm sought a declaratory judgment that no coverage was provided because an auger is neither a “car” nor a “trailer,” as defined in the policy but fell under the policy’s “mechanical device” exclusion for damages resulting from "THE MOVEMENT OF PROPERTY BY MEANS OF A MECHANICAL DEVICE, OTHER THAN A HAND TRUCK, THAT IS NOT ATTACHED TO THE VEHICLE.” The circuit court granted State Farm summary judgment. The appellate court construed the exclusion against State Farm.The Illinois Supreme Court reversed. The exclusion was not ambiguous. The auger is a machine or tool designed to move grain from one place to another and is a device that was “operated by a machine or tool” (a tractor) that is not a small hand-propelled truck or wheelbarrow, and was not attached to the insured vehicle. Exclusions are permissible if they do not differentiate between named insureds and permissive users. View "State Farm Mutual Automobile Insurance Co. v. Elmore" on Justia Law

The Supreme Court held that an insurer's payments on a fire insurance policy were not immune from garnishment as "proceeds of the sale or disposition" of property held in trust under former Va. Code 55.20.2(C) and that the contractual right under the insurance policy to receive fire loss payments was not intangible personal property held by the named insured and his wife as a tenancy by the entirety.Terry and Cathy Phillips owned their residence as tenants by the entirety until they retitled the property in the names of separate, revocable trusts as tenants in common. The residence was later damaged by fire. The residence was covered by an insurance policy issued by Chubb & Son, Inc. that named Terry Phillips as the policyholder. Andrea Jones sought satisfaction of a civil judgment she had obtained against Terry by filing this action to garnish insurance payments from Chubb arising out of the fire damage owned by the reciprocal trusts. The Phillipses sought to quash the garnishment, arguing that the insurance payments were immune from garnishment under section 55.1-136(C). The circuit court granted the motion. The Supreme Court reversed, holding that the circuit court erred in holding that section 55.1-136(C) immunized the insurance payments from garnishment. View "Jones v. Phillips" on Justia Law

The Court of Appeals affirmed the order of the Appellate Division affirming Supreme Court's conclusion that an excess insurer did not have an obligation to pay interest on an underlying personal injury judgment after the primary policy was voided.Plaintiff was injured at a construction site and sued the general contractor, which maintained an excess liability insurance policy with Defendant. Supreme Court granted partial summary judgment for Plaintiff. Plaintiff then commenced this action asserting that Defendant was obligated to pay the entire underlying damages award. Supreme Court ultimate determined that Defendant was obligated to pay $1.3 million in excess damages, prejudgment interest on those damages and interest that accrued from the date partial summary judgment was granted to Plaintiff until the entry of judgment. The Appellate Division affirmed. The Court of Appeals affirmed. At issue on appeal was whether Defendant was obligated to pay interest on the underlying personal injury judgment after the primary policy was voided. The Court of Appeals affirmed, holding that the excess policy did not provide overlapping coverage for certain interest payments covered in the primary policy. View "Chen v. Insurance Co. of State of PA" on Justia Law