Justia Insurance Law Opinion Summaries

After Armond Jairon Brown was tragically shot by a police officer after a stand-off in (and in front of) a house, Brown's mother (defendant) properly submitted claims to American General Life Insurance Company (AGLIC) for (1) life insurance benefits and (2) accidental death benefits. After AGLIC paid the life insurance benefits but denied the accidental death benefits, the insurer sought a declaratory judgment declaring that it properly denied defendant's claim.The Fifth Circuit affirmed the district court's grant of summary judgment for AGLIC, holding under Louisiana law that defendant's admissions conclusively establish that Brown was the aggressor and that this pattern of aggression precipitated his death by provoking the officers' responsive shooting. In this case, there is no record that defendant ever responded to the insurer's requests for admission and thus the admissions are factually conclusive under Federal Rule of Civil Procedure 36(a)(1)-(3). Therefore, the court held that, given defendant's binding admissions, there is no dispute of material fact and defendant cannot recover under the AGLIC accidental death rider. View "American General Life Insurance Co. v. Whitaker" on Justia Law

The Dais obtained a loan from Apex secured by a mortgage on their laundromat. The laundromat ceased operations; the Dais defaulted. Apex agreed to accept a deed in lieu of foreclosure if the property was marketable. A December 2008 inspection revealed that it was in disrepair, exposed to the elements, and open to vagrants. Apex took measures to preserve the property and returned the deed to the Dais in April 2009. In December 2010, two Chicago firefighters lost their lives battling a blaze at the abandoned laundromat. Their estates sued Apex. Apex and the estates settled. Apex's insurer, Federal, denied coverage, citing a policy exclusion for any liability or loss "arising out of property you acquire by foreclosure, repossession, deed in lieu of foreclosure or as mortgagee in possession.” The district court granted Federal summary judgment.The Seventh Circuit vacated, applying Pennsylvania law. Summary judgment was inappropriate given the open question of material fact: who possessed the property at the time of the fire. Apex instructed its realtor to post a notice informing the Dais how to obtain keys for the new locks. Apex urged the Dais to inspect and secure the property. In July 2009, Dai ordered a handyman to board up the property after being cited for building code violations. In October 2009, Dai entered into a settlement to cure the code infractions by November 2010. He failed to do so and served 180 days in jail. Apex had no contact with the property after April 2009. View "Apex Mortgage Corp. v. Great Northern Insurance Co." on Justia Law

In consolidated appeals, the issue presented for the Pennsylvania Supreme Court's review centered on whether, under the terms of the “replacement cost coverage” policies at issue, the insurer was permitted to withhold from any actual cash value (“ACV”) payment general contractor’s overhead and profit (“GCOP”) expenses, unless and until the insureds undertook repairs of the damaged property, even though the services of a general contractor were reasonably likely to be needed to complete the repairs. Appellants Konrad Kurach and Mark Wintersteen (“Policyholders”) each purchased identical “Farmers Next Generation” insurance policies from Appellee Truck Insurance Company (“Insurer”), to cover their Pennsylvania residential dwellings. Subsequent to the purchase of these policies, both Policyholders sustained water damage to their houses in excess of $2,500, and both filed claims with Insurer under the policies. Thus, where, as here, the cost of repairing or replacing a policyholder’s damaged property exceeds $2,500, Insurer was first required to pay the ACV of the property at the time of the loss to the policyholder (“step one”). Once the repair or replacement of the damaged property is commenced, Insurer was then obligated (in “step two”) to pay the depreciated value of the damaged property and also the expense of hiring a general contractor, “unless the law of [Pennsylvania] requires” payment of GCOP as part of ACV. After careful review, the Pennsylvania Supreme Court affirmed the order of the Superior Court, which found the insurer was entitled to withhold such costs. View "Wintersteen v. Truck Ins. Exchange" on Justia Law

In 2013, a fire caused the Sinclair Wyoming Refining Company to restrict operations for several months. It filed a claim with its eighteen insurers, including Infrassure, Ltd., which collectively provided Sinclair coverage for business interruption losses under an all-risk insurance policy. In 2015, after twenty months of claim adjustment, Sinclair and the other seventeen insurers settled the claim. But Infrassure did not agree with the settlement value and eventually exercised its right under the policy to have Sinclair’s covered loss calculated by a panel of three appraisers. The panel valued the loss at $60,365,508, with Infrassure liable for $4,527,413. Infrassure, still unsatisfied, sought to invalidate the award in district court, arguing that the appraisers relied improperly on the settlement amount rather than independently valuing the loss. The district court rejected this theory and confirmed the award, holding Infrassure failed to show any actionable misconduct on behalf of the appraisers. After review, the Tenth Circuit agreed the record revealed nothing warranting setting aside the appraisal award, and therefore affirmed. View "Sinclair Wyoming v. Infrassure" on Justia Law

The Supreme Court reversed the court of appeals' decision affirming the North Carolina Industrial Commission's finding that the uninsured/underinsured motorist (UIM) proceeds that Plaintiff received on behalf of her husband's estate through the settlement of a wrongful death lawsuit were subject to Defendants' subrogation lien under N.C. Gen. Stat. 97-10.2, holding that the UIM proceeds recovered from the wrongful death lawsuit may not be used to satisfy Defendants' workers' compensation lien.The decedent, Plaintiff's husband and an employee of Employer, was involved in a fatal motor vehicle accident with a third party in South Carolina. The Commission ordered Defendants to pay workers' compensation benefits to Plaintiff. Plaintiff then filed a wrongful death case seeking damages from the third party driver. The parties reached a settlement agreement that included recovery in the form of UIM proceeds. The workers' compensation insurance carrier for Employer subsequently claimed a lien on the UIM proceeds that Plaintiff recovered from the wrongful death settlement. The Commission ordered the distribution of Plaintiff's entire recovery from the South Carolina wrongful death settlement, concluding that Defendants were entitled to subrogation under section 97-10.2. The Supreme Court reversed, holding that Defendants may not satisfy their workers' compensation lien by collecting from Plaintiff's recovery of UIM proceeds in her South Carolina wrongful death settlement. View "Walker v. K&W Cafeterias" on Justia Law

In the Patient Protection and Affordable Care Act (ACA), Congress directed each state to establish an online exchange through which insurers may sell health plans if the plans meet certain requirements. One requirement is that insurers must reduce the “cost-sharing” burdens—such as the burdens of making co-payments and meeting deductibles—of certain customers. When insurers meet that requirement, the Secretary of Health and Human Services shall reimburse them for those cost-sharing reductions, 42 U.S.C. 18071(c)(3)(A). In October 2017, the Secretary stopped making reimbursement payments, due to determinations that such payments were not within the congressional appropriation that the Secretary had, until then, invoked to pay the reimbursements. Sanford, a seller of insurance through the North Dakota, South Dakota, and Iowa exchanges, and Montana Health, a seller through the Montana and Idaho exchanges, sued.The trial courts granted the insurers summary judgment, reasoning that the ACA reimbursement provision is “money-mandating” and that the government is liable for damages for its failure to make reimbursements for the 2017 reductions. The court did not reach the contract claim in either case. The Federal Circuit affirmed, citing the Supreme Court’s 2020 “Maine Community,” addressing a different payment-obligation ACA provision. Maine Community indicates that the cost-sharing-reduction reimbursement provision imposes an unambiguous obligation on the government to pay money; that obligation is enforceable in the Claims Court under the Tucker Act, 28 U.S.C. 1491(a)(1). View "Sanford Health Plan v. United States" on Justia Law

The Patient Protection and Affordable Care Act (ACA), 124 Stat. 119, directed each state to establish an online exchange through which insurers may sell health plans that meet certain requirements. Insurers must reduce the “cost-sharing” burdens, such as co-payments and deductibles, of certain customers. When insurers meet that requirement, the Secretary of Health and Human Services (HHS) shall reimburse them for the required cost-sharing reductions, 42 U.S.C. 18071(c)(3)(A). In October 2017, the Secretary stopped making reimbursement payments, due to determinations that such payments were not within the congressional appropriation that the Secretary had invoked to pay the reimbursements. Insurers sued.The Federal Circuit affirmed summary judgment in favor of the insurers on liability, reasoning that the ACA reimbursement provision is “money-mandating” and that the government is liable for damages. The court cited the Supreme Court’s 2020 “Maine Community,” addressing a different ACA payment-obligation as indicating that the cost-sharing-reduction reimbursement provision imposes an unambiguous obligation on the government to pay money; that obligation is enforceable through a damages action under the Tucker Act, 28 U.S.C. 1491(a)(1). The court remanded the issue of damages. The government is not entitled to a reduction in damages with respect to cost-sharing reductions not paid in 2017. As to 2018, the Claims Court must reduce the insurers’ damages by the amount of additional premium tax credit payments that each insurer received as a result of the government’s termination of cost-sharing reduction payments. View "Community Health Choice, Inc. v. United States" on Justia Law

The Supreme Judicial Court reversed the order of the superior court granting summary judgment in favor of Dorchester Mutual with respect to its duty to indemnify the parents of Timothy Krusell, holding that the allowance of summary judgment in favor of Dorchester Mutual was error.Timothy pushed Robert Haufler on a sidewalk, causing him to fall and sustain injuries. Haufler brought a personal injury action against the Krusells. Dorchester Mutual sought a declaratory judgment that it had no duty to indemnify the Krusells under a homeowners' insurance policy for Haufler's personal injury claims because Timothy's conduct was a form of "physical abuse" for which coverage was unavailable. A superior court judge concluded that coverage was precluded. The Supreme Judicial Court reversed, holding (1) the term "physical abuse," as used in the policy, was ambiguous, but a reasonable insured would interpret the term as not precluding coverage for Haufler's claim; and (2) there was no error in the allowance of summary judgment on so much of the Krusell's cross claim as asserted violations of Mass. Gen. Laws ch. 93A and Mass. Gen. Laws ch. 176D. View "Dorchester Mutual Insurance Co. v. Krusell" on Justia Law

After plaintiff allegedly damaged a house's electrical wiring while installing siding, Mid-Continent refused to provide him with defense and indemnity for the accident. The district court granted defendant a partial final judgment, holding that Mid-Continent owed plaintiff a duty to defend.Applying Texas law and the eight-corners rule, the Fifth Circuit affirmed and held that the underlying litigation falls within the coverage provisions of the commercial general liability (CGL) policy and hence obligates Mid-Continent to defend plaintiff. The court also held that the policy's j(5) and j(6) exclusions do not apply in this case. View "Gonzalez v. Mid-Continent Casualty Co." on Justia Law

The Supreme Court held that a health care provider who did not intervene in an employee's pending workers' compensation proceeding after receiving adequate notice of the right to intervene cannot initiate a collateral attack on the compensation award under Minn. Stat. 176.271, .291 or Minn. R. 1420.1850, subp. 3B.Scott Koehnen was injured during the course and scope of his employment for Flagship Marine Company. Koehnen received chiropractic treatment from Keith Johnson. Johnson submitted his charges to the workers' compensation insurer for Koehnen's employer, but both the employer and insurer (collectively, Flagship Marine) denied liability for Koehnen's injury. When Koehnen filed a claim petition seeking workers' compensation benefits his attorney sent a notice informing Johnson of his right to intervene. Johnson, however, did not move to intervene, and the proceeding continued without him. Koehnen and Flagship Marine subsequently entered into a settlement agreement. The compensation judge approved the stipulation for settlement and issued an award on stipulation. Johnson later filed a petition for payment of medical expenses pursuant to section 176.271, .291.The compensation judge dismissed the petition, and the Workers' Compensation Court of Appeals affirmed. The Supreme Court affirmed, holding that because Johnson chose not to intervene his petition was correctly dismissed. View "Koehnen v. Flagship Marine Co." on Justia Law