Justia Insurance Law Opinion Summaries

In this insurance dispute, the Supreme Court affirmed the trial court's grant of summary judgment to Insurer, holding that specific language in the insurance policy was sufficient to warn Insured that misstatements as to warranties in her application for the policy rendered the policy void ab initio.Insurer submitted an application to Insured indicating that she was the only member of her household, and the application was incorporated into the policy under the policy's terms. Insured's, sister, however, was living with Insured when the sister struck a pedestrian while driving the car covered under the policy. Insured filed a complaint for declaratory judgment claiming that because of Insured's misstatements, the policy was void ab initio. The trial court agreed and granted summary judgment to Insurer. The Supreme Court affirmed, holding that the misstatement regarding the warranty in the application for the insurance policy rendered the policy void ab initio. View "Nationwide Mutual Fire Insurance Co. v. Pusser" on Justia Law

The Tenth Circuit Court of Appeals certified two questions of law to the Oklahoma Supreme Court. Billy Hamilton, a small-business owner in Council Hill, Oklahoma, filed a claim in December 2015 with his insurer, Northfield Insurance Company, seeking coverage for his building's leaking roof. Northfield twice denied his claim: once in February 2016, and again in April 2016. Hamilton filed suit against Northfield in November of that year, alleging bad-faith denial of his insurance claim and breach by Northfield of the insurance contract. Hamilton rejected a proposed settlement, and the matter went to trial. A jury awarded him $10,652, the maximum amount of damages the judge instructed the jury it could award. Hamilton then sought attorney fees and statutory interest under 36 O.S. section 3629(B). Northfield responded that Hamilton was not the prevailing party under the statute, given that he had recovered less than its settlement offer to him. The federal district court agreed with Northfield, and Hamilton appealed to the Tenth Circuit Court of Appeals. Initially, a panel of that court affirmed the district court's determination that Hamilton was not the prevailing party for purposes of awarding attorney fees under section 3629(B). Following a petition for en banc rehearing by Hamilton and additional briefing by amicus curiae, the Tenth Circuit Court of Appeals granted panel rehearing sua sponte, vacated its opinion as to the issues raised in Hamilton's appeal, and certified the two questions to the Oklahoma Court. The questions were: (1) in determining which is the prevailing party under 36 O.S. 3629(B), should a court consider settlement offers made by the insurer outside the sixty- (formerly, ninety-) day window for making such offers pursuant to the statute?; and (2) should a court add to the verdict costs and attorney fees incurred up until the offer of settlement for comparison with a settlement offer that contemplated costs and fees? The Oklahoma Court answered both questions "no:" (1) a court may consider only those timely offers of settlement of the underlying insurance claim--and not offers to resolve an ensuing lawsuit that results from the insurer's denial of the same; and (2) this is strictly limited to the specific context of determining prevailing-party status under section 3629(B) alone. The Oklahoma Court expressed no opinion on a trial court's evaluation of the form of settlement offer described in the certifying court's second question when made outside the section 3629(B) setting. View "Hamilton v. Northfield Ins. Co." on Justia Law

William Persichette, through Franklin D. Azar & Associates, P.C., brought an underinsured-motorist (“UIM”) action against Owners Insurance Company (“Owners”) for allegedly handling his insurance claim unreasonably and in bad faith. About three months later, Persichette retained Mark Levy of Levy Law, P.C. (collectively “Levy Law”) as co-counsel. Owners promptly moved to disqualify Levy Law pursuant to Colo. RPC Rule 1.9(a) on the ground that Levy Law was Owners’ longtime former counsel and had a conflict of interest. The district court denied the motion, finding that Levy Law’s representation of Persichette was not “substantially related” to Levy Law’s decade-plus representation of Owners. Owners then filed a C.A.R. 21 petition invoking the Colorado Supreme Court's original jurisdiction. The Supreme Court concluded the district court erred in denying Owners’ motion to disqualify, and reversed. View "Persichette v. Owners Ins. Co." on Justia Law

This case arose when a truck driver driving a truck owned by FST collided with two vehicles. Grange, the insurer of the truck, filed suit against the driver of one of the impacted vehicles, FST, and T&G, asking the district court to declare its obligations under three insurance policies—two issued to FST and one issued to T&G. At issue was whether there was a change in the truck's legal status, such that FST could have "borrowed" its own truck back from T&G. The district court determined that coverage existed under the T&G policy but not the FST policies.The Eleventh Circuit affirmed the district court's judgment, holding that defendants failed to introduce evidence showing that a written lease gave exclusive use rights to T&G. Therefore, the district court correctly held that no reasonable factfinder could have found in defendants' favor. Although defendants introduced new evidence purporting to establish that the lease granted T&G exclusive use rights in their motion for reconsideration, the court held that the district court properly denied that motion, because the evidence could have been produced earlier. Finally, the court agreed with the district court that, under the policies and under Georgia law, the events here constituted a single accident. View "Grange Mutual Casualty Co. v. Baisden" on Justia Law

In this case involving the collusive fraud of an insured and the driver of the other car involved in a car crash the Supreme Court adopted an exception to the eight-corners rule to determine the liability insurer's duty to defend, holding that courts may consider extrinsic evidence regarding whether the insured and a third party suing the insured colluded to make false representations of fact for the purpose of securing a defense and coverage.Osbaldo Hurtado Avalos and Antonio Hurtado (collectively, the Hurtados) sued Karla Guevara after the car accident and sought coverage from Loya Insurance Company (Insurer). Insurer furnished an attorney to defend Guevara, but when Insurer discovered that Guevara and the Hurtados had lied to secure coverage Insurer denied both a defense and coverage. The trial court rendered judgment against Guevara, who assigned to the Hurtados her rights against Insurer. Hurtados then filed suit against Insurer. The trial court granted summary judgment for Insurer. The court of appeals reversed, holding that Insurer had duty to defend under the eight-corners rule. The Supreme Court reversed, holding that the trial court (1) correctly considered extrinsic evidence regarding whether Guevara and the Hurtados colluded to secure a defense and coverage; and (2) correctly determined that the evidence conclusively showed collusive fraud. View "Loya Insurance Co. v. Avalos" on Justia Law

The Supreme Court granted Petitioners' petitions for extraordinary relief in part and denied the petitions in part, holding that intervention after final judgment is impermissible under Nev. Rev. Stat. 12.130 and that an action that reached final judgment has no pending issues and, therefore, consolidation is improper.In 2007, Gary Lewis struck Cheyenne Nadler in an automobile accident. When Lewis and his insurer, United Automobile Insurance Company (UAIC), failed to defend Nalder's tort action, a default judgment was entered. In 2018, Nadler attempted to collect on the judgment through a new action. UAIC moved to intervene in and consolidate the 2007 case and the 2018 action. The district court granted the motions. The Supreme Court held (1) the district court erred in granting intervention in the 2007 action because a default judgment had been entered, but the court properly granted intervention in the 2018 action because a final judgment had not yet been entered; (2) the district court improperly consolidated the two cases; and (3) the district court properly vacated a judgment erroneously entered by the district court clerk when a stay was in effect. View "Nalder v. Eighth Judicial District Court" on Justia Law

Progressive Northwestern Insurance filed suit to obtain a declaratory judgment that it had not violated any duty to its insureds in the defense of a wrongful-death suit. The underlying suit had been brought in 2013 by Gabriel Gant against Justin Birk; his parents, Edward and Linda; and the Birks’ family company, Birk Oil. The suit alleged that Justin had negligently killed Kathyrn Gant (Gabriel’s wife) in a car accident; that his parents were liable because they had negligently entrusted the vehicle to him; and that Birk Oil was liable under the doctrine of respondeat superior because Justin was driving the vehicle incidental to his employment by the company. Gant’s attorneys estimated damages of many million dollars, which far exceeded defendants’ insurance coverage. Defendants had assets from which Gant could have collected additional money on a judgment against them, but his attorneys apparently thought that a better way to collect a large judgment would be if defendants had a claim against Progressive for not representing them properly and exposing them to a judgment far exceeding their insurance coverage. Accordingly, shortly before trial Gant entered into an agreement with the Birks in which Gant promised not to execute any judgment against the Birks, and in exchange the Birks assigned to Gant their rights to the policy limits under the Progressive and corporate insurance policies, and any claims the Birks had against Progressive for breach of contract, negligence, or bad faith. After a bench trial, Gant was awarded $6.7 million in damages. Progressive then brought this declaratory-judgment action and Gant counterclaimed, arguing that Progressive: (1) breached its duty to discover and disclose the corporate insurance policy; (2) was negligent in hiring attorney Kevin McMaster to defend the suit; and (3) was vicariously liable for McMaster’s conduct. The district court granted summary judgment in favor of Progressive on its claim and the counterclaims. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Progressive Northwestern Ins v. Gant" on Justia Law

The Court of Appeals held that an arbitration panel acted within the bounds of its broad authority by reconsidering an initial determination - denominated a "partial final award" - that addressed some, but not all, of the issues submitted for arbitration.Insureds sought payment of their costs resolving through a settlement a federal qui tam action under two insurance policies issued by Insurer. After Insurer denied coverage Insureds demanded arbitration under arbitration clauses contained in the policies. The arbitration panel issued what it called a "partial final award" determining that only one insurance policy was applicable and that one insured was entitled to defense costs but not indemnification. Insureds sought reconsideration, which the arbitration panel granted. The panel then issued a "final award" granting one insured recovery for damages constituting of both the settlement and defense costs. The Appellate Division reversed, vacated the final award, and confirmed the partial final award. The Court of Appeals reversed, holding that the arbitration panel did not exceed its authority by reconsidering the partial final award. View "American International Specialty Lines Insurance Co. v. Allied Capital Corp." on Justia Law

In 2005, a van containing six family members van slipped off the edge of an Illinois roadway. In the ensuing rollover crash, everyone was hurt; one passenger died. The crash occurred in a construction zone; a guardrail had been removed and not replaced. All lines had not been repainted on the repaved road, and pieces of asphalt lay on the shoulder. In a suit against the construction companies, the defense attorney told the plaintiffs that the two companies were operating as a joint venture with a $1 million liability insurance policy. The parties settled for $1 million. Plaintiffs signed a release of all claims that stated the plaintiffs agreed they were not relying on any statements by any parties’ attorneys. Four years later, the plaintiffs discovered that the companies carried separate liability policies.The district court ruled as a matter of law that the failure to identify the individual policies violated FRCP 26; that the undisclosed policies would have covered plaintiffs’ claims; and no joint venture agreement existed under Illinois law, so joint venture exclusions in the individual policies were inapplicable. A jury awarded damages of $8,169,512.84 for negligent misrepresentation. The Seventh Circuit reversed. The district court erred in allowing plaintiffs to rely on a Federal Rule of Civil Procedure for a duty of care; in deciding, before trial, that plaintiffs reasonably relied on the insurance disclosures; and in excluding the defense’s expert testimony on liability and settlement value. View "Turubchuk v. Southern Illinois Asphalt Co., Inc." on Justia Law

After a truck driver filed claims against his employer's insurer to recover for an injury he suffered when loading a truck, the district court granted summary judgment in favor of the insurer.The Eighth Circuit affirmed, holding that Minnesota law does not invalidate the insurer's "moving property exclusion." In this case, because plaintiff was not occupying, entering into, or alighting from the truck, his injury did not arise out of the "maintenance or use" of the truck. Therefore, Minnesota law did not require the insurer to cover the employer's liability. View "Great West Casualty Co. v. Decker" on Justia Law