Justia Insurance Law Opinion Summaries

In 2005, Protective Life Insurance Company (Protective Life) issued William McHugh a 60-year term life policy (the policy) that provided for a 31-day grace period before it could be terminated for failure to pay the premium. McHugh failed to pay the premium due on January 9, 2013, and his policy lapsed 31 days later. McHugh passed away in June 2013. This appeal raised one fundamental issue: whether Insurance Code sections 10113.71 and 10113.72 ("the statutes"), which came into effect on January 1, 2013, applied to term life insurance policies issued before the statutes' effective date. Mchugh's daughter, Blakely McHugh, the designated beneficiary under the policy, and Trysta Henselmeier (appellants) sued Protective Life for breach of contract and breach of the implied covenant of good faith and fair dealing, claiming Protective Life failed to comply with the statutes' requirement that it provide a 60-day grace period before it terminated the policy for nonpayment of premium. The parties filed various trial court motions, and Protective Life, relying largely on interpretations of the Department of Insurance (the Department) argued that the statutes did not apply retroactively to McHugh's policy and the claim. The court rejected Protective Life's arguments and ruled that the statutes applied to the claim. The matter proceeded to jury trial and Protective Life prevailed. Appellants appealed both a special verdict in favor of Protective Life and an order denying their motion for judgment notwithstanding the verdict (JNOV). Pursuant to Code of Civil Procedure section 906, Protective Life requested that the Court of Appeal affirm the verdict on the additional ground that the statutes did not apply to the policy and the trial court erred by ruling to the contrary when it denied Protective Life's motion for a directed verdict. The Court of Appeal concurred with Protective Life, finding the trial court should have granted the company’s motion for a directed verdict. View "McHugh v. Protective Life Insurance" on Justia Law

The Supreme Court affirmed the judgment of the appellate court affirming in part and reversing in part numerous interlocutory decisions made by the trial court in connection with the first and second phases of a trial between R.T. Vanderbilt Company, Inc. and numerous insurance companies, holding that the appellate court's opinion properly resolved the significant issues raised on appeal.These appeals concerned questions of insurance law arising from coverage disputes between Vanderbilt and the insurer defendants, who issued comprehensive general liability insurance policies to Vanderbilt for more than a half a century. The disputes stemmed from lawsuits alleging injuries from exposure to industrial talc containing asbestos that Vanderbilt mined and sold. On interlocutory appeal from several decisions made by the trial court the appellate court affirmed in part and reversed in part. The Supreme Court affirmed, holding (1) the appellate court properly construed the occupational disease exclusions to bar coverage for occupational disease claims brought not only by Vanderbilt employees but also by individuals who contracted an occupational disease while working for other employers; and (2) the appellate court properly resolved the remaining issues on appeal. View "R.T. Vanderbilt Co., Inc. v. Hartford Accident & Indemnity Co." on Justia Law

John and Michelle Strauss challenged the Court of Appeals decision affirming summary dismissal of their action against Premera Blue Cross, which arose out of the denial of coverage for proton beam therapy (PBT) to treat John's prostate cancer. At issue was whether the Strausses established the existence of a genuine issue of material fact regarding PBT's superiority to intensity-modulated radiation therapy (IMRT), thereby demonstrating that proton beam therapy was "medically necessary" within the meaning of their insurance contract. The Washington Supreme Court determined they did, and therefore reversed the Court of Appeals' decision, and remanded for a jury trial on the disputed facts. View "Strauss v. Premera Blue Cross" on Justia Law

While driving his truck, Moun Keodalah and an uninsured motorcyclist collided. After Keodalah stopped at a stop sign and began to cross the street, the motorcyclist struck Keodalah's truck. The collision killed the motorcyclist and injured Keodalah. Keodalah's insurance policy with Allstate Insurance Company included underinsured motorist (UIM) coverage. Keodalah requested Allstate pay him his UIM policy limit of $25,000. Allstate refused, offering $1,600 based on its assessment Keodalah was 70% at fault for the accident. After Keodalah asked Allstate to explain its evaluation, Allstate increased its offer to $5,000. Keodalah sued Allstate asserting a UIM claim. The ultimate issue before the Washington Supreme Court in this case was whether RCW 48.01.030 provided a basis for an insured's bad faith and Consumer Protection Act claims against an insurance company's claims adjuster. The Supreme Court held that such claims were not available, and reversed the Court of Appeals. View "Keodalah v. Allstate Ins. Co." on Justia Law

The Court of Appeal annulled the decision of the appeals board and remanded with directions to find that the special employer had a valid endorsement in its workers' compensation insurance policy excluding coverage for special employees. The court held that while the appeals board was correct that the limiting endorsement had not been signed by the special employer, the written affirmation required by the regulation then in effect is not limited to a signature. Taking into account the circumstances of the entire transaction and its history, the court held that there was substantial compliance with the requirement of a written affirmation. Therefore, the court held that CIGNA was liable for the claim as a covered claim within the meaning of Insurance Code section 1063.1. View "Travelers Property Casualty Co. v. Workers' Compensation Appeals Board" on Justia Law

The Supreme Judicial Court affirmed the orders denying a motor vehicle insurer's motions to stay trial in a wrongful death action until the question of coverage had been determined in a declaratory judgment action but and denying the insurer's Mass. R. Civ. P. 67 motion and vacated the wrongful death judgment, holding that the matter must be remanded for a reasonableness hearing.The Supreme Judicial Court addressed issues that arose where Insurer recognized its duty to defend Insureds in a wrongful death action but did so under a reservation of rights and then brought a separate action seeking a declaratory judgment that it owed no duty to indemnify Insureds for damages arising from the wrongful death action. The parties subsequently settled the wrongful death action. The plaintiff agreed to release the defendants from liability and seek damages only from Insurer. Insurer moved to deposit with the court the policy limit and postjudgment interest under Rule 67. The Supreme Judicial Court held (1) the judge properly denied Insurer's motions to stay; (2) the judge properly denied Insurer's motion to deposit the funds; and (3) where the settlements were executed with no determination of reasonable, the case must be remanded for a hearing on the reasonableness of the settlement/assignment agreements. View "Commerce Insurance Co. v. Szafarowicz" on Justia Law

The Supreme Court reversed the judgment of the intermediate court of appeals (ICA) affirming the judgment of the circuit court that there were not genuine issues of material fact regarding whether Defendant, Hawaii Medical Service Association (HMSA), acted in bad faith in denying Brent Adams' claim for coverage of an allogenic transplant, holding that there were genuine issues of material fact as to whether HMSA fulfilled its duty of good faith and fair dealing in its handling of Brent's claim.After Brent was diagnosed with stage III multiple myeloma, a life-threatening form of bone marrow cancer, doctors determined that Brent's best chance of survival was first an autologous transplant and then an allogenic transplant. HMSA provided coverage for the first phase of the transplant but denied the claim as to the allogenic transplant. Brent subsequently died. Brent and his wife, Patricia, filed this action alleging that HMSA acted in bad faith in administering Brent's claim for the allogenic transplant. The Supreme Court reversed the lower courts' summary judgment rulings for HMSA, holding that evidence of HMSA's conduct during its relationship with Brent raised genuine issues of material fact as to whether HMSA unreasonably handled Brent's claim for an allogenic transplant. View "Adams v. Hawaii Medical Service Ass'n" on Justia Law

Appellants had been renting their San Francisco home to tenants for eight years when the front porch collapsed, causing injury to a tenant. When the tenants sued, appellants sought defense and indemnification from their insurance provider, respondent State Farm, which denied their claim, because appellants’ homeowners’ insurance policy excluded coverage for injuries arising out of an insured’s business pursuits or the rental of their home. Appellants sued State Farm for breach of contract and bad faith denial of their insurance claim. The court of appeal affirmed summary judgment in favor of State Farm. The court rejected an argument that coverage should be restored under an exception for activities that are “ordinarily incident to non-business pursuits.” Appellants sought “to fold into a homeowners policy coverage for the commercial risks attendant to renting their home as a for-profit venture. There is a separate policy tailored to those business risks, a rental dwelling policy, that appellants eschewed in favor of a cheaper policy. Appellants’ argument, if accepted, would upend the allocation of risks and costs associated with commercial or personal activities that insurers rely upon to keep homeowners’ premiums lower than that of business enterprises.” View "Terrell v. State Farm General Ins. Co." on Justia Law

Benjamin Robinson drove his employer’s vehicle into the rear end of a stopped Holmes County garbage truck. The garbage truck was stopped picking up garbage on the side of the highway in dense fog. Robinson sued Holmes County and his uninsured motorist carrier, Brierfield Insurance Company. Robinson claimed Holmes County was negligent in its operation of the garbage truck. Robinson also asserted a breach of contract claim, stating that Brierfield Insurance Company breached the insurance contract by denying him uninsured motorist benefits. The trial court granted summary judgment and found not only that Holmes County was not negligent but also that it was immune under the Mississippi Tort Claims Act. The trial court further found that, since Holmes County was not negligent, Brierfield also was not liable as the uninsured motorist insurance provider. Robinson appealed, but finding no reversible error, the Mississippi Supreme Court affirmed granting summary judgment to Holmes County and Brierfield Insurance Company. View "Robinson v. Holmes County, Mississippi" on Justia Law

The United States Court of Appeals for the Third Circuit certified a question of law to the Pennsylvania Supreme Court regarding whether an increase to the limits of underinsured motorist (“UIM”) coverage for multiple vehicles that are insured under an existing policy constitutes a “purchase” for purposes of Subsection 1738(c) of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”). Michelle Barnard purchased a personal automobile policy from Travelers Home and Marine Insurance Company (“Travelers”) to insure her two vehicles. As part of this policy, Barnard purchased UIM coverage in the amount of $50,000 per vehicle. Barnard waived stacking of her UIM coverage limits. Two years later, Barnard increased the UIM coverage limit on each of her vehicles to $100,000. Barnard did not execute a new stacking waiver at that time. Then several more years later, Barnard was involved in a motor vehicle accident with an underinsured motorist. When Barnard sought UIM benefits from Travelers, Travelers offered her $100,000 based upon the UIM coverage limit on one of her vehicles. Barnard filed a complaint for declaratory judgment, seeking $200,000 in stacked UIM benefits. Travelers removed the case to the United States District Court for the Eastern District of Pennsylvania, where the parties filed cross-motions for summary judgment. Based upon the plain language of Subsection 1738(c), the Pennsylvania Supreme Court answered the Third Circuit's question in the affirmative: therefore, an increase of UIM coverage under circumstances as was presented here triggered an insurance company’s statutory obligation to offer an insured the opportunity to waive stacking of the new, aggregate amount of UIM coverage. View "Barnard v. Travelers Home, et al" on Justia Law