Justia Insurance Law Opinion Summaries

Bad Habit Trucking LLC owned a 1996 Peterbilt truck. Great West Casualty Company insured the truck. Dusty Weinreis, a member of Bad Habit Trucking LLC, took the truck to Butler Machinery Company for service work. The truck was destroyed by fire after the service work was completed but before Weinreis paid for the services. Great West paid Bad Habit Trucking $85,000 for the loss of the truck in accordance with the insurance policy. In November 2017 Butler sued Weinreis in small claims court for the unpaid service work. Weinreis counterclaimed in small claims court for the statutory maximum, $15,000, alleging loss of use of the truck, lost profits, cost to repair and replace the truck, and loss of personal property. Prior to the small claims hearing Butler moved to dismiss the case without prejudice. Weinreis resisted the motion, and a small claims hearing took place in 2018. The court awarded Butler $8,041.57 for the unpaid service work and awarded Weinreis $15,000 for lost profits. Offsetting the recoveries resulted in a net award to Weinreis of $6,958.43. In June 2018 Great West sued Butler in district court for $81,753.32 for the loss of the truck plus interest and costs. Butler moved to dismiss under N.D.R.Civ.P. 12(b)(6), arguing the case was fully decided in small claims court when Weinreis sued Butler for loss of the truck. The district court granted Butler’s motion to dismiss because the issue stemmed from the same transaction or occurrence, and found Great West should have filed a claim for damages in the small claims action. Great West moved to reconsider on the basis that Weinreis was the defendant in the small claims action, not Great West or Bad Habit Trucking. Great West argued privity did not exist between Weinreis in his personal capacity and Great West as the insurance company for Bad Habit Trucking. The district court denied the motion to reconsider. The North Dakota Supreme Court found the district court erred in dismissing Great West's claim, and reversed and remanded for further proceedings. View "Great West Casualty Company v. Butler Machinery Company" on Justia Law

Plaintiffs appealed the district court's denial of their motion for judgment as a matter of law in an action seeking reimbursement from State Farm after their house was destroyed by fire. The district court found that there was sufficient evidence to allow a reasonable juror to conclude that plaintiffs overstated the value of items lost in the fire by thousands of dollars and thus no expert was required to explain to the jury that fraudulent statements of this magnitude would be material to an insurer.The Eighth Circuit affirmed and held that the record contained sufficient evidence to sustain the jury's determination that plaintiffs made material misrepresentations relating to their insurance claims and thus these material misrepresentations regarding the personal property lost in the fire voided their right to recover at all under the policy. View "Borchardt v. State Farm Fire and Casualty Co." on Justia Law

After a child fell 50 ft. from a zipline at Bible camp, the parties dispute who potentially bears financial responsibility for her injuries. The Eighth Circuit held that, under the plain language of the insurance policy, the camp's insurer was not responsible for the conference center's alleged negligence. In this case, the insurer's potential liability for the child's injuries could not possibly have arisen out of the use of the premises leased to the insured. Accordingly, the court reversed and remanded for the entry of summary judgment for the insurer. View "Great American Alliance Insurance Co. v. Windermere Baptist Conference, Inc." on Justia Law

The Fifth Circuit affirmed the district court's grant of summary judgment for Travelers in an action brought by the insured, alleging contractual and statutory violations arising from the denial of her commercial property insurance claim.The court agreed with the district court that all of Travelers's limitations defenses were raised at a pragmatically sufficient time and that the insured was not prejudiced in her ability to respond. The court held that the insured's injury was inherently discoverable and the court need not reach the question of whether it was objectively verifiable. Therefore, the discovery rule was unavailable in this case. The court held that, because the insured's causes of action accrued on November 13, 2013, her January 25, 2016 suit was untimely. View "Smith v. Travelers Casualty Insurance Co." on Justia Law

Plaintiffs rented cars from Midway and opted to purchase insurance coverage; Midway purchased the policies from KnightBrook and National Specialty; Midway was the insured but was authorized to extend coverage to its customers under the policies; and these policies and the rates charged Midway were approved by the California Department of Insurance. Plaintiffs brought a class action against Midway, asserting that they were economically harmed by unlawful and fraudulent business practices. Plaintiffs also named as defendants KnightBrook, National Specialty and their managing general agent.The Court of Appeal affirmed the trial court's judgment in favor of Midway and held that there was no fraudulent omission; the Rental Car Agents Act, not more general insurance provisions, applied to the disclosure at issue; and plaintiffs demonstrated no conflict between the Rental Car Agents Act and Proposition 10. The court also held that the insurer defendants did not charge an unapproved rate; Midway was not required to charge its customers the premium it paid to the insurer defendants; and the doctrine of judicial abstention was inappropriate here. View "Adhav v. Midway Rent A Car, Inc." on Justia Law

The federal district court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. The Supreme Court was asked to construe section 38-77-350(C) of the South Carolina Code (2015) and determine whether, under the facts presented, an insurance company was required to make a new offer of underinsured motorist (UIM) coverage when an additional named insured is added to an existing policy. In 2012, Wayne Reeves acquired an insurance policy from Progressive Direct Insurance Company (Progressive) covering his motorcycle. When the policy was issued, Wayne declined optional UIM coverage. In 2015, Wayne's wife (Jennifer) and son (Bryan) were added to the policy as "drivers and household residents," because they also drove motorcycles. In 2017, Bryan sold his motorcycle and purchased another motorcycle, a 2016 Harley Davidson, which was added to the policy. At the time, Wayne had Bryan added as named insured to the policy. Progressive did not offer Bryan any optional coverages. Later in 2017, Bryan was involved in an accident while driving his 2016 Harley Davidson. Bryan ultimately made a claim against Progressive to reform the policy to include UIM coverage based on Progressive's failure to offer him the optional coverage. Progressive contended that adding Bryan as a named insured was a change to an existing policy, and as a result, Progressive was not required to offer Bryan UIM coverage. Based on the undisputed facts, the parties filed cross motions for summary judgment. The Supreme Court concluded under South Carolina law, Progressive was not required to make an additional offer of UIM coverage to Bryan. View "Progressive Direct v. Reeves" on Justia Law

In 2013, a bus driven by Defendant Asia Partman struck Respondent Andrew Neumayer while he was a pedestrian in Cayce, South Carolina. EMS transported Neumayer to Lexington Medical Center where he was diagnosed with a ruptured spleen, broken left ribs, left humerus fracture, left pneumothorax, and a punctured lung. After eight days in the hospital and medical costs of approximately $122,000, Neumayer was released. Partman worked for Defendant Primary Colors Child Care Center, and in November of 2013, Neumayer filed a lawsuit against both defendants, alleging negligence against Partman and Primary Colors. The defendants did not answer or respond in any fashion, and after a default judgment was entered, the court held a damages hearing, where it awarded Neumayer $622,500. Over eighteen months after the entry of default, Philadelphia Indemnity Insurance Co. (Philadelphia), Primary Colors' insurance carrier, received notice that its insured was involved in a lawsuit that culminated in a default judgment. While the record was unclear as to why it took eighteen months to notify Philadelphia, it ultimately received notice when Neumayer's counsel faxed documents seeking to collect $622,500. Philadelphia declined to pay that amount, instead asserting its indemnification obligation was limited to $25,000 because South Carolina jurisprudence required an insurer to pay only the minimum limits when it was substantially prejudiced by its insured's failure to provide notice of a lawsuit. Further, Philadelphia contended the failure to receive notice of the underlying lawsuit prevented an opportunity to investigate and defend. Neumayer filed this declaratory judgment action asking the court to require Philadelphia to pay the judgment in full. At issue before the South Carolina Supreme Court was whether notice clauses in automobile insurance policies were rendered meaningless by Section 38-77-142(C) of the South Carolina Code (2015) . The trial court found the clause in this policy void and accordingly required the insurance company to pay the full default judgment entered against its insured. The insurer appealed. The Supreme Court determined the circuit court erred in ruling that section 38-77-142(C) invalidated the standard notice clause contained in this insurance policy. “An insurer may continue to invoke notice clauses to deny coverage above the statutory limits, providing the insurer can prove that it was substantially prejudiced by its insured's failure to comply with the provision.” View "Neumayer v. Philadelphia Indemnity" on Justia Law

Plaintiff filed suit against AUIC, alleging that the release it procured from the insured was fraudulent conveyance under statutory and common law. In this case, the insured was involved in a car accident that injured plaintiff. AUIC paid the insured to release any bad faith claim he had against the company for AUIC's failure to accept an earlier settlement offer.The Court of Appeal held that California's Uniform Voidable Transactions Act (UVTA) filing deadlines did not pose a bar to plaintiff's UVTA cause of action; the operative complaint stated a valid UVTA claim against the insured; and plaintiff waived any challenge to the demurrer ruling on the common law cause of action. Accordingly, the court reversed the judgment of dismissal and remanded for further proceedings. View "Potter v. Alliance United Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's dismissal of Air Evac's claims in an action alleging that Arkansas Blue inadequately reimbursed Air Evac for ambulance services that Air Evac provided Arkansas Blue plan members. The court held that Air Evac's assignment did not convey the right to sue for equitable relief under section 1132(a)(3) of the Employee Retirement Income Security Act (ERISA). Furthermore, the district court did not err by finding that Arkansas Blue's conduct was not actionable because it fell within the Arkansas Deceptive Practices Act's safe harbor for actions or transactions permitted under the laws administered by the insurance commissioner. Finally, the district court did not err by rejecting Air Evac's claims for breach of contract and unjust enrichment. View "Air Evac EMS, Inc. v. USAble Mutual Insurance Co." on Justia Law

After obtaining an unfavorable result in an arbitration proceeding, Crowley Maritime filed suit against its insurer, National Union, seeking reimbursement in legal defense fees paid on behalf of an employee of Crowley. The district court granted National Union's converted motion for summary judgment on grounds that Crowley failed to timely report the claim at issue in this appeal to National Union as required by the relevant insurance policy.Applying Florida law, the Eleventh Circuit affirmed the district court's grant of National Union's converted motion for summary judgment, holding that the record supports the conclusion that Crowley failed to timely report the claim based on the affidavit as required by the policy. The court held that, with respect to the reporting period between April 16, 2008 and December 31, 2012, Crowley was bound by the arbitration panel's finding that Crowley had not reported a claim to National Union as required by the policy at that time; with respect to the reporting period beginning immediately after December 31, 2012 and running through the end of the discovery period on November 1, 2013, Crowley failed to report the claim based on the affidavit as required by section 7(a) of the policy; and Crowley has waived any arguments that either its February 2013 notice or its July 2015 notice should relate back to the April 2008 notice under section 7 of the policy. View "Crowley Maritime Corp. v. National Union Fire Insurance Co." on Justia Law