Justia Insurance Law Opinion Summaries

The Supreme Court reversed the judgment of the district court dismissing the amended complaint filed by Employers Mutual Casualty Company against Continental Resources, Inc., holding that the district court erred as a matter of law when it determined that Employers Mutual must defend Continental as an additional insured under a commercial general liability (CGL) insurance policy it issued to Black Rock Testing, Inc.Employers Mutual filed a declaratory judgment action to determine its obligations to defend and indemnify Continental under the CGL policy it issued to Black Rock. The district court granted Continental's motion for summary judgment and dismissed the complaint, concluding that Continental was entitled to a defense as an additional insured under the insurance policy. The Supreme Court reversed, holding (1) under any reasonable interpretation of the insurance contract and its endorsements, the policy did not cover Continental as an additional insured; and (2) therefore, Employers Mutual owed no duty to defend or indemnify Continental under the policy. View "Employers Mutual Casualty Co. v. Estate of Buckles" on Justia Law

The First Circuit affirmed the district court's dismissal of Appellants' claims in this putative class action against Lexington Insurance Company and other insurers alleging fraudulent misrepresentation and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961 et seq., holding that the facts Appellants pleaded demonstrated the absence of any circumstances constituting fraud.Appellants entered into structured settlement agreements with Lexington Insurance Company pursuant to which Lexington agreed that Appellants would receive specific periodic payments from annuities that Lexington would purchase. Appellants later brought this action alleging that Lexington and other affiliated insurers misrepresented the amount Appellants would receive from the settlements. The district court dismissed Appellants' claims with prejudice. The First Circuit affirmed, holding that Appellants failed to state with particularity the circumstances constituting fraud under Fed. R. Civ. P. 9(b). View "Ezell v. Lexington Insurance Co." on Justia Law

Two cases consolidated for review by the Delaware Supreme Court involved automobile accidents. John Henry and Charles Fritz sustained injuries in accidents while operating employer-owned vehicles during the course of their employment. In both cases, the accidents were allegedly caused by a third-party tortfeasor. Both employees received workers’ compensation from their respective employers’ insurance carriers. In each case, the vehicle was covered by an automobile liability insurance policy issued to the employer by Cincinnati Insurance Company. The superior court issued an order in Henry’s case first, finding the exclusive-remedy provision in the Delaware Workers’ Compensation Act in effect at the time of his accident precluded Henry from receiving underinsured motorist benefits under the Cincinnati policy. Following that decision, the Fritz court granted Cincinnati’s motion for summary judgment on the same ground. Henry and Fritz argued on appeal to the Delaware Supreme Court that the superior court erred in finding the Act’s exclusivity provision precluded them from receiving underinsured motorist benefits through the automobile liability policies their respective employers purchased from Cincinnati. The Supreme Court agreed both trial courts erred in finding the Act’s exclusivity provision prevented underinsured motorist benefits. The Court reversed and remanded for further proceedings. View "Henry v. Cincinnati Insurance Co." on Justia Law

In this insurance dispute involving an insurer withholding payments to a medical service corporation improperly controlled by nonphysicans the Court of Appeals ruled that the trial court did not err in declining to give a charge requiring the jury to find fraudulent intent or conduct "tantamount to fraud" in order to reach a verdict in favor of the insurers.Plaintiff Andrew Carothers, M.D., P.C., a professional service corporation, filed multiple collection actions against insurance carriers seeking to recover unpaid claims of assigned first-party no-fault insurance benefits. The jury found that Defendants had proved that Plaintiff was "fraudulently incorporated" and that Carothers did not engage in the practice of medicine. Plaintiff appealed, arguing that the court erred in failing to give a jury instruction on "the traditional elements of common-law fraud and fraudulent intent. The Appellate Division affirmed. The Court of Appeals affirmed, holding that the court's instructions to the jury were proper. View "Carothers v. Progressive Insurance Co." on Justia Law

The Court of Appeals affirmed the decision of the Appellate Division affirming the judgment of Supreme Court granting Defendant summary judgment in this insurance dispute, holding that a general business practice of failing promptly to disclose coverage within the meaning of N.Y. Ins. Law 2601(a)(6) does not include violations of the timely liability disclaimer requirement of N.Y. Ins. Law 3420(d)(2).This dispute arose between Plaintiff, the general contractor in an underlying personal injury action by an employee of Plaintiff's subcontractor, and Defendant, the subcontractor's general liability insurer. Defendant's policy named Plaintiff as an additional insured, extending coverage to Plaintiff for liability related to the "ongoing operations" of the subcontractor and other members of the risk retention group. After Defendant disclaimed coverage Plaintiff sought a declaratory judgment that the policy obligated Defendant to defend and indemnify Plaintiff in the employee's personal injury action. Supreme Court granted summary judgment for Defendant, and the Appellate Division affirmed. The Court of Appeals affirmed, holding that section 2601(a)(6) does not encompass the liability disclaimer requirement of section 3420(d)(2). View "Nadkos, Inc. v. Preferred Contractors Insurance Co. Risk Retention Group LLC" on Justia Law

The insurer appealed from the district court's judgment in favor of the adjuster. At issue was whether the district court erred in overturning the jury verdict and granting judgment as a matter of law in favor of the adjuster on the basis of insufficiency of the evidence to support the jury's conclusion that the statute of limitations was tolled such that the insurer's claim was timely filed.The Second Circuit certified a question of law to the Connecticut Supreme Court regarding the contours of the doctrine that tolls a limitation period because of a continuing course of conduct. The state court responded that the evidence was not legally sufficient to toll the statute of limitations on this factual record. Accordingly, because the state court's decision resolved the controlling question of Connecticut law, the court affirmed the judgment. View "Evanston Insurance Co. v. William Kramer & Associates, LLC" on Justia Law

In April 2007, Sun Life Assurance Company of Canada received an application for a $5 million insurance policy on the life of Nancy Bergman. The application listed a trust as the sole owner and beneficiary of the policy. Bergman’s grandson signed as trustee; the other members of the trust were all investors, and all strangers to Bergman. The investors paid most if not all of the policy’s premiums. Sun Life issued the policy. About five weeks after the policy was issued, the grandson resigned as trustee and appointed the investors as successor co-trustees. The trust agreement was amended so that most of the policy’s benefits would go to the investors, who were also empowered to sell the policy. More than two years later, the trust sold the policy and the investors received nearly all of the proceeds from the sale. Wells Fargo Bank, N.A. eventually obtained the policy in a bankruptcy settlement and continued to pay the premiums. After Bergman passed away in 2014, Wells Fargo sought to collect the policy’s death benefit. Sun Life investigated the claim, uncovered discrepancies, and declined to pay. Instead, Sun Life sought a declaratory judgment that the policy was void ab initio, or from the beginning. Wells Fargo counterclaimed for breach of contract and sought the policy’s $5 million face value; if the court voided the policy, Wells Fargo sought a refund of the premiums it paid. The United States District Court for the District of New Jersey partially granted Sun Life’s motion for summary judgment, finding New Jersey law applied and concluded “that this was a STOLI [(stranger-originated life insurance)] transaction lacking insurable interest in violation of [the State’s] public policy. . . . As such, it should be declared void ab initio.” The court also granted Wells Fargo’s motion to recover its premium payments, reasoning that “Wells Fargo is not to blame for the fraud here” and that “[a]llowing Sun Life to retain the premiums would be a windfall to the company.” Both parties appealed. Finding no dispositive New Jersey case law, the United States Court of Appeals for the Third Circuit certified two questions of law to the New Jersey Supreme Court regarding the Sun Life policy. In response to the certified questions, the Supreme Court found that STOLI policies were against public policy and void ab initio. The Court also noted that a party may be entitled to a refund of premium payments depending on the circumstances. “Among other relevant factors, courts should consider a later purchaser’s participation in and knowledge of the original illicit scheme.” View "Sun Life Assurance Company of Canada v. Wells Fargo Bank, N.A." on Justia Law

A general contractor was covered as an additional insured on a commercial general liability (CGL) policy issued to its roofing subcontractor. The insurer refused to defend the general contractor after it was sued by homeowners for construction defects concerning roofing, prompting this lawsuit. After a bench trial, the trial court concluded the insurer owed no duty to defend. It believed the exclusion in the additional insured endorsement for damage to "property in the care, custody or control of the additional insured" precluded any duty to defend the general contractor in construction defect litigation. The general contractor disputed the insurer's interpretation of the policy and contended there was a duty to defend. After review, the Court of Appeal agreed and reversed judgment: “the facts indicate only shared control between the general contractor and its roofing subcontractor. Because the insurer did not prove coverage for the underlying construction defect litigation was impossible, it owed the general contractor a duty to defend the homeowner claim.” View "McMillin Homes Construction v. Natl. Fire & Marine Ins. Co." on Justia Law

42 U.S.C. 4072, which provides for original exclusive jurisdiction in district court and a one-year limitations period, is applicable to actions against Write-Your-Own (WYO) carriers. WYO are private insurers which issue flood insurance policies underwritten by the Government in their own names as part of the National Flood Insurance Program created by the National Flood Insurance Act. The Fifth Circuit affirmed the district court's grant of summary judgment for the insured, holding that this WYO action did not arrive in federal court within one-year of the insured's claim denial and was therefore time-barred under section 4072. View "Ekhlassi v. National Lloyds Insurance Co." on Justia Law

Doe is HIV-positive and takes Genvoya to control his condition. Doe's BlueCross health insurance covers Genvoya. After February 2017, BlueCross required Doe to fill the HIV prescription through mail order or by picking it up at certain brick-and-mortar pharmacies. If Doe used BlueCross's specialty pharmacy network, his co-pay for each monthly batch of Genvoya would be $120. If Doe continued to get the medicine at his local pharmacy, he would have to pay the full cost, thousands of dollars per batch. Doe preferred interacting with his regular pharmacists, who knew his medical history and could spot the effects of harmful drug interactions. He also worried that deliveries to his house might compromise his privacy or risk heat damage to the medicine. Doe filed a putative class action, alleging that BlueCross discriminated against HIV-positive beneficiaries in violation of the Affordable Care Act and the Americans with Disabilities Act (ADA), which breached their insurance contract. The district court dismissed. The Sixth Circuit affirmed. The Affordable Care Act prohibits discrimination against the disabled in the provision of federally supported health programs under section 504 of the Rehabilitation Act. BlueCross did not violate the Rehabilitation Act; it did not exclude Doe from participating in the plan or deny him benefits covered by it. Section 504 does not prohibit disparate-impact discrimination. The ADA claim failed because Doe targets BlueCross’s operation of his health care plan, not its control over his pharmacy (a public accommodation). View "Doe v. BlueCross BlueShield of Tennessee, Inc." on Justia Law