Justia Insurance Law Opinion Summaries

Griffith Foods International and Sterigenics U.S. operated a medical supply sterilization plant in Willowbrook, Illinois, emitting ethylene oxide (EtO) over a 35-year period. In 2018, a report revealed high cancer rates in Willowbrook, allegedly due to these emissions. Griffith and Sterigenics faced over 800 lawsuits from residents claiming bodily injuries, including cancer, caused by the emissions. Griffith had obtained permits from the Illinois Environmental Protection Agency (IEPA) for the plant's operation, which included EtO emissions.The United States District Court for the Northern District of Illinois reviewed the case. Griffith and Sterigenics sought declarations that National Union Fire Insurance Company had a duty to defend them under their commercial general liability (CGL) policies. The district court ruled in favor of Griffith and Sterigenics, determining that the pollution exclusion in the CGL policies did not apply because the emissions were authorized by IEPA permits. The court relied on the Illinois appellate decision in Erie Insurance Exchange v. Imperial Marble Corp., which found ambiguity in the pollution exclusion when emissions were permitted by regulatory authorities.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court acknowledged the importance of the pollution exclusion in CGL policies and the precedent set by the Illinois Supreme Court in American States Insurance Co. v. Koloms. The Seventh Circuit noted the conflicting interpretations between Koloms and Imperial Marble regarding the scope of the pollution exclusion. Given the significant implications for Illinois law and the insurance industry, the Seventh Circuit decided to certify the question to the Illinois Supreme Court to determine the relevance of regulatory permits in applying the pollution exclusion in CGL policies. View "Griffith Foods International Inc. v National Union Fire Insurance Company of Pittsburg" on Justia Law

The case involves an insurance contribution action under the Oregon Environmental Cleanup Assistance Act (OECAA). The parties are insurers who issued comprehensive general liability (CGL) insurance policies to Schnitzer Steel Industries, Inc., and Schnitzer Investment Corporation. Schnitzer was named by the federal government as potentially responsible for contamination at the Portland Harbor Superfund Site. Continental Casualty Company and Transportation Insurance Company (together, Continental) paid defense costs on behalf of Schnitzer and sought contribution from Schnitzer’s other insurers, including Employers Insurance Company of Wausau (Wausau) and Century Indemnity Company (Century).The Multnomah County Circuit Court ruled that Wausau was still liable for contribution despite a settlement agreement with Schnitzer. The court found that Schnitzer had already obtained a federal judgment against Continental for all unpaid defense costs, and thus Schnitzer no longer had a claim for those costs against Wausau. The Court of Appeals reversed, holding that Wausau’s settlement with Schnitzer was a settlement of the environmental claim, which barred Continental’s contribution claim.The Oregon Supreme Court reviewed the case and reversed the Court of Appeals' decision. The Supreme Court held that the term "the environmental claim" in ORS 465.480(4)(a) refers to the specific environmental claim that has been paid by the targeted insurer. Since Schnitzer had already recovered the defense costs from Continental, Schnitzer had no remaining claim for those costs against Wausau that it could settle. Therefore, Wausau’s settlement did not extinguish Continental’s right to seek contribution for the defense costs it had paid. The judgment of the circuit court was affirmed, and the case was remanded for further proceedings. View "Continental Casualty Co. v. Argonaut Insurance Co." on Justia Law

A fire broke out in an apartment building in Surry County, North Carolina, leading to the deaths of four occupants due to smoke inhalation. The 911 dispatcher advised the caller not to open the window, which was believed to fuel the fire. The estates of the deceased sued Surry County and the dispatchers for negligence. The Travelers Indemnity Company, which insured Surry County, settled the claims for $9 million and sought contribution from American Alternative Insurance Corporation (AAIC), which also had issued a policy to Surry County.The United States District Court for the Middle District of North Carolina ruled that AAIC's policy provided primary but not excess coverage for the 911 call center employees, ordering AAIC to pay $1 million to Travelers. Both parties appealed the decision.The United States Court of Appeals for the Fourth Circuit reviewed the case and concluded that AAIC's policy did not cover the 911 call center employees. The court determined that both the primary and excess coverage provisions of AAIC's policy were limited to employees of Surry County Emergency Services and did not extend to the 911 call center. Consequently, the court affirmed the district court's ruling regarding the excess coverage but reversed the ruling on the primary coverage, concluding that AAIC was not liable for any part of the settlement. The case was remanded for the entry of judgment in favor of AAIC. View "The Travelers Indemnity Co. v. American Alternative Insurance Corp." on Justia Law

US Framing International LLC entered into a subcontract with Continental Building Company for framing services on two student-housing projects. Disputes arose, leading US Framing to leave the Knoxville project. Continental then filed an insurance claim alleging US Framing's breach of the subcontract. US Framing sued Continental and its officers, claiming insurance fraud under Tennessee law. The district court dismissed the case, stating US Framing failed to plead any injury directly caused by the alleged fraudulent insurance claim.The United States District Court for the Eastern District of Tennessee initially reviewed the case. The court granted Continental's motion to dismiss, concluding that US Framing did not demonstrate any direct injury resulting from Continental's insurance claim. US Framing then appealed the decision.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court's dismissal, holding that US Framing did not plausibly allege any economic damages directly resulting from Continental's alleged insurance fraud. The court also determined that US Framing could not recover attorney's fees or statutory penalties, as it did not establish itself as a prevailing party entitled to such relief. The court's decision was based on the interpretation of Tennessee law, which requires a direct causal link between the alleged fraud and the claimed damages. View "US Framing International LLC v. Continental Building Co." on Justia Law

Darnell Hairston was seriously injured while operating machinery at Zeeland Farm Soya, Inc. He sued Zeeland Farm Services, Inc. (ZFS) and an employee, later adding Specialty Industries, Inc. as a defendant for negligence and products liability. ZFS settled, but the case against Specialty Industries proceeded to trial, resulting in a jury awarding Hairston over $13 million. Specialty Industries had insurance policies with Burlington Insurance Company and Evanston Insurance Company, which paid their policy limits, leaving a significant portion of the judgment unpaid.The Ottawa Circuit Court denied Hairston and Specialty Industries' motion for supplemental proceedings to pursue a bad-faith refusal to settle claim against the insurers, suggesting they file a separate lawsuit. Hairston then served writs of garnishment on the insurers, which the trial court quashed, stating there was no judgment of bad faith. The trial court also imposed sanctions on Hairston for filing the writs.The Michigan Court of Appeals reversed the trial court's decision to quash the writs, relying on the precedent set in Rutter v King, which allowed bad-faith refusal to settle claims to be litigated through garnishment. However, the Court of Appeals affirmed the sanctions against Hairston.The Michigan Supreme Court reviewed the case and held that unresolved claims of bad-faith refusal to settle are not subject to garnishment under MCR 3.101(G)(1) because they are not sufficiently liquidated. The Court found that the Court of Appeals erred in relying on Rutter, which was decided before the current court rules were adopted. The Supreme Court reversed the Court of Appeals' decision and remanded the case to the trial court for further proceedings consistent with its opinion. View "Hairston v. Lku" on Justia Law

Plaintiffs, E&I Global Energy Services, Inc. and E&C Global, LLC, sued Liberty Mutual Insurance Company for breach of contract and tort claims related to a construction project. The United States, through the Western Area Power Administration (WAPA), contracted with Isolux to build a substation, and Liberty issued performance and payment bonds for Isolux. After Isolux was terminated, Liberty hired E&C as the completion contractor, but E&I performed the work. Plaintiffs claimed Liberty failed to pay for the work completed.The United States District Court for the District of South Dakota granted summary judgment for Liberty on the unjust enrichment claim and ruled in Liberty's favor on all other claims after a bench trial. The court denied Plaintiffs' untimely request for a jury trial, excluded an expert witness report filed after the deadline, found no evidence of an assignment of rights between E&C and E&I, and ruled against Plaintiffs on their fraud, deceit, and negligent misrepresentation claims.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the district court did not abuse its discretion in denying the jury trial request, as Plaintiffs failed to timely file the motion and did not justify the delay. The exclusion of the expert report was also upheld, as the district court properly applied the relevant factors and found the late report was neither substantially justified nor harmless. The court affirmed the district court's finding that there was no valid assignment of rights from E&C to E&I, meaning Liberty's promise to pay was to E&C, not E&I. The court also upheld the findings that Liberty did not have the intent to deceive or induce reliance, and that Bruce did not reasonably rely on Mattingly's statements. Finally, the court declined to address the unjust enrichment claim as Plaintiffs did not raise the argument below. The Eighth Circuit affirmed the district court's rulings in their entirety. View "E&I Global Energy Services v. Liberty Mutual Insurance Co." on Justia Law

The case involves a dispute between an individual plaintiff and Farmers Insurance Company of Oregon regarding the adequacy of a notice provided by the insurer. The plaintiff alleged that the notice issued by Farmers did not include all the required information as mandated by Oregon law, specifically ORS 746.290(2), which requires motor vehicle insurers to provide a notice with certain information in clear and conspicuous language approved by the director of the Department of Consumer and Business Services (DCBS).The Multnomah County Circuit Court agreed with the plaintiff's interpretation of the statute, granting the plaintiff's motion for summary judgment and denying Farmers' motion. The court held that Farmers had violated ORS 746.290(2) because the notice omitted required information, despite being approved by the director. The Court of Appeals upheld this ruling, reasoning that the statute did not delegate authority to the director to determine what is necessary to comply with the statute.The Supreme Court of the State of Oregon reviewed the case and reversed the decision of the Court of Appeals and the judgment of the circuit court. The Supreme Court held that the legislature intended for insurers to be able to rely on the director's approval to ensure compliance with the statute. Therefore, an insurer satisfies its obligation under ORS 746.290(2) if it uses language approved by the director, regardless of whether the approved language includes all the information described in the statute. The case was remanded to the circuit court for further proceedings consistent with this interpretation. View "Bellshaw v. Farmers Ins. Co." on Justia Law

Jacques Rivera, after being released from over 20 years in prison for a wrongful murder conviction, sued the City of Chicago and several police officers under 42 U.S.C. §1983 for civil rights violations. A jury awarded him over $17 million, and his attorneys sought more than $6 million in fees and costs. The case was settled for $18.75 million, including at least $3.75 million for attorneys' fees and costs. Chicago, which had an insurance policy with Starstone Insurance SE covering liabilities between $15 and $20 million, sought indemnity for the $3.75 million. Starstone refused, claiming their policy only covered damages, not attorneys' fees and costs, and filed for a declaratory judgment.The United States District Court for the Northern District of Illinois ruled in favor of Chicago, determining that the insurance policy covered the entire $18.75 million settlement as an "ultimate net loss" that Chicago was legally obligated to pay. Starstone appealed this decision.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court first addressed whether Starstone, a Societas Europaea (SE) based in Liechtenstein, qualified as a "corporation" under 28 U.S.C. §1332 for diversity jurisdiction purposes and concluded that it did. On the merits, the court found that the insurance policy's language covered the entire settlement amount, including attorneys' fees and costs, as part of the "ultimate net loss" Chicago was legally obligated to pay. The court affirmed the district court's decision, holding that the policy's terms included indemnity for attorneys' fees and costs awarded under statutory provisions. View "Starstone Insurance SE v City of Chicago" on Justia Law

Karl Tobien, a door-to-door salesman, was attacked by a dog while working in Ohio. He filed two federal lawsuits: one against the homeowners in the Southern District of Ohio, which was dismissed by agreement, and another against Nationwide General Insurance Company in the Eastern District of Kentucky. Tobien claimed Nationwide violated Kentucky’s Unfair Claims Settlement Practices Act, acted in bad faith, and sought punitive damages after the company denied his insurance claim.The United States District Court for the Eastern District of Kentucky dismissed Tobien’s lawsuit for improper venue, concluding that most relevant events occurred in Ohio. Tobien appealed, arguing that the Eastern District of Kentucky was a proper venue and that the district court should have transferred the case to the Southern District of Ohio instead of dismissing it.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo and upheld the district court’s decision. The court determined that Tobien failed to show that a substantial part of the events giving rise to his claims occurred in the Eastern District of Kentucky. The court also found that transferring the case to the Southern District of Ohio would not be in the interest of justice, as Ohio law would apply and Tobien’s claims would fail under Ohio law. Consequently, the Sixth Circuit affirmed the district court’s dismissal of Tobien’s lawsuit. View "Tobien v. Nationwide Gen. Ins. Co." on Justia Law

Jeremy Woods was injured in a car accident in 2017 and received medical care from Spine Specialists of Michigan PC. Woods assigned his right to payment of personal protection insurance (PIP) benefits to Spine Specialists, but MemberSelect Insurance Company refused to pay. Spine Specialists sued MemberSelect for payment. MemberSelect argued that the claims were barred by the one-year-back rule, which requires claims to be filed within one year of the medical services being rendered. The trial court granted MemberSelect's motion for summary disposition for services rendered before June 11, 2019, but denied it for services rendered between June 11, 2019, and August 12, 2020.The Court of Appeals affirmed the trial court's decision, reasoning that the tolling provision added to the one-year-back rule in 2019 did not apply to claims that accrued before the amendment's effective date. The court held that PIP benefits accrue when the medical services are rendered, not when payment is denied.The Michigan Supreme Court reviewed the case and held that the tolling provision added to MCL 500.3145 in 2019 does not apply retroactively to causes of action that began to accrue before the amendment became effective on June 11, 2019. The court affirmed the judgment of the Court of Appeals, concluding that the claims for services rendered between June 11, 2019, and August 12, 2020, were barred by the one-year-back rule. The court emphasized that the Legislature did not indicate an intent for the tolling provision to apply retroactively and that applying it retroactively would impose new obligations on insurers for past transactions. View "Spine Specialists Of Michigan PC v. Memberselect Insurance Company" on Justia Law