Justia Insurance Law Opinion Summaries
Joseph Wobig v. Safeco Ins Co of Illinois
Plaintiffs appealed the district court’s grant of summary judgment in favor of Safeco Insurance Company of Illinois (“Safeco”). The case involved a dispute over the applicability of an “other structure” exclusion in a homeowner’s policy when the building sustaining damage was “used in whole or in part for business.” At issue is a loss caused by the failure of an in-floor radiant heat system in a pole barn that was occasionally used for business purposes. The Eighth Circuit affirmed the district court’s summary judgment ruling in favor of Defendants. The court concluded that the business use exclusion for other structures precludes coverage for the loss, there is no evidence of bad faith on the part of Safeco, and Safeco had no duty to advise Plaintiffs about coverage. The court explained that Plaintiffs’ arguments seeking to engraft an additional requirement on the business use exclusion—that the structure be used for “actual business activity”— or that the limited coverage for business property located on the premises somehow changes or modifies the plain language of the business use exclusion are unavailing. Because the policy language is unambiguous and the exclusion is neither obscure nor unexpected, the reasonable expectations doctrine is inapplicable. Thus, Safeco did not breach the contract when it denied coverage.Further, the court held that there is no other evidence of bad faith in the investigation of this claim. Finally, there is no evidence in the record to support a claim that Plaintiff either relied on the agent to provide appropriate coverage or needed protection from any specific threat. View "Joseph Wobig v. Safeco Ins Co of Illinois" on Justia Law
MSP Recovery Claims, Series LLC, et al v. Metropolitan General Insurance Company, et al
Various actors in the Medicare Advantage program assigned claims for failure to pay or reimburse medical expenses owed under the Medicare Secondary Payer Act to Plaintiffs—MSP Recovery Claims, Series LLC; MSPA Claims 1, LLC; and MAO-MSO Recovery II LLC, Series PMPI, (collectively, “MSP Recovery”). MSP Recovery then asserted those claims against Metropolitan General Insurance Company, Metropolitan Casualty Insurance Company, Metropolitan Group Property & Casualty Insurance Company, Metlife Auto & Home Group, and Metropolitan P&C Insurance Company (collectively, “Defendants”). The district court dismissed MSP Recovery’s claims because the complaint failed to show that Defendants had a “demonstrated responsibility” to reimburse MSP Recovery’s assignors for the medical expenses at issue. The Eleventh Circuit held that at this procedural stage MSP Recovery’s complaint plausibly alleged that Defendants had a demonstrated responsibility to pay the claims, and the court, therefore reversed and remanded this case to the district court for further proceedings consistent with this opinion. The court explained that the district court found that it would not consider Exhibit A, which was attached to and referenced by incorporation in the factual allegations of MSP Recovery’s complaint. Because “documents attached to a complaint or incorporated in the complaint by reference can generally be considered by a federal court in ruling on a motion to dismiss under Rule 12(b)(6),” the court concluded that the district court erred in failing to consider whether the complaint and Exhibit A, taken together, plausibly alleged that Defendants’ responsibility to pay had been demonstrated prior to suit. View "MSP Recovery Claims, Series LLC, et al v. Metropolitan General Insurance Company, et al" on Justia Law
Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company
Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law
Griffin v. Trumbull Insurance Co.
Willie Griffin filed suit against Trumbull Insurance Company, the Michigan Assigned Claims Plan (the MACP), Allstate Insurance Company, Esurance Property and Casualty Insurance Company, and an unnamed John Doe insurance company, seeking personal protection insurance (PIP) benefits for injuries plaintiff sustained while riding a motorcycle. In May 2016, Griffin was driving a motorcycle when a large truck merged into his lane. Griffin swerved to avoid the truck. While there was no physical collision, Griffin’s motorcycle went down, it was damaged, and he was badly injured. The responding police officer recorded the truck driver’s name, personal telephone number, and residential address in the crash report; however, the officer did not record the license plate number or VIN of the truck, the insurer of the truck, the owner of the truck, or any other identifying information regarding the truck. Days after the accident, Griffin’s attorney sent a letter to the truck driver using the address in the crash report. Trumbull, Griffin's insurer, made numerous unsuccessful attempts to contact the truck driver before closing its investigation in late December 2016. In December 2016, Griffin submitted a separate PIP benefits claim to the MACP through the Michigan Automobile Insurance Placement Facility (the MAIPF). Griffin also submitted claims to Esurance and Allstate, which were both lower-priority insurers. In April 2017, Griffin then filed this lawsuit seeking payment of his PIP benefits. During discovery, the parties learned that the truck had been owned by Pavex Corporation and insured by Harleysville Insurance. Trumbull moved for summary judgment, arguing that it was not liable to pay PIP benefits because Harleysville was the highest-priority insurer. The MACP also moved for summary judgment (Allstate, Esurance, and the John Doe insurance company were dismissed by stipulation), and those orders were not appealed. The trial court granted the two summary judgment motions, holding that Harleysville was the highest-priority insurer and that Griffin had not exercised reasonable diligence in attempting to timely locate Harleysville. The Michigan Supreme Court reversed in part, finding that Griffin properly filed a claim under the no-fault act against all insurers who were identifiable prior to the expiration of the limitations period and that Trumbull’s delaying a decision on payment or denial of Griffin’s claim until after the limitations period expired did not excuse it from liability to pay PIP benefits. The trial court erred by granting Trumbull’s summary-disposition motion, and the Court of Appeals erred by affirming on the basis that a previously unidentifiable higher-priority insurer became identifiable during litigation well after the one-year notice and limitations period in MCL 500.3145 had expired. View "Griffin v. Trumbull Insurance Co." on Justia Law
Lanclos v. United States
Lanclos was born in 1982 at the Keesler Air Force Base Medical Center. During childbirth, she was seriously injured and as a result, suffers from Athetoid cerebral palsy. The settlement agreement for Lanclos’s medical malpractice suit required the government to make lump sum payments to Lanclos’s parents and their attorney; Lanclos would receive a single lump sum payment followed by specific monthly payments for the longer of 30 years or the remainder of her life. The government would purchase an annuity policy to provide the monthly payments. The government selected Executive Insurance to provide the monthly annuity payments. Executive encountered financial difficulties and, in 2014, reduced the amount of the monthly payments by 42%. Lanclos estimates that the reduction will result in a shortfall of $731,288.81 from the amount described in the settlement agreement.The Court of Federal Claims reasoned that the “guarantee” language in the Lanclos agreement applies to the scheduled monthly structure of the payments but not the actual payment of the listed amounts and that the government was not liable for the shortfall. The Federal Circuit reversed. Under the ordinary meaning of the term “guarantee” and consistent with the agreement as a whole, the government agreed to assure fulfillment of the listed monthly payments; there is no reasonable basis to conclude that the parties sought to define “guarantee” or to give the term an alternative meaning. View "Lanclos v. United States" on Justia Law
Thompson v. Crestbrook Insurance Co.
The Thompsons own property in Sonoma County that is subject to a conservation easement (Civ. Code 815) in favor of SLT, which prohibits any impairment of the land’s conservation values. SLT sued, alleging that the Thompsons had done work on the parcel that caused damage in violation of the conservation easement. The Thompsons tendered defense of the action to Burlington Insurance, which declined the tender on the ground that the action did not arise from an “occurrence,” defined as an “accident.” The Ninth Circuit upheld the denial of coverage.While that appeal was pending, the Thompsons tendered defense of the action to Crestbrook and Nationwide, under policies identical in relevant part to the Burlington policy. The insurers declined the tender. The trial court ultimately upheld the denial of coverage. The California court of appeal affirmed. The federal court judgment precludes relitigation of whether the SLT action arose from an “accident” within the meaning of the two insurers’ policies. The issue here is identical to the issue in the Burlington litigation. No material change in the law since the Burlington judgment diminishes its preclusive effect and there is no unfairness in affording the Burlington judgment preclusive effect. View "Thompson v. Crestbrook Insurance Co." on Justia Law
Marina Pacific Hotel and Suites, LLC v. Fireman’s Fund Ins. Co.
The owners of Hotel Erwin and Larry’s (a restaurant adjacent to the hotel) in Venice Beach—Marina Pacific Hotel & Suites, LLC; Venice Windward, LLC; Larry’s Venice, L.P.; and Erwin H. Sokol, as trustee of the Frances Sokol Trust (collectively insureds)—sued Fireman’s Fund Insurance Company alleging the COVID-19 virus was present on and had physically transformed, portions of the insured properties—“direct physical loss or damage” within the meaning of Fireman’s Fund’s first party commercial property insurance policy—but Fireman’s Fund refused to pay policy benefits for covered losses incurred as a result. The trial court sustained Fireman’s Fund’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage. The Second Appellate District reversed the trial court’s judgment sustaining Defendant’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage. The court held it was an error at the nascent phase of the case. The court explained that because the insureds adequately alleged losses covered by Fireman’s Fund’s policy, they are entitled to an opportunity to present their case, at trial or in opposition to a motion for summary judgment. The judgment of dismissal based on the trial court’s disbelief of those allegations, whether ultimately reasonable or not, must be reversed. View "Marina Pacific Hotel and Suites, LLC v. Fireman's Fund Ins. Co." on Justia Law
United Mine Workers of America v. Energy West Mining Company
The Multiemployer Pension Plan Amendments Act (“MPPAA”) requires an employer to pay “withdrawal liability” if it decides to leave a multiemployer pension plan. Calculating the amount of money the employer owes the plan requires an actuary to project the plan’s future payments to pensioners. The MPPAA requires the actuary to use “assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” 29 U.S.C. Section 1393(a)(1). The Energy West Mining Company (“Energy West”) withdrew from the United Mine Workers of America 1974 Pension Plan (“Pension Plan”). In calculating Energy West’s withdrawal liability, the actuary did not rely on the Pension Plan’s performance to determine what discount rate to use but instead adopted a risk-free discount rate. An arbitrator upheld the risk-free discount rate and the district court granted summary judgment to the Pension Plan, enforcing the arbitral award. The Second Circuit reversed because the actuary’s choice of a risk-free rate violates the MPPAA’s command. The court explained that to calculate Energy West’s withdrawal liability from the Pension Plan, the actuary was required to base his assumptions on the Plan’s actual characteristics. Because the actuary failed to do so, the court reversed the judgment of the district court and remanded for vacatur of the arbitration award. When the actuary calculates Energy West’s withdrawal liability, the discount rate assumption must be similar, but need not be identical, to the discount rate assumption used to calculate minimum funding. View "United Mine Workers of America v. Energy West Mining Company" on Justia Law
North Star Mutual Insurance Co. v. Miller
In this insurance dispute, the Supreme Court affirmed in part, vacated in part and reversed in part the decision of the district court granting summary judgment in favor of North Star Mutual Insurance Company and against Old Mill Bulk Foods, holding that the district court erred by not granting summary judgment in favor of Old Mill.In July 2018 a fire destroyed the premises of a deli-grocery store. Old Mill elected to renovate another building in which to relocate is business and sought $159,879 under the "extra expense" provision of its insurance policy through North Star. North Star denied coverage and then filed this declaratory judgment to determine the parties' rights and obligations under the policy. The district court denied the extra expenses. The Supreme Court held that the district court (1) erred by not granting summary judgment in favor of Old Mill as to the claimed extra expenses; and (2) properly granted summary judgment with respect to the claim for a walk-in cooler. View "North Star Mutual Insurance Co. v. Miller" on Justia Law
Vermont Mutual Insurance Co. v. Poirier
The Supreme Judicial Court reversed the judgment of the superior court in favor of Insureds in this insurance dispute over attorney's fees, holding that attorney's fees under Mass. Gen. Laws ch. 93A are not awarded as "damages because of 'bodily injury' and are not 'costs taxed against the insured.'"At issue was whether Insureds' insurance policy, which covered "sums that the insured becomes legally obligated to pay as damages because of 'bodily injury,'"included Insureds' liability for attorney's fees under chapter 93A, section 9(4) in an action for breach of warranty resulting in bodily injury. After paying the substantive damages on the claim, Insurer brought this declaratory judgment action to determine whether it was also responsible for attorney's fees. The superior court concluded that the policy did cover attorney's fees. The Supreme Judicial Court reversed, holding that Insureds' policy did not cover the award of attorney's fees under chapter 93A. View "Vermont Mutual Insurance Co. v. Poirier" on Justia Law