Justia Insurance Law Opinion Summaries

This case involves an insurance dispute following a fatal car accident. Jay Lanningham was killed in a car accident caused by an underinsured motorist. Lanningham had an insurance policy with Farm Bureau Mutual Insurance Company of Idaho that included underinsured motorist (UIM) coverage. However, Farm Bureau denied the UIM claims made by Lanningham's adult children, Jeremy and Jamie, for their father's wrongful death. The insurance company argued that the siblings did not qualify as insured persons under the policy since they did not reside with Lanningham.The District Court of the Fourth Judicial District of the State of Idaho granted Farm Bureau's motion for summary judgment, ruling that the insurance company rightfully denied payment to Jamie and Jeremy as they did not qualify as insured persons under the policy.The Supreme Court of the State of Idaho affirmed the lower court's judgment in favor of Farm Bureau. The court found that the plain language of Lanningham’s insurance policy precluded non-insureds from recovering UIM benefits. The court also held that the policy did not violate Idaho Code section 49-1212(12), which prohibits reduced liability coverage for family or household members. Furthermore, the court found that the case law precedent, Farm Bureau Mutual Insurance Company of Idaho v. Eisenman, was applicable and remains good law. The court concluded that neither Jamie nor Jeremy, as non-insured heirs, could recover UIM benefits under the plain language of the policy and Idaho Code section 41-2502. View "Lanningham v. Farm Bureau" on Justia Law

The case revolves around Wapiti Energy, L.L.C. ("Wapiti"), the owner of a 155-foot tank barge, the SMI 315, which broke free of its moorings and ran aground in marshland owned by a third party during Hurricane Ida. The vessel was insured under a marine package policy issued by Clear Spring Property and Casualty Company ("Clear Spring"). The policy provided coverage for wreck removal expenses that are compulsory by law. After the incident, Wapiti incurred expenses in removing the stranded vessel from the marshland and sought reimbursement from Clear Spring. Clear Spring, however, moved for summary judgment, arguing that the removal of the SMI 315 was not compulsory by law, and thus, it was not obligated to reimburse the expenses.The United States District Court for the Southern District of Texas ruled in favor of Clear Spring, concluding that removal of the SMI 315 was not compulsory by law and dismissing Wapiti’s claims. Wapiti appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and reversed the lower court's decision. The court concluded that the removal of the SMI 315 was compelled by the Louisiana possessory action, which made removal compulsory by law. The court reasoned that at the time of the incident, a reasonable owner would know that the barge stranded on a third party's property would expose them to a high probability of having to comply with an injunction mandating the removal of the vessel. Therefore, Wapiti's proactive removal of the vessel from the third party's marshland was warranted, and Clear Spring was obligated to reimburse the expenses. The case was remanded for further proceedings consistent with this opinion. View "Wapiti Energy v. Clear Spring Property and Casualty Co." on Justia Law

The case involves two brothers, Levi and Benjamin Goldfarb, who sought payment of a $500,000 claim under an Accidental Death & Dismemberment insurance policy after their father, Dr. Alexander Goldfarb, died while mountain climbing in Pakistan. The insurer, Reliance Standard Life Insurance Company, denied the claim because the cause of Dr. Goldfarb’s death was unknown, and therefore, his beneficiaries could not show that he died by accident. The Goldfarb brothers challenged the denial in district court under the Employee Retirement Security Act.The district court ruled in favor of the Goldfarbs, stating that Dr. Goldfarb’s death was accidental and that Reliance Standard’s failure to pay the Accidental Death & Dismemberment claim was arbitrary and capricious. The court granted summary judgment to the Goldfarbs and denied Reliance Standard’s cross motion for summary judgment. Reliance Standard appealed this decision.The United States Court of Appeals for the Eleventh Circuit disagreed with the district court's decision. The appellate court found that Reliance Standard’s decision that Dr. Goldfarb’s death was not accidental under the insurance policy was supported by reasonable grounds, and the denial of the Goldfarbs’ claim for benefits was not arbitrary and capricious. Therefore, the court reversed the district court’s grant of summary judgment to the Goldfarbs and directed the court to enter judgment in Reliance Standard’s favor. View "Goldfarb v. Reliance Standard Life Insurance Co." on Justia Law

The case involves plaintiffs Martin Tait, Jane Tait, and Bry-Mart, LLC (collectively, the Taits) who sued Commonwealth Land Title Insurance Company (Commonwealth) for breach of a title insurance policy. The Taits alleged that Commonwealth failed to pay the full amount by which their property’s value was diminished due to an undisclosed easement. The Taits had purchased a residential property in Danville for $1.25 million and had plans to subdivide the property into two lots. However, they discovered a separate 1988 maintenance easement that they believed would impact the marketability and value of the property and interfere with its potential development.The trial court granted Commonwealth’s motion for summary judgment, ruling that the policy required Commonwealth to compensate the Taits only for the value of their actual use of the property as a vacant residential lot suitable for only one home rather than its highest and best use as a subdividable lot. The court reasoned that the legal standard for title insurance losses did not permit consideration of a property’s highest and best use, only its actual use as vacant residential land.The Court of Appeal of the State of California First Appellate District Division Four disagreed with the trial court's interpretation. The appellate court held that the Taits’ policy entitles them to reimbursement for the diminution in value of their property based on its highest and best use. The court found that the Taits’ evidence of the likelihood of subdivision and the value of a subdividable lot created a triable issue of fact regarding the amount of the Taits’ loss under the policy, thereby precluding summary judgment. Therefore, the court reversed the trial court's decision. View "Tait v. Commonwealth Land Title Insurance Co." on Justia Law

This case involves a catastrophic wildfire that occurred in 2016 in the Great Smoky Mountains National Park in Eastern Tennessee. The fire spread into Gatlinburg and Sevier County, resulting in the destruction of over 2,500 structures and the death of 14 people. The appellant insurance companies paid claims to policy holders and then filed claims under the Federal Tort Claims Act (FTCA) against the National Park Service (NPS), alleging negligence for failure to follow multiple mandatory fire-management protocols and for the failure to issue mandatory warnings to the public.The government moved to dismiss the case for lack of subject-matter jurisdiction, arguing that it was immune from suit under the discretionary-function exception to the FTCA. The district court granted the motion on all three claims relating to fire-management protocols, but denied the motion on claims relating to the duty to warn. The insurance companies appealed, and the government cross-appealed.The United States Court of Appeals for the Sixth Circuit reversed the district court's order granting the government's motion to dismiss the insurance companies' incident-command claim. The court affirmed the district court's dismissal of the fire-monitoring claim and the Wildland Fire Decision Support System (WFDSS) claim as part of the discretionary fire-suppression decision-making process. The court also affirmed the district court's denial of the government's facial challenge to the insurance companies' duty-to-warn claims, and remanded these claims for further proceedings. View "American Reliable Insurance Co. v. United States" on Justia Law

Ian Simpson purchased a life insurance policy from Transamerica Life Insurance Company and named his then-fiancée, Holly Moore, as the primary beneficiary and his father, Jeffrey Simpson, as the contingent beneficiary. After Ian and Holly married and subsequently divorced, Ian died without changing the policy beneficiaries. The divorce decree stipulated that Holly was divested of all rights to Ian's life insurance policies. After Ian's death, both Holly and Jeffrey claimed the policy proceeds, leading Transamerica to file an interpleader action in federal court.The district court ruled in favor of Holly, holding that Texas Family Code § 9.301, which generally strips an ex-spouse of beneficiary interests in insurance policies after a divorce, only applies if the insured and the beneficiary were married when the insurance policy was purchased. The court reasoned that since the policy was purchased before Ian and Holly's marriage, Holly was not considered "the insured's spouse" at the time of the policy's inception, and therefore, the divorce decree did not divest her of the insurance proceeds.On appeal, the United States Court of Appeals for the Fifth Circuit reversed the district court's judgment. The appellate court interpreted § 9.301 to focus on the marital relationship at the time of the divorce decree's rendition, regardless of when the insurance policy was purchased. The court held that since Holly was Ian's spouse at the time of the divorce decree, § 9.301 divested her of her beneficiary interest in the policy. Therefore, the court ruled in favor of Jeffrey Simpson, the contingent beneficiary. View "Simpson v. Moore" on Justia Law

The case revolves around a dispute between American Compensation Insurance Company (ACIC) and Hector Ruiz, who operates Los Primoz Construction. Ruiz's employee, Raul Aparacio, suffered severe injuries after falling more than fifteen feet at a worksite. ACIC, which provided workers' compensation insurance for Ruiz's company, began paying benefits to Aparacio. However, when the payouts exceeded a quarter of a million dollars, ACIC sought to retroactively void the policy, alleging that Ruiz had materially misrepresented in his application that his company did not perform work more than fifteen feet above ground.The insurer filed for a declaratory judgment in federal court, but the federal district judge dismissed the insurer's lawsuit, concluding that Mississippi’s workers' compensation law does not permit an insurer to rescind a workers' compensation policy. The insurer appealed to the Fifth Circuit, which certified the question to the Supreme Court of Mississippi.The Supreme Court of Mississippi held that the Mississippi Workers’ Compensation Act (MWCA) does not allow insurers to void a workers' compensation policy based on an employer's material misrepresentation. The court reasoned that the MWCA makes no provision for an insurer to void a workers' compensation policy based on a material misrepresentation and exists to ensure injured workers are compensated. The court concluded that allowing rescission would go against the purpose of the MWCA. View "American Compensation Insurance Company v. Ruiz" on Justia Law

The case involves the United States of America, et al. ex rel. Michael Angelo and MSP WB, LLC (Relators-Appellants) against Allstate Insurance Company, et al. (Defendants-Appellees). The relators alleged that Allstate Insurance violated the False Claims Act by avoiding its obligations under the Medicare Secondary Payer Act. They claimed that Allstate failed to report or inaccurately reported to the Centers for Medicare & Medicaid Services (CMS) information regarding its beneficiaries, which led to Allstate failing to reimburse Medicare for auto-accident-related medical costs incurred by beneficiaries insured by Allstate.The United States District Court for the Eastern District of Michigan dismissed the case with prejudice, deeming the relators' second amended complaint deficient in numerous respects. The relators then moved for reconsideration, which the district court denied. They also filed a motion to amend or correct under Rule 59(e), asking the district court to amend its judgment to dismiss the case without prejudice to allow them to file another amended complaint. The district court denied the motion on all grounds.The United States Court of Appeals for the Sixth Circuit affirmed the district court's decision. The court found that the relators failed to state a claim for a violation of the False Claims Act. The court noted that the relators did not provide sufficient facts demonstrating that Allstate had an "established duty" to pay money or property owed to the government. The court also found that the relators did not demonstrate Allstate's understanding that its conduct violated its obligations under federal law. Furthermore, the court found that the relators' claim for conspiracy also failed as they did not provide any specific details regarding the alleged plan or an agreement to execute the plan. The court also affirmed the district court's decision to deny the relators leave to amend their complaint again. View "United States ex rel. Angelo v. Allstate Insurance Co." on Justia Law

The case involves Koppers Performance Chemicals, Inc., a New York-based corporation that manufactures wood preservation chemicals, and Argonaut-Midwest Insurance Company. In 2014, Phillip H. Riley and his wife sued Koppers and other lumber industry entities in South Carolina state court, alleging that Riley developed cancer from exposure to a chemical used in the lumber provided by Koppers. Koppers sought coverage under four commercial general liability policies issued by Argonaut. Argonaut, however, disclaimed any duty to defend or indemnify Koppers, arguing that the policies limited coverage to Koppers' Hawaii operations and did not cover the claims in the Riley lawsuit.The case was initially heard in the District of South Carolina, where the court granted Argonaut's motion for summary judgment and denied Koppers' motion for partial summary judgment. The court found that the insurance policies were limited to Koppers' Hawaii operations and that the original complaint did not allege a potential for coverage under the policies, thus Argonaut had no duty to defend.Upon appeal, the United States Court of Appeals for the Fourth Circuit reversed the lower court's decision. The appellate court found that the insurance policies did not unambiguously limit coverage to Koppers' Hawaii operations. Furthermore, the court held that Argonaut was required to consider extrinsic evidence it specifically requested from Koppers when assessing its duty to defend. The court vacated the district court's order granting Argonaut's summary judgment motion and denying Koppers' partial summary judgment motion on the issue of Argonaut's duty to defend, and remanded the case for further proceedings. View "Koppers Performance Chemicals, Inc. v. Argonaut Midwest Insurance Co." on Justia Law

Baylor Scott & White Holdings (BSW), the largest nonprofit health system in Texas, purchased a specialized commercial property insurance policy from Factory Mutual Insurance Co. (FM) to cover its facilities. The policy covered two types of claims—“Property Damage” and “Time Element” claims, which are synonymous with “business interruption” loss. BSW submitted a claim under the policy for its business interruption losses as a result of COVID-19, totaling over $192 million. FM denied the claim, stating that the only coverage under the policy for losses arising from COVID-19 came from the Communicable Disease Response Extension and the Interruption by Communicable Disease Extension, which had already been exhausted.FM moved to dismiss the amended complaint for failure to state a claim. The district court granted FM’s motion to dismiss, finding that BSW had not plausibly alleged “physical loss or damage” under the policy, and that the Contamination Exclusion and Loss of Use Exclusion barred BSW’s recovery under the policy. BSW appealed the district court’s dismissal order.The United States Court of Appeals for the Fifth Circuit affirmed the decision of the district court. The court held that, in the context of COVID-19 commercial-insurance coverage disputes, COVID-19 does not physically harm property. The court found that the alleged uniqueness of the policy’s language did not change this determination. The court also rejected BSW's contention that its complaint was wrongly dismissed because it included specific factual allegations of demonstratable, measurable, and tangible alteration of property caused by COVID-19. The court concluded that, as a matter of law, COVID-19 does not affect property in a “physical” way. View "Baylor Scott & White v. Factory Mutual" on Justia Law