Justia Insurance Law Opinion Summaries

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Plaintiff John O’Donnell appealed a superior court order granting summary judgment to defendant Allstate Indemnity Company. Following a November 2015 motor vehicle accident, O’Donnell filed an underinsured motorist claim under a personal umbrella insurance policy that he had purchased from Allstate. Allstate denied the claim. O’Donnell then filed this declaratory judgment action to determine whether his policy provided uninsured motorist coverage. The trial court concluded that O’Donnell’s policy did not provide uninsured motorist coverage, finding that a written waiver of uninsured motorist coverage that O’Donnell had executed in September 2011 remained in effect at the time of the accident. Finding no reversible error in that judgment, the New Hampshire Supreme Court affirmed. View "O'Donnell v. Allstate Indemnity Company" on Justia Law

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Richard and Debra Plein sued USAA Casualty Insurance Company, alleging insurance bad faith. The Pleins hired three attorneys, two of whom were members of the Keller Rohrback LLP lawfirm (Keller), to represent them. But Keller had previously defended USAA in bad faith litigation for over 10 years. Under the Rules of Professional Conduct, Keller would have been barred from representing the Pleins if the prior representation was in a matter "substantially related" to the Plein matter. Interpreting the "substantially related" language in the Rules of Professional Conduct was one of first impression for the Washington Supreme Court. The Court held that under RPC 1.9(a), USAA failed to show a "substantial risk" that Keller obtained 'confidential factual information" that would 'materially advance" the Pleins’ case. Accordingly, Keller did not represent former client USAA on any matter "substantially related" to the instant case. The Court therefore reversed the Court of Appeals decision that disqualification was required, and reinstated the trial court’s order that disqualification was not required. View "Plein v. USAA Cas. Ins. Co." on Justia Law

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The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the circuit court directing a verdict in favor of Defendant, an insurance agent, on Plaintiff's claim that Defendant was negligent because he procured an insurance policy that did not conform to Plaintiff's requirements, holding that Plaintiff must prove that it would have qualified for an insurance policy with better terms than the policy it actually obtained. Plaintiff sold new and used camper trailers. Plaintiff asked Defendant, an insurance agent, to acquire a policy to cover its camper inventory. Plaintiff thought Defendant had acquired a policy with a deductible for $1,000 per camper in the event of hail damage with a $5,000 aggregate deductible limit, but the policy actually required a $5,000 deductible per camper, with no aggregate limit. After a hailstorm damaged many of the campers on its lot, Plaintiff sued Defendant. The circuit court directed a verdict due to Plaintiff's failure to introduce evidence that an insurer would have insured Plaintiff with the deductible limits it thought it had. The Supreme Court affirmed, holding that Plaintiff must not only prove that an insurance policy with the requested deductibles was commercially available but that Plaintiff would actually have qualified for that policy. View "Emer's Camper Corral, LLC v. Western Heritage Insurance Co." on Justia Law

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New Jersey Transit Corporation (New Jersey Transit) sought to recover workers’ compensation benefits paid to an employee, David Mercogliano, who sustained injuries in a work-related motor vehicle accident. It sued the individuals allegedly at fault in the accident, defendants Sandra Sanchez and Chad Smith, pursuant to N.J.S.A. 34:15-40, a provision of the Workers’ Compensation Act that authorized employers and workers’ compensation carriers that have paid workers’ compensation benefits to injured employees to assert subrogation claims. The issue this case presented for the New Jersey Supreme Court's review was whether that subrogation action was barred by the Auto Insurance Cost Recovery Act (AICRA). The trial court granted defendants’ motion, ruling that New Jersey Transit could not assert a claim based on economic loss. It noted that N.J.S.A. 39:6A-2(k) defined economic loss for purposes of AICRA to mean “uncompensated loss of income or property, or other uncompensated expenses, including, but not limited to, medical expenses.” In the trial court’s view, because New Jersey Transit’s workers’ compensation carrier paid benefits for all of Mercogliano’s medical expenses and lost income, he had no “uncompensated loss of income or property,” and thus sustained no economic loss for purposes of AICRA. The trial court relied on Continental Insurance Co. v. McClelland, 288 N.J. Super. 185 (App. Div. 1996), and policy considerations in reaching its decision. The Appellate Division reversed that judgment, agreeing with New Jersey Transit that its subrogation action arose entirely from “economic loss comprised of medical expenses and wage loss, not noneconomic loss.” However, it rejected the trial court’s view that an employer’s or workers’ compensation carrier’s subrogation claim based on benefits paid for economic loss contravened AICRA’s legislative intent. Finding no error in the appellate court's judgment, the New Jersey Supreme Court affirmed. View "New Jersey Transit Corporation v. Sanchez" on Justia Law

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The Supreme Court accepted supervisory control over this matter and affirmed the district court's ruling denying Philadelphia Indemnity Insurance Company's motion to dismiss for lack of personal jurisdiction, holding that the district court did not err by holding that Montana had specific personal jurisdiction over Philadelphia under Montana's long arm statute and the due process clause of the Fourteenth Amendment. In the underlying action, Appellees were sued for failing to distribute to employees eighteen to twenty percent service charges (the Walter Class Action). Appellees submitted a claim to Philadelphia requesting defense and indemnity, but Philadelphia denied the claim. After Appellees settled the Walter Class Action and paid the judgment entered against them Appellees brought suit against Philadelphia arguing that Philadelphia had a duty to defend them in the Walter Class Action. Philadelphia filed a motion to dismiss for lack of personal jurisdiction, which the district court denied. The Supreme Court affirmed, holding (1) the case qualifies for and merits review pursuant to the Court's constitutional power of supervisory control; and (2) a Montana court may exercise specific personal jurisdiction over Philadelphia regarding Plaintiffs' claims. View "Gateway Hospitality Group Inc. v. Philadelphia Indemnity Insurance Co." on Justia Law

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In 2014, Liberty Life Assurance Company of Boston rejected the claim for long-term disability benefits by plaintiff-appellee Michael Ellis. As part of its employee-benefit plan, Comcast Corporation, for whom Ellis worked in Colorado from 1994 until 2012, had obtained from Liberty in 2005 a Group Disability Income Policy (the Policy). Ellis sought review of Liberty’s denial of benefits in the United States District Court for the District of Colorado under the Employee Retirement Income Security Act of 1974 (ERISA). The district court, reviewing the denial de novo, ruled that Liberty’s denial was not supported by a preponderance of the evidence. Liberty appealed, contending the court should have reviewed its decision under an abuse-of-discretion standard but that it should prevail even under a de novo standard. Ellis defended the district court’s choice of a de novo standard but argued he should prevail under either standard of review. The Tenth Circuit determined a plan administrator’s denial of benefits was ordinarily reviewed by the court de novo; but if the policy gave the administrator discretion to interpret the plan and award benefits, judicial review was for abuse of discretion. The Policy at issue provided that it was governed by the law of Pennsylvania, which was where Comcast was incorporated and has its principal place of business. Among its terms was one that gave Liberty discretion in resolving claims for benefits. A Colorado statute enacted in 2008, however, forbade such grants of discretion in insurance policies. The parties disputed whether the statute applied to the Policy under Colorado law, and whether Colorado law governed. The Tenth Circuit held that in this dispute the law of Pennsylvania was controlling. Liberty’s denial of benefits was therefore properly reviewed for abuse of discretion. Under that standard the denial had to be upheld. View "Ellis v. Liberty Life Assurance Co" on Justia Law

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Several insurance companies (the Insurers) appealed the denial of their motions to intervene in a construction defect action between a property owners' association (the Association) and a number of construction contractors and subcontractors (the Insureds). The underlying construction defect action proceeded to trial, resulting in a verdict for the Association. After review, the South Carolina Supreme Court determined the Insurers were not entitled to intervene as a matter of right, and the trial court did not abuse its discretion in denying them permissive intervention. However, the Court held the Insurers had a right to a determination of which portions of the Association's damages are covered under the commercial general liability (CGL) policies between the Insurers and the Insureds. The Court also recognized that the Insurers had the right and ability to contest coverage of the jury verdict in a subsequent declaratory judgment action. "In that action, the Insurers and the Insureds will be bound by the existence and extent of any jury verdict in favor of the Association in the construction defect action. However, they will not be bound as to any factual matters for which a conflict of interest existed, such as determining what portion of the total damages are covered by any applicable CGL policies." View "Builders Mutual Insurance Company" on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment in favor of American Family in a declaratory judgment regarding American Family's duty to defend and indemnify Mid-American. American Family had issued a commercial general liability insurance policy (CGL) to Mid-America. The court held that American Family has no duty to defend or indemnify Mid-American, because Mid-American's alleged defective construction work in the underlying suit is not considered an "occurrence" in the policy. Rather, Lehenbauer's damages are all the normal, expected consequence of MidAmerican's allegedly shoddy work and were the foreseeable or expected result of that work as a matter of law. Therefore, the court held that Mid-American's work causing the damages at issue is not "an accident" within the meaning of the CGL under Missouri law. Because there was no "accident" in this case, there is no "occurrence" and no possibility of coverage. View "American Family Mutual Insurance Co. v. Lehenbauer Farms, Inc." on Justia Law

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The Supreme Court vacated the trial court's grant of summary judgment for Defendants, holding that the trial court erred by entering summary judgment for defendant health-insurance plans, which were governed by the Employee Retirement Income Security Act of 1974 (ERISA), based on ERISA preemption. Plaintiff, a health-care provider, contracted with two third-party networks. Defendants and its affiliated employee health-insurance plans contacted with both health networks. Seven patients received treatments from Plaintiff, and the patients were covered under Defendants' plans. Plaintiff sued Defendants, alleging that they failed to pay agreed reimbursement rates for covered services under their plans. The trial court granted summary judgment against Plaintiff, concluding that Plaintiff's claims were preempted under ERISA's conflict-preemption provision, 29 U.S.C. 1144(a). The Supreme Court vacated the judgment, holding that genuine issues of disputed fact existed concerning the central issue of whether the provider's claims were denied coverage under the plans or whether the provider's claims necessitated interpreting the plan documents. View "FMS Nephrology Partners North Central Indiana Dialysis Centers, LLC v. Meritain Health, Inc." on Justia Law

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Plaintiffs filed suit against Liberty Mutual for breach of contract and bad faith under Alabama law after the insurer denied coverage for an infestation of brown recluse spiders in plaintiffs' home. The court held that the homeowners insurance policy excluded coverage for property damage caused by insects or vermin, and that brown recluse spiders are both "insects" and "vermin" under the ordinary meaning of those terms. Furthermore, the district court did not err by consulting dictionaries to determine these legislative facts. View "Robinson v. Liberty Mutual Insurance Co." on Justia Law