Justia Insurance Law Opinion Summaries

One night in February 2014 Carlile Transportation Systems, Inc. driver Bart Neal was driving a tractor-trailer southbound on the Dalton Highway. Neal could not steer properly at speeds above 35 miles per hour and decided to stop to put chains on his tires, partially blocking both traffic lanes, and, by his account, activated his flashers. Neal did not deploy reflective triangles. Eggor Enterprises, Inc. driver Joe Seurer was hauling a load of fuel northbound. By his account, Seurer saw lights in the distance but could not determine what they were. Seurer slowed his tractor-trailer from 50 to 35 miles per hour. About three-quarters of a mile from Neal, Seurer again saw lights and thought they might be from a pipeline maintenance truck stopped off the side of the road. He did not see reflective triangles or flashers. The road had an S-curve between Seurer and Neal. Until Seurer rounded the final curve, he did not realize Neal’s rig was blocking the road. Seurer applied his brakes about 300 feet from Neal, avoiding a serious collision but causing Seurer’s trailer to fall onto the side of the highway. The trailer’s fuel load spilled alongside the road. Eggor Enterprises’s insurer, HDI-Gerling American Insurance Company (HDI), paid over $3.5 million in cleanup costs to remediate the spill. HDI-Gerling, as subrogee of its trucking company client, sued Carlile for negligence. After a trial the jury determined that Carlile company’s driver was not negligent and returned a defense verdict. The insurance company appealed some of the superior court’s trial rulings. Seeing no reversible error, the Alaska Supreme Court affirmed the superior court’s entry of final judgment. View "HDI-Gerling America Insurance Company v. Carlile Transportation Systems, Inc." on Justia Law

Viviani left Stone Mansion with Hoey. Their vehicle crashed, killing Viviani and seriously injuring Hoey. Hoey sued Viviani’s estate, which tendered the defense to Encompass, which paid Hoey $600,000. Hoey released her claims. Encompass sued Mansion, alleging: it stands in the shoes of the insured estate; Mansion served Viviani alcohol while he was visibly intoxicated; under Pennsylvania’s Dram Shop law, a business that serves alcohol to a visibly intoxicated person is legally responsible for any damage that person might cause; and under the Uniform Contribution Among Tortfeasors Act (UCATA).In email correspondence, Mansion’s counsel informed Encompass that “I will be authorized to accept service.” Encompass sent counsel a copy of the filed complaint and an acceptance form via email. Counsel replied, “I will hold the acceptance ... [for] the docket n[umber].” That same day, Encompass provided the docket number. Mansion later claimed that, because it had not been properly served, it could remove the case to federal court. Encompass sought remand. The court concluded that the forum defendant rule precludes removal only if any of the parties in interest properly joined and served as defendants is a citizen of the state and that counsel did not accept service. The court then dismissed: The Dram Shop law indicates that a licensee is liable only to third persons (Hoey), for damages inflicted upon the third person (off premises) by the licensee's customer when the licensee furnishes that customer with alcohol when he was visibly intoxicated. … Encompass is acting as if it were Viviani in order to recover under [UCATA]. Because there is no potential cognizable Dram Shop claim between Viviani/Encompass and Mansion, there is no contribution claim.The Third Circuit upheld removal of the case, rejecting an argument that it is “inconceivable” that Congress intended the rule to permit an in-state defendant to remove an action by delaying service of process. Stone Mansion’s conduct did not preclude removal. The court reversed the dismissal. Encompass does not argue that it is entitled to recovery in tort against Stone Mansion but presents a distinct claim for contribution under the UCATA. Pennsylvania’s Dram Shop law does not prohibit this manner of recovery. View "Encompass Insurance Co v. Stone Mansion Restaurant Inc" on Justia Law

Some of KVG’s commercial tenants got caught growing marijuana in their rental units and caused substantial damage to the premises before the police caught them. KVG speedily evicted the tenants and sought coverage from its insurers for nearly $500,000 in related losses. Westfield denied the claims. The Sixth Circuit affirmed summary judgment for Westfield, reasoning that the damage was excluded by the policy, which is the Building and Personal Property Coverage Form. Under this Form, Westfield agreed to pay for “direct physical loss of or damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss.” A “Covered Cause of Loss” is any “Risk[] Of Direct Physical Loss,” with several exclusions, including that Westfield “will not pay for loss or damage caused by or resulting from” any “[d]ishonest or criminal act by you, any of your partners, members, officers, managers, employees (including leased employees), directors, trustees, authorized representatives or anyone to whom you entrust the property for any purpose.” While cultivating marijuana is a crime under federal law, it is protected by Michigan law under certain conditions but no reasonable jury could find that KVG’s tenants complied with Michigan law. View "K.V.G. Properties, Inc. v. Westfield Insurance Co." on Justia Law

When asked to decide the rate at which interest on a $7.8 million judgment Plaintiff obtained against the State accrued pending appeal, the Supreme Court held that the interest rate prescribed by Ariz. Rev. Stat. 41-622(F) applied to the judgment.Plaintiff filed this negligence action against the state, and the jury awarded her $7.8 million. The State’s appeal was unsuccessful. While the judgment was supposed to be paid from the State’s Risk Management Revolving Fund, the judgment was erroneously paid from the Construction Insurance Fund (CIF). When the mistake was discovered, the CIF was reimbursed from the Revolving Fund. In 2015, the parties filed cross-motions for summary judgment to resolve the calculation of post-judgment interest. At issue was whether, because the judgment had initially been paid from the CIF, it was subject to the rate of interest prescribed by Ariz. Rev. Stat. 44-1201(B) instead of the lower rate prescribed by section 44-622(F) for judgments paid from the Revolving Fund. The superior court concluded that the lower rate applied. The Supreme Court affirmed, holding that section 41-622(F) applied to the entire judgment, including any portion for which the State may be reimbursed by its excess insurance coverage. View "Glazer v. State" on Justia Law

At issue was the availability of homeowner’s liability insurance coverage for damages resulting from injuries Jonathan Ben-Ami received after Joshua Francoeur, a fellow high-school student, punched Ben-Ami a number of times in the face.Francoeur was the son of the named insured under a policy issued by Vermont Mutual Insurance Company. The superior court entered a declaratory judgment determining that Francoeur’s tortious conduct did not fall within a policy exclusion from coverage for bodily injury that is “expected or intended,” and therefore, that Ben-Ami was entitled to indemnification under the policy. The Supreme Judicial Court vacated the judgment and remanded for entry of judgment for Vermont Mutual, holding that Francoeur’s specific conduct established that the damages he inflicted on Ben-Ami were “expected” and therefore excluded from coverage by the Vermont Mutual policy. View "Vermont Mutual Insurance Co. v. Ben-Ami" on Justia Law

In 2010, the defendants formed PremierTox, a urinalysis testing company: Doctors Peavler and Wood owned a substance abuse treatment company, SelfRefind; Doctor Bertram previously worked for SelfRefind. Bottom and Walters owned a drug testing service and laboratory. Physicians at clinics ordered urinalysis tests to check if their patients used illicit drugs and to monitor their medications. PremierTox was to receive those urine samples, perform the testing, and report back. In October 2010, SelfRefind began to send frozen urine samples to PremierTox for testing, but PremierTox did not have the correct equipment. In 2011, after PremierTox bought the necessary, expensive machines, they broke down. Urine samples from SelfRefind piled up. PremierTox started testing them between February and April 2011 and finished testing them in October. Over the same period, it tested and billed for fresh samples as they came in, aiming for a 48-hour turnaround. PremierTox billed insurers, saying nothing about the delays. The defendants were charged with 99 counts of health care fraud and with conspiracy. A jury acquitted them of conspiracy and 82 of the health care fraud charges and convicted them of 17 health care fraud charges. The trial judge imposed sentences of 13-21 months in prison. The Sixth Circuit affirmed the convictions. A reasonable jury could find that the defendants violated 18 U.S.C. 1347 by requesting reimbursement for tests that were not medically necessary. View "United States v. Walters" on Justia Law

Allstate Insurance Company denied underinsured motorist (UIM) coverage to Nathan Ball for an accident involving his own vehicle after determining he was not an insured person under his then-fiancée’s parents’ Allstate automobile insurance policy. Ball contended that his fiancée was a “policyholder” for purposes of her parents’ policy, a necessary predicate to his argument for UIM coverage under the policy. But the policy declarations page did not list “policyholders,” it listed only “named insureds” and “drivers.” The superior court granted summary judgment on grounds that the policy language was not ambiguous because “policyholder” referred only to the parents, the “named insureds,” that the fiancée as only a listed driver, had no objectively reasonable expectation that she was a policyholder, and, therefore, that Allstate did not have a duty to provide Ball UIM coverage. The Alaska Supreme Court agreed “policyholder” encompassed only the named insureds, not listed drivers, and therefore affirmed the superior court’s decision. View "Ball v. Allstate Insurance Company" on Justia Law

Third-party defendant Dr. George Likakis was charged with aggravated arson and insurance fraud after a fire destroyed a building he owned (the Property). Plaintiff RSI Bank held a first-priority mortgage on the Property, and defendant/third-party plaintiff The Providence Mutual Fire Insurance Company (Providence) issued a commercial liability policy that covered the Property. Following the fire, Likakis and RSI Bank submitted insurance claims. Providence denied both sets of claims. Providence’s denial of coverage prompted the filing of two actions in the Law Division: (1) filed by Likakis against Providence; and (2) an action gave rise to this appeal: RSI Bank’s claims against Providence for breach of contract, fraudulent misrepresentation, violations of the Consumer Fraud Act, and bad faith. Providence filed a third-party complaint against Likakis, alleging claims for indemnification. Both civil lawsuits were pending when criminal proceedings commenced against Likakis. Likakis was indicted; Providence did not object to Likakis’ admission to the PTI program, provided he paid restitution, committed to protect/compensate Providence from all claims that might be brought by RSI, and dismissal of Likakis’ suit against Providence. With Likakis’s consent - but no assessment of his ability to pay - the court also imposed the three conditions that Providence had requested. During his PTI term, Likakis paid Providence the specific restitution amount and dismissed with prejudice his lawsuit. Likakis did not make any payment related to the separate indemnification provision. With the prosecutor’s consent, the PTI court terminated Likakis’s PTI supervision and dismissed his indictment. RSI Bank and Providence settled their coverage dispute. Providence agreed to pay RSI Bank to settle all of the bank’s claims based on the insurance policy and moved for summary judgment against Likakis based on the provision of the PTI agreement. The court held that the indemnification provision of the PTI agreement was enforceable against Likakis and ordered Likakis to pay Providence the portion of the settlement funds Providence attributed to fire damage, less the amount Likakis had paid during his PTI supervisory period. Likakis appealed, and an Appellate Division panel affirmed. The New Jersey Supreme Court reversed, finding an open-ended agreement to indemnify the victim of the participant’s alleged offense for unspecified future losses was not an appropriate condition of PTI. Moreover, a restitution condition of PTI was inadmissible as evidence in a subsequent civil proceeding against the PTI participant. The indemnification provision of the PTI agreement at issue should have played no role in this civil litigation. View "RSI Bank v. The Providence Mutual Fire Insurance Company" on Justia Law

In this insurance dispute, the Supreme Court reversed in part the entry of summary judgment in Plaintiff’s declaratory action regarding underinsured motorist coverage (UIM) in favor of Farmers Insurance Exchange, holding that the district court erred by holding that Farmers could offset its underinsured motorist coverage (UIM) obligation to Plaintiff dollar-for-dollar with GEICO’s entire UIM payment.Plaintiff was one of five passengers injured in an accident. The tortfeasor was underinsured by $48,686 as to Plaintiff’s damages. The vehicle in which Plaintiff was a passenger was insured by GEICO, and Plaintiff carried personal vehicle coverage with Farmers, including medical payment (MedPay) coverage and UIM coverage. GEICO paid Plaintiff its individual UIM coverage limit and Farmers paid Plaintiff under her MedPay coverage. In total, Plaintiff received payments of $2,500 less than her total stipulated damages. Disputes Plaintiff had with Farmers led Plaintiff to file this declaratory action. The district court held in Farmers’ favor on the two contested issues. The Supreme Court held (1) the policy language did not permit Farmers to offset its UIM obligation dollar-for-dollar with the entire GEICO UIM payment; (2) Farmers was entitled to offset its UIM obligation with its MedPay payments to Plaintiff; and (3) Plaintiff was entitled to recover attorney fees. View "Cramer v. Farmers Insurance Exchange" on Justia Law

United States District Court for the Northern District of Georgia certified a question of Georgia law to the state Supreme Court. At issue in this insurance coverage dispute between plaintiff National Casualty Company, a commercial insurer, and defendant Georgia School Boards Association - Risk Management Fund (“Risk Fund”), an interlocal risk management agency created pursuant to Article 29 of Chapter 2 of Title 20 of the Georgia Code, OCGA 20-2-2001 et seq. The gravamen of the question was whether Georgia law or public policy precluded a commercial insurance policy that was excess to coverage provided under OCGA 20-2-2002; the Supreme Court answered in the negative, there was no such prohibition. View "National Casualty Company v. Georgia School Boards Association Risk Management Fund" on Justia Law