Justia Insurance Law Opinion Summaries

Plaintiffs suffer from asbestos disease as a result of exposure to Grace's Montana mining and processing operations and sought to hold Grace’s insurers (CNA), liable for negligence. CNA sought to enforce a third-party claims channeling injunction entered under Grace’s confirmed plan of reorganization to bar the claims. Bankruptcy Code section 524(g) allows an injunction that channels asbestos mass-tort liability to a trust set up to compensate persons injured by the debtor’s asbestos; channeling injunctions can also protect the interests of non-debtors, such as insurers.The Third Circuit rejected the Plaintiffs’ argument that the Plan and Settlement Agreement’s terms preserved all of CNA’s duties as a workers’ compensation insurer in order to avoid preempting the state’s workers’ compensation laws. The court then applied a three-part analysis: Section 524(g)(4)(A)(ii) allows injunctions to “bar any action directed against a third party who is identifiable . . . and is alleged to be directly or indirectly liable for the conduct of, claims against, or demands on the debtor [that] . . . arises by reason of one of four statutory relationships between the third party and the debtor.” CNA is identified in the Injunction, satisfying the first requirement. Analysis of the second factor requires review of the law to determine whether the third-party’s liability is wholly separate from the debtor’s liability or instead depends on it. The Bankruptcy Court must make that determination, and, with respect to the “statutory relationship” factor, should review the law and determine whether CNA’s provision of insurance to Grace is relevant legally to the Montana Claims. View "W.R. Grace & Co. v. Carr" on Justia Law

Springer, a Utah physician, began a fellowship at the Cleveland Clinic and enrolled his family in its employee benefit plan, administered by Antares. During the enrollment period, Springer had his 14-month-old son, J.S., transported from a Utah hospital to the Cleveland Clinic by Angel Jet’s air ambulance service. J.S. had been hospitalized since birth for multiple congenital abnormalities. He required a mechanical ventilator. J.S.’s physician prepared a letter of medical necessity for the service. Before the flight, Angel Jet contacted Antares, which was unable to confirm that Springer and his son were members of the plan and did not precertify the service. Angel Jet proceeded with the transportation and submitted a bill to Antares for $340,100. Antares denied it for failure to obtain precertification. The Plan affirmed the denial but paid $34,451.75, reflecting the amount their preferred provider would have charged. Angel Jet brought suit under the Employee Retirement Security Act. The district court dismissed the suit, finding that Springer had not properly assigned his rights under the plan to Angel Jet. Springer then brought his own claim under ERISA Section 502(a)(1)(B). The Sixth Circuit affirmed, first finding that Springer had standing despite having received the service and not being billed. The denial was not arbitrary and capricious because J.S.’s transportation was not an emergency or precertified as required for a nonemergency. View "Springer v. Cleveland Clinic Employee Health Plan Total Care" on Justia Law

In this declaratory judgment action filed by a professional liability insurer seeking to establish that it had no duty to defend its insured in two state court proceedings, the First Circuit affirmed the judgment of the district court granting the declaratory judgment for the insurer, holding that the district court correctly determined that the claims against the insured in both lawsuits fell outside the professional liability coverage provided by the insurance policy.The insured, a physician, was the defendant in two civil suits filed in state courts in Maine and Maryland. The insured’s ex-wife claimed that the insured used his status as a doctor to obtain her medical records during their deteriorating marriage so that he could harass and embarrass her. The district court concluded that the insurer had no duty to defend the insured in either lawsuit. The First Circuit affirmed after a close review of the policy at issue, holding that the insurer had no duty to defend the insured in either the Maryland or the Maine proceedings. View "Medical Mutual Insurance Co. of Maine v. Burka" on Justia Law

At issue in this appeal was a statutory scheme that dictates how to calculate farmers' crop insurance policies. Determining that it had jurisdiction over the appeal, the Fifth Circuit held that farmers were permitted to exclude the historical data for the 2015 crop year, even though the FCIC had not completed its data compilation. In this case, the FCIC has not provided any textual or contextual clues that would cast doubt on the plain language of the Federal Crop Insurance Act, 7 U.S.C. 1508(g)(4). Therefore, the farmers prevailed at Chevron step one. View "Adkins v. USDA" on Justia Law

The Supreme Court affirmed in part and reversed and remanded in part the district court’s grant of summary judgment in favor of ALPS Property & Casualty Insurance Company (ALPS) in this declaratory action, holding that the district court erred when it determined that ALPS properly rescinded an insurance policy, which the court rendered void from the inception of the coverage period for Michael McLean and McLean & McLean, PLLP (M&M), but the court did not err in concluding that no coverage existed as to third-party claimants Miantae McConnell and Joseph and Marilyn Micheletti.Specifically, the Court held (1) the district court erred in concluding that Mont. Code Ann. 33-15-403 provided for a right to rescind the policy; and (2) the district court did not err when it concluded that the third-party claims were barred because they were lodged after ALPS had cancelled the policy or were excluded from coverage under other policy provisions. View "ALPS Property & Casualty Insurance Co. v. McLean & McLean" on Justia Law

At issue was whether section 38a-334-6(c)(2)(B) of the Regulations of Connecticut State Agencies, which authorizes exclusions in insurance policies when the owner of the underinsured vehicle is a rental car company designated as a “self-insurer” by the Insurance Commissioner pursuant to Conn. Gen. Stat. 38a-371(c), remains valid as applied to rental car companies in light of development in federal law.The insureds in this case, who were injured by an underinsured lessee driving a rental car owned by a self-insured rental car company, were denied underinsured motorist benefits under their policies because those policies contained a self-insurer exclusion. The Supreme Court reversed, holding that section 38a-334-6(c)(2)(B) of the regulations is invalid as applied because it conflicts with the public policy manifested in Conn. Gen. Stat. 38a-336(a)(1) that requires insurance policies to provide underinsured motorist coverage. View "Tannone v. Amica Mutual Insurance Co." on Justia Law

The Eighth Circuit held that the district court erred in holding that the misstatement clause in the contested life insurance policy did not apply where it might (or would) reduce the benefits of an incontestable policy to zero. In this case, the policy contained a provision that the policy was incontestable after two years, as well as a provision which permitted the insurer to reduce the benefit to the amount the premium would have purchased at the insured's correct age. The court explained that it was not apparent from the language in the policy that the amount payable was limited to the benefits available under the policy the insured actually purchased if she was ineligible for it at her age. Therefore, the court affirmed the district court's denial of summary judgment to Farmers, but reversed its grant of summary judgment to plaintiff, remanding for further proceedings. View "Yang v. Farmers New World Life Insurance Co." on Justia Law

The First Circuit vacated the district court’s grant of Liberty Mutual Insurance Company’s summary judgment motion in this case alleging that Liberty breached Plaintiff’s contractual rights by wrongfully denying his request for coverage under an insurance policy, holding that the district court’s reasoning in granting Liberty’s motion for summary judgment was flawed.Plaintiff argued in his complaint that Liberty improperly denied his coverage request under the Directors and Officers insurance policy that Liberty had issued to a Puerto Rico hospital where Plaintiff served as the medical director. The district court concluded that, under the policy, the “Claim” that would give rise to the “Loss” for which Plaintiff sought coverage should be “deemed first made” before the policy took effect and, therefore, was not covered by the policy. The First Circuit vacated the district court’s order granting Liberty’s summary judgment motion, holding that the “Claim” for which Plaintiff sought coverage from Liberty was not “first made” prior to the beginning of the policy at issue, and the district court wrongly construed the policy in concluding otherwise. View "Jimenez-Castaner v. Liberty Mutual Insurance Co." on Justia Law

In 2013, Tarinika Smith and twelve minor children (collectively Plaintiffs) were involved in an automobile accident with a vehicle driven by Adlai Johnson. Smith was operating a passenger van owned by Mount Vernon Missionary Baptist Church (Mt. Vernon), located in Rossville, Tennessee, which was transporting the children. The accident occurred in Marshall County, Mississippi. At the time of the collision, Smith was pregnant. Plaintiffs and Johnson were all Tennessee residents. The Marshall County Circuit Court entered an order dismissing Johnson from the suit for Plaintiffs’ failure to timely serve him. Church Mutual Insurance Company (“Church Mutual”), Mt. Vernon's insurer, moved to have the trial court declare that Tennessee substantive law controlled the case. After the trial court so declared, Church Mutual moved for summary judgment based on Tennessee law prohibiting direct actions against insurers for uninsured motorist (“UM”) claims. The trial court then entered summary judgment in favor of Church Mutual. Plaintiffs sought interlocutory review of all three rulings. The Mississippi Supreme Court found no error in the dismissal of Johnson for Plaintiffs’ failure to serve. Furthermore, the Supreme Court found no error with the trial court applying Tennessee law to determine whether the contract provided UM coverage to Plaintiffs. However, the Court determined the trial court erred in applying Tennessee substantive law. Therefore, the Court reversed those judgments of the Marshall County Circuit Court and remand for further proceedings. View "Smith v. Church Mutual Insurance Company" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to American Family in an action alleging breach of contract, negligent misrepresentation, and violation of Minnesota's consumer fraud statutes. The court held that American Family did not breach the contract because nothing in the policy imposed on American Family a contractual obligation to make objectively reasonable or accurate replacement cost estimates; American Family did not negligently misrepresent the replacement cost of plaintiffs home where, regardless of any breach of duty, no genuine dispute existed as to justifiable reliance upon the estimates; and plaintiffs could point to any promise, misrepresentation, or false statement made by American Family, let alone one that they relied upon, justifiably or unjustifiably, in deciding to purchase or renew the policy. View "Nelson v. American Family Mutual Insurance Co." on Justia Law