Justia Insurance Law Opinion Summaries

The Supreme Court withdrew its judgment and opinion issued in this case on April 7, 2017 and, while it reaffirmed the legal principles and rules announced in that opinion, it disagreed as to the procedural effect of those principles in this case. Its disposition remained the same, however, because a majority of the Court agreed to reverse the judgment of the court of appeals and remand the case to the trial court for a new trial.The primary issue in this case was whether Insured could recover policy benefits based on Insurer’s violation of the Texas Insurance Code even where the jury failed to find that Insurer failed to comply with its obligations under the policy. Here, the Court (1) unanimously reaffirmed the five rules it announced in the first opinion addressing the relationship between contract claims under an insurance policy and tort claims under the Insurance Code; (2) reaffirmed the holding in the first opinion that the trial court erred by disregarding the jury’s answer to a jury question; and (3) addressed the procedural effect of the Court’s holdings in this case but reached three different conclusions. The Court then remanded this case for a new trial. View "USAA Texas Lloyds Co. v. Menchaca" on Justia Law

Purnell hired Plaintiffs (Gabarette and Castillo) as independent contractors to deliver furniture in Virginia. Because it was a last-minute request, Plaintiffs did not have a vehicle available, so Purnell permitted them to use a truck that Purnell had rented from Penske. Driving to their destination, Plaintiffs stopped on the side of the interstate so Castillo could check on the security of the furniture load. Another driver struck the rented truck, killing Castillo and injuring Gabarette. Purnell’s motor vehicle insurance policy, issued by Wausau, included an uninsured/underinsured motorists (UIM) endorsement required by Virginia law, with coverage limited “to those autos shown as covered autos.” For UIM coverage—as opposed to liability coverage—the policy restricted coverage to “Owned Autos Only” and listed three vehicles on the “Schedule of Covered Autos You Own,” not including the rented Penske truck. The Declarations Pages provided that Wausau would “pay in accordance with the Virginia Uninsured Motorists Law, all sums the insured is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.” For UIM purposes, an insured party is “[a]nyone . . . occupying a covered auto.” The UIM endorsement defines “covered auto” as “a motor vehicle, or a temporary substitute, with respect to which the bodily injury or property damage liability coverage of the policy applies.” The district court granted Wausau summary judgment regarding UIM coverage. The Fourth Circuit affirmed, based on the plain language of the policy. View "Levine v. Employers Insurance Co. of Wausau" on Justia Law

Plaintiffs filed a putative class action, alleging that defendants (insurance providers, banks, and credit card companies) targeted credit card holders with fraudulent solicitations for illegal accidental disability and medical expense insurance policies. Plaintiffs were among the cardholders who purchased those policies, which plaintiffs allege were void ab initio because they violated New York insurance law. Although plaintiffs did not suffer qualifying losses or make claims for coverage, they argued that they are nevertheless entitled to reimbursement of the premiums and fees they paid defendants, plus enhanced damages, based on quasi‐contract, civil fraud, and statutory claims. The district court dismissed the suit, reasoning that plaintiffs could not establish the injury‐in‐fact element of Article III standing. The court concluded the policies were not void ab initio because under a New York savings statute, plaintiffs would have received coverage had they filed claims for qualifying losses, N.Y. Ins. Law 3103. The Second Circuit vacated, stating that an Article III court must resolve the threshold jurisdictional standing inquiry before it addresses the claim's merits. The district court’s analysis conflated the requirement for an injury in fact with the underlying validity of plaintiffs’ arguments, and engaged a question of New York state law that the state courts have yet to answer. View "DuBuisson v. Stonebridge Life Insurance Co." on Justia Law

The Supreme Court answered two certified questions from the United States Court of Appeals for the Fourth Circuit in this dispute between two insurance companies as follows: (1) The Workers’ Compensation Office of Judges does not have jurisdiction over a declaratory judgment action involving a dispute between insurance carriers regarding whether one or both carriers are responsible for contributing toward payment of an employee’s workers’ compensation benefits; and (2) Pursuant to W. Va. Code 33-46A-7(a), parties to a professional employer agreement must designate either the professional employer organization (PEO) or the client-employer as the responsible party for obtaining workers’ compensation insurance coverage for covered employees. Further, when parties to a professional employer agreement designate the PEO as the responsible party for obtaining workers’ compensation insurance coverage for covered employees, the policy obtained by the PEO is primary over a policy obtained by a client-employer. Thus, coverage under a workers’ compensation policy purchased by the client-employer is triggered only if the PEO or its carrier default on their obligation to provide workers’ compensation coverage. View "Brickstreet Mutual Insurance Co. v. Zurich American Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the circuit court’s grant of summary judgment to Plaintiffs’ underinsured motorist (UIM) carrier, Allstate Property and Casualty Co. (Allstate), holding that the court of appeals erred in concluding that Plaintiffs failed to provide Allstate with timely notice of the UIM claim and that they failed to rebut the presumption that Allstate was prejudiced by the untimely notice.Specifically at issue in this case was whether the court of appeals misinterpreted the UIM policy’s “proof of claim” provision as a “notice of accident” provision. The Supreme Court held (1) the operative event triggering the notice requirement in Plaintiffs’ UIM is the tender of the tortfeasor’s underlying policy limit, not the accident itself; (2) Wis. Stat. 631.81(1) does not apply to the UIM policy provision at issue; and (3) therefore, Plaintiffs provided Allstate with timely proof of their UIM claim as required by the policy. The Court remanded the case to the circuit court for further proceedings. View "Shugarts v. Mohr" on Justia Law

Edgar and Laurie Cook owned 200 acres of property in Bonner County, Idaho. The Property included Bloom Lake, a cabin, and a campground. The Cooks allowed people to use the lake and campground without charging a fee, but they solicited voluntary donations to help with the Property’s upkeep. Approximately twenty years ago, Michael Chisholm asked the Cooks if he could stay in the cabin in exchange for maintaining the Property. They agreed, and Chisholm began caring for the Property. In 2015, Joseph Stanczak and his girlfriend were camping at the Property. Chisholm invited them into the cabin, and a dispute later arose between Chisholm and Stanczak. Chisholm shot Stanczak twice with a .45 caliber handgun, then left the scene. Authorities later apprehended Chisholm and charged him with Aggravated Battery and Use of a Deadly Weapon in Commission of a Felony. Chisholm entered an Alford plea, by which he pleaded guilty without admitting guilt as to all the elements of the crimes. He was sentenced to prison. At issue in this was was the interpretation of the insuring clause of a bodily injury liability provision in a property insurance contract. The insurer, Farm Bureau Mutual Insurance Company of Idaho, determined it had no duty to defend or indemnify the Cooks because the shooting was not a covered act under the policy. Farm Bureau filed a declaratory judgment action seeking judicial confirmation of its determination. Farm Bureau then filed a motion for summary judgment, requesting that the district court find as a matter of law that the intentional shooting was not an “occurrence.” The district court granted Farm Bureau’s motion. Finding no reversible error in the district court's decision, the Idaho Supreme Court affirmed judgment in favor of Farm Bureau. View "Farm Bureau Ins v. Cook" on Justia Law

This appeal stemmed from a dispute between Summit Park Townhome Association and its insurer, Auto-Owners Insurance Company, over the value of property damaged in a hail storm. To determine the value, the district court ordered an appraisal and established procedural requirements governing the selection of impartial appraisers. After the appraisal was completed, Auto-Owners paid the appraised amount to Summit Park. But the court found that Summit Park had failed to make required disclosures and had selected a biased appraiser. In light of this finding, the court vacated the appraisal award, dismissed Summit Park’s counterclaims with prejudice, and awarded interest to Auto-Owners on the amount earlier paid to Summit Park. Summit Park appealed, raising six issues of alleged error with the proceedings. The Tenth Circuit affirmed, however, finding that in the absence of a successful appellate challenge to the disclosure order, Summit Park was obligated to comply and did not. The court was thus justified in dismissing Summit Park’s counterclaims. In addition, Summit Park’s failure to select an impartial appraiser compelled vacatur of the appraisal award under the insurance policy. View "Auto-Owners v. Summit Park" on Justia Law

This appeal stemmed from a dispute between Summit Park Townhome Association and its insurer, Auto-Owners Insurance Company, over the value of property damaged in a hail storm. To determine the value, the district court ordered an appraisal and established procedural requirements governing the selection of impartial appraisers. After the appraisal was completed, Auto-Owners paid the appraised amount to Summit Park. But the court found that Summit Park had failed to make required disclosures and had selected a biased appraiser. In light of this finding, the court vacated the appraisal award, dismissed Summit Park’s counterclaims with prejudice, and awarded interest to Auto-Owners on the amount earlier paid to Summit Park. Summit Park appealed, raising six issues of alleged error with the proceedings. The Tenth Circuit affirmed, however, finding that in the absence of a successful appellate challenge to the disclosure order, Summit Park was obligated to comply and did not. The court was thus justified in dismissing Summit Park’s counterclaims. In addition, Summit Park’s failure to select an impartial appraiser compelled vacatur of the appraisal award under the insurance policy. View "Auto-Owners v. Summit Park" on Justia Law

Nautilus Insurance Company ("Nautilus") and Lyon Fry Cadden Insurance Agency, Inc. ("LFC"), separately petitioned the Alabama Supreme Court for writs of mandamus directing the the trial court to vacate its orders denying their motions to dismiss the action filed against them by Precision Sand Products, LLC ("Precision"). From June 10, 2015, to June 10, 2016, Precision had in place a commercial general-liability insurance policy it had purchased from Nautilus through LFC, an insurance broker. In March 2016, Terry Williams sued Precision seeking recovery for injuries he allegedly suffered on Precision's property during the period the policy was in effect. Pursuant to the terms of the policy, Precision demanded that Nautilus defend and indemnify it against the Williamses' claims. Nautilus agreed, under reservation of rights, to defend Precision against the Williamses' claims. Then Nautilus filed a declaratory-judgment action against Precision and the Williamses at the federal district court, seeking a judgment declaring that, pursuant to an exclusion in the policy, Nautilus was not obligated to defend and indemnify Precision against the Williamses' claims. Precision filed in the Williamses' action a "crossclaim complaint" against Nautilus and LFC ("the state action"), asserting against both Nautilus and LFC various contract and negligence claims. Before the Alabama Supreme Court, LFC argued Precision could not recover against LFC for fraudulently procuring inadequate insurance or for negligently failing to procure adequate insurance unless and until Precision was actually denied coverage for, or a defense against, the Williamses' claims. The Supreme Court found the trial court, as a court of general jurisdiction, clearly had the constitutional and statutory authority to hear the types of claims Precision asserted against LFC. Thus, LFC did not demonstrate it had a clear legal right to dismissal from the state action based on a lack of subject-matter jurisdiction over Precision's claims. Nautilus has demonstrated that, under section 6-5-440 Ala. Code 1975, it had a clear legal right to dismissal from the state action. Accordingly, the Court granted Nautilus's petition and issued the writ directing the trial court to dismiss Nautilus from the state action. Furthermore, the Court determined LFC failed to carry its burden of demonstrating that it had a clear legal right to dismissal from the state action. Accordingly, LFC's petition was also denied. View "Ex parte Nautilus Insurance Company." on Justia Law

Plaintiffs Brian and Nancy Langevin appealed a superior court order denying their motion for summary judgment and granting summary judgment to defendant, Travco Insurance Company (Travco). The trial court ruled that plaintiffs were not entitled to payment from Travco under their medical payments coverage to pay a lien asserted by the plaintiffs’ health insurer because such payment would constitute a “duplicate payment” contrary to the language of both RSA 264:16, IV (2014) and plaintiffs’ automobile insurance policy with Travco. The New Hampshire Supreme Court reversed and remanded. "Although our interpretation does not allow the plaintiffs to retain the benefit of payment from both a health insurer and an automobile insurer for the same medical expense, we recognize that it does leave open the possibility that the plaintiffs will receive a double benefit in a different sense — they may receive and retain the benefit of medical payments coverage, and a recovery from the third-party tortfeasor. This type of double benefit is not prohibited by RSA 264:16, IV." The Court found the plain language of RSA 264:16, IV prohibited duplicate payments for the same medical expense from only two sources: “medical payments coverage and a health insurance policy.” It does not address payments, duplicate or otherwise, from a tortfeasor or a tortfeasor’s liability insurer. Because the statute expressly prohibited “duplicate payment” only from medical payments coverage and a health insurance policy, with no reference to payments from the tortfeasor or the tortfeasor’s liability policy, the Court construed the prohibition on “duplicate payment” as applying only to medical payments from health insurers and automobile insurers. View "Langevin v. Travco Insurance Company" on Justia Law