Justia Insurance Law Opinion Summaries

Baldwin Mutual Insurance Company ("Baldwin Mutual") appealed a circuit court’s class certification in a suit filed by Gloria McCain. McCain owned a house insured by Baldwin Mutual. The policy provided that any covered property losses would be settled “at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace the damaged property.” McCain's house was damaged twice, she filed claims and was reimbursed by Baldwin Mutual. In each incident, an independent adjuster examined McCain's damaged property and prepared an estimate. Baldwin Mutual paid McCain's claim in accordance with the estimate prepared by the adjuster. The record contained no allegation or evidence indicating that McCain sought more money from Baldwin Mutual in connection with those claims or that she was unhappy in any way. Nevertheless, McCain’s complaint alleged Baldwin Mutual had wrongfully been reducing the amount paid on claims made on actual-cash-value policies inasmuch as its practice was to deduct some amount for depreciation not only of the damaged materials and the labor costs of initially installing those damaged materials (based on their condition prior to the covered damage and their expected life span), but also of the labor costs associated with the removal of the damaged materials. The trial court certified a class based on McCain's claims, and Baldwin Mutual appealed the certification order. The Alabama Supreme Court reversed the certification order because "the class definition proposed by McCain in her brief submitted after the class-certification hearing was materially different from the class definition offered by McCain in her original complaint." Upon remand, McCain filed a second amended complaint that retained the allegations in her first amended complaint and amended the definition of the proposed class. In response to the amended complaint, Baldwin Mutual moved for motion for a summary judgment, contending that McCain's claims were barred by res judicata based on a final judgment of the trial court in "the Adair litigation," which allegedly involved the same claims and same parties. The Alabama Supreme Court concluded the trial court erred in certifying McCain's action for class treatment because the claims of the purported class representative were subject to res judicata. View "Baldwin Mutual Insurance Company v. McCain" on Justia Law

Plaintiff filed suit claiming accidental death benefits under a policy with Minnesota Life after her husband was bitten by a mosquito carrying West Nile Virus and passed away. The Fifth Circuit reversed the district court's dismissal of the complaint based on summary judgment, holding that there were genuine disputes of material fact as to whether the husband's death was accidental and thus an exclusion under the policy, and whether there were other causes of his death. Accordingly, the court remanded for a factfinder to decide determinative facts of plaintiff's breach-of-contract claim. However, the court affirmed the district court's dismissal of the bad-faith tort claim because Minnesota Life had a reasonable basis for denying the claim. View "Wells v. Minnesota Life Insurance Co." on Justia Law

At age 56, Newman purchased a long-term-care insurance plan MetLife, opting for one of MetLife’s non-standard options for paying her insurance premiums, “Reduced-Pay-at 65.” From the outset, Newman paid the elevated premium associated with her Reduced-Pay option. When she reached age 65, her premium was cut in half. When Newman was 67 years old, she was startled to discover that MetLife that year more than doubled her insurance premium. The Seventh Circuit reversed the dismissal of Newman’s proposed class action, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The allegations raised in the complaint were enough to entitle Newman to prevail on the liability phase of her contract claim and to go forward on her remaining claims. The policy language is at least ambiguous, because it can be read reasonably to fix a person’s premium, if she had opted for the Reduced-Pay option. Illinois construes ambiguous contracts against the insurer. Newman’s complaint also alleged facts that plausibly show that MetLife’s policy was both deceptive and unfair under the Illinois Consumer Fraud Act and adequately alleged fraudulent concealment and reasonable reliance. View "Newman v. Metropolitan Life Insurance Co" on Justia Law

At age 56, Newman purchased a long-term-care insurance plan MetLife, opting for one of MetLife’s non-standard options for paying her insurance premiums, “Reduced-Pay-at 65.” From the outset, Newman paid the elevated premium associated with her Reduced-Pay option. When she reached age 65, her premium was cut in half. When Newman was 67 years old, she was startled to discover that MetLife that year more than doubled her insurance premium. The Seventh Circuit reversed the dismissal of Newman’s proposed class action, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The allegations raised in the complaint were enough to entitle Newman to prevail on the liability phase of her contract claim and to go forward on her remaining claims. The policy language is at least ambiguous, because it can be read reasonably to fix a person’s premium, if she had opted for the Reduced-Pay option. Illinois construes ambiguous contracts against the insurer. Newman’s complaint also alleged facts that plausibly show that MetLife’s policy was both deceptive and unfair under the Illinois Consumer Fraud Act and adequately alleged fraudulent concealment and reasonable reliance. View "Newman v. Metropolitan Life Insurance Co" on Justia Law

The United States District Court for the Western District of Washington certified a question of Washington law to the Washington Supreme Court. The underlying case involved an insurance coverage dispute between two authorized foreign insurers, Ohio Security Insurance Company and AXIS Insurance Company. Ohio Security tried to serve AXIS at its office in Chicago, Illinois, rather than through the Washington State Office of the Insurance Commissioner. The United States District Court asked whether Washington law established service through the Washington State Insurance Commissioner (Insurance Commissioner) as the exclusive means of service for authorized foreign insurers in Washington. The answer to the certified question was yes: RCW 4.28.080(7)(a) provided the exclusive means of service on authorized foreign insurers. View "Ohio Sec. Ins. Co. v. AXIS Ins. Co." on Justia Law

The United States District Court for the Western District of Washington certified a question of Washington law to the Washington Supreme Court. The underlying case involved an insurance coverage dispute between two authorized foreign insurers, Ohio Security Insurance Company and AXIS Insurance Company. Ohio Security tried to serve AXIS at its office in Chicago, Illinois, rather than through the Washington State Office of the Insurance Commissioner. The United States District Court asked whether Washington law established service through the Washington State Insurance Commissioner (Insurance Commissioner) as the exclusive means of service for authorized foreign insurers in Washington. The answer to the certified question was yes: RCW 4.28.080(7)(a) provided the exclusive means of service on authorized foreign insurers. View "Ohio Sec. Ins. Co. v. AXIS Ins. Co." on Justia Law

The Supreme Judicial Court vacated the judgment of the superior court entering summary judgment in favor of Curtis Frye, Daryl Frye, and the Estate of Carroll Frye (collectively, the Estate) on the Estate’s action seeking enforcement of a property insurance contract for the loss of a dwelling by fire. The Court held that the trial court erred by interpreting Carroll’s insurance contract with MMG Insurance Company as providing coverage to the Estate because when the fire occurred, several weeks after Carroll’s death, none of the parties was both insured by MMG and in possession of an insurable interest. Therefore, Me. Rev. Stat. 24-A, 2406 preluded enforcement of the policy as to the dwelling as a matter of law. The Court remanded the case for entry of a summary judgment in favor of MMG. View "Estate of Carroll G. Frye v. MMG Insurance Co." on Justia Law

The Supreme Judicial Court vacated the judgment of the superior court entering summary judgment in favor of Curtis Frye, Daryl Frye, and the Estate of Carroll Frye (collectively, the Estate) on the Estate’s action seeking enforcement of a property insurance contract for the loss of a dwelling by fire. The Court held that the trial court erred by interpreting Carroll’s insurance contract with MMG Insurance Company as providing coverage to the Estate because when the fire occurred, several weeks after Carroll’s death, none of the parties was both insured by MMG and in possession of an insurable interest. Therefore, Me. Rev. Stat. 24-A, 2406 preluded enforcement of the policy as to the dwelling as a matter of law. The Court remanded the case for entry of a summary judgment in favor of MMG. View "Estate of Carroll G. Frye v. MMG Insurance Co." on Justia Law

State Farm issued two policies of motor vehicle insurance to plaintiff, covering a Pontiac Grand Am and a Pontiac GTO. Each policy provided liability, uninsured motorist, and underinsured motorist coverage in the amounts of $100,000 per person and $300,000 per accident. Each contained a “Driver Exclusion Endorsement” that excluded Evans. Plaintiff was a passenger in a Hyundai automobile that was owned and operated by Evans when Evans’s vehicle was involved in an accident with another automobile. Evans was at fault. Plaintiff was injured and had more than $30,000 in medical bills. Evans’s insurer paid plaintiff $20,000, the policy limit. State Farm denied plaintiff's claim for underinsured motorist coverage. The circuit court granted plaintiff summary judgment. The appellate court and the Illinois Supreme Court affirmed, citing the Illinois Safety and Family Financial Responsibility Law (625 ILCS 5/7-601(a)), under which no one may operate a motor vehicle or allow a vehicle to be operated without obtaining sufficient insurance, and the Insurance Code (215 ILCS 5/143a, 143a-2), requiring automobile liability insurance policies to include uninsured and underinsured motorist coverage. The court reasoned that the named driver exclusion violated Illinois mandatory insurance requirements and public policy where the exclusion barred coverage for the named insured. View "Thounsavath v. State Farm Mutual Automobile Insurance Co." on Justia Law

State Farm issued two policies of motor vehicle insurance to plaintiff, covering a Pontiac Grand Am and a Pontiac GTO. Each policy provided liability, uninsured motorist, and underinsured motorist coverage in the amounts of $100,000 per person and $300,000 per accident. Each contained a “Driver Exclusion Endorsement” that excluded Evans. Plaintiff was a passenger in a Hyundai automobile that was owned and operated by Evans when Evans’s vehicle was involved in an accident with another automobile. Evans was at fault. Plaintiff was injured and had more than $30,000 in medical bills. Evans’s insurer paid plaintiff $20,000, the policy limit. State Farm denied plaintiff's claim for underinsured motorist coverage. The circuit court granted plaintiff summary judgment. The appellate court and the Illinois Supreme Court affirmed, citing the Illinois Safety and Family Financial Responsibility Law (625 ILCS 5/7-601(a)), under which no one may operate a motor vehicle or allow a vehicle to be operated without obtaining sufficient insurance, and the Insurance Code (215 ILCS 5/143a, 143a-2), requiring automobile liability insurance policies to include uninsured and underinsured motorist coverage. The court reasoned that the named driver exclusion violated Illinois mandatory insurance requirements and public policy where the exclusion barred coverage for the named insured. View "Thounsavath v. State Farm Mutual Automobile Insurance Co." on Justia Law