Justia Insurance Law Opinion Summaries

After the Garcias bought their Lake Station Property in 2004, it was used as an automobile repair shop and a day spa. It previously was used as a dry cleaning facility and contained six underground storage tanks: four were used for petroleum-based Stoddard solvent, one was used for gasoline, and the last for heating oil. In 1999, the dry cleaning company reported a leak from the Stoddard tanks to the Indiana Department of Environmental Management (IDEM). In 2000, a site investigation was conducted and five groundwater monitoring wells were installed. IDEM requested additional information and testing in 2001 and 2004. The Garcias claim they had no knowledge of the preexisting environmental contamination before insuring with Atlantic. A 2014 letter from Environmental Inc. brought the contamination to the Garcias’ attention. The Garcias hired Environmental to investigate and learned that Perchloroethylene solvent and heating oil still affected the property. Atlantic obtained a declaration that its Commercial General Liability Coverage (CGL) policies did not apply. The Seventh Circuit affirmed, reading a “Claims in Process” exclusion to preclude coverage for losses or claims for damages arising out of property damage—known or unknown—that occurred or was in the process of occurring before the policy’s inception. View "Atlantic Casualty Insurance Co v. Garcia" on Justia Law

The Court of Appeal affirmed the trial court's order granting Allied's applications for prejudgment attachment stemming from an insurance dispute because Allied had established the probable validity of its claims. The court held that Allied established the probable validity of its unjust enrichment claim where Allied had a right of reimbursement because the intentional noncompliance policy exclusion applied in this case. The court also held that Allied also established the probable validity of its rescission claim because substantial evidence supported the trial court's finding that SCWW and GCES misrepresented and concealed a material fact (that they did not accept, process, transport or discharge hazardous waste). The trial court did not err in granting the applications for prejudgment attachment based on implied contract theories even if an express contract covers the same subject. Finally, the trial court properly calculated prejudgment interest from the date Allied paid $2.5 million. View "Santa Clara Waste Water Co. v. Allied World National Assurance Co." on Justia Law

Plaintiff Mahmoud Alzayat, on behalf of the People of the State of California, filed a qui tam action against his employer, Sunline Transit Agency, and his supervisor, Gerald Hebb, alleging a violation of the Insurance Frauds Prevention Act (IFPA or the Act). (Ins. Code, sec. 1871 et seq.) Alzayat alleged Hebb made false statements in an incident report submitted in response to Alzayat’s claim for workers’ compensation, and Hebb repeated those false statements in a deposition taken during the investigation into Alzayat’s claim for compensation. Hebb’s false statements resulted in Alzayat’s claim being initially denied. Defendants filed motions for judgment on the pleadings contending: (1) this lawsuit was based on allegedly false and fraudulent statements Hebb made in connection with a workers’ compensation proceeding and was, therefore, barred by the litigation privilege under Civil Code section 47(b); and (2) Alzayat’s claim was barred by the workers’ compensation exclusivity rule. The superior court concluded the workers’ compensation exclusivity rule was inapplicable, but ruled the litigation privilege barred Alzayat’s claim. Alzayat appealed, contending the litigation privilege only applied to tort claims and not to statutory claims such as an action under the IFPA, and the IFPA was a specific statute that prevailed over the general litigation privilege. The Court of Appeal agreed with Alzayat that his lawsuit was not barred by the litigation privilege. Furthermore, the Court concluded this lawsuit was not barred by the workers’ compensation exclusivity rule. The trial court erred by granting judgment on the pleadings for defendants, so we reverse the judgment. View "California ex rel. Alzayat v. Hebb" on Justia Law

Cigna filed suit against Humble seeking overpayments and Humble counterclaimed under the Employee Retirement Income Security Act (ERISA) and Texas state common law. The district court concluded that Cigna's claims and defenses failed as a matter of law, and awarded Humble damages and penalties. The Fifth Circuit held that the district court failed to apply the required abuse of discretion analysis; other courts have upheld Cigna's interpretation of its insurance plans; and there was substantial evidence supporting Cigna's interpretation. Therefore, the court reversed the district court's judgment. The court also held that Cigna was not a named plan administrator and reversed the district court's award of ERISA penalties against Cigna. The court vacated in part the district court's dismissal of Cigna's claims against Humble and vacated the district court's award of attorneys' fees, remanding for further consideration. View "Connecticut General Life Insurance Co. v. Humble Surgical Hospital, LLC" on Justia Law

Pursuant to the regulations that implement The Unfair Insurance Practices Act (“Act 205”), an insured can appeal to the Insurance Commissioner (“Commissioner”) of Appellee Pennsylvania Insurance Department (“Department”) when an insurer decides to cancel or not renew the insured’s homeowners’ insurance policy. This matter went before the Pennsylvania Supreme Court regarding whether, in the context of such an appeal, an insurer was collaterally estopped from litigating issues that were previously discussed in an investigative report that Consumer Services supplied in an earlier and separate appeal involving the same parties, when the Commissioner never entered a final order in the earlier appeal. The Supreme Court held that, for purposes of the doctrine of collateral estoppel, an investigative report does not constitute a final adjudication on the merits of any issue. Accordingly, an insurer is not collaterally estopped from litigating issues in the scenario described here. View "Skotnicki v. Insurance Department" on Justia Law

West Side was working on ConAgra’s grain bin when it exploded. In 2014, the Seventh Circuit held that West Side was solely liable for the injuries that workers suffered in the explosion and was liable for $3 million in property damage to ConAgra’s bin. West Side had an $11 million excess insurance policy with RSUI. West Side sued, alleging that RSUI breached its duty to settle ConAgra’s property damage claim. The Seventh Circuit affirmed summary judgment in favor of RSUI. Under Illinois law, the damage-to-property clause excludes the claim from coverage. RSUI had no duty to settle a claim that the insurance policy does not cover. Holding otherwise would undermine the basic premise of the damage-to-property exclusion: that general liability policies are not intended to protect the insured from the normal risks of its business. The damage that West Side caused was one of the normal risks associated with its business of remedying hot grain bins before they explode. Even if West Side was only working on the grain when the explosion occurred, it is immaterial. The exclusion does not apply only to the precise area of the property being worked on if the work performed was poor. View "West Side Salvage, Inc. v. RSUI Indemnity Co." on Justia Law

The application of Georgia law concerning a pollution exclusion contained in an insurance policy as excluding coverage for bodily injuries resulting from the ingestion of lead-based paint under the principle of lex loci contractus does not violate Maryland public policy.Appellants were exposed to lead-based paint at a property owned by the Salvation Army. Appellants sued Defendants, alleging lead-based paint related tort claims. Liberty Mutual Insurance Company issued comprehensive general liability insurance policies to the Salvation Army. The policies, which were purchased in Georgia, did not include lead-based paint exclusion provisions but did include pollution exclusion provisions. Appellants sought affirmation that Liberty Mutual was obligated to indemnify the Salvation Army and defend against Appellants’ claims. Liberty Mutual moved to dismiss the complaint, arguing that Maryland courts follow the doctrine of lex loci contracts in choosing the applicable law and that, under Georgia law, the insurance policy did not cover claims for lead-based paint poisoning. The Supreme Court held that application of Georgia law concerning the policy’s pollution exclusion under the principle of lex loci contracts does not violate Maryland public policy. View "Brownlee v. Liberty Mutual Fire Insurance Co." on Justia Law

The Tenth Circuit addressed whether the federal district court in Colorado may exercise specific personal jurisdiction over out-of-state defendant Continental Motors, Inc. based upon its contacts with Colorado through its website. Continental Motors’ website allows airplane repair businesses known as fixed- base operators (“FBOs”) to obtain unlimited access to its online service manuals in exchange for an annual fee. Arapahoe Aero, a Colorado-based FBO participating in the program, accessed and consulted the manuals in servicing an airplane that contained engine components manufactured by Continental Motors. The airplane later crashed in Idaho on a flight from Colorado. After the crash, Old Republic Insurance Company, the airplane’s insurer, paid the owner for the property loss and filed a subrogation action against Continental Motors in Colorado federal district court, seeking reimbursement. Old Republic alleged that Continental Motors’ online service manuals and bulletins contained defective information, thereby causing the crash. Continental Motors moved to dismiss the lawsuit for lack of personal jurisdiction, arguing that it did not purposely direct its activities at Colorado. Old Republic conceded that Continental Motors did not maintain sufficient contacts with Colorado to support jurisdiction for all purposes. The district court granted the motion to dismiss, ruling that it did not have specific jurisdiction over Continental Motors. On appeal, Old Republic maintains that Continental Motors was subject to specific personal jurisdiction in Colorado for purposes of this case. Finding no reversible error in dismissal, the Tenth Circuit affirmed. View "Old Republic Insurance Co. v. Continental Motors" on Justia Law

S.D. Codified Laws 58-11-9.4, which requires underinsured motorist (UIM) coverage in motor vehicle liability policies of insurance, does not limit UIM coverage to primary insurance policies and contemplates additional UIM coverage. Therefore, umbrella policies that include UIM coverage are subject to the same public policy prohibition invalidating an exception from coverage for accidents involving government owned vehicles.Plaintiffs purchased a motor vehicle liability policy from one insurer and a personal liability umbrella policy from a separate but related insurer. Both policies provided UIM coverage but both excluded coverage for accounts caused by government vehicles. When one of the plaintiffs was injured in an accident involving a government vehicle, Plaintiffs filed this declaratory action to determine the enforceability of the government vehicle exclusion in both policies. The circuit court determined that the exclusion was not enforceable in the motor vehicle liability policy but was enforceable in the umbrella policy. The Supreme Court reversed, holding that the circuit court erred in upholding the government vehicle exclusion in the umbrella policy. View "Streff v. State Farm Mutual Automobile Insurance Co." on Justia Law

In 2002, Toulon applied for Continental’s long-term care insurance policy. Continental provided a Long-Term Care Insurance Personal Worksheet to help Toulon determine whether the policy would work for her, given her financial circumstances. The Worksheet discussed Continental’s right to increase premiums and how such increases had previously been applied. Toulon did not fill out the Worksheet but signed and submitted it with her application. Toulon’s Policy stated that although Continental could not cancel the Policy if each premium was paid on time, Continental could change the premium rates. There was a rider, stating that premiums would not be increased during the first 10 years after the coverage date. In September 2013, Continental raised Toulon’s premiums by 76.5%. Toulon sued, on behalf of herself and a purported class. The Seventh Circuit affirmed dismissal, agreeing that Toulon failed to state claims for fraudulent misrepresentation because she did not identify a false statement or for fraudulent omission because Continental did not owe Toulon a duty to disclose. The court also properly dismissed Toulon’s claim under the Illinois Consumer Fraud and Deceptive Practices Act (ICFA) because she did not identify a deceptive practice, a material omission, or an unfair practice. The unjust enrichment claim failed because claims of fraud and statutory violation, upon which Toulon's unjust enrichment claim was based, were legally insufficient and an express contract governed the parties’ relationship. View "Toulon v. Continental Casualty Co." on Justia Law