Justia Insurance Law Opinion Summaries

The Supreme Court quashed the decision of the Fifth District Court of Appeals, which held on appeal in this case that trial courts may apply a contingency fee multiplier to an award of attorney’s fees to a prevailing party only in “rare” and “exceptional” circumstances. Petitioners, the insureds in a successful dispute with their homeowners’ insurance carrier, argued before the Supreme Court that the Fifth District’s decision misapplied Supreme Court precedent from Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), and its progeny. The Supreme Court agreed with Petitioners, holding that there is no “rare” and “exceptional” circumstances requirement before a trial court may apply a contingency fee multiplier. View "Joyce v. Federated National Insurance Co." on Justia Law

Excess Line Association of New York (ELANY), a legislatively created advisory association under the supervision of the Department of Financial Services (DFS), does not have capacity to sue its members to recover fees that it is statutorily authorized to receive and does not have capacity to sue to compel an accounting to determine amounts allegedly owed.ELANY commenced this action against Defendants - a third-generation, family-owned and operated insurance brokerage firm and consortium - seeking, inter alia, to recover stamping fees for excess line policies allegedly procured from 1989 through 2011 and to enforce its purported right to conduct an examination and accounting pursuant to the Insurance Law. Supreme Court dismissed the action, determining that ELANY lacked capacity to sue. The Appellate Division affirmed. The Court of Appeals affirmed, holding that the courts below correctly concluded that ELANY does not have capacity to sue for the relief sought. View "Excess Line Ass’n of New York v. Waldorf & Associates" on Justia Law

Ron Warren, individually and on behalf of the Estate of Derek Hebert, filed a petition for damages seeking to recover for the wrongful death of his son in a recreational boating accident under general maritime law and products liability. A jury found the defendant, Teleflex, Inc. liable under the plaintiff’s failure to warn theory of the case and awarded compensatory damages of $125,000 and punitive damages of $23,000,000. The court of appeal affirmed. The Louisiana Supreme Court granted certiorari mainly to review whether the trial court properly granted the plaintiff a new trial and whether the award of punitive damages was excessive and resulted in a violation of the defendant’s right to constitutional due process. After reviewing the record and the applicable law in this case, the Supreme Court found no reversible error in the trial court’s rulings; however, the Court did find the award of punitive damages was excessive and resulted in a violation of the defendant’s right to constitutional due process. View "Warren v. Shelter Mutual Ins. Co." on Justia Law

The terms of Utah Code 31A-22-305.3 requires that all vehicles covered under the liability provisions of an automobile insurance policy must also be covered under the underinsured motorist provisions of that policy, and with equal coverage limits, unless a named insured waives the coverage by signing an acknowledgment form meeting certain statutory requirements.When Derek Dircks and Michael Riley suffered injuries in a car accident they were in Riley’s personal vehicle on an assignment for their employer, Mid-State Consultants, Inc. Dircks and his wife (together, Plaintiffs) sought underinsured motorist benefits under Mid-State’s commercial insurance policy with Travelers Indemnity Company of America. The policy included liability coverage for persons driving in either a Mid-State fleet vehicle or a vehicle owned by a Mid-State employee when used for Mid-State Business. The policy also included underinsured motorist coverage but purported to limit this coverage to persons driving in Mid-State fleet vehicles. Travelers denied Plaintiffs’ claim, and Plaintiffs filed suit. The federal district court certified to the Supreme Court the question of whether state law requires that all vehicles for which Mid-State had purchased liability coverage be covered to the same extent under Mid-State’s underinsured motorist coverage. The Supreme Court answered the certified question in the affirmative. View "Dircks v. Travelers Indemnity Co. of America" on Justia Law

Plaintiff Greggory Owings sustained an on-the-job injury, for which he received long-term disability benefits by defendant United of Omaha Life Insurance Company (United), under the terms of a group insurance policy issued by United to Owings’ employer. Owings disagreed with, and attempted without success to administratively challenge, the amount of his disability benefits. He then filed suit against United in Kansas state court, but United removed the action to federal district court, asserting that the federal courts had original jurisdiction over the action because the policy was governed by the Employee Retirement Income Security Act of 1974 (ERISA). The district court ultimately granted summary judgment in favor of United. Owings appealed. The Tenth Circuit concluded after review of this matter that United was arbitrary and capricious in determining the date that Owings became disabled and, in turn, in calculating the amount of his disability benefits. Consequently, the Court reversed the district court’s grant of summary judgment in favor of United and remanded with directions to enter summary judgment in favor of Owings. View "Owings v. United of Omaha Life" on Justia Law

Defendant Travelers Indemnity Company of Connecticut ("Travelers") appealed a circuit court’s denial of its post-judgment motion seeking to set aside judgment entered on a jury verdict in favor of plaintiff Angela Worthington. Worthington was a passenger in a vehicle being driven by her husband. A friend of the Worthingtons and the Worthingtons' two minor children were also passengers in the vehicle. While the Worthingtons' vehicle was stopped at a nonfunctioning traffic light, it was struck in the rear by a vehicle being operated by Camille Thomas. Worthington and the other occupants in her vehicle were injured as a result of the accident. At the time of the accident, the company Worthington's husband owned had a comprehensive insurance policy with Travelers that included uninsured-motorist ("UM") and underinsured-motorist ("UIM") coverage. The Worthingtons sued Thomas and Travelers; the complaint included a UM/UIM claim against Travelers. After review of the claims Travelers made on appeal, the Alabama Supreme Court determined Travelers did not establish that the trial court erred in denying the post-judgment motion, and affirmed. View "Travelers Indemnity Company of Connecticut v. Worthington" on Justia Law

In 2009, Bancorp, which provides checking and savings accounts to individuals, purchased a bankers’ professional liability insurance policy from Federal. The policy stated: [Federal] shall pay, on behalf of an Insured, Loss on account of any Claim first made against such Insured during the Policy Period … for a Wrongful Act committed by an Insured or any person for whose acts the Insured is legally liable while performing Professional Services, including failure to perform Professional Services" but that Federal “shall not be liable for Loss on account of any Claim … based upon, arising from, or in consequence of any fees or charges” (Exclusion 3(n)). The 2010 Swift Complaint sought damages for Bancorp's "unfair and unconscionable assessment and collection of excessive overdraft fees.” Swift sought to represent a class of all U.S. BancorpSouth customers who "incurred an overdraft fee as a result of BancorpSouth’s practice of re-sequencing debit card transactions from highest to lowest.” In 2016, Bancorp agreed to pay $24 million to resolve all the claims, $8.4 million of which was for attorney’s fees, plus $500,000 in class administrative costs. Federal denied coverage. The Seventh Circuit agreed that Exclusion 3(n) excluded from coverage losses arising from fees and affirmed the dismissal of breach of contract claims and a bad faith claim. View "BancorpSouth Inc. v. Federal Insurance Co." on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment to State Farm Mutual Automobile Insurance Company on Kilby Butte Colony, Inc.’s complaint filed after State Farm declined the Colony’s underinsured motorist (UIM) claim submitted on behalf of Mary Ann and Ivan Stahl. The Stahls, members of the Kilby Butte Hutterite Colony, were injured in an automobile accident. Hutterite colony members own assets of the community collectively, and therefore, the Stahls could not own a vehicle in their individual capacities. All of the Colony’s auto insurance policies were purchased through State Farm, and no individual Colony members were listed as named insureds on any vehicle owned by the Colony. The district court determined the the Stahls did not qualify for UIM coverage because they did not satisfy the definition of an “insured” within the terms of the policy. The Supreme Court affirmed, holding that the district court did not err in finding that the Stahls did not satisfy the unambiguous definition of “insured” under UIM coverage in the policy and that they were therefore not entitled to those benefits. View "Kilby Butte Colony, Inc. v. State Farm Mutual Automobile Insurance Co." on Justia Law

In this dispute concerning a liability insurance policy, the Supreme Court granted relief in prohibition to State Auto Property Insurance Companies, holding that State Auto was entitled to a dismissal of CMD Plus, Inc.’s third-party complaint as a matter of law.When Plaintiffs filed an action against CMD, a residential construction company, seeking recovery for damages to their house and property, CMD filed a third-party complaint against State Auto, its insurer, alleging that State Auto delayed investigating Plaintiffs’ claim, settling Plaintiffs’ lawsuit, and indemnifying CMD. In this petition for a writ of prohibition, State Auto challenged the circuit court’s denial of its motion for summary judgment. The Supreme Court held that relief in prohibition was warranted because the record showed that State Auto defended and indemnified CMD throughout the lawsuit as required by the commercial general liability policy, and the terms of the policy provided no coverage to CMD for damage to its own property. View "State ex rel. State Auto Property Insurance Cos. v. Honorable James C. Stucky" on Justia Law

This case arose from a motor vehicle accident in 2012. William Taylor was driving a vehicle owned and insured by Guy's Seed Company (Guy's Seed); Appellant Mark Raymond was a passenger in the vehicle driven by Taylor. Both Raymond and Taylor were employees of Guy's Seed. Appellee American Mercury Insurance Company (Mercury) issued a commercial automobile insurance policy to Guy's Seed which provided uninsured/under-insured motorist (UM) coverage of $1,000,000 per accident. Larry Bedell was an employee of BlueKnight Energy Partners (BlueKnight); BlueKnight carried a $1,000,000 primary automobile liability policy and a $40,000,000 excess liability policy. Bedell was driving an oil tanker truck, owned by BlueKnight, and attempted to turn in front of the Guy's Seed vehicle causing a collision. The collision caused an immediate explosion, which resulted in Taylor's death and Raymond suffering significant permanent injuries. Raymond qualified as insured under Mercury's UM coverage. Raymond filed suit against Defendants, Bedell and BlueKnight. Mercury investigated and offered the UM policy limits to Raymond's and Taylor's representatives, paying $500,000 to each. Mercury then intervened in Raymond’s court case seeking subrogation from Defendants for the $500,000 payment made to Raymond under the UM policy. Raymond disputed Mercury's right to subrogation, but Defendants refused to settle unless the settlement amount was inclusive of Mercury's disputed subrogation claim. An agreement was reached where Raymond settled with Defendants for a confidential amount greater than the primary insurance liability limits but less than the excess policy; Defendants paid Raymond the amount of the settlement minus the $500,000 claimed by Mercury. The disputed $500,000 was to be held until there was an agreement or court order as to who was entitled to the funds. The question presented for the Oklahoma Supreme Court’s review centered on whether Mercury was entitled to subrogation for the $500,000 paid. The Supreme Court determined that contrary to Mercury's claims, Raymond was not receiving a windfall here. “Mercury was paid a premium for UM protection and Raymond recovered an amount not covering all of his damages within the limits of the primary liability policy and the UM policy. Raymond has also recovered an amount from the tort-feasor's other assets that, combined with the liability and UM funds, covered his damages. It would be unjust to permit Mercury to avoid its liability with its claim that the tort-feasor's other assets, that happened to be an excess liability policy, removed Mercury's liability thus denying Raymond from receiving that for which Mercury was paid a premium.” View "Raymond v. Taylor" on Justia Law