Justia Insurance Law Opinion Summaries

The Eighth Circuit affirmed the district court's grant of summary judgment for four insurance companies in an action filed by UnitedHealth, seeking indemnity and defense costs for underlying litigation settlements under its professional liability excess insurance policies. The court held that the district court properly concluded that UnitedHealth failed to present sufficient evidence as to how the settlement should be allocated between covered and non-covered claims; it was not enough under Minnesota law for UnitedHealth to show simply that its $350 million settlement included a covered claim of an unspecified amount; UnitedHealth failed to provide non-speculative evidence to allocate the $350 million settlement between the potentially covered AMA suit and non-covered Malchow suit; and the court declined to disturb the district court's grant of summary judgment for the Insurers on the matter of defense costs in the AMA litigation. View "UnitedHealth Group Inc. v. Executive Risk Specialty Ins." on Justia Law

Defendant Horizon Healthcare Services, Inc., New Jersey’s largest health insurer, maintained a two-tiered provider-hospital system. Plaintiff Saint Peter’s University Hospital, Inc., and plaintiff Capital Health System, Inc. and others, commenced separate lawsuits claiming Horizon treated them unfairly and in a manner that contravened their agreements when they were placed in the less advantageous Tier 2. Plaintiffs assert Horizon’s tiering procedures were pre-fitted or wrongfully adjusted to guarantee selection of certain larger hospitals for the preferential Tier 1. The New Jersey Supreme Court was asked, by way of interlocutory appeal, to settle multiple discovery disputes that arose in the course of the litigation. The Supreme Court concluded the Appellate Division exceeded the limits imposed by the standard of appellate review both by assessing the disputed information’s relevance against the panel’s own disapproving view of the merits and by giving no apparent weight or consideration to the protections afforded by confidentiality orders. Having closely examined the record, the Supreme Court rejected the Appellate Division’s determination that the chancery judges encharged with these matters abused their discretion. It was not an abuse of discretion for the chancery judges to find the information sought was relevant to plaintiffs’ claims that Horizon violated either the network hospital agreements’ contractual terms, or the overarching implied covenant of good faith and fair dealing, when they were relegated to the less desirable Tier 2. View "Capital Health System, Inc. v. Horizon Healthcare Services, Inc." on Justia Law

Dow Corning Alabama, Inc., Dow Corning Corporation, Rajesh Mahadasyam, Fred McNett, Zurich American Insurance Company ("Zurich"), and National Union Insurance Company of Pittsburgh, PA ("National Union"), all petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to transfer the underlying declaratory-judgment action to the Montgomery Circuit Court pursuant to Alabama's forum non conveniens statute. Dow Corning Alabama hired Alabama Electric Company, Inc., an independent contractor, to perform the electrical installation of a vacuum system at Dow Corning Alabama's facility in Montgomery. The contract contained a forum-selection clause. An employee of Alabama Electric was injured while working at Dow Corning Alabama's Montgomery facility. The employee sued the Dow defendants, which in turn tendered their request for defense and indemnity to Alabama Electric and National Trust, both of whom denied coverage. Zurich and National Union settled the Montgomery lawsuit through mediation, and the case was ultimately dismissed. Later, Alabama Electric and National Trust filed an action with the Houston Circuit Court seeking certain declarations concerning their duties and obligations under the master contract and/or the National Trust policy regarding the settlement. The Dow defendants moved to transfer the declaratory judgment action from Houston to Montgomery County pursuant to the forum noon conveniens statute. The Alabama Supreme Court denied the writ application, finding the Dow parties did not satisfy their burden at the trial-court level of demonstrating that a change in venue from Houston County to Montgomery County was warranted under the interest-of-justice prong. View "Ex parte Dow Corning Alabama, Inc." on Justia Law

Defendant Alfa Mutual Insurance Company sought mandamus relief when the Pickens Circuit Court denied its motion to transfer the underlying lawsuit to the Tuscaloosa Circuit Court. In 2016, Richard Holley, a resident of Pickens County, was involved in a motor-vehicle accident in Tuscaloosa County. The other vehicle was driven by David Evans, who was uninsured. Emergency-medical-services personnel treated Holley at the scene and then transported him to DCH Regional Medical Center in Tuscaloosa. Law-enforcement personnel who were based in Tuscaloosa County also responded to the accident. After the accident, Holley received follow-up treatment from three medical providers in Tuscaloosa and one medical provider in Mississippi. The Alabama Supreme Court concluded the trial court exceeded its discretion in denying Alfa's motion for a change of venue based on the interest-of-justice prong of the forum non conveniens statute. Accordingly, the Court granted Alfa's petition for the writ of mandamus and direct the trial court, in the interest of justice, to vacate its order denying the motion to transfer the action to the Tuscaloosa Circuit Court and to enter an order transferring the case from the Pickens Circuit Court to the Tuscaloosa Circuit Court. View "Ex parte Alfa Mutual Insurance Company." on Justia Law

Real parties in interest are insurers that issued excess comprehensive general liability (CGL) policies to Montrose, a manufacturer of the pesticide DDT. Montrose filed suit seeking a declaratory judgment that it may electively stack excess policies. The trial court rejected the elective stacking in favor of horizontal exhaustion, and denied Montrose's motion for summary adjudication, granting the excess insurers' cross-motion for summary adjudication. The Court of Appeal granted the petition for writ of mandate in part and denied in part, holding that the trial court correctly rejected Montrose's elective stacking approach and thus correctly denied Montrose's motion for summary adjudication and granted Continental Insurer's cross motion. The court also held that the record did not support a universal horizontal exhaustion approach. Therefore, the trial court erred in granting the insurers' motion on the issue of duty. View "Montrose Chemical Corp. v. Superior Court" on Justia Law

From 2006-2012 Packerland deceived at least one of its customers about the protein content of its Whey Protein Concentrate. Land O’Lakes purchased Packerland’s protein concentrate for use in making foods for calves and other young animals. Buyers infer protein levels from measuring nitrogen: a seller can add another nitrogen-rich substance to produce higher scores. The Ratajczaks, who owned Packerland, started adding urea to its protein concentrate. in 2006. Land O’Lakes suspected that the concentrate was high in nonprotein nitrogen but could not learn why; the Ratajczaks made excuses that Land O’Lakes accepted. The Ratajczaks sold Packerland in 2012. The new owner kept them as employees; they kept adding urea until the buyer learned what the truth. The Ratajczaks lost their jobs and settled for about $10 million before the buyer filed a complaint. Land O’Lakes stopped buying Packerland’s product and asserted claims of breach of contract, fraud, and violation of the Racketeer Influenced and Corrupt Organizations Act. Packerland’s insurers refused to defend or indemnify it or the Ratajczaks; the Ratajczaks’ personal insurer refused to indemnify them for their settlement with Packerland’s buyer. The district court dismissed Land O’Lakes’s suit and ruled in favor of the insurers. The Seventh Circuit affirmed, rejecting Land O’Lakes’ claim to treble damages under RICO and state-law and the Ratajczaks’ claims that Packerland’s insurers and their own insurers had to defend and indemnify them. View "Land O'Lakes, Inc. v. Ratajczak" on Justia Law

The Mississippi Workers’ Compensation Group Self-Insurer Guaranty Association (“Guaranty Association”) was ordered by the Mississippi Workers’ Compensation Commission (“Commission”) to assess former members of the Mississippi Comp Choice Workers’ Compensation Self-Insurers Fund (“Comp Choice”). In 2010, the Commission found that “a careful evaluation of the remaining assets and outstanding claims unfortunately shows an insufficient amount of Comp Choice assets to cover the projected claim payout.” The Commission ordered an assessment of the former members of Comp Choice for the last four years showing losses. The former members did not pay their assessments, and the Guaranty Association sued. The former members of Comp Choice filed a motion to dismiss, arguing that the Guaranty Association ignored their right of appeal and that the action was not ripe for consideration, was improper, and/or was premature and should be dismissed. The Circuit Court denied Comp Choice’s motion to dismiss, and ultimately ruled against the former members. Finding no reversible error in the judgment, the Mississippi Supreme Court affirmed. View "Scott Penn, Inc. v. Mississippi Workers' Compensation Group Self-Insurer Guaranty Association" on Justia Law

Defendant-appellant American Safety Indemnity Company (“ASIC”) challenged a judgment awarding over $1.4 million in compensatory and punitive damages to plaintiff-respondent Pulte Home Corporation (Pulte), who was the general contractor and developer of two residential projects in the San Marcos area. ASIC issued several sequential comprehensive general liability (CGL) insurance policies to three of Pulte's subcontractors, and during 2003 to 2006, it added endorsements to those policies that named Pulte as an additional insured. The projects were completed by 2006. In 2011 and 2013, two groups of residents of the developments sued Pulte for damages in separate construction defect lawsuits. After American Safety declined to provide Pulte with a defense, Pulte filed this action, asserting that the additional insured endorsements afforded it coverage and therefore required ASIC to provide it with defenses on the construction defect issues. After review, the Court of Appeal concluded the trial court was correct in ruling that the language of ASIC’s additional insured endorsements on the underlying insurance policies created ambiguities on the potential for coverage in the construction defect lawsuits, thus requiring it to provide Pulte with a defense to them. Additionally, the Court upheld the court's decision that Pulte was entitled to an award of punitive damages that was proportional, on a one-to-one basis, to the award of compensatory damages in tort. Although the Court affirmed the judgment as to its substantive rulings, the Court of Appeal was required to reverse in part as to the award of $471,313.52 attorney fees: the trial court abused its discretion in implementing an hourly attorney fee arrangement that Pulte did not arrive at until after trial, to replace the previous contingency fee agreement in a manner that Pulte intended would operate to increase its demand. Since the trial court calculated its $500,000 award of punitive damages by appropriately utilizing a one-to-one ratio to the compensatory, the trial court had to recalculate not only the fees award but also to adjust the amount of punitive damages accordingly. View "Pulte Home Corp. v. American Safety Indemnity Co." on Justia Law

The Eighth Circuit reversed the district court's award of damages to plaintiff for injuries that she sustained in a vehicle-related accident. The court held that the district court improperly applied a heightened duty to the sober designated driver for a group of intoxicated passengers. In this case, the findings of fact were insufficient to support apportioning greater fault to the driver based on her duty to exercise reasonable care in driving the vehicle. Accordingly, the court remanded for new findings and conclusions on the allocation of fault. View "Hiltner v. Owners Insurance Co." on Justia Law

Parents Theresa Allocca and Timothy Allen Davison, filed this action in their individual capacities, and Davison also filed as personal representative of the Estate of Timothy "Asti" Davison. Asti was fatally shot while operating a vehicle that an assailant, operating another vehicle, had forced onto a median on an interstate highway. The Parents sought uninsured motorist (UM) benefits based on several automobile insurance policies issued by defendants York Insurance Company of Maine, Allstate Insurance Company, and Horace Mann Teachers Insurance Company. The Superior Court granted summary judgment in favor of the insurers, concluding that neither any of the policies nor Maine’s UM statute provided coverage for the loss associated with Asti’s death. The Maine Supreme Court affirmed: "[a]lthough the conduct of the person who killed Asti was indisputably deliberate and not accidental, there is no evidence in the record that it was foreseeable to Asti himself, and so, based on that approach, his death would be viewed as 'accidental.' ... describing an intentional act, such as an intentional killing, as an 'accident' stretches the plain meaning of that word too far." Without addressing the superior court’s conclusion that the UM coverage in the policies was not applicable because the loss did not arise from the "use" of a motor vehicle, the Supreme Court concluded as a matter of law that Asti’s death was not caused by an "accident." View "Allocca. v. York Insurance Company of Maine" on Justia Law