Justia Insurance Law Opinion Summaries

3M filed an insurance claim to recover losses incurred on a number of investments due to fraud perpetrated by its own investment advisors. The Eighth Circuit affirmed the district court's grant of summary judgment to the Insurers, holding that the ownership requirement of Endorsement 8 applies to the Employee Dishonesty provision. Therefore, 3M does not own the stolen earnings and cannot seek coverage for the earnings under the Policy. Until the earnings were distributed to the partners, the stolen earnings were property of WG Trading, not 3M. The court explained that it is fundamental that property acquired with partnership funds is partnership property, and individual partners do not own partnership assets until the winding up of the partnership. Finally, the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., does not alter general commercial property rights, but merely defines the nature and scope of the fiduciary duties owed to plan participants. View "3M v. National Union Fire Insurance" on Justia Law

A provision of the mandatory form settlement document promulgated by the Director of the Division of Workers’ Compensation (“Director”) did not waive an injured employee’s statutory right under section 8-43-204(1), C.R.S. (2016), to reopen a settlement based on a mutual mistake of material fact. Petitioner Victor England was a truck driver for Amerigas Propane. He filed a workers’ compensation claim after sustaining a serious injury to his shoulder in December 2012 while making a delivery for Amerigas. England’s claim was governed by the Colorado Workers’ Compensation Act, which required that settlements between employer and employee must be written, signed by both sides, and approved by the Director or an administrative law judge (“ALJ”). Pursuant to section 8-43-204, the Director promulgated a form settlement agreement (“Form”), which the parties are required to use to settle all claims. In this case, the parties’ settlement agreement was consistent with the Form. England’s pain continued after the settlement agreement was signed and approved. In October 2013, he sought further medical evaluation, which revealed a previously undiagnosed stress fracture in the scapula (shoulder blade) of England’s injured shoulder. Up to this point, no one was aware that this fracture existed. England claims that if he had been aware of this fracture, he would not have settled his claim. England filed a motion to reopen the settlement on the ground that the newly discovered fracture justified reopening his workers’ compensation claim. An ALJ agreed, and the Industrial Claim Appeals Office (ICAO) affirmed. The court of appeals reversed, concluding that the Form waived England’s right to reopen. The Colorado Supreme Court held that because provisions of the form document must yield to statutory rights, the court of appeals erred in its conclusion. View "England v. Amerigas Propane" on Justia Law

Health insurers do not have a broad, unrestricted right of subrogation against third-party tortfeasors who cause injury to their insureds but, rather, are limited to reimbursement rights established by statute.In this personal injury case, the circuit court ruled that Haw. Rev. Stat. 663-10 and/or Haw. Rev. Stat. 431:13-103(a)(1) abrogated Hawai’i Medical Service Association’s (HMSA) contractual and common law rights in subrogation against a third-party tortfeasors responsible for injury to its insured. The Supreme Court affirmed, holding (1) a health insurer does not have equitable subrogation rights against a third-party tortfeasor in the context of personal injures; (2) a health insurer’s subrogation and reimbursement rights are limited by section 663-10 and section 431-13:103(a)(1); (3) any contractual provision that conflicts with section 663-10 is invalid; and (4) section 663-10 takes precedence over HMSA’s subrogation rights. View "Yukumoto v. Tawarahara" on Justia Law

Garnes’s Richmond home was damaged by a kitchen fire. She had a fire insurance policy, with a limit of $425,000 from FAIR Plan Association, California’s insurer of last resort. Gaines claimed she should receive the amount it will cost her to repair the house, less an amount for depreciation, the net amount of which was agreed to be $320,549. FAIR argued the Policy and the Insurance Code allowed it to pay the lesser of that amount or the fair market value of the house, which at the time of the fire was $75,000. After examining Insurance Code, the court of appeals agreed with Garnes. Section 2051 provides that under an open fire insurance policy that pays “actual cash value,” as does the Gaines Policy, the actual cash value recovery is determined in one of two ways. For a “partial loss to the structure,” the measure is “the amount it would cost the insured to repair, rebuild, or replace the thing lost or injured less a fair and reasonable deduction for physical depreciation” or “the policy limit, whichever is less.” Construed in accord with its plain meaning, this provision, coupled with sections 2070 and 2071, sets a minimum standard of coverage that requires FAIR to indemnify Garnes for the actual cost of the repair to her home, minus depreciation, even if that amount exceeds the home's fair market value. View "California FAIR Plan Association v. Garnes" on Justia Law

Plaintiff’s action to recover under an insurance policy for the loss of her house caused when a renter (who had an option to purchase) demolished it. The trial court determined the insurance policy at issue excluded for such a loss. Within two months of renting the property, plaintiff learned the renter demolished the house. The renter agreed to rebuild a house on the remaining foundation. The renter started, but did not finish, rebuilding the house. Plaintiff thereafter made a claim on her insurance policy. The Idaho Supreme Court found after review of this matter, that the words in an insurance policy were to be given the meaning applied by lay people in daily usage. One such clause implicated the intentional destruction of the house as compared to accidental loss or inadequate remodeling. The renter’s actions in demolishing plaintiff’s house down to the foundation would not be considered by lay people as the “remodeling” of the house. He did not make alterations to an existing structure; he demolished that structure. There was no house left to remodel. Plaintiff had authorized the renter to perform some remodeling, such as installing new flooring, countertops, light fixtures, paint and other cosmetic improvements, but there was no evidence in the record that he did any remodeling at all, much less that the direct cause of the loss of the Plaintiff’s house was caused by any remodeling that had been done. Accordingly, the Supreme Court affirmed the trial court’s judgment in favor of the insurance company. View "Fisher v. Garrison Property & Casualty Ins. Co." on Justia Law

AHAC, a surety, secured importers’ importation of preserved mushrooms and crawfish tail meat from China by issuing single transaction and continuous entry bonds in 2001 and 2002. The bonds obligated the importers and AHAC to pay, up to the face amounts of the bonds, “any duty, tax or charge and compliance with law or regulations” resulting from covered activities. Customs liquidated entries secured by the bonds and assessed antidumping duties, which the importers failed to pay. Customs started charging statutory post-liquidation interest on the unpaid duties, 19 U.S.C. 1505(d). From 2003-2009, Customs issued multiple demands notifying AHAC of its intent to seek section 1505(d) interest. Customs denied AHAC’s protest. AHAC did not challenge that denial under 28 U.S.C. 1581(a). The government commenced Trade Court suits. The Federal Circuit affirmed the Trade Court’s order that AHAC pay section 1505(d) interest up to the face amounts of the bonds. Section 1505(d) interest involves “charges or exactions of whatever character” under 19 U.S.C. 1514(a)(3); the statute does not exempt charges arising after liquidation. The bonds do not distinguish between pre- and post-liquidation interest. Because AHAC failed to contest its denied protest, AHAC was precluded from asserting defenses regarding its liability under section 1505(d). View "United States v. American Home Assurance Co." on Justia Law

Only two sections of the Michigan no-fault act mention healthcare providers, MCL 500.3157 and MCL 500.3158, and neither of those sections confers on a healthcare provider a right to sue for reimbursement of the costs of providing medical care to an injured person. Although MCL 500.3112 allows no-fault insurers to directly pay PIP benefits to a healthcare provider for expenses incurred by an insured, MCL 500.3112 does not entitle a healthcare provider to bring a direct action against an insurer for payment of PIP benefits. Covenant Medical Center, Inc., brought suit against State Farm Mutual Automobile Insurance Company to recover payment under the no-fault act for medical services provided to State Farm’s insured, Jack Stockford, following an automobile accident in which Stockford was injured. State Farm denied payment. In the meantime, Stockford had filed suit against State Farm for no-fault benefits, including personal protection insurance (PIP) benefits. Without Covenant’s knowledge, Stockford and State Farm settled Stockford’s claim for $59,000 shortly before Covenant initiated its action against State Farm. As part of the settlement, Stockford released State Farm from liability for all allowable no-fault expenses and any claims accrued through January 10, 2013. State Farm moved for summary judgment under MCR 2.116(C)(7) (dismissal due to release) and MCR 2.116(C)(8) (failure to state a claim). The trial court granted State Farm’s motion under MCR 2.116(C)(7), explaining that Covenant’s claim was dependent on State Farm’s obligation to pay no-fault benefits to Stockford, an obligation that was extinguished by the settlement between Stockford and State Farm. View "Covenant Medical Center, Inc. v. State Farm Mutual Automobile Ins. Co." on Justia Law

Some four years after Plaintiff suffered a casualty loss to his property, Plaintiff sued Nationwide Mutual Fire Insurance Company (Defendant), which insured the property pursuant to a policy that it had issued to Plaintiff, alleging breach of contract and bad faith. Defendant moved for judgment on the pleadings, arguing that the claim must fail because Plaintiff did not fully comply with the provisions of the policy and because Plaintiff brought suit more than two years after the date of loss, in contravention of the terms of the insurance contract. The hearing justice granted Defendant’s motion for judgment on the pleadings. The Supreme Court affirmed, holding that because Plaintiff failed to adhere to the two-year limitation provision, Plaintiff was not entitled to relief. View "Chase v. Nationwide Mutual Fire Insurance Co." on Justia Law

A workers' compensation insurance policy may be rescinded pursuant to Insurance Code section 650. A rescission is enforced by a civil action for relief based on rescission or by asserting rescission as a defense. In this case, the Board appealed an arbitrator's conclusion that, as a matter of law, the insurer could not rescind a workers' compensation insurance policy and that the policy was in effect. Because the arbitrator and the appeals board did not address and determine whether rescission was a meritorious defense to the employee's claim, the Court of Appeal annuled the appeal board's decision and remanded with directions to hear and determine whether the insurer was entitled to rescind, and did rescind, the policy at issue. View "Southern Insurance v. WCAB" on Justia Law

Lamar Ragland appeals the dismissal of his bad-faith claim against State Farm Mutual Automobile Insurance Company. Ragland sought punitive damages from State Farm based on State Farm's alleged bad-faith failure to pay and related failure to subject his claim for underinsured-motorist ("UIM") benefits to a cognitive review. State Farm moved to dismiss Ragland's claims, because Ragland had filed a separate civil action in 2014 that had not yet been resolved. After review, the Alabama Supreme Court dismissed Ragland's claim as being from a nonfinal judgment. View "Ragland v. State Farm Mutual Automobile Ins. Co." on Justia Law