Justia Insurance Law Opinion Summaries

Three matters consolidated for review resulted from separate automobile accidents between either an Allstate or a GEICO insured with Underinsured-Motorist (UIM) coverage and allegedly underinsured tortfeasors. In each case, it was undisputed that the applicable insurance policy contained a "consent-to-settle" clause requiring the provision of notice to, and the consent of, the affected insurer prior to the insured's settlement of any claims against the alleged underinsured tortfeasors and/or a release of the tortfeasors' liability. After review of the specific facts of each case, the Alabama Supreme Court concluded that because the insurers, in following the express directives of the Court, were deprived of their contractual rights as well as the benefit of the procedures set forth in the controlling case law, the insurers demonstrated a clear legal right to their requested relief. In case no. 1150511 and 1151266, the Court directed the applicable circuit court to vacate its respective orders purporting both to "enforce" the pro tanto settlement agreements against the insurer's consent and to dismiss the tortfeasors. In case no. 1150269, the Court dismissed the petition. View "Ex parte GEICO Indemnity Company." on Justia Law

The Louisiana Supreme Court granted review to determine the applicability of La. R.S. 9:2795.3, the Equine Immunity Statute. The trial court granted a motion for summary judgment filed by Equest Farm, LLC, finding that the immunity statute applied because plaintiff Danielle Larson was a participant engaged in equine activity at the time an Equest Farm pony bit her. The court of appeal reversed, holding that Larson was not a “participant” under the immunity statute, and that summary judgment was inappropriate because there were genuine issues of material fact as to whether another provision in the immunity statute might apply. The Supreme Court held that there were indeed genuine issues of material fact on the issue of whether the immunity statute applied. Accordingly, the Court affirmed the court of appeal and remanded to the trial court. View "Larson v. XYZ Ins. Co." on Justia Law

The Ninth Circuit reversed the dismissal of plaintiff's putative class action filed under California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200–17210, and common law, alleging that AARP, through its arrangement with Medigap, transacts insurance without a license in violation of the California Insurance Code. The Ninth Circuit held that plaintiff stated a plausible claim at the motion to dismiss stage that AARP "solicits" insurance without a license, and consequently committed an unlawful act in violation of the UCL. Plaintiff also adequately alleged that AARP violated the UCL's "fraudulent" and "unfair" prongs where plaintiff plausibly alleged that members of the public are likely to be deceived into paying AARP's additional 4.95% fee because AARP collects and labels the the fee as a "royalty" rather than a "commission." View "Friedman v. AARP" on Justia Law

Plaintiffs filed suit in state court against Allstate after it denied coverage for damages caused by Hurricane Irene to plaintiffs' waterfront home. Allstate removed to federal court, raising a statute of limitations defense. The district court did not address the limitations issue and ultimately entered judgment for plaintiffs. The Fourth Circuit concluded that plaintiffs' breach of contract claim was time barred because they did not file the complaint within one year of the denial of coverage, as required by the National Food Insurance Act of 1968 (NFIA), 42 U.S.C. 4001(a), and its regulations. Plaintiffs' argument that the statute should be tolled by their filing of a complaint in state court is foreclosed by Shofer v. Hack Co. Furthermore, the facts neither support a forfeiture or a waiver on behalf of Allstate. The Fourth Circuit also concluded that plaintiffs' claim for bad faith handling of their insurance claim under the North Carolina Unfair and Deceptive Trade Practices Act N.C. Gen. Stat. 75-1.1 et seq., was preempted by federal law and therefore barred. Accordingly, the Fourth Circuit reversed the judgment of the district court. View "Woodson v. Allstate Insurance Co." on Justia Law

Pennsylvania statute, prohibiting payment of fire insurance proceeds to named insured when there are delinquent property taxes, is not limited to situations where the named insured is also responsible for those taxes. Conneaut Lake Park, in Crawford County, included a historic venue, “the Beach Club,” owned by the Trustees. Restoration operated the Club under contract with the Trustees. Restoration insured the Club against fire loss through Erie. When the Club was destroyed by fire, Restoration submitted a claim. In accordance with 40 Pa. Stat 638, Erie required Restoration to obtain a statement of whether back taxes were owed on the property. The statement showed $478,260.75 in delinquent taxes, dating back to 1996, before Restoration’s contract, and owed on the entire 55.33-acre parcel, not just the single acre that included the Club. Erie notified Restoration that it would transfer to the taxing authorities $478,260.75 of the $611,000 insurance proceeds. Erie’s interpleader action was transferred after the Trustees filed for bankruptcy. Restoration argued that Section 638 applied only to situations where the owner of the property is insured and where the tax liabilities are the financial responsibility of the owner. The Third Circuit reinstated the bankruptcy court holding, rejecting Restoration’s argument. The statute does not include any qualifications. When Restoration insured the Club, its rights to any insurance proceeds were subject to the claim of the taxing authorities. Without a legally cognizable property interest, Restoration has no cognizable takings claim. View "In re: Trustees of Conneaut Lake Park, Inc." on Justia Law

The Supreme Court held that, under Utah Code 31A-22-305.3, a underinsured motorist (UIM) insurer must fully compensate its insured within its policy limits but only for damages in excess of what was paid by workers’ compensation so as to avoid an inappropriate double recovery. Danny Rutherford, who was injured when the work van he was driving was hit by another vehicle, sought double recovery from his employer’s workers’ compensation insurer and Truck Insurance Exchange, which provided Rutherford’s employer with underinsured motorist coverage. The district court granted summary judgment for Rutherford. In light of its holding, the Supreme Court reversed. View "Truck Insurance Exchange v. Rutherford" on Justia Law

The court affirmed the grant of summary judgment to Underwriters after Underwriters denied coverage based on the flood exclusion of the insurance policy at issue. The court concluded that the district court did not abuse its discretion by denying Hudson's motion to strike Underwriters' expert's opinion, because only a few days had passed at most between when Underwriters obtained their expert's opinion and disclosed it to Hudson; the term "flood" in this insurance contract was unambiguous and the court adopted the definition of "flood" given in Ebbing v. State Farm Fire & Cas. Co.; and Hudson's submission of lay testimony that the storm generated strong wind gusts and a photograph of the downed utility pole did not create a genuine issue of material fact as to whether wind or flood caused the damage to the docks, nor that the force generated from the flood waters directly or indirectly caused the damage to the marina's docks. View "Hudson Enterprises v. Certain Underwriters" on Justia Law

The faulty, inadequate, or defective work exclusion did not apply to the loss in this case. At issue in this appeal was the dismissal of Plaintiff’s action seeking to recover under an insurance policy for the loss of her house caused when a renter, who had an option to purchase the house, demolished it. The district court held that coverage for such loss was excluded under the policy. The Supreme Court vacated the judgment of the district court and remanded this case for further proceedings. View "Fisher v. Garrison Property & Casualty Ins" on Justia Law

The Alabama Supreme Court granted Alfa Mutual Insurance Company's petition for a writ of certiorari with respect to the issue whether University of South Alabama Medical Center Hospital's (USA) hospital lien was impaired and the amount of damages recoverable by USA from Alfa for that impairment. The Court reversed the Court of Civil Appeals insofar as it affirmed the circuit court's ruling that the amount of damages recoverable from Alfa was an amount equal to the entirety of USA's reasonable charges, irrespective of the amount that was otherwise owed by Alfa under the terms of its policy, and remanded for further proceedings. View "Ex parte Alfa Mutual Insurance Company." on Justia Law

Ebenezer Manu filed a complaint against GEICO Casualty Company alleging that GEICO violated Va. Code Ann. 8.01-66.1 for its bad faith conduct in adjusting his uninsured motorist bodily injury claim. Specifically, Manu alleged that GEICO, his uninsured motorist (UM) carrier, violated its duty of good faith by refusing to pay its UM policy limits prior to Manu obtaining a judgment against the uninsured tortfeasor. GEICO filed a demurrer. The circuit court ultimately granted GEICO’s motion to compel and dismissed the complaint with prejudice, concluding that section 8.01-66.1(D)(1) did not provide Manu a remedy against GEICO. The Supreme Court affirmed, holding (1) section 8.01-66.1(D)(1) does not create a duty for UM carriers to settle a case prior to trial but, rather, creates a remedy for the conduct of UM carriers that refuse in bad faith to pay once the insured has obtained judgment; and (2) accordingly, Manu’s complaint failed to state a cognizable claim. View "Manu v. GEICO Casualty Co." on Justia Law