Justia Insurance Law Opinion Summaries

A medical device company, Heart Tronics, purchased directors and officers liability insurance policies from AXIS and HCC. The AXIS policy has been exhausted. Plaintiff, Heart Tronics' de facto officer, filed suit against HCC, alleging it defrauded him and breached the 2007 policy by failing to pay his litigation expenses on appeal. Plaintiff also filed suit against AXIS, alleging that it conspired with HCC to defraud him. The district court sustained the insurers' demurrers without leave to amend and dismissed the action. The court concluded that the AXIS demurrer was properly sustained because AXIS was a stranger to the HCC policy and owed no duties connected with it; the HCC demurrer was improperly sustained because when a policy expressly provides coverage for litigation expenses on appeal, an exclusion requiring repayment to the insurer upon a "final determination" of the insured's culpability applies only after the insured's direct appeals have been exhausted; and thus the court reversed as to HCC, and affirmed as to Heart Tronics, HCC Global Financial Products, HCC Insurance Holdgins, Inc., and the AXIS defendants. View "Stein v. AXIS Ins. Co." on Justia Law

Appellant suffered injuries after being hit by another driver. The at-fault driver’s liability insurer paid Appellant $100,000, the full amount available under the policy. Appellant made a settlement demand on State Farm, with whom he had an underinsured-motorist policy that also had a $100,000 coverage limit. State Farm offered less than $30,000 to settle the claim. Appellant filed a complaint against State Farm alleging breach of contract and claiming that he was entitled to the full amount recoverable under the policy. The district court ultimately entered judgment in the amount of $98,800. Thereafter, Appellant amended his complaint to add a claim under Minn. Stat. 604.18, which authorizes the award of “taxable costs” when an insurer denies benefits without a reasonable basis. The district court concluded that State Farm had denied Appellant insurance benefits without a reasonable basis. The court then determined that the “proceeds awarded” to an insured under section 604.18 are capped by the insurance policy limit. The court of appeals affirmed after determining that the state was ambiguous. The Supreme Court affirmed, holding that section 604.18 unambiguously caps “proceeds awarded” at the amount recoverable under the insurance policy. View "Wilbur v. State Farm Mutual Automobile Insurance Co." on Justia Law

Owners Insurance Company issued Vicki and Chris Craig a policy with underinsured motorist (UIM) coverage. Vicki was injured in an accident when her vehicle was struck by a vehicle driven by another motorist. Vicki incurred damages exceeding $300,000. Shelter Insurance, which insured the at-fault motorist, paid the Craigs $50,000. The Craigs then sought from Owners $250,000, the declarations listed UIM limit amount. Owners paid the Craigs $200,000, citing the off-set provisions that allowed them to deduct the amount paid by Shelter. Thereafter, Owners sought a declaratory judgment over the disputed $50,000. The circuit court ruled that the policy was ambiguous and entered summary judgment in favor of the Craigs. The Supreme Court reversed, holding that the policy unambiguously provides for the $50,000 set-off, that the policy never promised to pay up to the full amount listed in the declarations, and that the declarations did not promise coverage. Remanded. View "Owners Insurance Co. v. Craig" on Justia Law

Plaintiff were a class of state employees and retirees who were enrolled in an Anthem Insurance group health insurance plan at the time of the 2001 demutualization of Anthem Insurance Companies. Plaintiffs brought suit against former Governor John Rowland, the State, Anthem Insurance, and other insurance company defendants alleging that their participation in the plan entitled them to membership in Anthem Insurance and a share of the demutualization proceeds. Plaintiffs claimed that Anthem Insurance and the other insurance company defendants breached their contractual obligations by not paying Plaintiffs for their membership interests and instead distributing their share of the proceeds to the State. The Supreme Court concluded that Plaintiffs’ claims against Rowland and the State were barred by the doctrine of sovereign immunity or otherwise should have been dismissed. After a trial, the trial court rendered judgment for the remaining defendants. The Supreme Court affirmed, holding that the trial court correctly concluded that the relevant contract provisions were ambiguous as to Plaintiffs’ eligibility for membership in Anthem Insurance and their entitlement to a share of the demutualization proceeds and properly considered extrinsic evidence to determine their meaning. View "Gold v. Rowland" on Justia Law

Prather, age 31, tore his Achilles tendon. His surgery to repair the injury was uneventful. He returned to work. Four days later he collapsed, went into cardiopulmonary arrest, and died as a result of a blood clot in the injured leg that had traveled to a lung. Prather’s widow applied for benefits under his Sun Life group insurance policy (29 U.S.C. 1132(a)(1)), which limited coverage to “bodily injuries ... that result directly from an accident and independently of all other causes.” Sun Life refused to pay. The Seventh Circuit ruled in favor of Prather’s widow, noting that deep vein thrombosis and pulmonary embolism are risks of surgery, but that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot. The forensic pathologist who conducted a post-mortem examination of Prather did not attribute his death to the surgery. Prather’s widow then sought attorneys’ fees of $37,170 under ERISA, 29 U.S.C. 1132(g)(1). The Seventh Circuit awarded $30,380, stating that there is no doubt of Sun Life’s culpability or of its ability to pay without jeopardizing its existence; the award of attorneys’ fees is likely to give other insurance companies in comparable cases pause; and a comparison of the relative merits of the contending parties clearly favors the plaintiff. View "Prather v. Sun Life Financial Insurance Co." on Justia Law

The issue in this workers’ compensation case was whether claimant was entitled to benefits for his “combined condition” claim. Claimant filed- and his employer’s insurer, SAIF Corporation, initially accepted-a claim for a lumbar strain combined with preexisting lumbar disc disease and related conditions. SAIF later denied the combined condition claim on the ground that the lumbar strain had ceased to be the major contributing cause of the combined condition. Claimant objected. He did not contest that his lumbar strain had ceased to be the major contributing cause of his combined condition. Instead, he argued that the otherwise compensable injury was not limited to the lumbar strain that SAIF had accepted as part of his combined condition claim. In claimant’s view, an “otherwise compensable injury” within the meaning of ORS 656.005(7)(a)(B) referred not just to the condition that SAIF accepted, but also includes any other conditions not accepted that might have resulted from the same work-related accident that caused the lumbar strain, and that larger group of work-related conditions continued to be the major contributing cause of his combined condition. As a result, claimant contended that an employer could not close a combined condition claim if any of those non accepted conditions remained the major cause of the combined condition claim. The Workers’ Compensation Board rejected claimant’s argument and upheld SAIF’s denial of claimant’s combined condition claim, concluding that existing precedent defined the “otherwise compensable injury” component of combined conditions to consist of the condition or conditions that the employer has accepted as compensable. The Court of Appeals reversed, acknowledging that its holding was “potentially at odds” with existing precedents from both that court and the Oregon Supreme Court. It nevertheless concluded that those precedents were either distinguishable or should be reconsidered. The Supreme Court concluded that the Court of Appeals erred and that the Workers’ Compensation Board was correct. View "Brown v. SAIF Corp." on Justia Law

Plaintiffs filed suit against oil and gas companies and their insurers, claiming that the companies' dredging activities caused damage to the fisheries the fishermen used. The district court granted summary judgment for Florida Gas and Southern Natural because plaintiffs did not create a genuine issue of material fact as to whether the companies' activities constituted "dredging" so as to support maritime tort claims. The district court then denied plaintiffs' motion for reconsideration. The court affirmed the district court's judgment as to Florida Gas because none of plaintiffs' evidence created a genuine issue of material fact as to whether Florida Gas participated in dredging activities. However, the court reversed the district court's judgment as to Southern Natural because plaintiffs presented new, conclusive evidence in their motion for reconsideration pertaining to Southern Natural that they were justified in not presenting earlier. In this case, plaintiffs provided three types of new evidence upon reconsideration: Southern Natural's deposition transcript; documentary evidence offered during Southern Natural's deposition; and Southern Natural's responses to requests for admission. The court disagreed with the district court's analysis, particularly as it pertained to Southern Natural's deposition transcript and responses to requests for admission. The court explained that these items were clearly probative and, if the district court would have considered the contents of Southern Natural's deposition or its admissions, plaintiffs would have defeated summary judgment as to Southern Natural. View "In Re: Louisiana Crawfish Producers" on Justia Law

Three individuals were passengers in a vehicle driven by Kristina Lowe. Lowe negligently caused the vehicle to crash, and Rebecca Mason and Logan Dam died from injuries they sustained. At the time of the accident, Lowe was a resident at the home of her mother, Melissa Stanley. Stanley had a personal auto insurance policy issued by Amica that provided for $300,000 in liability coverage. The Estates brought wrongful death actions against Lowe, and the parties stipulated to the entry of judgments against Lowe in favor of the Estates in the amount of one million dollars. The Estates then filed reach-and-apply actions against Amica seeking to apply insurance money from Stanley’s policy to the judgments against Lowe. The superior court concluded that the Estates could not reach and apply insurance money from Stanley’s policy toward satisfaction of the judgments against Lowe because the “regular use” exclusion in the policy applied to preclude coverage for Lowe’s negligent use of the car. The Supreme Judicial Court affirmed, holding that the regular use exclusion in Stanley’s policy applied to preclude coverage in this case. View "Estate of Mason v. Amica Mutual Insurance Co." on Justia Law

In 2014, the City Council of South Portland enacted an ordinance prohibiting the bulk loading of cure oil on marine tank vessels in South Portland. In 2015, the Portland Pipeline Corporation and American Waterways Operators (PPLC) sued the City of South Portland and its Code Enforcement Officer in federal court, arguing that the ordinance was unconstitutional. The complaint requested only nonmonetary relief. The City notified the Maine Municipal Association Property & Casualty Pool (Pool), which provides liability coverage to the City and its public officials, of the lawsuit and requested a defense, which the Pool declined to provide. The City then brought this action alleging breach of the duty to defend. The superior court granted summary judgment for the Pool, concluding that the Pool had no duty to defend because the complaint requested only declaratory and injunctive relief, not damages, and therefore, there was no potential that the City could be liable for damages within the scope of coverage. The Supreme Judicial Court affirmed on different grounds, holding that the Pool had no duty to defend because any potential damages would be excluded from coverage. View "City of South Portland v. Maine Municipal Association Property & Casualty Pool" on Justia Law

At issue in this appeal was the scope of the “covered profession” clause of a professional liability errors and omissions insurance policy issued to Utah County Real Estate, LLC (Prudential) by Houston Casualty Company. While working as a real estate agent for Prudential, Robert Seegmiller engaged in a professional relationship with the plaintiffs in this action (collectively, Investors) on a real estate deal that went sour. The Investors obtained a judgment against Seegmiller for negligence. Rather than execute the judgment against Seegmiller, the Investors settled with him, acquiring any claims he might have against Prudential’s insurer, Houston Casualty. The Investors then brought this action alleging that Houston Casualty breached the policy by failing to defend and indemnify Seegmiller. The district court granted summary judgment for Houston Casualty. The Supreme Court affirmed on the ground that Seegmiller’s conduct in the transaction was not covered by the policy because he was not providing services “for a fee” in the transaction. View "Compton v. Houston Casualty Co." on Justia Law