Justia Insurance Law Opinion Summaries

While working at a subsidiary of General Dynamics Corporation (GDC), Plaintiff participated in GDC’s long-term disability (LTD) plan, which was funded and administered by Aetna Life Insurance Company. Plaintiff became disabled in 2003 and applied for plan benefits. Aetna approved her claim until 2010, when it began offsetting Plaintiff’s monthly LTD benefits by her gross Social Security income. Plaintiff sued Aetna and GDC, alleging that Aetna breached its fiduciary duty and seeking a declaration that her past and future LTD benefits should be offset against the Social Security Disability Insurance (SSDI) benefits she was awarded minus any income taxes she was assessed on those benefits. The district court granted summary judgment in favor of Defendants, thus affirming Aetna’s interpretation of the plan’s offset provision. The First Circuit affirmed, holding (1) the plan permits Aetna to offset LTD benefits by the gross amount of SSDI benefits; and (2) the district court did not err in denying discovery. View "Troiano v. Aetna Life Insurance Co." on Justia Law

Bruce Evertson was killed in a two-vehicle accident during the course and scope of his employment. Bruce’s estate filed a wrongful death claim against the insurer of the other driver. The county court accepted a settlement in the matter and allocated the proceeds among Bruce’s widow, Darla Evertson, and adult children. Darla received workers’ compensation benefits from Travelers Indemnity Company as a result of Bruce’s death. Travelers filed a subrogation claim to Darla’s settlement proceeds. The county court ordered that Travelers was not entitled to any distribution of Darla’s proceeds and did not provide Travelers any future credit against the workers’ compensation benefits it owed Darla. The court of appeals affirmed. The Supreme Court vacated the decision of the court of appeals and remanded with directions to vacate the order of the county court, holding that the county court lacked subject matter jurisdiction to hear and decide the subrogation matter. View "In re Estate of Evertson" on Justia Law

Prather, age 31, tore his left Achilles tendon playing basketball. He scheduled surgery for July 22. On July 21, he called the surgeon’s office complaining of swelling and that an area of the left calf was sensitive and warm to the touch. The surgery was uneventful and he was discharged from the hospital the same day. He returned to work and was doing well in a follow-up visit to his surgeon on August 2. 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 life 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.” The district court granted Sun Life summary judgment. The Seventh Circuit reversed, 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. View "Prather v. Sun Life & Health Insurance Co." on Justia Law

This appeal arises out of a dispute between Century and Global over the extent to which Global is obligated to reinsure Century pursuant to certain reinsurance certificates. The district court held that the dollar amount stated in the “Reinsurance Accepted” section of the certificates unambiguously caps the amount that Global can be obligated to pay Century for both “losses” and “expenses” combined. Century contends that Global is obligated to pay expenses in addition to the amount stated in the “Reinsurance Accepted” provision and that, at a minimum, the district court erred in concluding that the certificates were unambiguous. The court certified to the New York Court of Appeals the following question: Does the decision of the New York Court of Appeals in Excess Insurance Co. v. Factory Mutual Insurance Co., impose either a rule of construction, or a strong presumption, that a per occurrence liability cap in a reinsurance contract limits the total reinsurance available under the contract to the amount of the cap regardless of whether the underlying policy is understood to cover expenses such as, for instance, defense costs? View "Global Reinsurance Corp. of America v. Century Indemnity Co." on Justia Law

Plaintiff purchased an insurance policy from defendant that provided coverage for his house, other structures on his property, personal property, and loss of use for up to 12 months. The policy also included “extended dwelling coverage,” which provided additional coverage of 50 percent to pay for unexpected repair or rebuilding costs that exceeded the base amount of coverage for the house. A fire completely destroyed plaintiff’s house and its contents and damaged other structures on the property. Plaintiff and defendant disagreed about what was owed under the policy. In particular, the parties disagreed about whether plaintiff was entitled to the extended dwelling coverage without having to first actually replace the house. After a lengthy and complicated trial, the jury returned a special verdict finding for plaintiff on his breach of contract claim and assessing damages in the amount of the limits of the extended dwelling coverage. The jury also found for defendant on the counterclaim, however. The trial court declined to enter a judgment awarding plaintiff any damages. The court concluded that, in light of the jury’s findings on the counterclaim, the insurance policy had been voided, and as a result, it was defendant who was entitled to a judgment for all payments that it had made under the policy up to that time. Plaintiff appealed. The Court of Appeals concluded that the trial court had erred in even sending the counterclaim to the jury because there was no evidence that defendant had reasonably relied on any misrepresentations by plaintiff. Defendant petitioned the Oregon Supreme Court, which ultimately denied defendant’s petition. Plaintiff sought an award of $30,771 in attorney fees incurred before the Supreme Court, contending that, given the Court of Appeals’ decision, he was the prevailing party on appeal and was entitled to fees. The Supreme Court concluded that plaintiff’s action was “upon [a] policy of insurance” within the meaning of ORS 742.061(1), and therefore did not address whether defendant was correct about the insufficiency of plaintiff’s “alternative” theory of recovery under the statute, based on his defeat of the counterclaim. Defendant advanced no other objection to the requested award of fees. The petition for attorney fees was allowed. View "Masood v. Safeco Ins. Co. of Oregon" on Justia Law

The issue this case presented for the Oregon Supreme Courts review centered on a liability insurer’s duty to defend an insured against a civil action. "Ordinarily, courts decide whether an insurer had a duty to defend by comparing the provisions of the insurance policy to the allegations of the complaint against the insured, without regard to extrinsic evidence." In this case, the trial court and the Court of Appeals concluded that extrinsic evidence should have been considered, and after considering such evidence, held that the insurer had a duty to defend. On review, the Supreme Court agreed that the insurer had a duty to defend and therefore affirmed. "We do not see any need to resort to extrinsic evidence, however, or to modify our existing case law regarding when an insurer has a duty to defend." View "West Hills Development Co. v. Chartis Claims" on Justia Law

The Phoenix Insurance Company refused to defend and/or indemnify its named insured, an attorney referred to as “John Doe,” against claims advanced by Harry Sanders. Suing in his capacity as executor of the estate of Nancy Andersen and as Doe’s assignee, Sanders brought this diversity suit alleging primarily that Pheonix forsook its duty to defend Doe against the claims advanced by Sanders. The district court dismissed Sanders’s complaint for failure to state a claim. The First Circuit affirmed, holding (1) under the circumstances of this case, Pheonix’s duty to defend was never triggered and, thus, never breached; and (2) Sanders’s other theories of liability were unavailing. View "Sanders v. Phoenix Insurance Co." on Justia Law

Appellant, who was injured in a car accident, sought basic economic loss benefits under Minnesota’s No-Fault Automobile Insurance Act from his insurer, Founders Insurance Company. An arbitrator awarded Appellant $19,128 in basic economic loss benefits. The district court confirmed the arbitration award. The court of appeals reversed, concluding that the Founders was not required to provide basic economic loss coverage because Founders was an out-of-state insurer that did not write motor vehicle insurance in Minnesota. The Supreme Court reversed, holding that Minn. Stat. 65B.50(2) requires an out-of-state insurer to provide no-fault benefits to its insured when its insured is in an accident in Minnesota and the insured vehicle is in Minnesota, even if the insurer is not licensed by the state to issue motor vehicle insurance. View "Founders Insurance Co. v. Yates" on Justia Law

Favorite Healthcare Staffing is an employment agency that provides nurses and other health care professionals to Laurel Regional Hospital. The contract between the Agency and the Hospital (the “Staffing Agreement”) states that the Agency-provided practitioners assigned to the Hospital are the employees of the Agency, not the Hospital. At issue in this case is whether a nurse employed by a staffing agency and assigned to work at a hospital qualifies as an “employee” of the hospital under the hospital’s insurance policy (the "Dimensions Policy"). The district court answered in the negative and granted summary judgment in favor of the hospital's insurer. The court concluded, however, that the term “employee” as used in the Dimensions Policy is not ambiguous and that it includes those workers who qualify as employees under the right-to-control test. Therefore, Dimensions has an independent obligation to provide coverage to those workers who meet the definition of “employee,” without regard to how those workers may be classified under the Staffing Agreement executed by the Hospital and the Agency. Because the evidence contained in the record establishes that the nurse is the Hospital’s employee under the right-to-control and the borrowed-servant standards, the court concluded that she is a “protected person” who qualifies for coverage under the professional-liability portion of the Dimensions Policy. Accordingly, the court vacated and remanded. View "Interstate Fire and Casualty v. Dimensions Assurance Ltd." on Justia Law

Advent was the general contractor for the Aspen Village project in Milpitas. Advent subcontracted with Pacific, which subcontracted with Johnson. Advent was covered by a Landmark insurance policy and a Topa excess insurance policy. Johnson was covered by National Union primary and excess policies. Kielty, a Johnson employee, fell down an unguarded stairway shaft at the site and sustained serious injuries. Kielty sued Advent, which tendered its defense to its insurers and to National Union. National Union accepted under a reservation of rights. Kielty settled for $10 million. Various insurers, including Topa and National Union (under its primary policy), contributed to the settlement. National Union did not provide coverage under its excess policy. Advent sought a declaration that it was an “additional insured” under that excess policy. Topa intervened, seeking equitable contribution from National Union, and equitable subrogation. Advent dismissed its complaint with prejudice. Summary judgment was entered against Topa, for National Union. The court of appeal affirmed. While Topa’s policy was vague, National Union’s excess policy states that coverage will not apply until “the total applicable limits of Scheduled Underlying Insurance have been exhausted by the payment of Loss to which this policy applies and any applicable, Other Insurance have been exhausted by the payment of Loss.” View "Advent, Inc. v. National Union Fire Insurance Co. of Pittsburgh" on Justia Law