Justia Insurance Law Opinion Summaries

Flambeau adopted an employee wellness program, requiring its employees, as a condition of receiving employer-subsidized health insurance, to fill out a medical questionnaire and to undergo biometric testing. One employee did not meet those requirements in time for the 2012 benefit year;, he and his family were briefly without health insurance. He filed a complaint with the Equal Employment Opportunity Commission, which filed suit, arguing that Flambeau’s requirement violated the Americans with Disabilities Act (ADA) ban on involuntary medical examinations, 42 U.S.C. 12112(d)(4). The district court dismissed; the Seventh Circuit affirmed. The court declined to address whether wellness programs are exempt from the limits on medical examinations because the ADA does not “restrict … [an] organization … administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law” or the EEOC argument that this insurance safe harbor does not apply to wellness programs. The court held that the relief the EEOC sought is either unavailable or moot. The employee resigned before suit was filed. He did not incur damages as a result of Flambeau’s policy and is not entitled to punitive damages. Flambeau abandoned its wellness program requirements for reasons unrelated to the litigation. View "Equal Employment Opportunity Commission v. Flambeau, Inc." on Justia Law

At issue in this case was the Insurance Commissioner’s 2011 regulation (the Regulation) covering replacement cost estimates for homeowners insurance. A few weeks before the Regulation was to become effective, Association of California Insurance Companies and the Personal Insurance Federation of California (collectively, the Association) filed a complaint for declaratory relief challenging the validity of the Regulation. The trial court invalidated the Regulation, concluding that the Regulation exceeded the Commissioner’s authority by attempting to define additional acts or practices by regulation rather than by the procedure set out in Cal. Ins. Code 790.06. The Court of Appeal affirmed. The Supreme Court reversed, holding that Cal. Ins. Code 790.10 explicitly vests in the Commissioner authority to issue “reasonable rules and regulations” to administer the Unfair Insurance Practices Act, and this statutory authority supported the Regulation. View "Association of California Insurance Cos. v. Jones" on Justia Law

At issue in this case was whether an insured may receive personal injury protection (PIP) coverage under a personal motor vehicle liability insurance policy for injuries sustained while driving a taxicab owned by the insured but not covered by the personal motor vehicle liability insurance policy where the policy contains an exclusion for motor vehicles owned but not insured under the policy. The Maryland Insurance Commissioner concluded that the insurer’s denial of coverage was unlawful in this case. The circuit court reversed. The Court of Special Appeals affirmed the judgment of the circuit court. The Court of Appeals affirmed, holding that an insurer of a personal motor vehicle liability insurance policy, which includes PIP coverage, is not responsible, as a result of the application of the personal motor vehicle liability insurance policy’s owned but not insured exclusion, for PIP coverage for injuries the insured sustained while driving a taxicab owned by the insured but not covered by the personal motor vehicle liability insurance policy. View "Maryland Insurance Administration v. State Farm Mutual Automobile Insurance Co." on Justia Law

Philadelphia Indemnity Insurance Company (“Philadelphia”) and Lexington Insurance Company (“Lexington”) insured the same school building that suffered fire damage. In a declaratory judgment action, they disputed their relative responsibilities to pay for the loss. The district court ordered Philadelphia to pay 54 percent and Lexington to pay 46 percent of the approximately $6 million loss. Lexington appealed, arguing it should have no obligation to pay. Philadelphia cross-appealed, arguing Lexington should have paid more. Finding no reversible error, the Tenth Circuit affirmed the district court's allocation between the insurers. View "Philadelphia Indemnity v. Lexington Insurance" on Justia Law

At issue in this case was (1) how Utah Code 30-3-5(1)(e) should be interpreted in correlation with Utah Code 75-2-804, and (2) the proper interpretation of “express terms” in section 75-2-804(2). Tyler Hertzske and Linda Snyder each claimed sole entitlement to the death benefits of a life insurance policy held by Edward Hertzske, deceased. The district court granted summary judgment to Tyler, concluding that Tyler was entitled to judgment as a matter of law. In so holding, the judge concluded (1) where section 30-3-5(1)(e) was not considered or included in the divorce proceedings, it did not apply, and (2) the Policy did not contain “express terms” that would except it from revocation under section 75-2-804(2). The Supreme Court affirmed, holding (1) section 75-2-804(2) creates a rebuttable presumption that a beneficiary designation in a life insurance policy is revoked upon divorce; (2) section 30-3-5(1)(e) does not apply in this instance, and, rather, section 75-2-804 governs; (3) a life insurance policy must contain “express terms” referring to divorce in order for the beneficiary designation of a former spouse to survive revocation by section 75-2-804(2); and (4) the Policy did not contain “express terms” that would except it from revocation under section 75-2-804(2). View "Snyder v. Hertzske" on Justia Law

The court certified the following questions of state law to the California Supreme Court: 1. Is California’s common law notice-prejudice rule a fundamental public policy for the purpose of choice-of-law analysis? May common law rules other than unconscionability not enshrined in statute, regulation, or the constitution, be fundamental public policies for the purpose of choice-of-law analysis? 2. If the notice-prejudice rule is a fundamental public policy for the purpose of choice-of-law analysis, can a consent provision in a first-party claim insurance policy be interpreted as a notice provision such that the notice-prejudice rule applies? View "Pitzer College v. Indian Harbor Insurance Co." on Justia Law

In the Original Action, Michelle Pratt filed a class action on behalf of residents of Autumn Hills against Collier and two other entities, alleging that two wells supplied by Autumn Hills contained contaminated water. Barbara Williams was later substituted as a class representative. The state court awarded plaintiffs $70,085,000 for medical monitoring, and $11,952,000 for the loss in value to their homes. Williams then filed an equitable garnishment action in state court against the Insurers and Collier pursuant to Missouri Revised Statute 379.200. The district court ultimately entered a consent judgment in favor of Collier. The court concluded that the consent judgment was a final judgment and the court had jurisdiction over the appeal of the consent judgment; Williams has not waived her right to appeal the consent judgment where Williams' consent to entry of judgment against her represented consent to the form, rather than the substance, of the judgment; and the judgment on the pleadings was not a final order, and thus Williams did not file her notice of appeal out of time. The court also concluded that because Williams brought this action on behalf of a class previously certified under a state-law analogue to Rule 23, the action was necessarily “filed under” Rule 23 or a state-law analogue, even though the complaint omits explicit reference to such a rule. Therefore, the district court had jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). Finally, the court concluded that the district court did not err in granting judgment on the pleadings to the Insurer because the Insurers had no duty to defend or indemnify Collier for the claims asserted in the Original Action. Accordingly, the court affirmed the judgment. View "Williams v. Employers Mutual Casualty Co." on Justia Law

American Family Insurance Company (American Family) issued automobile insurance policies to policyholders that were later injured in automobile accidents. The policy contained an anti-assignment clause, but, in order to obtain medical treatment, the policyholders assigned their interests in basic economic loss benefits to their medical provider, Stand Up Multipositional Advantage MRI, P.A. (Stand Up). Stand Up filed suit against the policyholders, their attorneys, and American Family for failing to make payment directly to Stand Up in accordance with the assignments. The district court granted summary judgment for the defendants, concluding that the anti-assignment clause was unenforceable, and therefore, the assignments to Stand Up were valid. The court of appeals reversed. The Supreme Court affirmed, holding that the anti-assignment clause was valid and precluded the assignments the policyholders made to Stand Up. View "Stand Up Multipositional Advantage MRI, P.A. v. American Family Insurance Co." on Justia Law

JEI filed suit against its liability insurance carrier, U.S. Specialty, alleging breach of contract and seeking a declaratory judgment related to U.S. Specialty's refusal to indemnify JEI for settlement of the underlying suit brought by a former JEI director. U.S. Specialty argued that the underlying suit was excluded from coverage based on the language in the directors' and officers' liability insurance policy. The district court granted summary judgment for U.S. Specialty. The court concluded that application of the insured vs. insured exclusion in this case demonstrates that U.S. Specialty does not owe coverage to JEI; the exclusion applied to Cheryl Sullivan, an insured person under the policy, and her two daughters; U.S. Specialty need only show that the exclusion clause applied to the suit as brought and it has done so; the allocation clause does not restore coverage for any part of the underlying suit where the allocation clause speaks generally to any claim brought with covered and uncovered matters; and the insured vs. insured exclusion speaks directly to lawsuits brought with the participation of insured persons. Accordingly, the court affirmed the district court's grant of summary judgment in favor of U.S. Specialty. View "Jerry's Enterprises, Inc. v. U.S. Specialty Insurance Co." on Justia Law

The Riverwalk at Arrowhead Country Club and Magnolia North Horizontal Property Regime developments were constructed between 1997 and 2000. After construction was complete and the units were sold, the purchasers became aware of significant construction problems, including building code violations, structural deficiencies, and significant water-intrusion problems. In 2003, the purchasers filed suit to recover damages for necessary repairs to their homes. Lawsuits were filed by the respective property owners' associations (POAs), which sought actual and punitive damages for the extensive construction defects under theories of negligent construction, breach of fiduciary duty, and breach of warranty. As to the Riverwalk development, individual homeowners also filed a class action to recover damages for the loss of use of their property during the repair period. The defendants in the underlying suits were the related corporate entities that developed and constructed the condominium complexes: Heritage Communities, Inc. (the parent development company), Heritage Magnolia North, Inc. and Heritage Riverwalk, Inc. (the project-specific subsidiary companies for each separate development), and Buildstar Corporation (the general contracting subsidiary that oversaw construction of all Heritage development projects), referred to collectively as "Heritage." The issues presented to the Supreme Court by these cases came from cross-appeals of declaratory judgment actions to determine coverage under Commercial General Liability (CGL) insurance policies issued by Harleysville Group Insurance. The cases arose from separate actions, but were addressed in a single opinion because they involved virtually identical issues regarding insurance coverage for damages. The Special Referee found coverage under the policies was triggered and calculated Harleysville's pro rata portion of the progressive damages based on its time on the risk. After review of the arguments on appeal, the Supreme Court affirmed the findings of the Special Referee in the Magnolia North matter, and affirmed as modified in the Riverwalk matter. View "Harleysville Group Ins. v. Heritage Communities, Inc." on Justia Law