Justia Insurance Law Opinion Summaries

Insured filed a complaint challenging Insurer’s termination of workers’ compensation issuance. The insurance commissioner declined to consider the merits of the complaint on the ground that the complaint raised factual issues that could not be resolved by the agency. Insurer filed a petition for judicial review seeking a declaration that the insurance commissioner should have exercised jurisdiction over the dispute. The district court granted the commissioner’s motion to dismiss, concluding that Insurer lacked standing to litigate the issues. The Supreme Court dismissed Insurer’s appeal, holding that, under the circumstances presented and applying established caselaw, the appeal was moot. View "Auto-Owners Insurance Co. v. Iowa Insurance Division" on Justia Law

In the 1990s, Stryker purchased a Pfizer subsidiary that made orthopedic products, including the “Uni-knee” artificial joint. It was later discovered that those devices were sterilized using gamma rays, which caused polyethylene to degrade. If implanted past their five-year shelf-life, the knees could fail. Expired Uni-Knees were implanted in patients. Stryker, facing individual product-liability claims and potentially liable to Pfizer, sought defense and indemnification under a $15 million XL “commercial umbrella” policy, and a TIG “excess liability” policy that kicked in after the umbrella policy was fully “exhausted.” XL denied coverage, arguing that the Uni-Knee claims were “known or suspected” before the inception of the policy. Stryker filed lawsuits against the insurers, then unilaterally settled its individual product-liability claims for $7.6 million. Stryker was adjudicated liable to Pfizer for $17.7 million. About 10 years later, the Sixth Circuit held that XL was obliged to provide coverage. XL paid out the Pfizer judgment first, exhausting coverage limits. TIG declined to pay the remaining $7.6 million, arguing that Stryker failed to obtain “written consent” at the time the settlements were made. Stryker claimed that the policy was latently ambiguous because XL satisfied the Pfizer judgment first, Stryker was forced to present its settlements to TIG years after they were made. The district court granted Stryker summary judgment. The Sixth Circuit reversed, finding the contract unambiguous in requiring consent. View "Stryker Corp. v. National Union Fire Insurance Co." on Justia Law

Advanced Specialty Pharmacy LLC, Meds I.V., Inc. (collectively referred to as "Meds I.V."), and several others were sued by individuals asserting various wrongful-death and personal-injury claims. Meds I.V. was insured by Pharmacists Mutual Insurance Company. Pharmacists Mutual filed an interpleader complaint in the action and submitted $4 million to the circuit court, which Pharmacists Mutual alleged was the limits to Meds I.V.'s insurance policies with it, and requested that the circuit court divide the insurance moneys among the claimants. The claimants alleged that the policy limits were $7 million. The parties filed cross-motions for a summary judgment, and the circuit court entered a summary judgment in favor of the claimants. The Supreme Court affirmed the summary judgment insofar as it held that the general aggregate limit applied to limit Pharmacists Mutual's liability to $4 million. However, the Court reversed the circuit court's judgment insofar as it held that the products/completed-work-hazard aggregate limit also applied to expand Pharmacists Mutual's liability by $3 million to $7 million. The case was remanded back to the circuit court for further proceedings. View "Pharmacists Mutual Ins. Co. v. Advanced Specialty Pharmacy, LLC" on Justia Law

This action arose from the murder of a teenager by her two friends. The victim’s parents filed a wrongful death action against the killers and the two women they lived with, Tara Clendenen and Rachel Shoaf. Clendenen and Shoaf were insured under homeowner’s insurance policies issued by American National Property and Casualty Company (ANPAC) and Erie Insurance Property and Casualty Company (Erie). Although not parties to the state court action, ANPAC and Erie filed declaratory judgment actions in the federal district court seeking a determination that the homeowner’s insurance policies did not provide coverage for the claims being asserted in the complaint and that the insurers had no duty to defend or indemnify the defendants. The federal court found that it was unclear whether coverage was available to Sheaf and Clendenen in the state court action and certified questions to the Supreme Court. The Supreme Court held (1) the unambiguous intentional/criminal acts exclusions in the insurers’ policies precluded liability coverage to Clendenen and Shoaf for the claims in the underlying case because the murder was expected or intended by the killers, co-insureds under their respective policies; and (2) the unambiguous severability clauses in the insurers’ policies did not prevail over the unambiguous intentional/criminal acts exclusions. View "American National Property & Casualty Co. v. Clendenen" on Justia Law

Scott and Dawn Smith (together, Insureds) filed an insurance claim with Erie Insurance Company (Insurer) seeking uninsured-motorist coverage as a result of injuries suffered by Scott in a no-contact accident allegedly caused by an unidentified vehicle. Insurer denied the claim. The trial court granted summary judgment to Insurer, concluding that a provision in the policy requiring Insureds to provide “independent corroborative evidence” that the unknown driver caused the injury meant that Insureds had to submit evidence, independent of Scott’s own testimony, corroborating that the accident was caused by an unknown motorist, and this they failed to do. The court of appeals reversed. The Supreme Court affirmed, holding that the policy’s requirement of independent corroborative evidence could be met using evidence derived from the insured’s testimony. View "Smith v. Erie Insurance Co." on Justia Law

Parties to a facultative reinsurance certificate differ as to which of two arbitration provisions govern the resolution of a dispute that has arisen between them. First Mutual, the ceding company, sought to compel its reinsurer, Infrassure, to submit to arbitration governed by an endorsement. Infrassure filed suit seeking a declaratory judgment that the arbitration provision contained in the body of the form is controlling. First Mutual counterclaimed. The district court held that the form’s procedures governed, granted declaratory relief in favor of Infrassure, dismissed First Mutual’s counterclaims, and denied the request to compel arbitration. The court concluded that the contract is unambiguous and the arbitration clause in the body of the certificate controls. The court explained that its reading of the facultative certificate is easily confirmed by consulting other provisions. Accordingly, the court affirmed the judgment. View "Infrassure, Ltd. v. First Mutual Transportation Assurance Co." on Justia Law

Plaintiffs contend that their insurance policy from Amica covered damage caused by a fire to their house and personal property. On appeal, plaintiffs challenge the district court's grant of summary judgment for Amica. The district court concluded that no reasonable jury would be able to reconcile the difference between the value of the personal property plaintiffs reported as lost in the fire and the value of personal property they reported in their bankruptcy petition a year earlier. Therefore, the district court determined that the insurance policy was void as a matter of law, and granted summary judgment to Amica on plaintiffs' claims. The court affirmed, concluding, as a matter of law, that because plaintiffs intentionally made material misrepresentations on the Proof of Loss, their entire insurance policy is void under the Concealment of Fraud provision. View "Neidenbach v. Amica Mutual Insurance Co." on Justia Law

Terrill Graf, bought his fiancee a van for her 50th birthday. Celebrating the birthday and new purchase, Graf drank liquor and then gathered four friends in the van. Plaintiff Wendy Peden was one of those friends. She says that she expected Graf only to show off the van and to photograph the group. But Graf drove away with his friends in the van, crashing it, and causing serious injuries to Peden. She obtained $240,000 in insurance benefits. But Peden claimed more under her insurance policy for underinsured-motorist benefits. The insurer (State Farm) initially denied the claim, but ultimately paid her an additional $350,000, the maximum amount that she could receive under the underinsured-motorist coverage. Peden sued State Farm under Colorado’s common law and statutory law, claiming an unreasonable denial or delay in paying benefits. The issue this case presented for the Tenth Circuit’s review was whether a reasonable fact-finder could conclude that State Farm unreasonably denied or delayed payment of benefits. The district court answered “no.” But the Tenth Circuit disagreed after careful consideration of the facts of this case, and reversed the grant of summary judgment to State Farm. The denial of Peden’s motion for partial summary judgment was vacated, and the entire matter remanded for further proceedings. View "Peden v. State Farm Mutual Auto Ins Co" on Justia Law

OneBeacon filed suit for declaratory judgment, seeking to rescind an insurance policy or obtain a declaration that the prior-knowledge exclusion barred coverage. The Welch Firm counterclaimed, asserting violations of the common law Stowers duty and the Texas Insurance Code. DISH intervened. The jury returned a verdict in favor of DISH and the Welch Firm. OneBeacon timely appealed and the Welch parties cross-appealed. The court affirmed the district court’s orders denying OneBeacon’s motion and renewed motion for judgment as a matter of law based on the policy’s prior-knowledge exclusion; concluded that the district court did not err in holding that DISH’s July 14, 2011, letter demanding policy limits in exchange for a full release of its claims against the Welch Firm was a valid Stowers demand which OneBeacon rejected; concluded that the district court did not err in entering judgment on the jury’s award of additional damages on the ground that OneBeacon “knowingly” violated Section 541.060 of the Texas Insurance Code; concluded that OneBeacon's challenges to the jury's $8 million award was not properly before the court; and concluded that the district court did not err in requiring the Welch Firm to choose between additional damages under Chapter 541 and exemplary damages under Stowers. View "OneBeacon Insurance Co. v. T. Wade Welch & Associates" on Justia Law

Peter Lee and three other passengers were injured in a single vehicle accident. The driver held an insurance policy issued by USAA Casualty Insurance Company and United States Automobile Association (collectively, USAA), and all of the passengers were covered by TRICARE. TRICARE paid medical benefits for the passengers and asserted medical payment liens for the passengers’ combined medical expenses. Lee made a settlement demand on USAA for Perez’s $100,000 policy limits. USAA offered to pay the policy limits provided that Lee first secure lien releases from TRICARE. TRICARE eventually waived its liens, and USAA issued a check for the policy limits of $100,000. Lee continued his suit against Perez after receiving the policy limits payment from USAA. Perez agreed to a consent judgment and assigned his claims against USAA to Lee. Elizabeth West, acting as guardian ad litem for Lee, filed suit asserting that USAA acted in bad faith by conditioning payment on resolving the TRICARE liens. The district court granted summary judgment for West, holding USAA liable to Lee for the consent judgment. The Supreme Court reversed, holding that USAA’s grounds for conditioning its payment of policy limits upon resolution of the TRICARE liens were reasonable under existing law, and therefore, USAA was entitled to judgment as a matter of law. View "West v. United Services Automobile Ass’n" on Justia Law