Justia Insurance Law Opinion Summaries

Plaintiff-Appellee Century Surety Company (“Century”) issued a commercial lines policy to Defendant-Appellant Shayona Investment, LLC covering commercial property and business income coverage. Shayona submitted claims, Century paid them, and then Century sought a declaratory judgment in the district court as to whether the claims were fraudulent. At trial, the jury found in favor of Century, awarding it both the amount the company paid Shayona under the policy and the sum it spent investigating the claims. Shayona appealed, arguing that the standard of proof the court instructed the jury to use was wrong. Finding no reversible error, the Tenth Circuit affirmed the district court's entry of judgment on the verdict. View "Century Surety Co. v. Shayona Investment" on Justia Law

Insureds, who owned a policy from Insurer, alleged that Insurer failed to pay them for damage to their home from sinkhole loss, thus breaching the terms of the insurance policy. When Insurer became insolvent, Florida Insurance Guaranty Association (FIGA) was activated to handle the “covered claims.” The circuit court ordered appraisal, and the appraisers determined the amount of loss to be $130,600. FIGA objected to the confirmation of the appraisal award, arguing that the statutory definition of “covered claim” in effect when Insurer was adjudicated insolvent should govern any payments made on the claim, thus prohibiting any direct payment to Insureds for their sinkhole loss. The circuit court confirmed the appraisal award and entered judgment in favor of Insureds in the amount of $130,600, concluding that Insureds’ rights to recover against FIGA for sinkhole loss were established when Insurer issued the insurance policy. The Second District Court of Appeal reversed. The Supreme Court affirmed, holding (1) the definition of “covered claim” in effect on the date that Insurer was adjudicated to be insolvent governed the scope of FIGA’s liability to Insureds for the sinkhole loss at their property; and (2) Insureds were precluded from obtaining an appraisal award for their sinkhole loss directly from FIGA under the terms of the policy. View "de la Fuente v. Florida Insurance Guaranty Ass’n" on Justia Law

Plaintiffs, who owned insurance policies with National Lloyds Insurance Company, filed independent lawsuits against National Lloyds, claiming they were underpaid on claims following two hail storms in Hidalgo County. The Multidistrict Litigation Panel of Texas (MDL Panel) granted the motions of other insurance carriers seeking to transfer cases arising from the hail storms to a pretrial court and subsequently transferred Plaintiffs’ claims to the same pretrial court. At issue in this case was National Lloyd’s failure to produce certain information requested by Plaintiffs. The pretrial court entered an order compelling National Lloyds to produce six categories of documents, including “management reports and emails,” and assessed sanctions for attorney’s fees. National Lloyds sought mandamus relief, asserting that the compelled discovery was overbroad. The Supreme Court conditionally granted mandamus relief, holding (1) the pretrial court abused its discretion in compelling production of the management reports and emails; and (2) because the pretrial court’s order was overboard as the management reports and emails, but because National Lloyds failed to produce five other categories of discovery, the sanctions award must be reevaluated. View "In re National Lloyds Insurance Co." on Justia Law

Barbara Bagley and Vom Baur, her common law husband, were traveling in a Range Rover when Bagley lost control of the vehicle and flipped it. Ten days later, Baur died from the injuries he sustained in the accident. Bagley, in her capacity as sole heir and personal representative of her deceased husband’s estate, brought suit against herself as an individual, alleging that she negligently caused her husband’s death. Bagley, who sued under Utah’s wrongful death and survival action statutes, brought suit to compel State Farm Insurance Company, with whom she maintained a motor vehicle insurance policy, to indemnify her. The district court dismissed the complaint, concluded that a person cannot simultaneously act as plaintiff and defendant in a wrongful death or survival action suit. The court of appeals reversed. The Supreme Court affirmed, holding that the court of appeals did not err when it concluded that the wrongful death and survival action statutes permit a person acting in the legal capacity of an heir or personal representative to sue herself in an individual capacity for negligently causing a decedent’s death or injury. View "Bagley v. Bagley" on Justia Law

In 2008, the workers’ compensation insurance policy for South Jersey (SJ), a trash-removal business, neared expiration, SJ, through its insurance agent, entered into a three-year Reinsurance Participation Agreement (RPA) with Applied Underwriters. The RPA stated that any disputes would be arbitrated in Tortola or in an agreed location and indicated that it would be governed by Nebraska law. The RPA and its attachments total 10 pages. SJ claims that it believed the RPA was a workers’ compensation insurance policy; that Applied fraudulently presented it as such; that the RPA is actually a retrospective rating insurance policy under which premiums would be based on claims paid during the previous period; and that it was promised possible huge rebates. SJ acknowledged that Applied is not an insurer and cannot issue workers’ compensation insurance. Applied represented that SJ purchased a primary workers’ compensation policy from Continental, which entered into a pooling agreement with California; all are Berskshire Hathaway companies. The pooling agreement was a reinsurance treaty. According to Applied, the RPA was not insurance, but an investment instrument. For 34 months, SJ paid monthly premiums of $40,000-$50,000, expecting a rebate. Claims paid on its behalf were $355,000 over three years. After the RPA expired, Applied declared that SJ owed $300,632.94. SJ did not pay. Applied filed a demand for arbitration. SJ sought declaratory relief as to the arbitration provision and rescission of the RPA. The district court denied the motion to compel arbitration. The Third Circuit reversed. SJ’s challenges to the arbitration agreement apply to the contract as a whole, rather than to the arbitration agreement alone; the parties’ dispute is arbitrable. View "South Jersey Sanitation Co., Inc v. Applied Underwriters Captive Risk Assurance Co., Inc." on Justia Law

Defendant drove a car he had rented from Enterprise Rent-A-Car (Enterprise) into Plaintiff’s knee. At the time of the incident, Plaintiff was insured under a policy issued by IDS Property Casualty Insurance Company (IDS), which provided uninsured/underinsured motorist coverage. Plaintiff filed a complaint against Defendant, Defendant’s automobile liability insurer, and Enterprise. Plaintiff also served IDS with a copy of the summons and complaint for the purpose of bringing a claim under his uninsured motorist coverage policy. The trial court granted summary judgment in favor of IDS, concluding that the rental car did not qualify as an “uninsured motor vehicle” under the policy. The court of appeals affirmed. The Supreme Court reversed, holding that the rental car was an “uninsured motor vehicle” under the policy. Remanded. View "Martin v. Powers" on Justia Law

After a 2013 fire at the Milwaukee County Courthouse, the county filed a claim with its primary insurer, the State of Wisconsin Local Government Property Insurance Fund. The Fund had engaged Lexington as either its reinsurer or excess insurer (the parties disagree) and maintained a separate insurance policy with Cincinnati Insurance that covered machinery and equipment at the Courthouse. The Fund paid all but a small portion of the county’s claimed losses, filed a reimbursement claim with Lexington, and insisted that the remaining unpaid portion of the county’s claim should be paid by Cincinnati. Pursuant to separate Joint Loss Agreements (JLA) in the county’s policies, the Fund and Cincinnati agreed to arbitrate their dispute. The district court denied Lexington’s motion to be allowed to participate in the arbitration. The Seventh Circuit affirmed. The Fund policy JLA provides a procedure whereby the parties could “signify” an agreement to arbitrate. No such signals were exchanged between Lexington and any other party; no agreement to arbitrate exists between Lexington and the other insurers. Absent such an agreement, Lexington is not entitled to insert itself into the arbitration between the Fund and Cincinnati. View "State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co." on Justia Law

Richard Tryon was injured by an underinsured motorist while driving his motorcycle. At the time of the accident, Tryon owed two automobiles insured with Encompass Indemnity Co. and Philadelphia Indemnity Insurance Co. (together, the Companies). Both policies included Underinsured Motorist Insurance (UIM) coverage provisions. The Companies denied UIM coverage for Tryon on the basis of their respective insurance policies, which had owned-but-not-scheduled-for-coverage exclusions. Tryon filed suit against the Companies. The trial court granted summary judgment for Encompass and Philadelphia, ruling that the language in the policies issued by the Companies clearly excluded coverage of Tryon’s motorcycle. The court of appeals reversed, concluding that the unpublished Court of Appeals opinion in Motorists Mutual Insurance Co. v. Hartley and the Supreme Court’s holding in Chaffin v. Kentucky Farm Bureau Insurance Cos. mandated coverage. The Supreme Court affirmed in part and reversed in part, holding (1) owned-but-not-scheduled provisions for UIM coverage are enforceable so long as they expressly and plainly apprise insureds of the exclusion; and (2) the Philadelphia policy failed to plainly exclude coverage under the circumstances, but the terms of the Encompass policy plainly excluded coverage. View "Philadelphia Indemnity Insurance Co. v. Tryon" on Justia Law

After suffering a fall at work, Linda Mitchell returned to the same position she had before her injury, and continued to work for more than seven months until she was terminated for a cause unrelated to the injury. She then sought and was awarded disability benefits from the Mississippi Workers’ Compensation Commission. But because the Administrative Law Judge (ALJ) and Commission both failed to recognize that Mitchell’s return to work created a rebuttable presumption that she suffered no loss of earning capacity, the Supreme Court reversed the award of disability benefits and remanded this case to the Commission to apply the correct legal standard. View "Hudspeth Regional Center v. Mitchell" on Justia Law

In 2014, Lend Lease, the construction manager of the Chicago River Point Tower Project, hired Cives as a subcontractor. Cives hired Midwest Steel. Midwest had, years before, hired AES to supply Midwest with additional workers, who were co‐employed by Midwest and AES. Lend Lease entered into a “contractor-controlled insurance program” with Starr Liability with a $500,000 deductible. All subcontractors were to join in the policy. AES had, several years earlier, obtained workers’ compensation for its workers from TIC, so that injured AES‐Midwest workers could obtain workers’ compensation from either Starr (or Lend Lease under the deductible) or TIC. Four ironworkers, jointly employed by Midwest and AES and performing work for Midwest were injured on the job and sought workers’ compensation. The claims exceeded $500,000, so Lend Lease had to pay its full deductible. Starr paid the remaining claims. Lend Lease filed suit against TIC, AES’s insurer, and AES, seeking reimbursement of the $500,000. The district court dismissed. The Seventh Circuit affirmed. Lend Lease made a deal with Starr and is bound by it. The court rejected an argument that AES has been unjustly enriched; AES was not obligated to purchase an insurance policy that would cover Lend Lease's deductible. View "Lend Lease (US) Construction, Inc. v. Administrative Employer Services, Inc." on Justia Law