Justia Insurance Law Opinion Summaries

This case stems from the rate filing submitted to the Green Mountain Care Board (GMCB) by MVP Health Insurance Company (MVP) with respect to the Agri-Services health insurance plan. The State of Vermont, GMCB found that the 2015 Agri-Services rate filing would not promote access to quality health care and denied it for that reason. MVP appealed, arguing: (1) that GMCB’s disapproval was an arbitrary use of discretion based on vague standards that unconstitutionally delegated authority to GMCB; (2) that GMCB’s decision was not supported by the record; and (3) that GMCB’s statutory interpretation of its authority was compelling error. After review, the Supreme Court held that 8 V.S.A. 4062 was constitutional, but found that GMCB’s conclusions were not supported by specific findings on the statutory criteria required for approval of health insurance rates and, accordingly, reversed and remanded for new findings. View "In re MVP Health Insurance Company" on Justia Law

Samantha Hollaway was involved in an accident with Harry Sykes, who was insured by Direct General Insurance Company of Mississippi. Hollaway sought compensation from Direct General for both bodily and property damage. Direct General settled Hollaway’s property damage claim, but there was a breakdown of settlement negotiations with respect to Hollaway’s bodily injury claim. Hollaway filed suit, asserting a third-party bad faith claim against Direct General under the Kentucky Unfair Claims Settlement Practices Act. The trial court granted summary judgment in favor of Direct General, finding that liability and causation were legitimately disputed, and therefore, Direct General could not have acted in bad faith as a matter of law. The Court of Appeals affirmed. The Supreme Court affirmed, holding that Hollaway failed to make a colorable third-party bad-faith claim and, therefore, summary judgment in favor of Direct General was appropriate. View "Hollaway v. Direct Gen. Ins. Co. of Miss., Inc." on Justia Law

Hilger, the president of Allied, which provides customized products to financial institutions, was named in separate lawsuits brought by credit unions in Michigan and Tennessee. Hilger’s codefendants include O’Malley, who sells life insurance through O’MA, and Phillips, who brokers the sale of life-insurance to third parties through Berkshire and Capital. The credit unions allege that the defendants persuaded them to fund loans used to pay life-insurance premiums by overstating the value of the policies that would serve as collateral. Hilger tendered his defense to Landmark under a professional liability policy held by O’MA. Although Hilger is not a named insured under O’MA’s policy, the policy defines “covered persons and entities” to include O’MA’s independent contractors. Landmark sought a declaratory judgment that it has no duty to defend, arguing that Hilger did not perform the professional services at issue in the Michigan and Tennessee suits as an O’MA independent contractor. The district court, applying Illinois law, entered judgment on the pleadings for Hilger. The Seventh Circuit reversed. Landmark is entitled to take discovery and offer evidence regarding the true nature of Hilger’s relationship to O’MA. Judgment on the pleadings was inappropriate. Under Illinois law an insurer that seeks a declaration of its duty to defend may offer evidence outside the underlying complaint for purposes of establishing that no duty exists. View "Landmark Am. Ins. Co v. Hilger" on Justia Law

Sharel Kenney appealed the trial court’s grant of summary judgment in favor of USAA Casualty Insurance Company (USAA-CIC) and Foremost Insurance Company (Foremost). Kenney purchased a motorcycle in Slidell, Louisiana. Kenney, a Louisiana resident, completed a Louisiana Motorcycle Insurance Application with Foremost, which included an Uninsured/Underinsured Motorist Bodily Injury Coverage Form (“UMBI Form”). Pursuant to the Form, Kenney elected not to purchase UMBI coverage. Following receipt of the application and the UMBI Form, Foremost issued a policy to Kenney. Daniel Steilberg, Kenney’s fiancé, was listed as an operator on the insurance policy. While riding the motorcycle, Kenney and Steilberg were involved in an accident with an uninsured motorist on Highway I-90 in Bay St. Louis, Mississippi. After the accident, Kenney made claims for uninsured-motorist coverage under three separate policies. Kenney did receive payments from Foremost representing the actual cash value for property damage to the motorcycle. Kenney also filed a claim with USAA-CIC, the insurer for Kenney’s Dodge Charger, but she was denied payment for medical expenses and uninsured/underinsured-motorist coverage. After the denials of coverage, Kenney filed suit against the uninsured motorise, Foremost, USAA-CIC and Steilberg, Finding that the trial court erred in granting summary judgment as to Foremost but not as to USAA-CIC, the Supreme Court affirmed the trial court in part and reversed and remanded in part. View "Kenney v. Foremost Insurance Co." on Justia Law

American Family Mutual Insurance Company (AFM) sought review of a Court of Appeals decision upholding the trial court's judgment in a garnishment proceeding requiring AFM to pay a judgment that plaintiffs FountainCourt Homeowners’ Association and FountainCourt Condominium Owners’ Association (FountainCourt) had obtained against AFM’s insured, Sideco, Inc. (Sideco). The underlying dispute centered on a housing development that was constructed between 2002 and 2004 in Beaverton. FountainCourt sued the developers and contractors seeking damages for defects in the construction of the buildings in the development. Sideco, a subcontractor, was brought in as a third-party defendant, and a jury eventually determined that Sideco’s negligence caused property damage to FountainCourt’s buildings. Based on that jury verdict, the trial court entered judgment against Sideco in the amount of $485,877.84. FountainCourt then served a writ of garnishment on AFM in the amount owed by Sideco, and, in response, AFM denied that the loss was covered by its policies. The trial court ultimately entered judgment against AFM, after deducting the amounts that had been paid by other garnishees. After review, the Supreme Court found no reversible error in the court of Appeals' judgment and affirmed the courts below. View "FountainCourt Homeowners v. FountainCourt Develop." on Justia Law

This case involved a dispute over the validity of three stranger-originated life insurance (STOLI) policies. The United States Court of Appeals for the Eleventh Circuit certified two questions of Florida law to the Supreme Court that were determinative of the case and for which there appeared to be no controlling precedent. The certified questions involved two Florida statutes: Fla. Stat. 627.404(1), requiring that an insurable interest exist at the inception of each life insurance policy, and Fla. Stat. 627.455, providing that an insurance policy is incontestable two years after its issuance. STOLI transactions offer an insured (often an elderly one) “free” or “risk-free” insurance in exchange for transferring the policy to the investor after the two-year incontestability period has expired. The Supreme Court answered that a party cannot challenge the validity of a life insurance policy after the two-year contestability period established by section 627.455 because it is created through a STOLI scheme. View "Wells Fargo Bank, N.A. v. Pruco Life Ins. Co." on Justia Law

Bayer, an ironworker with Area Erectors, which was hired by Garbe to build Panduit’s warehouse facilities, fell and is now quadriplegic. Bayer filed a claim against Area under the Workers’ Compensation Act (820 ILCS 305/1). Area began making temporary total disability payments and payments for Bayer’s medical expenses. Bayer also sued Panduit, Garbe, and a structural engineering company for negligence. Panduit and Garbe sued Area under the Joint Tortfeasor Contribution Act (740 ILCS 100/0.01). Bayer's settlement with Area was approved, so Area was discharged from contribution liability. Other claims were resolved, leaving only Bayer’s action for negligence against Panduit. Judgment ($64 million) was entered in Bayer’s favor. Under the Workers’ Compensation Act (820 ILCS 305/5(b)), Area was entitled to recover out of that judgment the amount of compensation it paid or would pay to Bayer, including amounts paid or to be paid under the Act for medical expenses, vocational rehabilitation, and temporary partial disability benefits. The court suspended future workers’ compensation payments. The Act provides that where, “the services of an attorney at law of the employee . . . have . . . substantially contributed to the procurement ... of the proceeds out of which the employer is reimbursed, then, in the absence of other agreement, the employer shall pay such attorney 25% of the gross amount of such reimbursement,” 820 ILCS 305/5(b), so Bayer’s lawyers were entitled to fees equal to 25% of the amount Area had paid for lost wages, medical expenses, and other compensable items before payments were suspended. Building on its 1990 holding that the gross amount of reimbursement subject to attorney fees includes both benefits paid before the third-party recovery and the amount of such benefits the employer will be relieved from paying in the future by reason of the third-party action, the Illinois Supreme Court held that the value of future medical care should be included in this calculation. View "Bayer v. Panduit Corp." on Justia Law

Defendant insurance company denied uninsured motorist coverage to a third party beneficiary injured in an automobile accident because it had cancelled the policy before the accident occurred. The third party sued, and the insurer sought summary judgment. The third party opposed, contending the cancellation was invalid because a written notice seeking information sent by the insurer to the insureds prior to cancellation was unreasonable as a matter of law, and disputed facts existed as to whether the insurer had mailed the notice of cancellation and actually cancelled the policy. The trial court granted summary judgment, and finding no error, the Court of Appeal affirmed. View "Mills v. AAA Northern CA, NV and Utah Ins. Exch." on Justia Law

Bryan Wagner had previously obtained oil and gas properties in Louisiana from ExxonMobil, and Wagner agreed to indemnify and defend ExxonMobil against various claims and liabilities. Wagner and ExxonMobil were sued for damages in Louisiana by owners of land that is subject to these mineral rights, and ExxonMobil then sued Wagner in Texas state court seeking to enforce Wagner’s alleged contractual obligations to ExxonMobil. Northfield and Federal issued insurance policies to Wagner. Federal acknowledges its duty to defend Wagner in ExxonMobil’s suit, but Federal contends that Northfield also owes a duty to defend Wagner, and Federal seeks a declaration to that effect as well as recovery of 50% of Wagner’s defense costs. The district court determined that Northfield was not obligated to defend Wagner because of a pollution exclusion clause in Northfield’s policy. The court concluded that ExxonMobil has alleged potential claims against Wagner that are not clearly excluded by the Pollution Endorsement, and thus the district court should not have granted summary judgment in favor of Northfield on the basis of that exclusion. The court considered Federal's alternative claim and concluded that the district court did not err in granting summary judgment in favor of Northfield as to Federal's claim that ExxonMobil's allegations against Wagner are covered by his Northfield policy because of the “Underground Resources & Equipment Buyback” (the UREB) Endorsement. Finally, the court concluded that the exception to the Insured Contract exemption applies for purposes of the duty to defend. Accordingly, the court reversed and remanded. View "Federal Ins. Co. v. Northfield Ins. Co." on Justia Law

Allstate filed a qui tam action on behalf of itself and the State against defendants under the California Insurance Frauds Prevention Act, Insurance Code 1871.7. Following entry of the qui tam judgment, Allstate began efforts to collect it. During its investigation, Allstate learned of a series of real estate transactions conducted by defendants designed to transfer away their assets. Allstate, on behalf of the State, filed an action to set aside the fraudulent transfers of real and personal property. Allstate subsequently obtained a stay of the fraudulent conveyance action and returned to the qui tam court where it filed a motion for an order allocating the qui tam judgment proceeds. The motion was based on a stipulation entered into between the People and Allstate allocating to Allstate 50 percent of the civil penalties and assessments, plus reasonable attorney fees and costs. The trial court granted Allstate's allocation motion and entered the stipulation as judgment. Defendants appealed. The court held that judgment-debtor defendants in qui tam insurance fraud actions are not aggrieved by such allocation orders under section 1871.7, subdivision (g)(2)(A), with the result that they do not have standing to appeal. Accordingly, the court dismissed the appeal. View "People ex rel. Allstate Ins. Co. v. Dahan" on Justia Law