Justia Insurance Law Opinion Summaries

Utica Mutual Insurance Company (Utica) insured Herbert H. Landy Insurance Agency (Landy) under a professional liability insurance policy. The policy required Utica to defend Landy in lawsuits arising from Landy’s provision of professional services as an insurance broker and agent. CRES Insurance Services, LLC sued Landy in California state court, alleging negligence and that Landy engaged in unfair business practices. When Landy demanded that Utica defend it in the CRES lawsuit, Utica filed this action in federal district court seeking a declaration that CRES’s negligence claim did not trigger its duty to defend. The district court granted summary judgment to Landy. The First Circuit affirmed, holding (1) CRES’s complaint can be reasonably construed to allege a professional liability claim and is therefore covered by the policy; and (2) Utica failed to meet its burden of establishing that the policy’s exclusion for “unfair competition of any type” applies in this case. View "Utica Mut. Ins. Co. v. Herbert H. Landy Ins. Agency, Inc." on Justia Law

Jerry and Karen Slack hired Jeffrey Fisher and his construction company, Fisher Builders, to build a remodeled home. During the project, the deck collapsed, and the Slacks’ construction permit was revoked. The Slacks filed a negligence action against Fisher and his company. Fisher had a commercial general liability insurance policy with Employers Mutual Casualty Company (EMC). EMC filed a declaratory action alleging that there was no coverage and that it had no duty to defend or indemnify any party in the negligence action. Fisher and Fisher Builders ultimately settled with the Slacks and assigned their rights under the EMC insurance policy to the Slacks. The district court granted summary judgment in favor of EMC, ruling that Fisher’s conduct was clearly intentional and did not fit within the meaning of “occurrence” under the policy, regardless of whether Fisher intended the consequences. The Supreme Court reversed, holding that the district court (1) erred by concluding that, in the context of general liability insurance, the term “occurrence,” defined by the policy as “an accident,” categorically precludes coverage for any intentional conduct on the part of the insured with unintended results; and (2) erred when it granted summary judgment in favor of EMC, as issues of material fact precluded summary judgment. Remanded. View "Employers Mut. Cas. Co. v. Slack" on Justia Law

Because of an internal oversight, American Bank failed to respond to a summons and the state court entered a $98.5 million default judgment against it. Eight months after receipt of the summons, American Bank notified its insurer, St. Paul, of the lawsuit and St. Paul denied coverage due to late notice. American Bank was subsequently able to have the default judgment vacated and the suit dismissed, but at an expense of $1.8 million. St. Paul now seeks a declaratory judgment that it had no duty to pay for American Bank's defense, and American Bank counterclaims. The court affirmed the district court's entry of judgment for St. Paul where, among other things, American Bank did not provide St. Paul with notice as soon as practicable, as required by the terms of its insurance policy, and because the late notice caused St. Paul prejudice. Therefore, St. Paul was within its right to deny coverage. View "St. Paul Mercury Ins. Co. v. American Bank Holdings, Inc." on Justia Law

Plaintiff was a pedestrian in a crosswalk when he was struck by a vehicle operated by an uninsured motorist. Plaintiff, who was an insured under his mother’s automobile insurance policy, filed suit against The Commerce Insurance Company seeking uninsured motorist coverage for his injuries. The parties stayed the action pending arbitration pursuant to the terms of the policy. The arbitrator awarded Plaintiff a total of $197,550. Plaintiff filed a motion to confirm the arbitration award. Defendant, in turn, filed a motion to modify/correct the arbitration award to conform with the insurance policy, which provided uninsured-motorist coverage up to a limit of $100,000. The superior court granted Defendant’s motion and entered an order for Plaintiff in the amount of $100,000. The Supreme Court vacated the order of the superior court, holding that the trial justice erred when he (1) reviewed the arbitrator’s award under a de novo review and supplemented the record with the admission of the insurance policy and the testimony of the arbitrator; and (2) modified the arbitration award because there were no grounds to do so under Rhode Island’s Arbitration Act. Remanded with instructions to issue an order confirming the arbitration award. View "Lemerise v. Commerce Ins. Co." on Justia Law

Karpinski sued, alleging that Smitty’s Sausalito bar negligently allowed two intoxicated men to enter and remain in the bar, and that the men punched Karpinski in the head, causing serious injuries. After court-ordered mediation, Karpinski agreed to dismiss Smitty’s in exchange for $40,000. Karpinski moved for entry of judgment under Code of Civil Procedure 664.6. Smitty’s opposed the motion because liens had been imposed by the federal government, based on Medicare payments to Karpinski, and by the state, based on crime victim compensation payments. The court entered a default judgment against the individuals ($1,430,968.84) and granted enforcement of the settlement, reasoning that the agreement requires that Karpinski "negotiate, satisfy, and dispose of all liens," but does not state that he must do so before receiving payment, and requires Karpinski to hold Smitty’s, its attorneys, and insurer harmless with respect to lien claims. Regardless of concern over whether Karpinski will honor that obligation, there is a remedy if he does not. The court awarded Karpinski $2,200 in attorney fees. The court of appeal affirmed. That there are no guarantees does not alter the fact that Smitty’s agreed to pay Karpinski $40,000 in exchange for his release and promises to satisfy all liens. View "Karpinski v. Smitty's Bar, Inc." on Justia Law

A group of New York-based third party payor health insurers (“TPPs”) that provided prescription drug benefits to union members appealed a Superior Court judgment dismissing with prejudice their second amended complaint. At issue were claims brought by the TPPs under various state consumer fraud laws against AstraZeneca Pharmaceuticals LP, and Zeneca Inc. (collectively “AstraZeneca”). The TPPs alleged that AstraZeneca falsely advertised its more expensive patented prescription drug "Nexium" as superior to the less expensive generic drug "Prilosec," causing the TPPs to overpay for Nexium when generic Prilosec would have sufficed. After conducting an extensive choice of law analysis, the Superior Court determined that New York law controlled the TPPs’ claims. The court then held that the TPPs failed to state a claim under New York’s consumer fraud statute for failure to allege legally sufficient causation. The TPPs appealed, arguing the Superior Court's choice of law analysis was flawed, and that the Superior Court's causation analysis was equally flawed. After a careful review of the record on appeal, the Delaware Supreme Court affirmed the ultimate judgment of the Superior Court, finding it not necessary to discuss whether the Superior Court correctly analyzed the choice of law issue, because under either state consumer fraud statute the TPPs could not recover damages as a matter of law. View "Teamsters Local 237 Welfare Fund, et al. v. AstraZeneca Pharmaceuticals LP" on Justia Law

After Eric Orloske shot his brother, Brian, to death after Eric tripped and fell down the stairs in his home while holding a loaded shotgun, the trustee for Brian's next of kin filed a wrongful death suit against Eric. At issue in this appeal is whether Country Mutual's homeowner's policy, which covered Eric's home, provided coverage for Brian's death. The court concluded that the district court correctly determined that Minnesota's reasonable-expectations doctrine is inapplicable in this case and correctly granted summary judgment to Country Mutual.The doctrine forces insurers to communicate the coverage and exclusions of their policies clearly; it is not a means of avoiding unambiguous policy language. Here, the policy expressly listed the criminal-acts exclusion - Eric had pleaded guilty to manslaughter for Brian's death - in the exclusion section of the policy between exclusions related to controlled substances and pollution. Accordingly, the court affirmed the judgment. View "Country Mutual Ins. Co. v. Orloske" on Justia Law

Two insurers shared indemnification costs to settle claims made against mutual insureds in a construction defect litigation brought by third parties. One insurer, defendant Arch Specialty Insurance Company (Arch), refused to share the costs to defend the insureds in the underlying litigation. The other insurer, plaintiff Certain Underwriters at Lloyds, London (Underwriters), paid all defense costs and then sought equitable contribution from Arch. In ruling on cross-motions for summary judgment/adjudication, the trial court concluded Arch had no duty to defend the insureds in the underlying litigation, because Arch's insurance policy expressly stated it had a duty to defend provided no "other insurance" afforded a defense, and Underwriters' policy did afford a defense. Underwriters appealed summary judgment entered in favor of Arch and also challenged the trial court's denial of Underwriters' motion for summary adjudication of Arch's responsibility to contribute to defense costs. After review, the Court of Appeal concluded Arch's "other insurance" clause could not be enforced in this equitable contribution action between successive primary insurers, "[e]nforcement of such a clause in a primary CGL policy would violate public policy." The Court also concluded Arch did not successfully circumvent this result by including the clause in the "coverage" section of the insurance policy as well as the "limitations" section. Accordingly, the trial court's judgment was reversed and the trial court directed to enter an order denying summary judgment to Arch and granting Underwriters' cross-motion for summary adjudication that Underwriters was entitled to equitable contribution. View "Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co." on Justia Law

In the early morning of November 11, 2007, Sofia Roberts caused a motor-vehicle accident that killed five people (including herself) and severely injured two others. She was driving a Chrysler 300 that she had obtained from the Marc Heitz Auto Valley automobile dealership (Heitz) a few days earlier. The Chrysler had been delivered to Heitz by Bob Moore Auto Group (Moore) earlier that day. Her estate was sued by the estates of Brant Winton and Rebecca Burgess (two of the others killed in the accident) and two survivors, Daniel Cosar and Marcus Moore (collectively, the Victims). The suits were settled for $3,000,000 each for the survivors and the Winton estate and $5,000,000 for the Burgess estate. Allstate Insurance Company (Allstate), the insurer on Roberts’s personal automobile-liability policy, contributed its policy limit of $50,000. The judgment limited execution to other applicable insurance policies. Three insurance carriers (for the Heitz or Moore dealerships), Universal Underwriters Insurance Company (Universal), Phoenix Insurance Company (Phoenix), and National Union Fire Insurance Company of Pittsburgh, PA (National) (collectively, the Insurers), then sued the Victims at a federal district court in Oklahoma under diversity jurisdiction, seeking declaratory judgments that their policies did not cover Roberts for the accident. The district court granted summary judgment to the Insurers. The Victims appealed, arguing Heitz still owned the Chrysler at the time of the accident and that Universal is therefore responsible under the “garage” and “umbrella” coverages of its policy for Heitz. Alternatively, the Victims argued that Moore owned the vehicle at the time of the accident and that Phoenix and National were liable under their policies for Moore. After review, the Tenth Circuit found no reversible error and affirmed the district court’s judgments. View "Universal Underwriters Ins Co. v. Winton" on Justia Law

In Employers Insurance Co. of Nevada v. Chandler, the Supreme Court held that an insurer may refuse to pay additional funds when a claimant reopens a workers’ compensation claim until the claimant demonstrates that he or she has exhausted any third-party settlement funds. In the instant case, Appellant, a construction driver, was injured by another driver during the course of his employment. Appellant filed a workers’ compensation claim, which his employer, through a workers’ compensation administrator (collectively, Employer), accepted. Employer eventually closed the claim. When Appellant was unable to return to work, he sought to reopen his claim, but Employer denied it. Appellant filed an administrative appeal. An appeals officer granted Employer summary judgment. At issue on appeal was whether Chandler precluded Appellant from reopening his claim because he spent settlement funds on expenses other than medical costs. The Supreme Court reversed, holding (1) a claimant may reopen his workers’ compensation claim after exhausting his settlement funds on nonmedical expenses; and (2) the appeals officer erred when issuing a decision without detailed findings of fact and conclusions of law. View "Poremba v. Southern Nevada Paving" on Justia Law