Justia Insurance Law Opinion Summaries

Ramara engaged Sentry as a general contractor to perform work at its Philadelphia parking garage. Sentry engaged a subcontractor, Fortress, to install concrete and steel components. As required by its agreement with Sentry, Fortress obtained a general liability insurance policy from Westfield naming Ramara as an additional insured. In April 2012, Axe, a Fortress employee, was injured in an accident. Axe filed a tort action against Ramara and Sentry but did not include Fortress as a defendant as it was immune from actions by its employees if they were entitled to compensation for their injuries under the Pennsylvania Workers’ Compensation Act. Ramara tendered its defense to Westfield, which declined to defend, claiming that Axe’s complaint did not include allegations imposing that obligation under its policy. The district court granted partial summary judgment to Ramara, and later entered a second order, a quantified judgment against Westfield for Ramara’s counsel fees and costs incurred to date. The Third Circuit first held that the district court lacked jurisdiction to alter its first order with respect to the aspects of that order already on appeal. The court affirmed that Westfield has a duty to defend Ramara in the underlying Axe action. View "Ramara Inc v. Westfield Ins. Co" on Justia Law

From 2010 to 2012, Appellant Freedom Medical Supply, Inc. (“Freedom”), provided electrical muscle stimulators (“EMSs”) and portable whirlpools to automobile accident victims covered by Appellee State Farm Fire and Casualty Company and/or State Farm Mutual Automobile Insurance Company (collectively, “State Farm”). Notably, although Freedom purchased these items for relatively little cost, it applied significant markups. As found by the United States District Court for the Eastern District of Pennsylvania herein, Freedom purchased the EMSs for approximately $20 to $30 each, yet charged approximately $1,525 to $1,600 each, and purchased the whirlpools for approximately $40 each, yet charged approximately $525 each. Because neither the EMSs nor portable whirlpools have a federally-determined Medicare fee, Freedom sought reimbursement from State Farm for 80% of the foregoing charges. State Farm denied Freedom's claims, and the district court ultimately agreed with State Farm when Freedom filed suit. Freedom appealed to the United States Court of Appeals for the Third Circuit, which, noting that no Pennsylvania court or agency has addressed the question, sought to certify to the Pennsylvania Supreme Court. The question presented was: "[m]ay an insurer use methods not specifically identified in [the Motor Vehicle Financial Responsibility Law (MVFRL)] to calculate the 'usual and customary' charge for devices and services not listed on the Medicare Fee Schedule for purposes of determining the amount to be paid to providers of those devices and services?" In answer to the question submitted, the Supreme Court held that Section 69.43(c) of the MVFRL permitted, but did not require, that reimbursements be calculated predicated on the provider’s bill for services or the data collected by the carrier. View "Freedom Medical Supply v. State Farm" on Justia Law

Two employees were injured in the course of their employment, collected workers’ compensation benefits and then reached settlement agreements with third parties including damages for their pain and suffering. The same insurer insured by employers and sought reimbursement from the employees’ recoveries. In one employee’s case, the superior court judge rejected a settlement agreement providing that the insurer would not have a lien on the damages for pain and suffering. In the second employee’s case, a superior court judge approved a settlement agreement similar to the agreement rejected by the judge in the first employee’s case. The Appeals Court determined that the employees’ awards for pain and suffering were exempt from the insurer’s liens. The Supreme Judicial Court combined the two cases for argument and held that an insurer’s lien does not extend to damages allocated to an employee’s pain and suffering. View "DiCarlo v. Suffolk Constr. Co., Inc. v. Angelini Plastering, Inc." on Justia Law

In 2006, plaintiff Robert Kyle Morris, a licensed insurance agent, was working for his father's independent insurance agency, the Morris Insurance Agency ("Morris Insurance"). At some point, Morris contacted one of the Farmers entities about becoming a Farmers agent. Morris testified that he initially became interested in working as a Farmers agent because Farmers had a policy whereby a Farmers agent could place insurance with a different company if a customer was not eligible for insurance issued by Farmers or if Farmers refused to underwrite a policy for the customer. He further testified that he had not been looking to disaffiliate himself from his father's insurance agency and that he had told a Farmers recruiter that he did not want to cut off the working relationship he had with his father. Morris also testified that, when he agreed to become a Farmers agent, he signed several different agreements; that nothing in any of those agreements or documents indicated that his relationship with his father's agency constituted a conflict of interest; that the documents given to him did not say anything contrary to what he had been told by any recruiter, or that any representations made to him by the agents of Farmers were false. Despite signing an agent agreement, and having been recruited, Morris' contract was ultimately terminated for conflict of interest. Morris sued Farmers, arguing that Farmers had fraudulently induced him to become a Farmers agent. The trial court ruled in Morris' favor, and Farmers appealed. The Supreme Court affirmed in part and reversed in part. The Court found Morris did not blindly rely on oral representations and ignore the terms of his contract. "The only information contrary to what Morris had been told was buried in a 200-page manual among dozens of other documents provided for training modules, and even longtime Farmers employees were not aware of the existence of the statement." Morris presented sufficient evidence of fraudulent inducement for the matter to be decided by the jury. Farmers' postjudgment motion was denied by operation of law, but the trial court did not make any findings regarding Farmers' request for a remittitur of the punitive-damages award. The Court remanded this case for the trial court to conduct a hearing on the punitive-damages award. View "Farmers Insurance Exchange v. Morris" on Justia Law

In 2002, Plaintiffs commenced a proposed class action civil rights suit against the County of Rensselaer. The County invoked Selective Insurance Company’s duty to provide a defense under the policies that the company sold to the County. Selective agreed to defend the County in the action, subject to the insurance policy limits and the deductible. Selective’s counsel and the County agreed to settle the actions for $1,000 per plaintiff, determined to be slightly more than 800 individuals in total, with attorney fees also being recoverable. Selective abided by the terms of the settlement. The County, however, refused to pay Selective more than a single deductible payment. Selective then commenced this action for money damages, arguing that each class member was subject to a separate deductible. Supreme Court concluded that a separate deductible payment applied to each class member and that all legal fees should be allocated to one policy. The Appellate Division affirmed. The Court of Appeals affirmed, holding that the class action suit did not constitute one occurrence under the relevant policies’ definition of “occurrence” and that the attorney’s fees generated in defending that suit were properly allocated to the named plaintiff. View "Selective Ins. Co. of Am. v. County of Rensselaer" on Justia Law

Paul Galipeau was involved in a fatal accident while riding his motorcycle. Galipeau and his wife were insured under four vehicle policies issued by State farm, one on the motorcycle and the others covering three different vehicles. Each of the policies provided uninsured motorist (UM) coverage with a per-person limit of $100,000. The Estate demanded from State Farm the aggregate of each policy’s UM coverage limit, less the $50,000 recovered from the tortfeasor. State Farm paid the differential between the motorcycle policy UM limit and the amount already recovered by the Estate and otherwise refused the demand. The Estate subsequently sued State Farm for wrongful denial of coverage. The superior court entered judgment for State Farm, ruling that coverage under the three non-motorcycle policies was precluded by an “other-owned-vehicle” exclusion that each policy contained. The Supreme Court affirmed, holding that the superior court did not err in entering summary judgment for State Farm on the ground that the other-owned-vehicle exclusion in the four policies precluded coverage under the three non-motorcycle policies. View "Estate of Galipeau v. State Farm Mut. Auto. Ins. Co." on Justia Law

The insured, who had been sued for damages by plaintiffs, entered into a settlement whereby it agreed to assign its rights and interests under the insurance policy to plaintiffs. However, when plaintiffs sought to recover under the policy, the insurer denied coverage because the insured breached the policy's notice conditions. The trial court granted summary judgment to the insurance company, finding that notice was not given as soon as practicable, and that the insurance company need not show appreciable prejudice as a result of the delay in notice in order to refuse coverage. Plaintiffs appealed, and the Appellate Division affirmed substantially for the reasons given by the trial court. After its review, the New Jersey Supreme Court held that because this Directors and Officers claims made policy was not a contract of adhesion but was agreed to by sophisticated parties, the insurance company was not required to show that it suffered prejudice before disclaiming coverage on the basis of the insured's failure to give timely notice of the claim. View "Templo Fuente De Vida Corp., et al. v. National Union Fire Insurance Co." on Justia Law

Chapter 1301 of the Texas Insurance Code requires healthcare insurers to make coverage determinations and pay claims made by preferred healthcare providers within a specified time or face penalties. HCSC filed suit seeking a declaratory judgment against Methodist, seeking a declaration that Chapter 1301 does not apply to HCSC as the administrator of particular health plans, and the Federal Employee Health Benefits Act of 1959 (FEHBA), 5 U.S.C. 8901, et seq., preempts application of the statute to its administration of claims under the Federal Employees Health Benefits Program (FEHBP). The district court granted summary judgment to HCSC. The court held that Chapter 1301 is not applicable to BCBSTX’s activities as administrator of the self-funded plans or state government plans, nor to those activities that it performs as administrator of claims under the BlueCard program. The court also held that FEHBA preempts Chapter 1301’s application to the claims processed by BCBSTX under FEHBP plans. Accordingly, the court affirmed the judgment. View "Health Care Serv. Corp. v. Methodist Hospitals" on Justia Law

National Union was ordered to pay part of the costs Continental incurred to defend Valspar against several lawsuits. Valspar intervened and now appeals. The court concluded that National Union had a duty to defend Valspar and therefore has an equitable obligation to contribute to paying the costs of the defense. Neither Valspar’s agreement to pay National Union’s costs, Continental’s agreement not to recover defense costs from Valspar, nor Continental’s alleged failure to pay a small fraction of the costs defeats Continental’s right to contribution from National Union. These are distinct obligations. And National Union’s share of the defense costs paid by the insurers is unaffected by amounts paid by Valspar. Accordingly, the court affirmed and remanded for further proceedings. View "Continental Casualty Co. v. The Valspar Corp." on Justia Law

This appeal involves an insurance broker that allegedly failed to obtain insurance requested by its client, who subsequently sustained uninsured liability when he negligently caused a fire that spread to neighboring buildings. The client settled that uninsured liability by assigning to plaintiffs his causes of action against the insurance broker. Plaintiffs, neighboring business owners and an insurance company that paid for damages to a neighboring building, pursued the assigned causes of action by filing a lawsuit against the insurance broker. The trial court granted summary judgment for the insurance broker. The court concluded that California, like the majority of jurisdictions in the United States, recognizes the assignability of a client’s causes of action against an insurance broker or agent for failing to obtain insurance. The court also concluded that, in the insurance context, the rule from California’s equitable subrogation doctrine applies to a contractual assignment only if the assignee is an insurance company and the assignor was that insurance company’s policyholder. In this case, the assignees (plaintiffs) did not issue an insurance policy to the assignor (i.e., the insurance broker’s client) and thus were never potential equitable subrogees of the assignor. Therefore, the court concluded that their contractual assignments are not subject to the rule of superior equities. Further, there is a triable issue of material fact about whether the client requested the insurance broker to obtain insurance coverage before the fire. Accordingly, the court reversed the judgment. View "AMCO Ins. Co. v. All Solutions Ins. Agency" on Justia Law