Justia Insurance Law Opinion Summaries

Cincinnati filed suit seeking a declaratory judgment that it does not owe a duty to defendant or indemnify claims brought against its insured, All Plumbing, for sending unsolicited faxed advertisements alleged to be in violation of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227. The district court ruled that Cincinnati could not assert any of its defenses to coverage under the primary liability provision of the policy because it had failed to reserve its rights, but could assert such defenses under the excess liability provision. However, the district court did not address the asserted defenses under that provision. The court dismissed the appeal for lack of a final decision as to all requested relief where the district court's decision did not resolve all of Cincinnati’s rights and liabilities under the excess liability provision of the policy. View "Cincinnati Ins. Co. v. All Plumbing, Inc." on Justia Law

Plaintiff filed suit asserting causes of action against Topa for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief. At issue on appeal is whether an excess liability insurance policy that “follows form” to an underlying primary policy that provides uninsured motorist/underinsured motorist (UM/UIM) coverage must also provide such coverage after the underlying policy limit has been exhausted. The court held that the excess policy does not provide coverage for first party UM/UIM claims because the policy’s insuring agreement unambiguously limits the insurer’s indemnity obligation to third party liability claims. In this case, the plain language of the Topa insuring agreement unambiguously provides coverage for third party liability claims only. Accordingly, the court affirmed the judgment entered in favor of the excess insurer. View "Haering v. Topa Ins." on Justia Law

State Farm Mutual Automobile Insurance Company petitioned the Alabama Supreme Court for certiorari review of the Court of Civil Appeals' decision affirming the trial court's judgment ordering State Farm to pay an attorney fee based on a common-fund theory for the recovery of the moneys advanced by State Farm to James Ross Pritchard, Jr., pursuant to "Lambert v. State Farm Mutual Automobile Insurance Co.," (576 So. 2d 160 (Ala. 1991)). Pritchard sued Broderick McCants, State Farm (Pritchard's uninsured/underinsured-motorist ("UIM") insurer), and others seeking damages for injuries Pritchard suffered in an automobile accident with a vehicle being operated by McCants. Applying the Court's determination that a UIM insurer does not have a subrogation interest in a "Lambert" advance to the facts of this case, the Court held that State Farm did not have a subrogation interest in the $50,000 it advanced to Pritchard pursuant to "Lambert" and, consequently, that Pritchard's recovery from the tortfeasor of the "Lambert" advance did not create a common fund from which State Farm was required to pay its share of Pritchard's attorney fee. View "Ex parte State Farm Mutual Automobile Insurance Company." on Justia Law

In 2004, Michael Britt purchased a Beneteau brand sailboat. Michael had insured the sailboat with St. Paul pursuant to a Seahorse Underwriters Boat Insurance Policy that provided coverage limits of $85,000 for "accidental direct physical loss of or damage to [the sailboat] ... except as specifically stated or excluded in this policy." From 2004 onward, the sailboat served as Michael's residence in Florida; Michael had no other established residence. In early September 2011, Michael telephoned Willis Britt, "Britt," his father, and told Britt that he had accepted a job driving a commercial truck and that he had to attend orientation for the new job in Oklahoma City, Oklahoma. Michael informed Britt that he planned to sail the sailboat from West Palm Beach, Florida, to Jacksonville, Florida, store the boat in Jacksonville, and rent a car in Jacksonville to drive to Oklahoma City for the orientation. On or around September 11, 2011, Michael set sail for Jacksonville. On September 15, 2011, the United States Coast Guard boarded the sailboat approximately one mile off the coast of Cape Canaveral, Florida, for a "cold hit" inspection. That inspection revealed that the sailboat was seaworthy. There was no evidence of any severe weather in the Cape Canaveral area on September 15, 2011, on which date, Michael was supposed to check in with his father upon arrival in Jacksonville, but never did. In October 2011, Britt contacted St. Paul to report the sailboat as lost. In 2012, Britt was appointed conservator of Michael's estate by the Chilton Probate Court. Shortly thereafter, Britt filed a claim with St. Paul for the lost sailboat. St. Paul sent Britt a letter in which it declined coverage for the sailboat. The Supreme Court found that the "mysterious-disappearance" exclusion in Michael's insurance policy was not ambiguous, nor did it conflict with the 30-day provision; rather, the policy, when read as a whole, could accommodate both provisions (one providing coverage and one excluding coverage). Because the Court held that the mysterious-disappearance exclusion was unambiguous and does not conflict with the 30-day provision, and because there was no genuine issue of material fact concerning the disappearance of the sailboat, the trial court should have entered a summary judgment in St. Paul's favor. View "St. Paul Fire & Marine Insurance Company v. Britt" on Justia Law

Respondent was injured in a car accident caused by a hit-and-run driver. Respondent filed an uninsured motorist suit against the unknown driver seeking damages. State Farm, Respondent’s uninsured motorists’ insurance carrier, defended the lawsuit. State Farm advanced Respondent $30,628 on her damages before trial, but after the jury returned a verdict for Respondent, the circuit court refused State Farm any credit against the final judgment for the advance payment. The Supreme Court reversed the circuit court’s judgment order, holding that the court erred (1) when it refused to deduct State Farm’s advance payment against the final judgment, and (2) in calculating prejudgment interest. Remanded. View "Doe v. Pak" on Justia Law

The United States Court of Appeals for the First Circuit certified a question of New Hampshire law to the New Hampshire Supreme Court. The question arose from a dispute between Old Republic Insurance Company and Stratford Insurance Company as to their respective coverage and defense obligations arising out of a motor vehicle accident involving their insureds. Old Republic and Stratford each provided insurance coverage for a tractor-trailer that collided with a passenger vehicle. The owner of the tractor, Ryder Truck Rentals, had purchased an insurance policy from Old Republic. DAM Express, a for-hire motor company, had leased the tractor from Ryder. Although, pursuant to the lease agreement, Ryder was responsible for obtaining liability insurance for the tractor, DAM also purchased a separate insurance policy from Stratford. When the collision occurred, the driver of the tractor-trailer was employed by DAM, and the trailer was owned by Coca-Cola. The question posed to the New Hampshire Supreme Court was whether, under New Hampshire law, when was an excess insurer’s duty to defend triggered? Did New Hampshire follow the general rule that the excess insurer’s duty to defend is triggered only when the primary insurer’s coverage is exhausted? If not, what rule as to allocation of defense costs and timing of payment did New Hampshire follow? The New Hampshire Court responded that under New Hampshire law, the excess insurer’s duty to defend is triggered only when the primary’s insurer’s coverage is exhausted. View "Old Republic Insurance Co. v. Stratford Insurance Co." on Justia Law

Plaintiff-Appellant Corey Christy purchased a commercial general-liability insurance policy from Travelers in the name of his sole proprietorship, K&D Oilfield Supply. Subsequently, Christy registered his business as a corporation under the name K&D Oilfield Supply, Inc. Christy renewed his CGL Policy annually, but did not notify Travelers that he had incorporated his business. After Christy formed K&D, Inc., he was in an accident and made a claim under the CGL Policy. Travelers denied coverage based on Christy’s failure to inform it of the change in business form, and Christy filed this action. On cross motions for summary judgment, the district court found in favor of Travelers. Because there was a material factual dispute as to whether Christy knew or should have known Travelers would have considered the formation of K&D, Inc. material to its decision to renew the Policy, summary judgment based on Christy’s legal duty to speak was inappropriate. And because the existence of a legal duty governs whether Christy engaged in a material misrepresentation by not informing Travelers he had formed K&D, Inc., the Tenth Circuit held the district court erred in reforming the Policy on that basis at this stage of the proceedings. Accordingly, the Court reversed the district court’s grant of summary judgment and remanded for further proceedings. But because Christy had not met his burden to come forward with evidence in support of his claim for breach of the implied covenant of good faith and fair dealing, the Tenth Circuit affirmed the district court’s grant of summary judgment on that claim. View "Christy v. Travelers Indemnity" on Justia Law

Employee benefits plans regulated by the Employee Retirement Income Security Act (ERISA) often contain subrogation clauses requiring participants to reimburse the plan for medical expenses if they later recover money from a third party. Montanile was seriously injured by a drunk driver. His ERISA plan paid more than $120,000 for his medical expenses. Montanile sued the drunk driver, obtaining a $500,000 settlement. The plan administrator sought reimbursement from the settlement. Montanile’s attorney refused and indicated that the funds would be transferred from a trust account to Montanile unless the administrator objected. The administrator did not respond. Montanile received the settlement. Six months later, the administrator sued under ERISA 502(a)(3), which authorizes plan fiduciaries to file suit “to obtain . . . appropriate equitable relief . . . to enforce . . . the plan.” 29 U.S.C. 1132(a)(3). The district court rejected Montanile’s arguments, The Eleventh Circuit affirmed, holding that even if Montanile had completely dissipated the fund, the plan was entitled to reimbursement from Montanile’s general assets. The Supreme Court reversed and remanded for determination of whether Montanile had dissipated the settlement. When an ERISA-plan participant wholly dissipates a third-party settlement on nontraceable items, the plan fiduciary may not bring suit under section 502(a)(3) to attach the participant’s separate assets. Historical equity practice does not support enforcement of an equitable lien against general assets. View "Montanile v. Bd. of Trs. of Nat'l Elevator Indus. Health Benefit Plan" on Justia Law

Seahawk filed suit against insurers for proceeds covering the physical damage to a drilling rig and the loss on a drilling contract. The court concluded that, because there were two occurrences, the district court properly denied Seahawk’s claim for the cost of repairs between February and December 2010. That court’s proximate-cause analysis was the correct legal standard for determining the number of occurrences, and the district court did not clearly err in finding that the February storm was not the proximate cause of the sequence of losses following the July storm. The court also concluded that the district court did not err in rejecting Seahawk’s claim under the Contract Provision. The concurrent-cause doctrine applies, and Seahawk could not recover because it failed to comply with the requirements of that doctrine. Accordingly, the court affirmed the district court's judgment for the insurers. View "Seahawk Liquidating Trust v. Certain Underwriters" on Justia Law

In 2012, plaintiff Heidi Kroeber was shot outside the Bad Monkey Bar in Kent, Washington by Matthew Atkinson, who was driving an uninsured truck belonging to a friend at the time he opened fire. Plaintiff and her boyfriend had antagonized Atkinson earlier that evening. After pleading guilty to the crime of "Drive-By Shooting," Atkinson claimed that he had not intended to injure anyone and later claimed that he did not know that he was shooting where people were standing. There were factual disputes concerning whether Atkinson's truck was stopped or in motion at the time that he opened fire, and whether he accelerated rapidly away from the scene after the shooting. Plaintiff filed a claim with defendant, GEICO Insurance Company, to recover damages under the UIM coverage provision of her own automobile insurance policy. Under the relevant parts of this policy, GEICO was liable for "damages an insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle due to: 1. bodily injury sustained by that insured and caused by an accident; and 2. the liability of the owner or operator for these damages must arise out of the ownership, maintenance or use of the underinsured motor vehicle." GEICO denied plaintiffs claim, asserting that her injuries did not arise out of the use of Atkinson's truck. Plaintiff sued GEICO, claiming that she was entitled to UIM coverage. The case was removed to the United States District Court for the Western District of Washington, and that court certified two questions to the Washington Supreme Court: (1) whether an injury to an insured pedestrian "arose out of" the intentional firing of a gun from an uninsured pickup truck; and (2) whether it is material if the shooter intended to harm anyone when firing the gun. The Washington Supreme Court answered the first question by holding that an injury "arises out of' vehicle use so long as some causal connection is present between a condition of, an attachment to, or some aspect of a vehicle and the resulting injury. "The converse is also true-·-an injury does not 'arise out of' vehicle use under circumstances where no such causal connection exists, making the vehicle the mere situs of the accident." The Court answered the second question in the negative. View "Kroeber v. Geico Ins. Co." on Justia Law