Justia Insurance Law Opinion Summaries

MRMC purchased a primary-insurance policy from Zurich and excess insurance from AXIS. MRMC filed suit to recover under its primary- and excess-insurance policies after suffering losses in a state lawsuit. The trial court granted AXIS summary judgment. The court held that the AXIS policy unambiguously precludes exhaustion by below-limit settlement. In this case, the AXIS policy is not triggered where MRMC pays the difference between Zurich’s liability limit and a below-limit settlement releasing Zurich of any further obligations. Accordingly, the court affirmed the judgment. View "Martin Resource Mgmt. Corp. v. Zurich Am. Ins." on Justia Law

Plaintiffs filed suit against Mercury for breach of contract and tortious breach of insurance contract after Mercury denied reimbursement for the cost of repair to the second story of plaintiffs' house. Mercury argued that plaintiffs' claim under their homeowner’s insurance policy was not covered because the damage to their property did not constitute a “collapse” as defined by the policy. The trial court granted summary judgment to Mercury and denied plaintiffs' motion for summary adjudication. The court held that Mercury is not liable for the reimbursement costs because there was not a collapse as defined in the policy, the duty to mitigate arises only after a loss from a collapse, and Mercury had no duty, express or implied, to reimburse plaintiffs for costs to prevent imminent insurable damage. Accordingly, the court affirmed the judgment. View "Grebow v. Mercury Ins." on Justia Law

David Stoms was killed in an automobile accident by an uninsured driver. David was driving a car belonging to his employer, Diamond Motor Sports, Inc., which had purchased uninsured motorists coverage on its insurance policy only for a limited class of drivers. Under Diamond Motor's insurance policy, only directors, officers, partners, and owners of the corporation had uninsured motorists coverage. David Stoms was a finance manager at Price Toyota, one of Diamond Motor's dealerships. The insurance policy gave all drivers, including David, personal injury protection coverage up to $30,000 per accident. David had purchased no supplemental coverage of his own. Although Federated Insurance paid the entire $30,000 in personal injury protection on David's behalf, it denied Mrs. Stoms benefits for uninsured motorists coverage resulting from David's death. Mrs. Stoms sued Federated Insurance, demanding those benefits. The parties filed cross-motions for summary judgment and the Superior Court granted Federated Insurance's motion. Mrs. Stoms argued that the Superior Court erred in granting Federated Service Insurance Company's motion for summary judgment after concluding that the insurance policy it issued to Diamond Motor was neither contrary to public policy nor ambiguous. Finding no reversible error, the Supreme Court affirmed. View "Stoms v. Federated Service Insurance Company" on Justia Law

In 2013, the Delaware Supreme Court determined that Matthew Kelty was eligible for personal injury protection (PIP) benefits under an insurance policy between State Farm Mutual Automobile Insurance Company and John and Shirley Lovegrove after Kelty was injured in an accident involving the Lovegroves' vehicle. As a result, the Supreme Court reversed the Superior Court's earlier grant of summary judgment to State Farm and remanded the case for further proceedings. On remand, the parties argued about whether Kelty was entitled to receive only the statutory minimum of $15,000, or $100,000, including excess coverage the Lovegroves opted to pay for but which was expressly limited in the policy to the insureds and their relatives who lived with them. The Superior Court held that Kelty was entitled to receive the full $100,000 because the policy's limitation on who could benefit from the excess coverage was "void as against public policy." The Supreme Court reversed finding that the plain language of the statute, 21 Del. C. 2118, required PIP policies to provide only $15,000 of coverage. Imposing a higher minimum here simply because the Lovegroves chose to pay for additional coverage for themselves and their relatives "thwart[ed] Delaware's public policy to encourage drivers to purchase more than the statutorily-mandated minimum by increasing the cost of excess coverage.[. . .] It is not the role of the judiciary to alter that amount and thus disrupt the incentives that the General Assembly has itself set up for insurers and consumers. Accordingly, we reverse the judgment of the Superior Court." View "State Farm Mutual Automobile Insurance Co. v. Kelty" on Justia Law

Plaintiff was involved in a vehicle collision with another driver, who admitted fault. At the time of the accident, Plaintiff’s vehicle was insured with Farmers Insurance Exchange under a policy that included underinsured motorist (UIM) coverage. After Plaintiff received medical treatment, Plaintiff filed a complaint requesting “all sums due and owing” under her insurance policy with Farmers. During the course of the litigation, Farmers extended settlement offers to Plaintiff, but the case did not settle. The jury returned a verdict in favor of Plaintiff. Thereafter, Plaintiff moved for attorney fees and nontaxable costs under the insurance exception to the American Rule. The district court denied Plaintiff’s motion, concluding that the insurance exception did not apply to Plaintiff’s attorney fees and related costs. The Supreme Court reversed, holding that the district court incorrectly interpreted Montana law when it relied on only the circumstances surrounding the filing of Plaintiff’s complaint to conclude that Plaintiff did not meet the insurance exception. Remanded for further proceedings to determine whether Farmers forced Plaintiff to assume the burden of legal action to obtain the full benefit of her UIM policy, thus entitling her to attorney fees under the insurance exception. View "Mlekush v. Farmers Inc." on Justia Law

Morady sold life insurance policies. Davis, a former lawyer, approached elderly African-Americans and paid them small amounts to become the nominal applicant-buyers of the policies, with Morady as the insurance agent, and to put the policies into an irrevocable trust, with Davis as trustee. The beneficial interest in the trust would be sold to an investor who would pay the remaining premiums and wait for the death of the insured. The insurer would not have sold the policies had it known that the premiums would be paid by an unrelated third party in the expectation that the policy would be transferred to him; its contracts with agents, including Morady, required them to conform to an “absolute prohibition against participation in any type of premium financing scheme involving an unrelated third party,” but the law allows an investor to purchase the beneficial interest in an existing life insurance policy. The net loss to Ohio National (beyond $120,000 commissions paid to Morady) was $605,000 in litigation expenses to void the policies. The total death benefits specified in the illegal policies amounted to $2.8 million. The Seventh Circuit agreed that Morady’s conduct constituted fraud and a breach of her contract and affirmed summary judgment, with damages of $726,000. View "Ohio Nat'l Life Assurance Corp. v. Davis" on Justia Law

Plaintiff appealed the district court's grant of summary judgment to State Farm in plaintiff's suit contending that State Farm's breach of its fiduciary duty caused the excess judgment in an underlying lawsuit. The court made an Erie guess that the Mississippi Supreme Court would not impose a duty to timely offer to settle a claim in which the claim amount greatly exceeds the policy limits, absent a settlement offer by the third-party claimant. Further, an insurer has no duty to timely disclose the policy limits to a third-party claimant. The court also concluded that the district court did not err in finding no genuine dispute that the excess judgment was not caused by State Farm’s failure to advise plaintiff of his potential excess exposure and right to retain independent counsel. Accordingly, the court affirmed the judgment. View "Hemphill v. State Farm Mut. Auto. Ins." on Justia Law

Luke Joerg (“Luke”) was a developmentally disabled adult who had lived with his parents his entire life and had never worked. Luke was struck by a car in 2007. John Joerg (“Joerg”), Luke’s father, filed an action against State Farm Mutual Automobile Insurance Company, Joerg’s uninsured motorist carrier. Joerg filed a motion in limine to exclude evidence of any collateral source benefits to which Luke was entitled, including discounted benefits under Medicare and Medicaid. The trial court precluded State Farm from introducing evidence of Luke’s future Medicare or Medicaid benefits. The jury awarded a total of $1,491,875 in damages, including $469,076 for future medical expenses. The Second District Court of Appeal reversed the award for future damages, concluding that Luke’s Medicare benefits should not have been excluded by the collateral source rule. The Supreme Court quashed the decision below, holding that the trial court properly excluded evidence of Luke’s eligibility for future benefits from Medicare, Medicaid, and other social legislation as collateral sources. View "Joerg v. State Farm Mut. Auto. Ins. Co." on Justia Law

In 2001, Furnival and its insurer agreed to a Pollution and Remediation Legal Liability Policy, detailing $10 million in liability protection; a 10-year coverage period; and insurance coverage for 12 Furnival locations, including the Elizabethtown Landfill Site, which Furnival was obligated to clean up under a consent decree with the federal government. Insurer knew about the consent decree when the Policy issued. The Policy Endorsements list five reasons for which insurer may “refuse to offer a renewal extension of coverage,” and states that insurer “shall not cancel nor non-renew this Policy except for the reasons stated above.” None of the listed reasons for non-renewal occurred. In 2006, the parties increased the Policy’s limit to $14 million. After the term expired, insurer sent Furnival’s insurance broker its version of a renewal offer, providing $5 million of coverage over a one-year term, omitting coverage for Elizabethtown, the only previously insured site for which Furnival had made a claim, refusing to renew the same terms. The Third Circuit vacated a ruling in favor of insurer, holding that, for a contract to be considered a renewal, it must contain the same, or nearly the same, terms as the original contract. View "Indian Harbor Ins. Co v. F&M Equip., Ltd" on Justia Law

Plaintiffs, alleging to be putative class members of multiple class actions, have filed their own individual suits against the defendant, Louisiana Citizens Property Insurance Corporation (Citizens). Plaintiffs were residents of, and owned homes in, St. Bernard Parish at the time Hurricane Katrina. Their properties were insured under policies of all-risk or homeowners insurance by defendant. Plaintiffs originally filed suit against Citizens on December 3, 2009, seeking contractual and bad faith damages arising out of Citizens’ handling of their property damage claims related to Hurricane Katrina. Citizens excepted on grounds of prescription and lis pendens. At issue is whether the doctrine of lis pendens barred plaintiffs’ suits where the plaintiffs were not named parties in the first-filed class actions. The Supreme Court found the trial court erred in overruling the defendant’s exception of lis pendens. View "Aisola v. Louisiana Citizens Property Insurance Corp." on Justia Law