Justia Insurance Law Opinion Summaries

Brown filed a class action complaint, alleging that she contacted Defender by telephone in response to its advertisement for a home security system; that, during several calls, she provided Defender with personal information; and that Defender recorded those calls without her permission and without notifying her of the recording. Brown claimed violations of California Penal Code 632, which prohibits the recording of confidential telephone communications without the consent of all parties. Defender owned a commercial general liability insurance policy issued by First Mercury, covering “personal injury” and “advertising injury.” In a separate definitions section, the policy defined both “advertising injuries” and “personal injuries” as those “arising out of … [o]ral or written publication of material that violates a person’s right of privacy.” The parties eventually reached a settlement. Defender provided First Mercury with timely notice of the Brown suit. First Mercury denied coverage and refused to defend. The Seventh Circuit affirmed dismissal of Defender’s suit against First Mercury. Defender’s Policy requires “publication,” which was neither alleged nor proven. View "Defender Sec. Co. v. First Mercury Ins. Co." on Justia Law

Sentinel Insurance Company, Limited appealed a declaratory judgment entered in favor of Alabama Municipal Insurance Corporation ("AMIC") in this dispute between Sentinel and AMIC over which insurance company was responsible for providing primary insurance coverage in an underlying automobile-accident case. After reviewing the AMIC policy and the Sentinel policy, the Supreme Court concluded that the language in each was unambiguous as to which provided primary coverage: the AMIC policy provided primary coverage, and the Sentinel policy provided excess coverage. The Court held that the trial court erred in concluding that the Sentinel policy provided primary coverage. Therefore, the trial court's judgment was reversed, and the case was remanded for further proceedings. View "Sentinel Insurance Company, Ltd. v. Alabama Municipal Insurance Corp." on Justia Law

This case was, "[i]n short, ... an insurance bad faith failure to defend/indemnify/settle case arising out of several underlying lawsuits, which in turn arose out of the [respondents'] operation and financing of a dairy farm in between 2007 and 2010." Specifically, the respondents were involved in two earlier actions, the first as plaintiffs and the second as defendants. Both actions concerned the respondents' operation of a dairy farm and milking facility located in Dallas County. At all relevant times in the first action, both Laird Cole and Henry Cole were insured by Alfa Mutual Insurance Company. At all relevant times in the second action, Laird Cole was insured by Alfa. While these two actions were ongoing, Jerry Newby was the president and chief executive officer of Alfa. On July 25, 2013, Laird Cole and Foundation Farms sued Alfa in the circuit court, alleging "claims of fraud, breach of contract, bad faith, breach of the enhanced duty of good faith, negligence, and wantonness arising out of [Alfa's] handling [of the] underlying lawsuits." The respondents filed an amended complaint adding Henry Cole as an additional plaintiff and "clear[ing] up some of the allegations." On April 30, 2014, Alfa moved for summary judgment, alleging that there was no dispute as to any material fact and that Alfa was entitled to judgment as a matter of law. Respondents then served Alfa with a subpoena ordering Newby to appear at a video deposition. Newby and Alfa petitioned the Supreme Court for a writ of mandamus to direct the circuit court to vacate its November 19, 2014, order denying the petitioners' motion to quash the subpoena directed to Newby for deposition testimony that was requested by respondents. After review of the matter, the Supreme Court concluded that petitioners failed to demonstrate that they had a clear legal right to the relief sought and denied their petition. View "Ex parte Jerry Newby and Alfa Mutual Insurance Company." on Justia Law

Stephen Hansen was injured when Brad Aguilar struck Hansen’s vehicle. Hansen sued Aguilar, who was insured by State Farm Mutual Automobile Insurance Company. State Farm agreed to defend Aguilar under a reservation of rights. Aguilar agreed to a settlement with Hansen in which he assigned his rights against State Farm to Hansen. Hansen filed this action in federal district court alleging, among other claims, that State Farm breached a contract in its representation of Aguilar. The federal district court concluded that State Farm breached its contractual duty to defend Aguilar because it did not provide Aguilar with independent counsel of his choosing. State Farm moved for reconsideration. The federal district court granted the motion in part and certified two questions to the Supreme Court concerning Nevada’s conflict-of-interest rules in insurance litigation. The Supreme Court answered (1) Nevada law requires an insurer to provide independent counsel for its insured when a conflict of interest exists between the insurer and its insured; and (2) an insurer is only obligated to provide independent counsel when an actual of conflict exists, and a reservation of rights letter does not create a per se conflict of interest. View "State Farm Mut. Auto. Ins. Co. v. Hansen" on Justia Law

In December, 2009, Heelan, a Vernon Hills police officer for approximately 20 years, responded to an emergency call, slipped on ice, and fell. He was ultimately diagnosed with significant osteoarthritis in both hips, aggravated by the fall, and had two hip replacement surgeries. He did not return to work. The Village Police Pension Board awarded a line-of-duty disability pension, 40 ILCS 5/3-114.1. The Village sought a declaration that it was not obligated to pay Heelan’s health insurance premium under the Public Safety Employee Benefits Act (the Act), 820 ILCS 320/10. The circuit court entered judgment in favor of Heelan. The appellate court and Illinois Supreme Court affirmed, Proof of a line-of-duty disability pension establishes a catastrophic injury under section 10(a) of the Act as a matter of law; a public safety officer’s employer-sponsored health insurance coverage expires upon the termination of the officer’s employment by the award of the line-of-duty disability pension. The Act lengthens such health insurance coverage beyond the termination of the officer’s employment. View "Village of Vernon Hills v. Heelan" on Justia Law

Max Trucking transports freight throughout the United States, maintaining a staff of six dispatchers at its Michigan headquarters. The dispatchers find jobs on websites and contact one of 76 truck drivers, including about 20 drivers based in Michigan, to offer the load to that driver. The Michigan Worker’s Disability Compensation Act (WDCA) requires employers to maintain worker’s compensation insurance coverage for their employees. Liberty Mutual issued Max a policy, which it renewed annually for several years. In 2011, Liberty audited Max and determined that 16–18 Michigan-based drivers, who leased trucks from Max through a lease-to-buy program, were employees, not independent contractors, and increased Max’s policy premium. Max has not paid the premium increase and sought a declaratory judgment that drivers operating under the lease-to-buy program are not employees but are independent contractors under the WDCA. Liberty filed a counterclaim, seeking unpaid premiums totaling $101,592. The Sixth Circuit affirmed judgment in favor of Liberty Mutual, agreeing that the truckers are employees, despite evidence that that they may decline to work, can incur a financial loss, made a significant financial investment in the vehicle purchase, and receive all tax deductions and depreciation of the vehicles on their personal tax returns. View "Max Trucking, LLC v. Liberty Mut. Ins. Corp." on Justia Law

In 2006, fire destroyed Calvin’s home. His insurer paid the claim, but indicated that it would not reinsure him. Calvin rebuilt on the same land and applied for a policy through the Mackey Agency. Calvin answered questions posed to him by Eleen Mackey, an employee, who entered the information into a computer. Asked if he had a fire loss within the previous three years, Calvin stated that he had a fire at the same location. Mackey printed the application. Calvin signed without reading it. The “No” box next to the question about prior fire loss was marked, but the blank within the question was not filled in. The space for Calvin's initials is also blank. Metropolitan issued a homeowner’s policy in 2007. Calvin paid the premiums regularly. In 2011, Calvin’s rebuilt home was destroyed by fire while the family was on vacation. Metropolitan’s investigation was inconclusive; no cause could be determined. Metropolitan denied Calvin’s claim and sought a declaratory judgment to void the policy, based on material misrepresentations in the application and the claims process, claiming that Calvin caused the fire to be set. Calvin counterclaimed breach of contract, slander, outrage, and bad faith. The district court determined that Calvin misrepresented his prior loss and that there was no evidence that Metropolitan acted in a dishonest, malicious, or oppressive manner. The Eighth Circuit reversed as to misrepresentation in the application and breach of contract, but affirmed with respect to bad faith and on Metropolitan’s defense of arson claim. Metropolitan can seek rescission of the contract. View "Metro. Prop. & Cas. Ins. Co. v. Calvin" on Justia Law

Allstate filed suit against telemarketing companies, chiropractic clinics, and affiliated law offices spanning several states, contending that they had violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962, by defrauding insurance companies such as Allstate. Defendants would convince persons who had been in vehicle accidents but were not at fault to receive unnecessary chiropractic services. Defendants would then file third-party claims against the at-fault party's insurer. A jury returned a verdict for Allstate, including a sizable award and attorney's fees. Both parties appealed. The court concluded that the jury could reasonably infer that the scheme was fraudulent and that using the mail or wire services was inevitable. Consequently, it makes no difference that Defendants Friedman, Toca, and Plambeck did not take the x-rays at issue. The court also concluded that Allstate presented sufficient evidence to satisfy the unchallenged jury instruction regarding proximate cause; given the court's highly deferential standard of review and the evidence presented to show the inappropriateness and unreasonableness of the entire course of treatments prescribed by the chiropractors, this case does not suffer from the same flaws as did Receivable Finance, where the court concluded that Allstate's damages were too speculative; and the court rejected defendants' claims that the statute of limitations bars certain of Allstate's claims and that the district court erred in admitting Allstate's experts. The court also concluded that the district court did not abuse its discretion in awarding attorney's fees and prejudgment interest. Accordingly, the court affirmed the judgment. View "Allstate Ins. Co. v. Plambeck" on Justia Law

Insured filed a complaint alleging that Insured had breached a title insurance policy. Insured also alleged that Insurer had acted in bad faith and requested an award of attorney’s fees and costs pursuant to Va. Code Ann. 38.2-209. Insured demanded a jury trial “on all counts so triable.” Insurer sought to have the trial judge, rather than the jury, consider the issues of bad faith and attorney’s fees. The jury was permitted to award attorney’s fees. The jury found in favor of Insured and awarded $442,000 in attorneys’ fees and costs. The trial court judge vacated the jury’s award of attorney’s fees and costs, ruling that section 38.2-209(A) requires a judge, not a jury, to determine whether an insurer committed a bad faith breach of an insurance contract warranting an award of attorney’s fees. Reconsidering the evidence de novo, the judge then concluded that the evidence was insufficient to prove that Insurer had acted in bad faith. The Supreme Court affirmed, holding (1) a judge, not a jury, must determine whether an insurer has acted in bad faith under the policy; and (2) section 38.2.209(A) does not implicate the right to a jury trial under Va. Const. art. I, 11. View "REVI, LLC v. Chicago Title Ins. Co." on Justia Law

Jennifer Ploutis’ home was insured under a policy issued by Allstate Property and Casualty Insurance Company when water pipes in the home burst, damaging the home and certain contents. When the parties were unable to reach an agreement on the cost of certain repairs, Ploutis filed a complaint for breach of contract against Allstate. Upon the request of Ploutis, the action was nonsuited. Well after two years after the damage was sustained, Ploutis filed the present action. Allstate filed a demurrer asserting that Ploutis failed to comply with the conditions precedent under the policy by bringing the action within two years “after the inception of loss or damage.” The circuit court overruled the demurrer, concluding that the limitations period was tolled pursuant to Va. Code Ann. 8.01-229(E)(3), which tolls the “statute of limitations” with respect to nonsuited actions. Judgment was entered in favor of Ploutis. The Supreme Court reversed the judgment of the circuit court and entered final judgment for Allstate, holding that the circuit court erred in ruling that section 8.01-229(E)(3) applies to the contractual period of limitations for filing an action under Allstate’s policy. View "Allstate Prop. & Cas. Ins. Co. v. Ploutis" on Justia Law