Justia Insurance Law Opinion Summaries

Following heavy snowfall in Pine Bluff, Arkansas, the roofs of several chicken houses at ten poultry farms collapsed. Norfolk & Dedham Mutual Fire Insurance Company, which insured the farms, sued Rogers Manufacturing Corporation, the manufacturer of the roof trusses used in the chicken houses, claiming strict product liability, negligence, and breach of warranties. Rogers moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that Norfolk’s claims were barred by the Arkansas statute of repose.The United States District Court for the Eastern District of Arkansas agreed with Rogers and dismissed the complaint. Norfolk appealed the dismissal, arguing that the statute of repose did not apply to Rogers because the roof trusses were standardized goods, not custom-designed for the farms.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s dismissal de novo, accepting the allegations in the complaint as true and drawing all reasonable inferences in Norfolk’s favor. The court found that Norfolk’s complaint plausibly supported an inference that the roof trusses were standardized goods, which would not be covered by the Arkansas statute of repose. The court emphasized that at this early stage, the complaint should not be dismissed if it allows for a reasonable inference of liability.The Eighth Circuit reversed the district court’s dismissal of the complaint and remanded the case for further proceedings, noting that the facts and legal arguments could be further developed as the case progresses. View "Norfolk & Dedham Mutual Fire Insurance Company v. Rogers Manufacturing Corporation" on Justia Law

Patricia Nicholson filed a garnishment action after her husband was killed in an accident involving Ava Mercer, who was insured by Key Insurance Company. Key provided Mercer with an attorney but did not actively defend her. Nicholson attempted to settle for the policy limit, but Key delayed. Nicholson then filed a wrongful death suit, and Key offered to settle for the policy limit, which Nicholson rejected. Instead, Nicholson and Mercer agreed that Mercer would assign her rights to sue Key for bad faith to Nicholson, and Nicholson would not execute any judgment against Mercer. Mercer waived her right to a jury trial and did not present a defense. Nicholson won a $3 million verdict.The Leavenworth District Court ruled against Key on the merits, finding that Key acted in bad faith and ordered garnishment for the $3 million judgment. Key did not argue that garnishment was statutorily unavailable due to the assignment of rights at the district court level. On appeal, Key raised the issue of subject-matter jurisdiction for the first time, arguing that garnishment was impossible following an assignment of rights, thus the district court lacked jurisdiction.The Kansas Supreme Court reviewed the case and affirmed the lower courts' decisions. The court clarified that subject-matter jurisdiction is the constitutional power of courts to decide disputes and does not disappear due to a flawed claim. The court held that the district court had jurisdiction to hear Nicholson's garnishment action on the merits. The court emphasized that Key's statutory arguments should have been presented as a motion to dismiss at the district court level and could not be raised for the first time on appeal under the guise of a jurisdictional argument. The judgment of the Court of Appeals and the district court was affirmed. View "Nicholson v. Mercer" on Justia Law

Plaintiff's multi-unit apartment building in Staten Island was damaged by fire on August 4, 2014. At the time, she had an insurance policy with Tower Insurance Company of New York, which required any legal action to be brought within two years of the damage and stipulated that replacement costs would only be paid if repairs were made as soon as reasonably possible. Restoration was completed in July 2020, and her claim was denied on September 1, 2020. Plaintiff filed a lawsuit on August 4, 2020, seeking full replacement value and coverage for lost business income, alleging that Tower/AmTrust's bad faith conduct delayed the restoration process.The Supreme Court granted the Tower/AmTrust defendants' motion to dismiss the complaint, citing the policy's two-year suit limitation provision. The court found that the plaintiff failed to demonstrate that she attempted to repair the property within the two-year period or took any action to protect her rights as the limitation period expired. The Appellate Division affirmed the dismissal, holding that the plaintiff did not allege that she reasonably attempted to repair the property within the two-year period but was unable to do so. Consequently, the claims against the broker defendants were also dismissed as the plaintiff's failure to recover was due to her own actions.The New York Court of Appeals affirmed the Appellate Division's order. The court held that the plaintiff did not raise an issue as to whether the suit limitation provision was unreasonable under the circumstances. The plaintiff's allegations were deemed conclusory and lacked specific details about the extent of the damage or efforts to complete repairs within the two-year period. The court concluded that the Tower/AmTrust defendants' motion to dismiss was properly granted, and the claims against the broker defendants were also correctly dismissed. View "Farage v Associated Insurance Management Corp." on Justia Law

National Casualty Company and Nationwide Mutual Insurance Company entered into reinsurance agreements with Continental Insurance Company, which included arbitration clauses. A billing dispute arose, leading Continental to demand arbitration. National Casualty and Nationwide filed a lawsuit in federal court, claiming that prior arbitral awards resolved the billing dispute and precluded new arbitration. They appealed the district court's order compelling arbitration under the Federal Arbitration Act.The United States District Court for the Northern District of Illinois granted Continental's motion to compel arbitration and dismissed the action. National Casualty and Nationwide argued that the prior arbitral awards precluded the new arbitration proceeding, but the district court ruled that the arbitration clauses required the dispute to be arbitrated.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, holding that the preclusive effect of prior arbitral awards is an issue for the arbitrator to decide, not the federal court. The court relied on its precedent, which aligns with Supreme Court rulings, stating that procedural questions arising from an arbitrable dispute are for the arbitrator to resolve. The court also rejected Continental's motion to vacate the district court's dismissal order and stay the action pending arbitration, as it was not properly before the court and lacked merit. The court concluded that the district court correctly compelled arbitration and dismissed the case. View "National Casualty Co. v. Continental Insurance Co." on Justia Law

A driver, Safet Miftari, was injured in an accident caused by an uninsured motorist while driving his taxi. He filed a claim for coverage under a policy he had for a different vehicle, which was denied by his insurer, Umialik Insurance Co., because the policy excluded uninsured and underinsured motorist (UIM) coverage for vehicles not insured under the same policy. Miftari then sued the uninsured motorist, who defaulted, and a jury awarded Miftari $1 million in noneconomic damages. Subsequently, Miftari sued Umialik to enforce the judgment.The Superior Court of Alaska, Fourth Judicial District, granted Miftari’s motion for partial summary judgment, holding that Umialik was bound by the prior judgment under the doctrine of res judicata. The court also denied Umialik’s motion to prevent Miftari from pursuing economic damages. In a separate order, the court held that the insurance policy’s exclusion of UIM coverage for injuries sustained in any of the policyholder’s vehicles insured under a separate policy was not authorized by Alaska law.The Supreme Court of the State of Alaska reviewed the case. It held that Alaska law does not authorize excluding UIM coverage for a vehicle not insured under the same insurance policy under which UIM coverage is sought. The court also concluded that res judicata prohibits the parties from relitigating noneconomic damages and litigating economic damages against the insurer. The court affirmed the superior court’s orders on summary judgment, binding Umialik to the jury’s damages verdict and precluding Miftari from seeking economic damages. View "Umialik Insurance Co. v. Miftari" on Justia Law

The case involves a billing dispute between a group of emergency room physicians (plaintiff) and an insurance company (defendant). The dispute centers on the interpretation of Connecticut’s surprise billing law, which aims to protect insured individuals from high medical bills when they receive emergency care from out-of-network providers. The plaintiff contends that the law requires the defendant to fully reimburse them for emergency services and then collect any applicable cost-sharing amounts (deductibles, copayments) from the insured. The defendant argues that it can deduct the insured’s cost-sharing amounts from the reimbursement it pays to the plaintiff.The United States District Court for the District of Connecticut dismissed the plaintiff’s stand-alone claims under the surprise billing law, concluding that the law does not create a private right of action. The court then certified three questions to the Connecticut Supreme Court: (1) whether a CUTPA claim can be maintained for conduct that violates the surprise billing law but not CUIPA, (2) whether the surprise billing law requires insurers to fully reimburse providers and then collect cost-sharing amounts from insureds, and (3) whether the defendant’s practice of deducting cost-sharing amounts from reimbursements violates the surprise billing law.The Connecticut Supreme Court held that Connecticut law does not recognize a cause of action under CUTPA for conduct that violates the surprise billing law but is not identified as an unfair insurance practice under CUIPA. The court also held that the surprise billing law does not require insurers to fully reimburse providers and then collect cost-sharing amounts from insureds. Instead, insurers can deduct the insured’s cost-sharing amounts from the reimbursement paid to the provider. Finally, the court concluded that the defendant’s practice of deducting cost-sharing amounts from reimbursements does not violate the surprise billing law. View "NEMS, PLLC v. Harvard Pilgrim Health Care of Connecticut, Inc." on Justia Law

Jon Willis, an employee of Shamrock Management, L.L.C., was injured while working on an offshore oil platform operated by Fieldwood Energy, L.L.C. The injury occurred when a tag line slipped off a grocery box being delivered by a vessel operated by Barry Graham Oil Service, L.L.C. Willis sued Barry Graham for negligence. Barry Graham then sought indemnification, defense, and insurance coverage from Shamrock and its insurer, Aspen, based on a series of contracts linking the parties.The United States District Court for the Western District of Louisiana denied Barry Graham's motion for summary judgment and granted Shamrock and Aspen's motion, ruling that Barry Graham was not covered under the defense, indemnification, and insurance provisions of the Shamrock-Fieldwood Master Services Contract (MSC). Willis's case was settled, and Barry Graham appealed the district court's decision on its third-party complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court concluded that the MSC required Shamrock to defend, indemnify, and insure Barry Graham because Barry Graham was part of a "Third Party Contractor Group" under the MSC. The court also determined that the cross-indemnification provisions in the contracts were satisfied, and that the Louisiana Oilfield Anti-Indemnity Act (LOAIA) did not void Shamrock's obligations because Fieldwood had paid the insurance premium to cover Shamrock's indemnities, thus meeting the Marcel exception.The Fifth Circuit reversed the district court's judgment and remanded the case for further proceedings consistent with its opinion. View "Barry Graham Oil v. Shamrock Mgmt" on Justia Law

In April 2013, Michael Riste applied for a bail bond for his son, Michael Peterson, and signed an Indemnity Agreement and a Premium Agreement with Bad Boys Bail Bonds (Bail Agent). The agreements required Riste to pay a $10,000 premium in installments. Peterson signed identical documents after his release. The Bail Agent executed a $100,000 bail bond on behalf of The North River Insurance Company (Surety), ensuring Peterson's appearance at future court proceedings. Peterson failed to appear, leading to the forfeiture of the bail bond and a summary judgment against the Surety in October 2015.Two panels of the California Court of Appeal previously affirmed the denial of motions by the Surety and Bail Agent to set aside the summary judgment, vacate the forfeiture, and exonerate the bond. In October 2020, a class action cross-claim in Caldwell v. BBBB Bonding Corp. argued that the Bail Agent's premium financing agreements were subject to Civil Code section 1799.91 and were unenforceable without proper notice to cosigners. The trial court and the Court of Appeal agreed, enjoining the Bail Agent from enforcing such agreements without the requisite notice.In September 2022, the Surety and Bail Agent filed a third motion to set aside the summary judgment, citing Caldwell and arguing that the premium was part of the consideration for the bail bond, making the bond void. The trial court denied the motion, and the Surety and Bail Agent appealed.The California Court of Appeal, Second Appellate District, Division Three, affirmed the trial court's order. The court held that the bail bond was not void because the consideration for the bail bond was Peterson's release from custody, not the premium financing agreement. The court concluded that the trial court had jurisdiction over the bond and properly denied the motion to set aside the summary judgment, vacate the forfeiture, and exonerate the bond. View "People v. North River Insurance Co." on Justia Law

Yolanda Bell obtained an automobile insurance policy from Shelter General Insurance Company. In February 2018, her vehicle was damaged, and Shelter determined it was a total loss, paying her $11,787 after deductions. Bell filed a class action suit in February 2022, alleging that Shelter breached its contractual duties by not including taxes and fees required to acquire a replacement vehicle in its payment. Bell argued that the policy did not require her to replace the vehicle before being reimbursed for these costs.The Circuit Court of Jackson County dismissed Bell's petition without prejudice, agreeing with Shelter's argument that the policy only covered taxes and fees if they were actually incurred by purchasing a replacement vehicle. Bell appealed the decision, standing on her original petition rather than amending it.The Supreme Court of Missouri reviewed the case de novo. The court found that Bell's petition adequately pleaded a breach of contract claim by alleging the existence of the insurance policy, her performance under the policy, Shelter's failure to pay the required taxes and fees, and the resulting damages. The court emphasized that the interpretation of the policy's terms was a matter for summary judgment or trial, not for a motion to dismiss. Consequently, the Supreme Court of Missouri reversed the circuit court's judgment and remanded the case for further proceedings. View "Bell vs. Shelter General Insurance Company" on Justia Law

Centaur, L.L.C. entered into a Master Services Contract (MSC) with United Bulk Terminals Davant, L.L.C. (UBT) in 2015 to build a concrete containment wall at UBT's dock facility. River Ventures, L.L.C. provided vessel transportation for Centaur’s employees working on the project. Centaur employee Devin Barrios was injured while transferring a generator from a River Ventures vessel to a barge leased by Centaur. The district court found River Ventures 100% at fault for the accident and imposed a $3.3 million judgment. River Ventures and its insurer, XL Specialty Insurance Company, satisfied the judgment and subsequently brought breach of contract claims against Centaur under the MSC.The United States District Court for the Eastern District of Louisiana held a bench trial on the breach of contract claims. The court dismissed the claims, finding an ambiguity in the MSC regarding Centaur’s insurance procurement obligations. Specifically, the court found that requiring Centaur to procure a Protection & Indemnity (P&I) policy with crew/employee coverage would result in an absurd consequence due to potential duplicative coverage with the Worker’s Compensation policy.The United States Court of Appeals for the Fifth Circuit reviewed the case. The appellate court found that the MSC unambiguously required Centaur to procure a P&I policy that included crew/employee coverage. The court disagreed with the district court’s finding of absurdity, noting that mutually repugnant escape clauses in the Worker’s Compensation and P&I policies would result in both policies being liable on a pro rata basis. The appellate court also reversed the district court’s dismissal of the excess/bumbershoot breach of contract claim, as it was contingent on the P&I claim. The Fifth Circuit reversed the district court’s judgment and remanded the case for further proceedings consistent with its opinion. View "Centaur v. River Ventures" on Justia Law