Justia Insurance Law Opinion Summaries
Haar v. Nationwide Mutual Fire Insurance Co.
The Second Circuit affirmed the district court's grant of defendant's motion to dismiss after the Court of Appeals answered the certified question. In light of the Court of Appeals' holding that section 230(11)(b) of the New York Public Health Law does not create a private right of action for bad faith and malicious reporting to the Office of Professional Medical Conduct to the New York Court of Appeals, the court held that plaintiff's section 230(11)(b) claim was properly dismissed. View "Haar v. Nationwide Mutual Fire Insurance Co." on Justia Law
Rawan v. Continental Casualty Co.
The Supreme Judicial Court affirmed the decision of the superior court allowing Insurer's motion for summary judgment and dismissing Plaintiffs' action claiming that Insurer failed to effectuate a prompt, fair, and equitable settlement, holding that consent-to-settle clauses in professional liability policies do not violate Mass. Gen. Laws ch. 176D, 3(9)(f). Insurer issued a professional liability policy to Insured that contained a consent-to-settle clause. Plaintiffs sued Insured for engineering design errors in their house, and Insured refused to consent to settle. Plaintiffs then brought this action under Mass. Gen. Laws ch. 93A. The motion judge granted summary judgment in favor of Insured, concluding that the consent-to-settle clause in this case limited Insurer's ability to engage in further settlement practices with Plaintiffs once Insured refused to give Insurer consent to settle Plaintiffs' claims. The Supreme Judicial Court affirmed, holding that where Insurer made good faith efforts to investigate the claim and encourage Insured to settle and where Insurer's shortcomings did not proximately cause harm to Plaintiffs the superior court did not err in allowing Insurer's motion for summary judgment. View "Rawan v. Continental Casualty Co." on Justia Law
Commercial Construction Endeavors, Inc. v. Ohio Security Insurance Company
On a winter night in 2014, strong winds blew through the town of Georgia, Vermont, causing a partially constructed livestock barn to collapse. Commercial Construction Endeavors, Inc. (CCE), the contractor building the barn, sought recompense for the resulting losses from its insurer, Ohio Security Insurance Company. However, insurer and insured disagreed as to policy coverage for costs incurred by CCE in removing the remains of the collapsed barn and rebuilding it to its pre-collapse state. Ultimately, CCE sued Ohio Security for breach of contract. In successive summary-judgment rulings, the trial court held that the contractor’s rebuilding expenses were covered under the policy, but the cost of debris removal was not. Ohio Security cross-appealed the first ruling and CCE appealed the second; the Vermont Supreme Court reversed the first ruling and affirmed the second. The Court determined the additional collapse coverage applied only to “Covered Property,” which was business personal property; CCE did not dispute that the barn was not business personal property and thus was not “Covered Property.” Therefore, the court’s first summary-judgment ruling was reversed. The debris removal was not a loss involving business personal property. As a result, it was not a loss to “Covered Property” at that term was defined by the policy at issue. View "Commercial Construction Endeavors, Inc. v. Ohio Security Insurance Company" on Justia Law
Posted in: Business Law, Civil Procedure, Construction Law, Insurance Law, Real Estate & Property Law, Vermont Supreme Court
Atlantic Specialty Insurance Co. v. Coastal Environmental Group Inc.
Atlantic sought a declaratory judgment that the insurance policy it had issued to Coastal was void ab initio or, in the alternative, that there was no coverage for the loss of the barge or damage to an adjacent pier. District Court Judge Wexler passed away prior to issuing his findings of fact and conclusions of law. The case was transferred to Judge Azrack, who, after no party requested the recall of any witness under Federal Rule of Civil Procedure 63, issued findings of fact and conclusions of law in her role as successor judge and entered judgment finding Atlantic liable to Coastal under the terms of the policy. Under Federal Rule of Civil Procedure 52(a)(6), factual findings of successor judges who have certified their familiarity with the record are subject to the "clearly erroneous" standard of review. The Second Circuit also held that, under Federal Rule of Civil Procedure 63, a successor judge is under no independent obligation to recall witnesses unless requested by one of the parties. In this case, the court found no reversible error in Judge Azrack's findings of fact and conclusions of law, including findings that Coastal did not breach its duty of uberrimae fidei, and thus the policy was not void; Atlantic failed to prove that the vessel was unseaworthy; the loss of the vessel was due to a "peril of the sea" and was covered by the policy; Coastal was entitled to damages for contractual payments withheld by its contractor for repairs to a pier; and Coastal proved its damages using only a summary spreadsheet of invoices, as evidence. View "Atlantic Specialty Insurance Co. v. Coastal Environmental Group Inc." on Justia Law
Posted in: Admiralty & Maritime Law, Civil Procedure, Insurance Law, US Court of Appeals for the Second Circuit
Principle Solutions Group, LLC v. Ironshore Indemnity, Inc.
After a scammer posing as an executive of Principle Solutions persuaded an employee to wire money to a foreign bank account, Principle Solutions sought coverage under the "fraudulent instruction" provision of its insurance policy with Ironshore. Ironshore denied Principle Solution's claim, asserting that the scammer's communications with the employee did not meet the conditions for a fraudulent instruction. The Eleventh Circuit affirmed the district court's grant of summary judgment. The court held that the policy unambiguously covered Principle Solutions' claim, because the loss involved a fraudulent instruction directing a financial institution to transfer funds and the loss resulted directly from the fraudulent instruction. View "Principle Solutions Group, LLC v. Ironshore Indemnity, Inc." on Justia Law
Ex parte Liberty National Life Insurance Company and Marcus Rich.
Liberty National Life Insurance Company and Marcus Rich sought mandamus relief to direct the Montgomery Circuit Court ("the trial court") to vacate its order denying their motions to transfer an action filed against them by Kenny and Margie Girdner to Elmore County and to enter an order transferring the action. According to the allegations in the Girdners' complaint, starting in 2017 Liberty National agent Rich came to their house in Wetumpka and offered to restructure their existing Liberty National life-insurance policies; Rich said the restructuring could save the Girdners money. The Girdners alleged that the policies were restructured under the assurances that their premiums would not increase substantially. In late March 2018, three different Liberty National agents met with the Girdners at their house to discuss fixing the "mess" Rich created with their policies. The Girdners alleged that they were given information at that meeting that indicated either that Rich did not know what he was doing or that Rich had intentionally allowed their policies to lapse in order to gain additional commission when new policies were issued. The Girdners again agreed to restructure the policies as the three agents recommended to have their policies reinstated. By September 2018, after Liberty National had failed to reinstate their insurance policies, the Girdners sued Liberty National and Rich alleging misrepresentation, suppression, deceit, unjust enrichment, negligent and/or wanton hiring, supervision, and training, breach of contract, conversion, and "negligent/wanton service." The Girdners asserted that venue was proper in Montgomery County under section 6-3-7(a)(1) and (3), Ala. Code 1975. The Girdners also stated Liberty National had a registered agent in Wetumpka, Elmore County, and that Rich was a resident of Butler County. The Alabama Supreme Court concluded Liberty National and Rich demonstrated venue was improper in Montgomery County and was proper in Elmore County under sections 6-3-7(a)(1) and 6-3-2(a)(3), they demonstrated a clear legal right to have the underlying action transferred to Elmore County. View "Ex parte Liberty National Life Insurance Company and Marcus Rich." on Justia Law
Crockett v. Shelter Mutual Insurance Co.
The Supreme Court affirmed the order of the circuit court granted summary judgment in favor of Shelter Mutual Insurance Company on Plaintiffs' claim arising from medical expenses they incurred following an automobile accident, holding that the trial court did not err in granting summary judgment. On appeal, Plaintiffs argued that the language in the relevant insurance policy was ambiguous or, in the alternative, the policy language was against public policy and should be declared void. The Supreme Court affirmed, holding (1) the applicable policy language was not ambiguous, and the policy was not against the public policy of the State of Arkansas; and (2) Plaintiffs' argument that the trial court erred in denying their motion in limine was moot. View "Crockett v. Shelter Mutual Insurance Co." on Justia Law
Shotts v. GEICO
In 2014, Brian Shotts was injured in a car accident caused by Dana Pollard. Shotts was insured under a policy issued by GEICO General Insurance Company (“GEICO”), which included underinsured motorist (“UM”) coverage. Pollard had automobile insurance through Farmers Insurance (“Farmers”). Shotts filed a claim with Farmers, which offered Pollard’s policy limits as settlement. Before accepting the offer, Shotts notified GEICO of the accident. GEICO opened a claim, assigned an adjuster, and began an investigation. GEICO also waived its subrogation rights, allowing Shotts to accept the offer from Farmers. GEICO’s investigation determined that Shotts’s injuries exceeded Pollard’s policy limits by $3,210.87. GEICO offered Shotts a settlement of that amount, but Shotts declined the offer as “unreasonably low.” Shotts demanded GEICO promptly “pay the first dollar of his claim, up to the value of [the] claim or the total available UM limits” of $25,000. He also asked GEICO to reevaluate the offer. In response, GEICO requested additional information about Shotts’s injuries. It then proposed a peer review to determine whether his injuries exceeded the $3,210.87 offer. Shotts sued for bad faith breach of contract, alleging that GEICO acted in bad faith by: (1) conducting “a biased and unfair investigation and evaluation of [his] claim”; and (2) failing to pay the full value of his claim. He also requested punitive damages. The district court granted summary judgment for GEICO on both bad faith claims and denied punitive damages. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Shotts v. GEICO" on Justia Law
Posted in: Civil Procedure, Contracts, Insurance Law, Personal Injury, US Court of Appeals for the Tenth Circuit
Ex parte Dow Corning Alabama, Inc., et al.
Dow Corning Corporation, Dow Corning Alabama, Inc., Rajesh Mahadasyam, Fred McNett, Zurich American Insurance Company, and National Union Fire Insurance Company of Pittsburgh, Pa., petitioned the Alabama Supreme Court for a writ of mandamus to direct the trial court to vacate an order, entered in a declaratory-judgment action, requiring disclosure of what the petitioners contended was information protected by the attorney-client privilege and the work-product doctrine and to grant their motion for a protective order. In August 2011, Scotty Blue II was injured while working at a facility owned by Dow Corning Alabama. Blue's employer at the time of the accident was Alabama Electric Company, Inc., of Dothan ("Alabama Electric"), which was, pursuant to a contract with Dow Corning Alabama, installing a vacuum system at Dow Corning Alabama's facility. The Alabama Supreme Court determined that although the Dow parties sought contribution from Alabama Electric and National Trust, thereby raising an issue of whether a settlement with Blue was a good-faith, reasonable settlement, resolution of that issue did not require privileged information. The Court surmised the issue could be resolved by consideration of the nonprivileged materials generated in connection with Blue's personal-injury action. Thus, the Dow parties did not waive those protections by seeking indemnity. Accordingly, the Court granted the Dow parties' petition and directed the trial court to vacate its discovery order requiring disclosure of the requested information, and to enter an appropriate protective order. View "Ex parte Dow Corning Alabama, Inc., et al." on Justia Law
Peoples v. United Servs. Auto. Ass’n
Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA. View "Peoples v. United Servs. Auto. Ass'n" on Justia Law
Posted in: Civil Procedure, Class Action, Consumer Law, Contracts, Insurance Law, Washington Supreme Court