Justia Insurance Law Opinion Summaries

Plaintiffs filed suit against Liberty Mutual, seeking to recover flood-insurance proceeds after their house was damaged by Hurricane Isaac. Plaintiffs submitted an original signed, sworn proof of loss with the handwritten note “Will send supplement later," and later sought payment from Liberty Mutual for the supplemental amount without providing a second proof of loss.The district court granted summary judgment for Liberty Mutual. Consistent with the First and Eighth Circuits, the court held that a second proof of loss was necessary for plaintiffs to perfect their claim. Therefore, the court concluded that the district court properly granted summary judgment for Liberty Mutual. Because plaintiffs have made no argument that the evidence was indeed “newly discovered” for purposes of Rule 59(e), the court found no abuse of discretion in the district court’s denial of plaintiffs' motion for reconsideration. View "Ferraro v. Liberty Mutual Ins. Co." on Justia Law

Viktor Barengolts was driving a tractor-trailer on Route 30 in Wheatland Township, Illinois when he rear-ended the Bernals in their pickup truck, causing serious injuries and property damage. The Bernals sued Unlimited Carrier, the company whose placard appeared on the tractor at the time; Viktor Barengolts; and Michael Barengolts, who owned the tractor. Viktor contacted Artisan, his insurance provider, which denied coverage, stating that the Contingent Liability Endorsement excluded coverage because he was driving the tractor on behalf of Unlimited Carrier at the time of the accident. The policy lists Viktor as an insured and Michael as an additional insured. Michael’s tractor is covered. Counsel for Unlimited Carrier wrote to Artisan, demanding that it defend the Barengoltses. Artisan refused. Michael disclosed that he did not sign a lease with Unlimited Carrier for use of the tractor until eight days after the accident. Counsel for the Barengoltses again unsuccessfully tendered the defense and sought indemnity. NAICO, the insurer for Unimited Carrier, defended the Barengoltses under a reservation of rights and paid settlements totaling $98,750 to the Bernals. The Seventh Circuit affirmed that Artisan had a duty to defend, that it breached that duty, and that Artisan was estopped from asserting defenses under its policy, stating that Artisan gambled and lost. View "Nat'l Am. Ins. Co. v. Artisan & Truckers Cas. Co." on Justia Law

Appellant was one of nineteen individuals injured when a school bus was struck by an at-fault vehicle. Appellant sought excess underinsured motorist (UIM) coverage benefits from his family’s automobile policy with American Family Mutual Insurance Company because his damages exceeded the recovery available to him under the coverage of the school bus. American Family denied Appellant’s claim for excess UIM benefits, claiming that, pursuant to the Minnesota No-Fault Automobile Insurance Act, Appellant’s excess UIM coverage ($100,000) did not “exceed” the UIM coverage provided by the school bus’s insurance ($1,000,000). Appellant then brought this action, seeking the difference between the recovery he received and his UIM policy limits from American Family. The district court granted summary judgment in favor of American Family, and the court of appeals affirmed. The Supreme Court reversed, holding (1) the phrase “coverage available,” as used in Minn. Stat. 65B.49(3)(a)(5), in reference to the “excess insurance protection” for an injured insured, is ambiguous; and (2) the phrase “coverage available” means the benefits actually paid to the insured under the coverage provided by the occupied vehicle’s policy. View "Sleiter v. Am. Family Mut. Ins. Co." on Justia Law

In 2009, Carol McClue was involved in a serious car accident. At the time of the accident, Carol had underinsured motorist (UIM) insurance coverage through Safeco Insurance Company of Illinois. In 2011, Carol was diagnosed with bulbar ALS. In 2013, Carol died from the illness. After the diagnosis, Dan McClue, Carol’s husband, submitted claims to Safeco for UIM benefits for damages associated with Carol’s ALS. Safeco denied the claims. Dan subsequently filed suit against Safeco, asserting that Safeco breached the insurance contract by failing to provide UIM benefits for Carol’s ALS. Before trial, the district court granted Safeco’s motions in limine to exclude expert testimony from two doctors - Dr. John Sabow and Dr. Decontee Jimmeh-Fletcher. The district court subsequently granted summary judgment to Safeco on the grounds that, without the expert testimony, Dan did not have admissible evidence to establish that the car accident caused Carol’s ALS. The Supreme Court (1) affirmed the district court’s ruling barring Dan from using Dr. Jimmeh-Fletcher’s testimony to establish causation in this case; but (2) reversed the district court’s ruling that Dr. Sabow was not qualified to present expert testimony during trial. View "McClue v. Safeco Ins. Co. of Ill." on Justia Law

In 2011, a tornado struck and substantially damaged Midwest’s building and its contents. After the tornado, the medical practice was to relocate, which required substantial work. Until construction was complete, Midwest operated out of a temporary location, but was unable to operate at its normal capacity. Moving the repaired MRI machine to the new building required a crane; it was necessary to reinforce floors; replace exterior brick; and install pipe, specialized heating and air conditioning equipment, and copper shielding. The new location opened about a year after the tornado. Cincinnati Insurance paid Midwest the policy limit of $2,414,161.26 for the building; the policy limit of $388,000 for business personal property; and $828,081.75 for business income interruption and extra expenses. . Midwest requested “Extra Expense” reimbursement for the costs to repair and relocate the MRI machine and to replace the other specialty equipment necessary for normal operations. Cincinnati denied payment, contending the expenditures were covered under the Building or Business Personal Property provisions, for which it had paid the policy limits. The district court found the claimed expenses were recoverable under the Extra Expense provision. The Eighth Circuit affirmed, noting that the language of the Policy does not specifically exclude coverage under the Extra Expense provision if the expenses happen to fall under another coverage in the Policy. View "Midwest Reg'l Allergy Ctr., P.C. v. Cincinnati Ins. Co." on Justia Law

Cox spent millions of dollars cleaning up pollution and debris after Hurricane Katrina caused extensive damage to the oil-and-gas facilities it operated. St. Paul, Cox's liability insurer, reimbursed Cox for $1.4 million and then filed suit seeking a declaration that the remainder of Cox’s costs were not “pollution clean-up costs” covered by the policy. Cox counterclaimed. The district court entered judgment awarding Cox damages for breach of the policy and penalty interest under the Texas Prompt Payment of Claims Act, Tex. Ins. Code Ann. 542.051-.061. The court concluded that the plain language of the Act provides that a violation of any of the Act’s deadlines - including St. Paul’s violation of the section 542.055(a) deadline here - begins the accrual of statutory interest under section 542.060. Therefore, the court rejected St. Paul’s argument that, notwithstanding an insurer’s violation of section 542.055(a), interest cannot begin to accrue until 60 days after the insurer receives sufficient information which would allow the insurer to adjust the claim. Because this argument is the only argument that either party has raised against the district court’s determination of the interest-accrual period, the court found no reversible error in the district court’s award of penalty interest to Cox. Accordingly, the court affirmed the judgment. View "Cox Operating, LLC v. St. Paul Surplus Lines Ins. Co." on Justia Law

Appellant was injured in a car accident. Appellant obtained a default judgment against both the driver and the owner of the other vehicle. Thereafter, Appellant brought this action under Nev. Rev. Stat. 485.3091, Nevada’s absolute-liability statute, against the owner’s insurer to recover upon the judgment under the insurance policy. The district court entered judgment in favor of the insurer. The Supreme Court affirmed in part, reversed in part, and remanded, holding that the district court (1) erred in declining to apply section 485.3091 to Appellant’s action, as a statutory third-party claimant can sue the insurer to enforce compliance with the statute; (2) properly dismissed Appellant’s claim for breach of the implied covenant of good faith and fair dealing, as the statute provides no express language that permits a third-party claimant to pursue an independent bad faith claim against an insurer; and (3) did not err in not awarding Appellant damages based upon a promissory estoppel theory. View "Torres v. Nev. Direct Ins. Co." on Justia Law

Asphalt hired a company that, from 2005-2008, sent about 44,000 fax advertisements to potential customers. FS, which received some of the faxes, filed a class-action, alleging violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, seeking statutory damages of $500 for each fax. Asphalt notified Western, its insurer during the time when roughly 33,000 faxes were sent. The policies contained a deductible of $1,000 “per claim” for property damage, personal, and advertising injury, applicable to “all damages sustained by one person or organization as the result of any one claim” and to “legal expenses incurred in the handling and investigation of each claim.” Western hired a law firm to represent Asphalt, but did not refer to a reservation of rights. The firm handled the defense for four years. Western sent another letter, stating that Western intended to defend subject to a reservation of rights. Western sought a declaration that it owed no duty to defend or to indemnify. The district court determined that FS lacked standing to bring counterclaims and that Western had a duty to defend, having waived its defenses by waiting four years to issue a reservation-of-rights letter. The Eighth Circuit affirmed, holding that Western did not waive the $1,000 deductible, which applies separately to each fax, so that there is also no duty to indemnify. View "W. Heritage Ins. Co. v. Fun Servs. of Kan. City" on Justia Law

When the plant closed, plaintiffs retired under a collective bargaining agreement (CBA) that provided that the employer would continue health insurance and that coverage an employee had at the time of retirement or termination at age 65 or older (other than discharge for cause) “shall be continued thereafter provided that suitable arrangements for such continuation[] can be made… In the event… benefits … [are] not practicable … the Company in agreement with the Union will provide new benefits and/or coverages as closely related as possible and of equivalent value." In 2011 TRW (employer’s successor) stated that it would discontinue group health care coverage beginning in 2012, but would be providing “Health Reimbursement Accounts” (HRAs) and would make a one-time contribution of $15,000 for each eligible retiree and eligible spouse in 2012 and, in 2013, would provide a $4,800 credit to the HRAs for each eligible party. TRW did not commit to funding beyond 2013. Plaintiffs sued, claiming that the change violated the Labor-Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. The court entered summary judgment, ruling that the CBAs established a commitment to lifetime health care benefits. The Sixth Circuit affirmed, but subsequently vacated and remanded for reconsideration in light of the Supreme Court’s 2015 decision in M & G Polymers. View "United Steel v. Kelsey-Hayes Co." on Justia Law

Georgia-Pacific appealed the district court's declaratory judgment that Kinsale owed no indemnity under a policy it had issued to Georgia-Pacific. The district court found that a policy exclusion applied that related to claims brought by one insured against another. Georgia-Pacific hired Advanced for demolition work on Georgia-Pacific’s idled plywood plant in Gloster, Mississippi. Advanced was covered by a Commercial General Liability policy written by Kinsale. Georgia-Pacific was an additional insured under the policy. Lawsuits arose after a fire occurred at the plant, damaging equipment Advanced leased from H&E for the demolition work. H&E filed suit against Advanced and Advanced filed a third-party demand for indemnification against Georgia-Pacific. Georgia-pacific then filed a claim for coverage under the Kinsale policy for any indemnification it might be found to owe Advanced. Kinsale denied coverage based on a policy exclusion. The court concluded that the insured versus insured exclusion does not apply. In this case, Advanced “brought” a “claim” against another insured, Georgia-Pacific, but it was not one for “property damage.” The plain meaning of the exclusion makes it inapplicable to an indemnity claim. Accordingly, the court reversed and remanded. View "Kinsale Ins. Co. v. Advanced Services, Inc." on Justia Law