Justia Insurance Law Opinion Summaries

In 2006, Asoyia, an Iowa producer of soybean oil, purchased a general commercial agribusiness insurance policy and a commercial umbrella liability policy from Michigan Millers Mutual Insurance. In June 2007, a fire destroyed the Sunnyside Country Club, an Asoyia customer. Although Asoyia received a subrogation notice in June 2007, it did not notify Michigan Millers. No one associated with Asoyia participated in the fire investigation. In 2009 Sunnyside’s insurer, United, sued in state court, alleging Asoyia’s soybean oil caused the fire when a pile of laundered rags containing the oil spontaneously combusted. Asoyia then provided notice to Michigan Millers, which sought a declaration that it has no duty to defend or indemnify because of Asoyia’s prejudicial failure to provide prompt notice of the loss. A jury determined the late notice did not prejudice Michigan Millers. The Eighth Circuit affirmed, noting that the court instructed the jury to consider, whether “the fire investigation by United Fire and the Waterloo Fire Department was sufficiently thorough and the evidence was sufficiently well-preserved to allow Michigan Millers to fully investigate the fire after it received notice and whether Michigan Millers lost the opportunity to try “to settle the claim” or “to conduct, direct, or participate in a meaningful fire investigation.” View "Michigan Millers Mut. Ins. v. Asoyia, Inc." on Justia Law

In 1998, as required by his divorce decree, Jon purchased a $100,000 life insurance policy from Minnesota Life. Although the decree required Jon to maintain a life insurance policy payable to his children until his child support obligations ended, Jon designated his sister, Joetta, as beneficiary. His child support obligations ended in 2008. Jon died in 2013. On or near his body was found a handwritten note purportedly signed by Jon and expressing his intent that his daughter, Nikole, receive the proceeds of the life insurance policy. Joetta sought an order directing the insurer to pay the proceeds to her. Minnesota Life moved to interplead the funds and to join in the action. Nikole filed a counterclaim, seeking an order directing Minnesota Life to pay the proceeds to her. The district court granted Joetta summary judgment. The Eighth Circuit affirmed, reasoning that Jon did not take adequate steps to change the beneficiary from Joetta to Nikole under the policy’s change-of-beneficiary requirements and Nikole presented no evidence that Joetta agreed to give the proceeds to Nikole, or that Jon asked Joetta to do so View "Hearing v. Holloway" on Justia Law

Prior to his death and after consulting a lawyer about divorcing Wife, Husband changed the beneficiary on his term life insurance policy from Wife to Respondents, his parents and sister. Less than four months before Husband’s death, Wife petitioned for dissolution of marriage to Husband. Following Husband’s death, the district court dismissed the dissolution proceeding. Wife subsequently filed suit against Respondents, alleging that Husband’s transfer violated Minn. Stat. 518.58(1)(a), which prohibits the transfer of “marital assets” by a party who contemplates commencing a marriage dissolution. The district court granted summary judgment to Respondents. The court of appeals affirmed, holding that section 518.58(1)(a) did not apply to Wife’s claim because her dissolution proceeding abated upon Husband’s death and the statute applies only in current dissolution proceedings. The Supreme Court affirmed, holding that because the language of section 518.58(1)(a) limits the statute’s application to pending dissolution proceedings, the statute did not provide Wife, who was no longer a party to a marital dissolution proceeding, a remedy in this case. View "Nelson v. Nelson" on Justia Law

The Cleveland Indians hired National to produce Kids Day events at baseball games, with attractions, including an inflatable bouncy castle and inflatable slide. The contract required National to secure a five-million-dollar comprehensive liability policy. National submitted an Application to Doodson Insurance Brokerage, stating on the application that the Kids Day events would include inflatable attractions. Doodson arranged for National to obtain a policy, but it excluded from coverage injuries caused by inflatable slides. Johnson admiring a display at a 2010 Indians game, was crushed by an inflatable slide that collapsed onto him. He died of his injuries. Johnson’s estate won a $3.5 million state court default judgment against National. The Sixth Circuit held that the insurance policy did not cover Johnson’s injuries. National and the Indians sued Doodson and obtained settlements. Johnson’s estate, which has not collected on the default judgment against National, sued Doodson, alleging negligence and breach of contract. The Sixth Circuit affirmed dismissal. Under Michigan law, the broker’s contractual duty to its client to protect the client from negligence suits, without more, does not create a tort duty to an injured party who brings such suits and Johnson was neither a party to nor an intended third-party beneficiary of the contract between the broker and National. View "Johnson v. Doodson Ins. Brokerage" on Justia Law

Georgia citizen George Skipper was involved in a motor vehicle accident with a logging truck that was driven by Harold Moors and owned by Specialty Logging, LLC. Specialty had a commercial automobile insurance policy with a $1,000,000 per occurrence limit, which was issued by ACE Property and Casualty Insurance Company (ACE). Following the accident, Skipper retained an attorney who wrote a demand letter to ACE offering to settle the case for the limits of the Policy. ACE retained two lawyers from Atlanta, Brantley Rowlen and Erin Coia, to represent Specialty and Moors. Specialty and Moors offered Skipper $50,000. Not satisfied with that offer, Skipper and his wife filed a lawsuit in the Allendale County Court of Common Pleas against Specialty and Moors. Unbeknownst to ACE or its attorneys, the Skippers entered into a settlement with Specialty and Moors, agreeing to execute a Confession of Judgment for $4,500,000, in which they admitted liability for the Skippers' injuries and losses. The Specialty Parties also agreed to pursue a legal malpractice claim against ACE and its attorneys Rowlen and Coia, and assigned the predominant interest in that claim to the Skippers.1 In exchange for the Specialty Parties' admission of liability, the Skippers agreed not to execute the judgment as long as the Specialty Parties cooperated in the legal malpractice litigation against Defendants. Armed with the assignment, the Skippers and Specialty Parties filed a legal malpractice action against the attorneys, also with the Allendale County court. The case was removed to the United States District Court for the District of South Carolina. In federal court, ACE and its attorneys argued that the assignment of the malpractice claim was invalid and that the Skippers had no valid claims to assert. Because the question of whether a legal malpractice claim could be assigned between adversaries in litigation in which the alleged malpractice arose was a novel question in South Carolina, the South Carolina Supreme Court accepted a certified question South Carolina law from the federal district court. After review, the South Carolina Court held that in South Carolina, the assignment of a legal malpractice claim between adversaries in litigation in which the alleged malpractice arose was prohibited. View "Skipper v. ACE Property" on Justia Law

The appeals before the Tenth Circuit in this opinion concerned the regulations (as a part of the Affordable Care Act ("ACA")) that required group health plans to cover contraceptive services for women as a form of preventive care ("Mandate"). In response to religious concerns, the Departments implementing the ACA (Health and Human Services ("HHS"), Labor, and Treasury) adopted a regulation that exempted religious employers (churches and their integrated auxiliaries) from covering contraceptives. When religious non-profit organizations complained about their omission from this exemption, the Departments adopted a regulation that allowed them to opt out of providing, paying for, or facilitating contraceptive coverage. Under this regulation, a religious non-profit organization could opt out by delivering a form to their group health plan’s health insurance issuer or third-party administrator or by sending a notification to HHS. The Plaintiffs in the cases here were religious non-profit organizations. They argued that complying with the Mandate or the accommodation scheme imposed a substantial burden on their religious exercise. The Plaintiffs argued the Mandate and the accommodation scheme violated the Religious Freedom Restoration Act (“RFRA”) and the Religion and Speech Clauses of the First Amendment. While Tenth Circuit recognized the sincerity of Plaintiffs’ beliefs and arguments, it concluded the accommodation scheme relieved Plaintiffs of their obligations under the Mandate and did not substantially burden their religious exercise under RFRA or infringe upon their First Amendment rights. The Court affirmed the district court’s denial of a preliminary injunction to the plaintiffs in Little Sisters of the Poor Home for the Aged v. Sebelius, (6 F.Supp. 3d 1225 (D. Colo. 2013)), and reversed the district courts’ grants of a preliminary injunction to the plaintiffs in "Southern Nazarene University v. Sebelius," (No. CIV-13-1015-F, 2013 WL 6804265 (W.D. Okla. Dec. 23, 2013)), and "Reaching Souls International, Inc. v. Burwell," (No. CIV-13-1092-D, 2013 WL 6804259 (W.D. Okla. Dec. 20, 2013)). View "Little Sisters of the Poor v. Burwell" on Justia Law

While in the course and scope of his employment with Employer, Plaintiff suffered serious injuries. Plaintiff recovered workers’ compensation insurance benefits in the amount of $207,147. Plaintiff subsequently brought this action against Employer, alleging that Employer was an uninsured employer under the Workers’ Compensation Act at the time of the accident. The district court granted summary judgment in favor of Employer, concluding that Employer was an insured employer under the Act and was therefore entitled to tort immunity pursuant to Mont. Code Ann. 39-71-411. The Supreme Court affirmed, holding that the district court did not err in concluding that Employer was an insured employer under the Act and therefore was entitled to tort immunity. View "Stokes v. Golden Triangle, Inc." on Justia Law

Plaintiffs filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., claiming that State Farm submitted false claims to the government for payment on flood policies arising out of damage caused by Hurricane Katrina. On appeal, plaintiffs primarily challenged the district court's discovery ruling and State Farm principally challenged the jury verdict. The court concluded that the district court's denial of plaintiffs' request for additional discovery after the verdict in their favor was an abuse of discretion because it affected plaintiffs' substantial rights and therefore, the court reversed the district court’s decision. However, the court affirmed the district court’s decisions with respect to the seal violations, subject matter jurisdiction, and State Farm’s motion for judgment as a matter of law. The court remanded for further proceedings. View "Rigsby v. State Farm Fire & Casualty Co." on Justia Law

This case involved a lease agreement between Greyhound Lines, Inc., the lessee, and Utah Transit Authority (UTA), the lessor, for a section of UTA’s intermodal transportation facility (intermodal hub). The insurance procurement provision of the lease agreement required Greyhound to purchase commercial general liability insurance covering UTA. At issue was whether the provision required that this insurance cover UTA’s negligent acts. This litigation resulted from a Greyhound passenger’s fall from a concrete pedestrian ramp during a layover at the intermodal hub. UTA admitted negligence in not installing a handrail on the pedestrian ramp. UTA settled the injured passenger’s claim and requested that Greyhound reimburse it for the cost of the claim under the lease agreement. Greyhound refused. The district court entered judgment against Greyhound. The Supreme Court affirmed, holding (1) under Utah law, an agreement to procure insurance for the benefit of another is not subject to strict construction; (2) the district court did not err when it concluded that the injured passenger’s claim triggered Greyhound’s duty to procure insurance that covered UTA’s negligent acts; and (3) the district court did not abuse its discretion in awarding UTA’s attorney fees. View "Utah Transit Auth. v. Greyhound Lines, Inc." on Justia Law

Procaccio purchased its workers' compensation insurance from West Bend. This litigation concerns three policy years: 2006, 2007, and 2010. Procaccio contends that West Bend’s offset procedure effectively nullified its Illinois Contracting Classification Premium Adjustment Program (ICC) credit for these policy years, resulting in substantial overcharges. The district court agreed and awarded a large sum in damages. The court concluded that the insurance policy contained no agreement to adjust the Schedule Modification credit after the ICC credit became due; West Bend needs parol evidence to prove its version of the parties’ agreement, but the insurance contract was fully integrated so any evidence of an oral understanding with Procaccio’s president is inadmissible; and while West Bend had the unilateral right to issue endorsements, that authority is cabined by contractual and statutory restrictions on its ability to alter its rates. The court further concluded that, even if the Schedule Modification credit was artificially inflated for these policy years, West Bend was not permitted to reduce it based on Procaccio’s ICC credit. Accordingly, the court affirmed the district court's judgment. View "West Bend Mut. Ins. Co. v. Procaccio Painting & Drywall" on Justia Law