Justia Insurance Law Opinion Summaries

Leonor, a Michigan dentist, suffered an injury that prevented him from performing dental procedures. At the time of his injury, he spent about two-thirds of his time performing dental procedures and approximately one third managing his dental practices and other businesses that he owned. After initially granting coverage, his insurers denied total disability benefits after they discovered the extent of his managerial duties. Leonor sued, alleging contract and fraud claims. The district court granted summary judgment to Leonor on his contract claim, holding that “the important duties” could plausibly be read to mean “most of the important duties” and resolving the ambiguity in favor of Leonor under Michigan law. The Seventh Circuit affirmed, stating that the context of the policy language in this case permits a reading of “the important duties” that is not necessarily “all the important duties.” View "Leonor v. Provident Life & Accident Co." on Justia Law

F.H. Stoltze Land & Lumber Company and Maxum Specialty Insurance Group (collectively, “Stoltze”) and Les Schlegel Enterprises (“Schlegel”) contracted for Schlegel to log Stoltze’s property. Schlegel obtained liability insurance from American States Insurance Company (ASI). Whitney Shanks, a worker for Schlegel, injured himself during logging operations on Stoltze’s property. Shanks filed a personal injury lawsuit against both Schlegel and Stoltze. Stoltze tendered defense and indemnity of Shanks’s suit to ASI. After ASI accepted the tender, the district court dismissed the case against Schlegel on the grounds that Schlegel was immune to suit under the Workers’ Compensation Act’s exclusive remedy provision. ASI subsequently withdrew its defense of Stoltze, asserting that the policy covered Stoltze only to the extent that Schlegel was liable. Stoltze then filed a complaint against ASI, seeking declaratory judgment that ASI was required to defend and indemnify Stoltze against Shanks’s suit. The district court entered summary judgment for ASI, concluding that because the court in the underlying action determined that Schlegel was immune and not liable, ASI had no duty to defend or indemnify Stoltze. The Supreme Court affirmed, holding that ASI’s insurance policy with Schlegel did not require ASI to defend and indemnify Stoltze in an action in which Schlegel could not be held liable. View "F.H. Stoltze Land & Lumber Co. v. Am. States Ins. Co." on Justia Law

Priesendorf, distraught and drunk, asked Purscell for a ride to a cemetery. On the return trip, Priesendorf's behavior became erratic. She put her foot on the accelerator, on top of Purscell's foot. Purscell got her to stop. Later, Priesendorf unbuckled her seat belt, scooted over, and repeated the behavior. Purscell was unable to remove his foot. Approaching a stop sign, he put his other foot on the brake, with no effect. Purscell saw the Carrs' vehicle. Priesendorf continued to press the accelerator. Purscell swerved, but the vehicles collided and overturned. The Carrs' vehicle caught fire. Priesendorf was dead at the scene. Later, Purscell learned the gravesite Priesendorf had visited belonged to a person who had been killed in an accident while Priesendorf was driving drunk. Priesendorf had attempted suicide following her friend's death; none of her other friends would give her a ride because of her erratic behavior. Infinity insured Purscell's vehicle with policy limits of $25,000 per person and $50,000 per accident for bodily injury. Infinity immediately put the full amount on reserve, with $25,000 designated to Priesendorf's fatality and $25,000 designated to the Carrs. Infinity immediately received a settlement offer from the Carrs, seeking policy limits. Tim's medical expenses were over $97,000 and ongoing. Amy had separate claimes. Infinity stated that it needed to investigate coverage. Infinity informed Purscell of his right to seek independent counsel. The Carrs withdrew their settlement offer. Infinity eventually filed an interpleader, depositing policy limits in court. A jury awarded Tim Carr $830,000 and Carr $75,000; Priesendorf's wrongful death claim settled for $7,764.50, leaving Purscell with a substantial judgment against him. Purscell sued Infinity, alleging bad faith and breach of fiduciary duty. The district court first and Eighth Circuit rejected the claims. View "Purscell v. Tico Ins. Co." on Justia Law

The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court. The issue centered on how the term "collapse" was interpreted under Washington law in an insurance policy that insured "accidental direct physical loss involving collapse," subject to the policy's terms, conditions, exclusions and other provisions, but did not define "collapse" except to state that "collapse [did] not include settling, cracking, shrinking, bulging or expansion." The Washington Court concluded that in the insurance contract, "collapse" means "substantial impairment of structural integrity." "Substantial impairment of structural integrity" means substantial impairment of the structural integrity of a building or part of a building that renders such building or part of a building unfit for its function or unsafe and, under the clear language of the insurance policy here, must be more than mere settling, cracking, shrinkage, bulging, or expansion. View "Queen Anne Park Homeowners Ass'n v. State Farm Fire & Cas. Co." on Justia Law

A fire damaged a 12-apartment Oakland building owned by Lee. The fire started in a ground floor unit. Lee’s insurer, California Capital, claimed that flames did not extend beyond that unit. Lee claims the fire damaged six apartments with fire or smoke. Capital prepared an estimate of damage to unit 3 of $69,255.34. Lee retained a licensed public adjuster, who submitted a claim for $800,000. After Capital completed re-inspection, it issued an additional payment of $109,367.41. The court granted a petition to compel an insurance appraisal (Insurance Code 2071), directing the panel to “value three categories of items” without making causation or coverage determinations, or valuing the loss of income. Capital argued that Lee’s estimate sought an award for items that did not exist at the property, including extra windows. The panel declined an inspection request by Capital and issued an award setting forth replacement cost loss and actual cash value for each claimed item. Exhibit A consisted of items in the insurer’s scope of loss. Exhibit B consisted of items in the insured’s scope of loss. The trial court confirmed the award. The court of appeal reversed. The award neither complies with the statute nor accomplishes the objectives of an appraisal. It was error to compel the appraisal panel to assign loss values to items simply because they were listed in the insured’s scope of loss, regardless of whether inspection revealed they were undamaged or never existed. View "Lee v. Cal. Capital Ins. Co." on Justia Law

Defendants were the divorced parents of a minor child, Maya. Maya lived with Mother but regularly stayed at Father’s home for overnight visits twice a week. While Maya was visiting Father in keeping with the normal visitation schedule, she was bitten by Father’s dog and suffered serious injuries. Mother brought a personal injury suit on Maya’s behalf against Father. Father sought a defense under the terms of his homeowner’s insurance policy with Peerless Insurance Company (Peerless). Peerless, in turn, filed a declaratory judgment action seeking a declaration that Maya was a resident of Father’s household and was therefore excluded from coverage for injures she sustained from the attack by Father’s dog. The hearing justice granted summary judgment for Peerless, concluding that Maya was a resident of Father’s home, and therefore, there was no coverage for her injuries under the Peerless policy. Both defendants appealed. The Supreme Court affirmed, holding that, under the facts of this case, Maya was a resident of Father’s home on the day she was injured. View "Peerless Ins. Co. v. Luppe" on Justia Law

An investment scheme exploiting the complexities of certain variable annuity policies led to litigation in the United States Court of Appeals for the First Circuit. The First Circuit certified to the Rhode Island Supreme Court two questions, and the Court accepted those questions pursuant to the discretionary authority provided to it in Article I, Rule 6 of the Supreme Court Rules of Appellate Procedure. The Supreme Court answered (1) an annuity is not infirm for want of an insurable interest when the owner and beneficiary of an annuity with a death benefit is a stranger to the annuitant; and (2) a clause in an annuity that purports to make the annuity incontestable from the date of its issuance precludes the maintenance of an action based on the lack of an insurable interest. View "W. Reserve Life Assurance Co. of Ohio v. ADM Assocs., LLC" on Justia Law

Respondent suffered a significant injury in a motor vehicle accident and was totally disabled for approximately five months. During her period of disability, Respondent was unable to perform most household duties. Respondent later filed a claim for replacement service loss benefits with her no-fault insurance provider, Western National Mutual Insurance Co. (Appellant), alleging that she was entitled to the reasonable value of the home care and maintenance services she was unable to perform. Appellant refused to pay Respondent’s claim, asserting that it would not reimburse Respondent for household services that were not replaced in some way. An arbitrator awarded Respondent’s entire claim. The district court denied Appellant’s motion to vacate the arbitration award. The court of appeals affirmed, concluding that Minn. Stat. 65B.44(5) does not require replacement of household services when the injured person is primarily responsible for household duties. The Supreme Court affirmed, holding that an injured person who has primary responsibility for care and maintenance of the household need not replace household services as a condition to recovering the reasonable value of such services under section 65B.44(5). View "Schroeder v. Western Nat’l Mut. Ins. Co." on Justia Law

Kienstra, a Missouri resident, received treatment for uterine fibroid tumors at the Mayo Clinic in 2008. Her health plan concluded that her treatment fell outside the plan's coverage as experimental and requiring prior approval. Internal appeals failed. The plan is a self-funded multiple employer plan, maintained pursuant to collective bargaining agreements, and subject to the Employee Retirement Income Security Act, 29 U.S.C. 1002(1). The plan specified that any civil action for wrongful denial of medical benefits under ERISA must be filed within two years of the final date of denial. Kienstra filed suit almost two and a half years after she learned her claim had been denied. She unsuccessfully argued that the contractual limitations period was invalid because the plan's rules of construction stated that its terms should be read to comply with Missouri law, that a 10-year Missouri statute of limitations governed, and that a separate statute barred contracting parties from shortening that limitations period. The Eighth Circuit affirmed. There is no conflict between the plan's contractual limitations period and Missouri law; state law does not "apply of its own force to a suit based on federal law—especially a suit under ERISA, with its comprehensive preemption provision." View "Munro-Kienstra v. Carpenters' Health & Welfare Trust Fund of St. Louis" on Justia Law

Plaintiff filed suit against State Farm, seeking damages based on an uninsured motorist claim, bad-faith denial of the claim, and conversion. The district court granted summary judgment to State Farm and granted State Farm's motion to amend the judgment after a jury verdict on compensatory damages. The court concluded that plaintiff has not shown a genuine dispute of material fact that would have justified the denial of summary judgment on the claim of bad faith in refusing to offer payment of the policy limit on his claim; because State Farm has an arguable basis for the denial of plaintiff's claim for policy limits, the court need not consider whether the conduct was sufficiently egregious to rise to the level of an independent tort; and State Farm did not waive its argument that plaintiff's damages could not be more than that of the policy limit because it moved to have evidence of the policy limit excluded at trial. Accordingly, the court affirmed the judgment. View "Dey v. State Farm Mutual Auto Ins. Co." on Justia Law