Justia Insurance Law Opinion Summaries

Central United Life Insurance Co. (CULI) purchased Judith Gleason’s cancer benefit insurance policy prior to Gleason’s death from breast cancer. Gleason’s Estate submitted notice of potential claims under the policy to CULI. CULI paid certain claims but denied payment for claims submitted outside the policy limit. The Estate contested the denial of the untimely-filed claims. The district court granted partial summary judgment for the Estate, ruling that CULI owed payment for the untimely-filed claims, provided it was not prejudiced by the late notice. After a trial, the jury found that CULI had violated the Montana Unfair Trade Practices Act (UTPA) but did not award damages and therefore did not consider whether CULI acted with malice. The Supreme Court affirmed in part, reversed in part, and remanded, holding (1) the district court correctly applied the notice-prejudice rule; and (2) when an insurer is found to have violated the UTPA, a jury is not required to find compensatory damages beyond those for breach of the insurance contract before considering malice and punitive damages under the UTPA, and therefore, a new trial must be held on the issue of malice and punitive damages. View "Estate of Gleason v. Cent. United Life Ins. Co." on Justia Law

Plaintiff filed suit against Mid-Century for breach of the insurance policy and insurance bad faith after Mid-Century denied her tender of the defense of a lawsuit brought by nonparty Henri Baccouche. On appeal, plaintiff challenged the trial court's grant of Mid-Century's motion for summary judgment and denial of her cross-motion for summary adjudication. Baccouche filed a verified complaint alleging causes of action for trespass to real property and trees, abatement of private nuisance, declaratory relief, and for quiet title. The court concluded that Baccouche's claims against plaintiff arose from nonaccidental conduct, which was outside the policy. Accordingly, the court affirmed the judgment. View "Albert v. Mid-Century Ins." on Justia Law

Recall Total Information Management, Inc. (Recall) contracted with IBM to transport and store computer tapes containing personal information of IBM employees. Recall subcontracted with Executive Logistics Services, LLC (Ex Log) to provide transportation services for the tapes. In connection with the agreements, Federal Insurance Company (Federal) issued a commercial general liability policy and Scottsdale Insurance Company (Scottsdale) issued an umbrella liability policy to Ex Log. Both policies named Recall as an additional insured. When Ex Log lost the computer tapes, IBM spent large sums providing identity theft services. In informal negotiations, IBM sought reimbursement of those sums from Recall and Ex Log (together, Plaintiffs). Defendants - Federal and Scottsdale - refused to participate in the negotiations or to provide coverage to Plaintiffs under the policies. Plaintiffs commenced this action alleging breach of the insurance contracts. The trial court rendered summary judgment in favor of Defendants. The Appellate Court affirmed. The Supreme Court affirmed, holding that the Appellate Court did not err in concluding that (1) Defendants did not waive coverage defenses by breaching their duty to defend Plaintiffs in settlement negotiations; and (2) the policy provisions at issue did not afford coverage for claims made against Plaintiffs by a third party. View "Recall Total Info. Mmgt., Inc. v. Fed. Ins. Co." on Justia Law

Orr died in a motorcycle accident. His daughters sought benefits under a group life insurance policy governed by the Employment Retirement Income Security Act and issued by USIC to Orr’s former employer. The policy provided accidental death, subject to exclusions, including one for loss resulting “directly or indirectly from … intoxication[.]” USIC asserted that Orr’s death resulted from his intoxication. The letter explained that autopsy and toxicology reports revealed that Orr’s blood alcohol level at the time of the accident exceeded the legal limit and that USIC’s medical consultant opined that Orr “would have been impaired in attention, coordination, and balance,” as a result. The letter advised the Orrs of their right to seek review and included a copy of USIC’s Life Claims Denial Review Procedure, stating, in boldfaced, all-caps print, that a request for review must be submitted in writing within 60 days and warning: “If … you do not complete both the first and second review before filing a lawsuit, a court can dismiss your lawsuit.“ The document encourages claimants to call with any questions. The Orrs filed suit before completing the review process. The Seventh Circuit affirmed summary judgment in favor of USIC on grounds of failure to exhaust administrative remedies. View "Orr v. Assurant Emp. Benefits" on Justia Law

This case arose from a complicated series of transactions often called “fronting arrangements” in the insurance industry. Lincoln was awarded $16.5 million on its tortious interference claims against CSi and Alpha. The case involved the diversion of funds from a reinsurance arrangement involving insurer Lincoln and a claims administrator, U.S. Auto. Numerous issues were raised on appeal. The court affirmed: (1) the judgment entered against CSi and Alpha; (2) the grant of summary judgment on Lincoln’s conversion claims; (3) the denial of Lincoln’s cross-motion for summary judgment on its fiduciary duty claims; and (4) the denial of the motion to alter the judgment to include ZVN. The court also held that Lincoln forfeited the right to appeal the dismissal of its claims against Doug Maxwell asserting alter ego liability. The court reversed: (1) the refusal to alter the judgment to include Lincoln General’s breach of contract claim against U.S. Auto; (2) the grant of summary judgment on all the fiduciary duty claims that Lincoln appealed, including the claims for aiding and abetting; and (3) the tortious interference claim against Jim Maxwell. Accordingly, the court remanded for further proceedings. View "Lincoln Gen. Ins. Co. v. U.S. Auto Ins." on Justia Law

Cornhusker Casualty Company appealed a district court’s summary-judgment ruling, arguing that the district court incorrectly concluded that Cornhusker was estopped from asserting noncoverage as a defense to the claims of Shari and Steve Skaj. The Skajs cross-appealed the district court’s sua sponte entry of summary judgment against them on their counterclaim for attorneys’ fees. Vincent Rosty filed a cross-appeal too, alleging that the district court erred in granting summary judgment to Cornhusker on some of his tort-based counterclaims. R&R Roofing, Inc. was a Wyoming construction company primarily operated by Randy Rosty and Steven Rosty. R&R purchased a Cornhusker commercial liability policy listing “R&R” and “Randy Rosty” as the named insureds. Vincent, who was an R&R employee at that time, did not appear as a named insured under the Policy. Vincent drove R&R’s dump truck to the Skaj home to deliver roofing supplies. The truck was accidentally knocked into second gear, rolled forward toward Ms. Skaj as she approached, and pinned her against a parked motor home, injuring her. A laboratory test performed later that day detected the presence of marijuana and methamphetamines in Vincent’s bloodstream. The Skajs ultimately sued R&R, Steven, and Vincent, asserting several negligence claims. Counsel retained by Cornhusker to defend against the Skajs’ lawsuit sought and received an extension of “the answer deadline for all defendants.” Communication related to that request indicated that defense counsel at that point “d[id] not know if [she would] be representing all of the defendants.” Defense counsel filed an answer to the Skajs’ complaint on behalf of Steven and R&R only, noting, “I do not represent Vincent Rosty.” In filing its answer, Cornhusker did not attempt to advise Vincent of its decision at that time not to represent him. An entry of default against Vincent issued, and the non-defaulting defendants were dismissed from the litigation. The Skajs sought to recover a judgment as to Vincent. Cornhusker hired separate representation for Vincent who opposed the default-judgment proceedings. The state court issued a default-judgment order assessing a total in damages and costs of $897,344.24 against Vincent. One week after the default-judgment hearing, Cornhusker sent Vincent a letter purporting for the first time to deny coverage on grounds that Vincent was not a named insured to the R&R policy. Cornhusker repeated this ground in its declaratory judgment action in federal district court. Vincent responded by counterclaiming against Cornhusker, asserting various contract and tort theories. The Skajs filed their own counterclaim, seeking a declaration “that Cornhusker [was] required to pay the judgment in the underlying action." All parties filed motions for summary judgment, but the court announced that there would be no trial. It declared that Cornhusker was estopped from denying coverage to Vincent because Cornhusker had represented that it would provide a defense, never reserved its rights, and did not advise Vincent of its decision to deny coverage until more than sixteen months after the entry of default. Cornhusker appealed the district court's judgment. But finding no reversible error, the Tenth Circuit affirmed the court's judgment. View "Cornhusker Casualty Co. v. Skaj" on Justia Law

At the time that Claimant suffered a compensable work-related injury to his left knee, Liberty Mutual Insurance Group (Liberty Mutual) was the workers’ compensation insurance carrier for Claimant’s employer (Employer). Claimant subsequently suffered a compensable work-related injury to his right knee. At the time, Chubb & Son (Chubb) was the workers’ compensation insurance carrier for Employer. Claimant was scheduled to have bilateral knee replacement surgery, but the two insurance carriers disagreed about who would pay for Claimant’s temporary total disability benefits. After a hearing, the Workers’ Compensation Commissioner required Liberty Mutual to reimburse Chubb for one half of Claimant’s temporary total disability benefits. The Workers’ Compensation Review Board and the Appellate Court affirmed. Liberty Mutual appealed, claiming that the Commissioner lacked the statutory authority to order the reimbursement to Chubb. The Supreme Court affirmed, holding that, given the unique factual circumstances of this case, the Commissioner had the authority to order the reimbursement pursuant to the relapse statute, Conn. Gen. Stat. 31-307b. View "Gill v. Brescome Barton, Inc." on Justia Law

A man working at a concrete-pouring job was assaulted by another worker at the job site. The injured man filed a lawsuit against the assailant and both the concrete-pouring company and its owner. Although the company’s commercial general liability insurer initially provided a defense attorney in the negligence action, the insurer later brought a declaratory judgment action alleging that the incident fell within the policy’s employee-exclusion clause. The superior court granted summary judgment to the insurance company. The Supreme Court affirmed. "[B]ecause courts look to workers’ compensation law to give meaning to the phrase 'arising out of and in the course of employment' in workers’ compensation/employers’ liability policies, and because commercial general liability policies are designed to avoid the existence of an overlap or a gap between workers’ compensation/employers’ liability and commercial general liability policies, sister jurisdictions interpret the same phrase in employee-exclusion clauses in commercial general liability policies in light of the identical language in workers’ compensation statutes. We have found no case law holding that the contractual phrase 'arising out of and in the course of employment' in commercial general liability exclusions should be interpreted differently from the identical phrase in workers’ compensation statutes. For purposes of this appeal, we will use workers’ compensation case law to interpret the meaning of the commercial general liability policy’s exclusion of coverage for bodily injury "arising out of and in the course of employment.'" The employer did not purchase workers' compensation coverage. And in reading the general liability policy in question, the Supreme Court concluded the superior court did not err in determining that the incident here fell within the employee-exclusion claim. View "Devine v. Great Divide Insurance Company" on Justia Law

When a fire caused by NSTAR Electric and Gas Company employees damaged a building owned by the Massachusetts Institute of Technology (MIT), two insurers paid the claims of the building’s tenants. The insurers then brought this complaint against NSTAR Electric Company and NSTAR Electric & Gas Company (collectively, NSTAR) seeking to recover for the claims paid. NSTAR moved for partial summary judgment, contending that, to the extent to which the insurers sought recovery for business interruption losses, the claims were barred by Massachusetts Department of Telecommunications and Energy Tariff No. 200A, filed with and approved by the Department of Public Utilities, and in effect when the explosion occurred. The tariff contained a limitation of liability clause that limited NSTAR from liability to nonresidential customers for special, indirect, or consequential damages resulting from the utility’s gross negligence. A judge of the superior court allowed NSTAR’s motion for partial summary judgment, concluding that a tariff filed with and approved by a regulatory agency may limit a public utility’s liability. The Supreme Judicial Court affirmed, holding that the limitation of liability clause in the tariff precluded Plaintiffs’ claims to recover for business interruption and other consequential or economic damages. View "Maryland Cas. Co. v. NSTAR Elec. Co." on Justia Law

Randy Ellington owned and operated R&J Cabinets as a sole proprietorship. When Ellington received a work-related injury, R&J had no employees. Kentucky Employers’ Mutual Insurance (KEMI) had previously issued a workers’ compensation policy to Ellington and R&J as “insureds.” At the same time, the policy included a specific exclusion from coverage of Ellington as the sole proprietor. KEMI denied Ellington’s claim for benefits, arguing that it was not covered because of the sole-proprietor exclusion endorsement. An administrative law judge concluded that Ellington was not covered by the policy. The Court of Appeals reversed, finding the policy was ambiguous and construing it in Ellington’s favor to provide coverage for his injuries. The Supreme Court reversed, holding that the policy, as issued, is not a personal policy but rather a business policy purchased by a sole proprietor, and Ellington, as the sole proprietor, was not entitled to benefits under the policy. View "Ky. Employers Mut. Ins. v. Ellington" on Justia Law