Justia Insurance Law Opinion Summaries

Symetra appealed the district court's refusal to award attorneys' fees under the Texas and Washington State Structured Settlement Protection Acts (SSPAs). Rapid cross appealed the district court's award of attorneys' fees as damages for tortious interference and the district court's permanent injunction, arguing that the injunction relies on an erroneous interpretation of the SSPAs. The court concluded that the district court erroneously held that Symetra could not recover any fees under the SSPAs where specific transfers were challenged throughout this litigation and Symetra can recover some portion of its fees related to some of those transfers. Therefore, remand is appropriate, but Symetra bears the burden of segregating fees and the district court retains discretion to deny Symetra's attorneys' fees request for failure to segregate. The court also concluded that the district court's award of fees incurred in state court with respect to one annuitant as damages for tortious interference under Texas law was proper where the natural and proximate cause of Rapid's conduct toward the annuitant was to drag Symetra into Indiana state court litigation. The district court's requirement that state court transfer orders also list first-refusal rights contravenes the SSPAs. However, the court found no error in the district court's analysis of first refusal rights under the SSPAs. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Symetra Life Ins. Co. v. Rapid Settlements, Ltd." on Justia Law

The underlying case stemmed from a tragic accident that occurred on an oceangoing passenger vessel that resulted in the death of the captain. Under these circumstances, a marine engineering firm purchased an architect’s and engineer’s professional liability insurance policy, which insured the firm against any liability it might incur in a tort action for the negligent preparation of working drawings used to build the vessel. At issue was whether, under the terms of the architect's and engineer's professional liability (A&E) policy, Evanston was obligated to provide AMI a defense in the underlying lawsuit. Also at issue was whether the A&E policy obligated Evanston to pay American Home, as AMI's subrogee, the price of its settlement in the underlying lawsuit. The court found no basis for the district court's third-party beneficiary finding and set aside the district court's determination that Evanston was obligated to provide AMI a defense. The court concluded that the district court erred in holding that Evanston was liable for the $325,000 sum American Home paid in the underlying lawsuit to settle the claims where American Home failed to establish, as established by Endorsement No. 11, that AMI's liability for the captain's death was the result of an act, error, or omission of GPA arising out of the professional services it had performed. Accordingly, the court reversed the judgment of the district court. View "Atlantic Marine Florida, LLC v. Evanston Ins. Co." on Justia Law

Plaintiffs, insurance producers who conduct business within the state and licensees of the Department of Insurance (department), filed a declaratory judgment action against the Commissioner of Insurance seeking declaratory rulings with respect to the legality of their conduct in the sale of life insurance policies. The trial court dismissed the action, concluding (1) Plaintiffs failed to exhaust their administrative remedies before bringing this declaratory judgment action pursuant to Conn. Gen. Stat. 4-175; and (2) Plaintiffs failed to establish their standing to bring this declaratory judgment action. The Supreme Court reversed, holding (1) the trial court improperly determined that Plaintiffs were not aggrieved parties with standing to bring this declaratory judgment action; and (2) the trial court improperly dismissed this declaratory judgment action on the ground that Plaintiffs had failed to exhaust their administrative remedies. View "Fin. Consulting, LLC v. Comm’r of Ins." on Justia Law

Seneca Insurance Company paid $1 million to settle a lawsuit in which its insured alleged Seneca had mishandled insurance claims for hail damage to the insured’s property. Seeking to recoup the costs of defending and settling the lawsuit, Seneca brought this action for implied equitable indemnity and negligence against its insurance adjuster, Western Claims, Inc., and Western Claims’ agent Lou Barbaro. The district court allowed Western Claims to discover and admit as evidence at trial correspondence containing advice from Seneca’s lawyers regarding the underlying hail damage claim and litigation. It concluded Seneca put the advice at issue in this lawsuit, thereby waiving any attorney-client privilege or work-product protection. The jury ultimately found in Western Claims’ favor. On appeal, Seneca sought a new trial, arguing the district court erred in concluding Seneca put the legal advice at issue. Western Claims cross appealed, arguing that even if the district court erred, Western Claims was nevertheless entitled to judgment as a matter of law on both of Seneca’s claims. After review, the Tenth Circuit concluded that because Seneca cited “advice of counsel” to justify settling with its insured in the underlying action, Seneca could not shield that advice from Western Claims. Accordingly, the Court affirmed the district court's decision that Seneca waived any attorney-client privilege or work-product protection. The Court did not reach Western Claims’ cross appeal. View "Seneca Insurance Co. v. Western Claims" on Justia Law

Three patients, who were injured in unrelated motor vehicle accidents, were all treated at the Regional Medical Center at Memphis (Hospital). In each case, either the patient’s insurance company or TennCare paid the Hospital the full amount of the adjusted charges for their case. However, the Hospital refused to release the lien it had perfected under the Tennessee Hospital Lien Act as it awaited recovery from the third-party tortfeasors the full, unadjusted amount of the hospital lien. The patients filed suit. The trial court dismissed the suit, but the Court of Appeals reversed, determining that the hospital could not maintain its lien because each of the patients’ debts had been extinguished. The Supreme Court affirmed in part and reversed in part, holding (1) except for the unpaid co-pays and deductibles, which are a patient’s responsibility, neither the Act nor the Hospital’s contracts with the patients’ insurance companies authorized the Hospital to maintain its lien after the patients’ insurance company paid the adjusted bill; and (2) one of the patients in this case had not extinguished her debt to the Hospital and was therefore not entitled to have the lien against her extinguished. View "West v. Shelby County Healthcare Corp." on Justia Law

Douglas Lunsford was injured in an accident involving multiple tortfeasors. Lunsford filed a negligence action against Thomas Mills, Mills’ employer James Crowder, and Shawn Buchanan, who carried liability policies totaling $1,050,000. Plaintiff was covered by two underinsured motorist (UIM) policies with North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau) with combined limits of $400,000. Buchanan’s provider tendered to plaintiff the $50,000 limits of Buchanan’s policy, and Plaintiff settled his claim with Mills’ and Crowder’s coverage provider for $850,000. Farm Bureau, an unnamed defendant, moved for summary judgment, arguing that Plaintiff was not entitled to UIM coverage because the combined policy limits of Defendants exceeded Plaintiff’s UIM limits. Plaintiff also moved for summary judgment, arguing that he was was entitled to recover $350,000 - Farm Bureau’s UIM policy limits minus an offset for Buchanan’s insurance payment. The trial court granted summary judgment for Lunsford. The Court of Appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) an insured is only required to exhaust the liability insurance coverage of a single at-fault motorist in order to trigger the insurer’s obligation to provide UIM benefits; but (2) the Court of Appeals erred in determining that Lunsford was entitled to interest and costs against Farm Bureau. View "Lunsford v. Mills" on Justia Law

Jennifer Van Kleek was caring for Walter and Janet Chapman’s dog while the Chapmans were out of town when the dog bit her on her lower lip. Van Kleek sent a claim to the Chapmans’ homeowner’s insurer, Farmers Insurance Exchange (Farmers), for her injuries from the bite. Farmers denied the claim, concluding the Van Kleek was “legally responsible” for the dog and therefore, she was also an insured, and the policy excluded coverage for bodily injuries to insureds. The policy defined “insured” to include “any person…legally responsible for covered animals." Van Kleek filed a complaint for declaratory judgment seeking a determination that the policy covered her claim. The district court granted Farmers’ motion for summary judgment, concluding that Van Kleek was “legally responsible” for the dog because she was the only person responsible for feeding, watering, and letting the dog into the backyard while the Chapmans were away. The Supreme Court affirmed, holding that Van Kleek was an insured under the policy because she was “legally responsible” for the Chapmans’ dog, and therefore, the unambiguous terms of the policy excluded coverage of her injury. View "Van Kleek v. Farmers Ins. Exch." on Justia Law

Elvira was driving a car, owned by Mullalli, when she hit ice and collided with a negligently parked vehicle. Elvira, who suffered a traumatic brain injury, acute cervical and lumbar sprains, bulging discs, and other injuries, sued in federal court to recover under Mullalli’s no-fault State Farm automobile insurance policy,. Elvira and Mullalli are citizens of Michigan; State Farm is an Illinois citizen. The district court dismissed for lack of diversity jurisdiction, reasoning that the suit was a “direct action” under 28 U.S.C. 1332(c)(1), requiring Mullalli’s Michigan citizenship to be imputed to State Farm. The Sixth Circuit reversed. Because the direct action proviso does not apply to suits brought against the insurer by insured persons identifiable before the accident occurs, this suit was not a direct action and Mullalli’s citizenship should not have been imputed to State Farm. The court distinguished between the personal protection provisions of Michigan’s no-fault law that require coverage of an identifiable group of individuals: the named insured, a spouse, any relatives living with them, and any occupant of a car they own and the property protection provision of the statute, which states simply that “an insurer is liable to pay benefits for accidental damage.” View "Ljuljdjuraj v. State Farm Mut. Auto. Ins. Co." on Justia Law

Paulino suffered a spinal-cord injury in a work-related accident that left him permanently paraplegic. Employer's workers’ compensation insurer was Chartis. After medical treatment and intensive rehabilitation, Paulino moved to CCS for post-acute rehabilitation. When Paulino was capable of basic self-care, CCS set a discharge date of April 30. Paulino had workers’ compensation income of less than $400 per week and was ineligible for other assistance as an undocumented Mexican national. He required wheelchair-accessible housing, an electric hospital bed, and access to public transportation. His case manager was unable to locate suitable, affordable housing acceptable to Paulino. CCS refused to discharge Paulino to a residence not adequately adapted to Paulino’s needs. Chartis continued to pay medical bills and was prepared to pay for modifications to a permanent home, but notified Paulino that it would not pay his CCS living expenses (rent, utilities, groceries, cable television) after April 30. On May 6, Chartis withdrew those payments. Paulino continued to reside at CCS. A court affirmed the Iowa Workers’ Compensation Commissioner's conclusion (Ia Code 85.27) that special circumstances case made Paulino's continued stay at CCS appropriate and compensable. Paulino sued, alleging bad-faith denial of benefits as of May 6, seeking consequential and punitive damages. The Eighth Circuit affirmed the district court’s grant of summary judgment for Chartis. View "Paulino v. Chartis Claims, Inc." on Justia Law

Appellant, a former plumbing inspector for the Town of Sangerville, sued a Town Selectman, asserting claims of common law slander and violations of his constitutional right to due process. The claims stemmed from the Selectman’s statement at a public meeting that Appellant had made “less than quality decisions” while serving as plumbing inspector. The Selectman filed an offer of judgment, which Appellant accepted. After judgment was entered, Appellant initiated this reach and apply action against Argonaut Insurance Company seeking to recover for the slander count and due process claims. The district court granted summary judgment for Argonaut, concluding that the exclusions in the insurance policies for “employment-related” practices barred Appellant’s recovery. The district court agreed and denied Appellant’s motion. The First Circuit affirmed, holding that because Appellant’s judgment against the Selectman arose from an employment-related dispute, the insurance policies unambiguously excluded coverage for claims arising from employment-related practices. View "Ruksznis v. Argonaut Ins. Co." on Justia Law