Justia Insurance Law Opinion Summaries

“In Texas, the general rule…is that an injured party cannot sue the tortfeasor’s insurer directly until the tortfeasor’s liability has been finally determined by agreement or judgment.” Plaintiff sued San Diego Tortilla (SDT) for personal injuries after he lost his hand operating a tortilla machine. Plaintiff then added a declaratory judgment claim against SDT’s liability insurer, Essex Insurance Company, seeking a declaration that Essex must indemnify SDT for its liability to Plaintiff. Essex filed motions to dismiss Plaintiff’s claims, arguing that the “no direct action” rule barred Plaintiff from suing Essex until SDT’s liability to Plaintiff was determined. The trial court denied the motions, and the court of appeals denied Essex’s petition for writ of mandamus. The Supreme Court conditionally granted mandamus and directed the trial court to grant Essex’s motions to dismiss, holding that no exception to the “no direct action” rule applied in this case. View "In re Essex Ins. Co." on Justia Law

The owner and managing agent of an apartment building (collectively, the insureds) were insureds under two different policies: they were named insureds under their own policy and additional insureds under a policy obtained by a contractor they hired. When an employee of the contractor was injured, the contractor’s insurer, seeking to disclaim liability, sent written notice to the insureds’ own carrier but not to the insureds themselves. The insureds brought third party claims against the contractor and the contractor’s insurer, asserting that the contractor’s insurer was required to provide them with a defense and indemnification. Supreme Court granted summary judgment against the contractor’s insurer. The Appellate Division affirmed, concluding that the contractor’s insurer had failed to comply with N.Y. Ins. Law 3420(d)(2) because it had not sent its disclaimer notice to its additional insureds. The Court of Appeals affirmed, holding that the contractor’s insurer failed to comply with section 3430(d)(2) under the circumstances of this case. View "Sierra v. 4401 Sunset Park, LLC" on Justia Law

Fireman’s Insurance issued a policy covering loss from property damage, including rent, on a building owned by Stephens XII. Three days after the policy became effective, Stephens XII discovered the property had been seriously damaged by burglars who stripped it of electrical and other conductive materials. Fireman’s delayed resolving the claim. Stephens XII filed suit. The policy provided that Stephens XII could recover either the full cost of repair, so long the repairs were actually made, or the depreciated value of the damaged property. As of the trial, Stephens XII had not repaired the damage. The jury awarded Stephens XII the full cost of repairing it plus lost business income (a theory not authorized by the policy), but declined to award lost rent, authorized by the policy. The trial court granted Fireman’s judgment notwithstanding the verdict, finding neither of the awards permitted under the policy. The appeals court reversed. Although Stephens XII is not entitled to an immediate award for the costs of repairing the damage, it is entitled to a conditional judgment awarding these costs if the repairs are actually made. The award for lost business income is properly construed as an award for compensable lost rent. View "Stephens & Stephens XII v. Fireman's Fund Ins." on Justia Law

Strauss Painting, Inc./Creative Finishes, Ltd. contracted with the Metropolitan Opera Association, Inc. to perform work on the Met’s premises. At the time Strauss/Creative contracted with the Met, Strauss had in place a CGL policy issued by Mt. Hawley Insurance Company. Manuel Mayo, a Creative employee, was injured while working at the Met. Mayo sued the Met for negligence. The Met brought a third-party action against Strauss in the Mayo suit. Strauss then commenced this action against Mt. Hawley and the Met, seeking a declaration that Mt. Hawley was obligated to defend and indemnify it in the Met’s third-party action. The Met cross-claimed against Mt. Hawley seeking a declaration that it was an additional insured on Strauss’s CGL policy, thereby requiring Mt. Hawley to defend and indemnify it in the Mayo litigation. The lower courts concluded (1) Mt. Hawley was required to defend the Met in the Mayo lawsuit because the Met was an additional insured on Strauss’s CGL policy; and (2) Strauss’s notice of the accident to Mt. Hawley was untimely, and Mt. Hawley timely disclaimed coverage on that ground. The Court of Appeals modified the order of the Appellate Division by denying the Met’s motion for summary judgment on its first cross-claim, holding (1) the Met was not an additional insured on Strauss’s CGL policy with Mt. Hawley; and (2) Strauss’s notice to Mt. Hawley was untimely as a matter of law. View "Strauss Painting, Inc. v. Mt. Hawley Ins. Co." on Justia Law

Petitioners Susan and Peter White appealed a superior court order denying their petition for a declaratory judgment that respondent Charles Matthews was covered under a homeowner's insurance policy issues to his mother by respondent Vermont Mutual Insurance Company. Matthews' dog bit Mrs. White while Matthews was staying with friends at the mother's home in Moultonborough. The policy defined an "insured" to include "residents of your household who are… your relatives." Matthews’s mother also owns a home in Naples, Florida, where she lives for approximately half of the year, and where Matthews usually visits only at Christmas. The petitioners and Matthews claim that the Florida residence is Matthews’s mother’s primary residence, but they do not claim that Matthews is a resident of the Florida home. Matthews testified that he lived in Massachusetts for 80% or more of the year. However, he had not changed his voting registration since he first registered to vote when he was eighteen, and he was still registered to vote in Moultonborough (he voted in Moultonborough in the 2012 election, a month before the hearing in this case). Matthews also held a New Hampshire driver’s license and his vehicle was registered in New Hampshire (his decision to register his car in New Hampshire was motivated by his desire to avoid buying automobile insurance, which is required in Massachusetts). Matthews typically notifies his mother in advance of using the Moultonborough house for permission to stay there. Following the 2011 incident involving Matthews' dog, petitioners sought a declaratory judgment that Vermont Mutual was responsible for any damages that might recover from Matthews. After a bench trial, the court denied the petition and the subsequent motion for reconsideration, finding that the policy did not contemplate Matthews as a resident of the Moultonborough house. Finding no reversible error, the Supreme Court affirmed the superior court's judgment. View "White v. Vermont Mutual Insurance Company" on Justia Law

An action was initiated by certain former members and the board of Mississippi Comp Choice Self-Insurers Fund. Comp Choice was a workers’ compensation group self-insurer operating under a certificate of authority granted by the Mississippi Workers’ Compensation Commission. Defendant Mississippi Workers’ Compensation Group Self-Insurer Guaranty Association (“GGA”) ordered a review of Comp Choice. Based on information revealed in the review, the Commission required Comp Choice to execute a Memorandum of Understanding outlining a plan to “strengthen the financial and operational aspects of the [Comp Choice] Fund under the control and guidance of the Commission.” Six months later, the Commission decided not to approve Comp Choice for future operation. Comp Choice voluntarily surrendered its certificate of authority to operate as a group self-insurer in January 2009. GGA stepped into the shoes of Comp Choice to protect claimants. Comp Choice a complaint against GGA, alleging, inter alia, gross negligence, breach of fiduciary duty, bad faith, conversion, and a demand for an accounting. GGA filed a motion to dismiss and claimed immunity under the Mississippi Tort Claims Act (MTCA) and the Mississippi Workers’ Compensation Self-Insurer Guaranty Association Law. The trial court granted the motion, finding that GGA was “covered” by the MTCA, sub silentio ruling that Plaintiffs could not pursue a “cause of action” as referenced in Mississippi Code Section 71-3-179. The trial court held that only the MTCA applied to suits against the Mississippi Workers’ Compensation Group Self Insurer Guaranty Association. The trial court dismissed all other claims, granting leave to amend the complaint for an MTCA action only. Comp argued on appeal to the Supreme Court: (1) the trial court erred in granting defendant's motion to dismiss based on whether GGA as an unincorporated legal entity, was covered by the Mississippi Tort Claims Act, and therefore, entitled to its various protections, immunities and exceptions pursuant to Miss. Code Ann. 11-46-7; and (2) the trial court erred in dismissing based on the determination that GGA as an unincorporated legal entity, was covered by the Mississippi Tort Claims Act, even where the immunity created in GGA in Miss. Code Ann. 71-3-179 abrogated the immunity afforded under the Mississippi Tort Claims Act in Miss. Code Ann. In the case sub judice, the Supreme Court determined that facts were still undeveloped, precluding the trial court and itself from determining whether Plaintiff’s claims, as alleged in its complaint, could be pursued only under the MTCA, as ordered by the trial court, and Plaintiff could not pursue a cause of action as contemplated by Section 71-3-151, et seq, or otherwise. "Absent factual development, no court at this stage of the proceedings could accurately discern whether GGA is an instrumentality of the Commission, vel non, as argued by GGA." View "The Former Board of Trustees and Members of Mississippi Comp Choice Self-Insurers Fund v. Mississippi Workers' Compensation Group Self-Insurer Guaranty Association" on Justia Law

Plaintiff, who was injured while working in Genesee County, filed a workers’ compensation claim. While his claim was pending, defendants, in their capacity as administrators of the workers’ compensation hearing system, advised plaintiff that the Genesee County hearing site where plaintiff’s case was assigned would be closed and that all pending cases from the county, including plaintiff’s, would be transferred to the State Secondary Complex in Dimondale, which is about 70 miles away in Eaton County. Plaintiff brought a mandamus action to compel defendants to maintain the Genesee County hearing site. The trial court granted mandamus relief, and in a divided and published opinion, the Court of Appeals affirmed. The issue before the Supreme Court was whether the trial court abused its discretion by issuing a writ of mandamus compelling defendants to ensure that hearings in workers’ compensation cases were held in the county in which the alleged injury occurred. The Court disagreed with the Court of Appeals, finding that plaintiff did not have a clear legal right to a hearing in Genesee County. Defendants, accordingly, did not have a clear legal obligation to hold the hearing there either. The trial court was reversed, and direct to enter judgment denying plaintiff's complaint for mandamus. View "Younkin v. Zimmer" on Justia Law

Christina Elliott appealed the dismissal of her lawsuit against Geico Indemnity Company (Geico). Elliott’s husband was killed when his motorcycle was struck by a truck driven by a drunk driver, Lesa Shaffer, who was returning to her job at Peterson’s Corner, a restaurant and bar in Nevada City. The trial court concluded Geico was not required to pay underinsured motorist benefits under a motorcycle insurance policy issued to Elliott and her husband because Elliott recovered more than the $100,000 underinsured motorist coverage limits in settlement of a wrongful death action brought against Shaffer and the owners of the restaurant (Shaffer’s insurer paid $15,000 and the owners’ general liability insurer paid $250,000). The Court of Appeal agreed with the trial court: the Geico policy at issue here unambiguously allowed Geico to deduct from the underinsured motorist coverage limits “the amount paid to the insured by or for any person or organization that may be held legally liable for the injury.” Because $265,000 was paid to Elliott in settlement of her claims that both Shaffer and the owners may be held legally liable for the injury, Geico properly deducted this amount from the underinsured motorist coverage limits. View "Elliott v. Geico" on Justia Law

In 2007, neighbors reported a fire that had erupted at the home of the Terrence and Judith Tincher in Downingtown. The residence was the central unit of a two-story triplex purchased by the Tinchers in 2005. The fire was eventually extinguished and no one was harmed. Investigators concluded that a lightning strike near the home caused a small puncture in the corrugated stainless steel tubing (“CSST”) transporting natural gas to a fireplace located on the first floor of the residence. The CSST installed in the Tinchers’ home was manufactured and sold by Omega Flex as part of a gas transportations system marketed as the TracPipe System. The melting of the CSST caused by the lightning strike ignited the natural gas and fueled the fire estimated to have burned for over an hour. The fire caused significant damage to the Tinchers’ home and belongings. After the fire, the Tinchers reported the incident to their insurer, United Services Automobile Association (“USAA”). USAA compensated the Tinchers for their loss up to the limit of their policy and received an assignment of liability claims. The Tinchers suffered an additional out-of-pocket loss because a portion of their claimed loss exceeded the limits of the USAA policy. In January 2008, the Tinchers filed a complaint against Omega Flex; USAA prosecuted the claims in the name of the Tinchers to obtain reimbursement of the insurance proceeds payout, but the Tinchers retained an interest in the litigation to recover the losses exceeding their insurance coverage. The Tinchers asserted claims premised upon theories of strict liability, negligence, and breach of warranty, alleging that Omega Flex was liable for damages to their home caused by the placement on the market and sale of the TracPipe System. Omega Flex, Inc., appealed the Superior Court's decision to affirm the judgment on the verdict entered in favor of the Tinchers. After review, the Supreme Court reversed in part, and remanded the case with instructions: (1) "Azzarello v. Black Brothers Company," (391 A.2d 1020 (Pa. 1978)) was overruled; (2) a plaintiff pursuing a cause upon a theory of strict liability in tort must prove that the product is in a “defective condition”; (3) whether a product is in a defective condition is a question of fact ordinarily submitted for determination to the finder of fact; (4) to the extent relevant here, the Court declined to adopt the Restatement (Third) of Torts: Products Liability despite acknowledging that "certain principles contained in that Restatement has certainly informed [its] consideration of the proper approach to strict liability in Pennsylvania in the post-Azzarello paradigm." View "Tincher v. Omega Flex, Inc." on Justia Law

Michele Dupree sued Auto-Owners Insurance Company, seeking to recover, under her homeowners’ insurance policy, the full cost of repair or replacement for the personal property that was destroyed in a fire at her home. Because the parties did not agree on the extent of the personal property loss, the parties submitted separate appraisals to an umpire under the process set forth in the insurance policy. The umpire issued an appraisal award that set forth the full replacement cost, the applicable depreciation, and the actual cash value loss of the property. Defendant paid plaintiff the actual cash value of the property but refused to pay the full replacement cost on the ground that plaintiff had failed to submit proof, in accordance with the replacement-cost provision of her insurance policy, that she had actually replaced the damaged property. The court denied defendant’s motion for summary judgment and granted summary judgment to plaintiff. Defendant appealed. The Court of Appeals, affirmed in an unpublished opinion per curiam. On appeal, the issue before the Supreme Court was whether plaintiff’s appraisal award entitled her to only the actual cash value of her damaged personal property or whether defendant was liable for the full replacement cost of that property, i.e., actual cash value plus the applicable depreciation amount. The Supreme Court reversed, finding that plaintiff was not entitled to the full replacement cost of her property because she did not submit proof of actual loss in accordance with her policy. Defendant was liable for only the actual cash value of plaintiff’s damaged personal property. View "Dupree v. Auto-Owners Insurance Company" on Justia Law