Justia Insurance Law Opinion Summaries

In 2006 Western Capital made a $2.77 million loan to finance a Chicago development, which failed. Western initiated foreclosure, resulting in allegations that Western had breached its contract, committed fraud, and violated consumer protection statutes. Western requested that its insurers cover costs associated with its defense. Philadelphia Indemnity is Western’s general liability insurer. The mortgages were insured by CT on the standard ALTA form, which covers losses sustained because of defects in title and lien priority, and requires CT to pay costs, attorneys’ fees and expenses incurred in defense of the title or the lien, but excludes “fees, costs or expenses incurred by the insured in the defense of those causes of action which allege matters not insured against by this policy.” The district court declined to enforce the limitation, applied the “complete defense” rule, and held that CT had a duty to defend the entire lawsuit. The Seventh Circuit reversed. An insurer’s duty to defend is contractual. Title insurance, unlike general liability insurance, only indemnifies against losses incurred by reason of defects in title and specifically limits the duty to defend to claims within that coverage. The Illinois Supreme Court has never applied the complete-defense rule to title insurance. View "Western Capital Partners, LLC v. Chicago Title Ins. Co." on Justia Law

Appellant North River Insurance Company challenged the Court of Chancery’s denial of its request for permanent injunctive relief. This multi-forum litigation concerns policies issued by North River to a safety products company, Mine Safety Appliances Company (MSA). North River issued thirteen policies to MSA covering periods from 1972 through 1986. MSA defended against thousands of personal injury claims allegedly caused by defects in its mine safety equipment. MSA seeks coverage under North River’s policies as well as from several other insurers. The issue this case presented for the Supreme Court's review was whether North River’s coverage under these policies was "triggered" (as a matter of Pennsylvania law), and was being litigated, along with its claims against other insurers in federal and state courts in Pennsylvania, the Delaware Superior Court and in certain later-filed cases in West Virginia. North River requested that the Court of Chancery permanently enjoin MSA from prosecuting the later-filed claims in West Virginia and from assigning to any tort claimants the right to recover under any insurance policy issued by North River to MSA. During the course of this appeal, North River narrowed its focus to the assignment issue. Finding no reversible error to the Court of Chancery's decision, the Delaware Supreme Court affirmed. View "The North River Insurance Co. v. Mine Safety Appliances Co." on Justia Law

Plaintiffs Brett Woods and Kathleen Valdes were state employees and representatives of a class of New Mexico state and local government employees who alleged they paid for insurance coverage through payroll deductions and premiums pursuant to a policy issued by Standard Insurance Company (Standard), but did not receive the coverage for which they paid and, in some cases, were denied coverage entirely. Plaintiffs filed suit in New Mexico state court against three defendants: Standard, an Oregon company that agreed to provide the subject insurance coverage; the Risk Management Division of the New Mexico General Services Department (the Division), the state agency that contracted with Standard and was responsible for administering benefits under the policy; and Standard employee Martha Quintana, who Plaintiffs allege was responsible for managing the Division’s account with Standard and for providing account management and customer service to the Division and state employees. Plaintiffs' ninety-one-paragraph complaint, stated causes of action against Standard and the Division for breach of contract and unjust enrichment; against Standard for breach of fiduciary duty, breach of the implied duty of good faith and fair dealing, and Unfair Practices Act violations; and against Standard and Ms. Quintana for breach of the New Mexico Trade Practices and Fraud Act. The issue this appeal presented for the Tenth Circuit's review centered on whether remand to the state court pursuant to the Class Action Fairness Act (CAFA) was required under either of two CAFA provisions: the state action provision, which excludes from federal jurisdiction cases in which the primary defendants are states; or the local controversy exception, which requires federal courts to decline jurisdiction where, among other things, there is a local defendant whose alleged conduct forms a significant basis for the claims asserted by plaintiffs and from whom plaintiffs seek significant relief. The Court concluded that neither provision provided a basis for remand, and therefore reversed the decision of the magistrate judge remanding the case to state court. But because the Tenth Circuit could not determine whether Defendants have established the amount in controversy required to confer federal jurisdiction, the case was remanded to the district court for the resolution of that issue. View "Woods v. Standard Insurance Co." on Justia Law

Pine Top, an insurer, sued Banco, an entity wholly owned by Uruguay, claiming that Banco owes $2,352,464.08 under reinsurance contracts. The complaint sought to compel arbitration but alternately proposed that the court enter judgment for breach of contract. Pine Top moved to strike Banco’s answer for failure to post security under Illinois insurance law. The district court denied the motion and later denied the motion to compel arbitration. The Seventh Circuit affirmed, citing the Foreign Sovereign Immunities Act, which prohibits attaching a foreign state’s property, thereby preventing application of the Illinois security requirement, 28 U.S.C. 1609. Banco did not waive its immunity in the manner allowed by that law and Pine Top forfeited contentions that the McCarran-Ferguson Act allows a state rule to govern. On the arbitration question, the court held that denials of motions to compel arbitration under the Panama Convention are immediately appealable under 9 U.S.C. 16(a)(1)(B), but that the contract language, reasonably read, does not transfer the right to demand arbitration. View "Pine Top Receivables of IL, LLC v. Banco de Seguros del Estado" on Justia Law

The plaintiff in this automobile-accident lawsuit sued her underinsured-motorist insurance carrier. Even though the UM carrier admitted liability and agreed to pay any damages awarded at trial that exceeded available liability coverage, plaintiff insisted on informing the jury of the insurance company’s status as a defendant. The trial judge refused to allow it. Finding no reversible error, the Supreme Court affirmed. View "Heflin v. Merrill" on Justia Law

The Circuit Court granted summary judgment in favor of Columbia Casualty Company and Continental Casualty Company, finding there was no wrongdoing in denying coverage to four former insureds (Ex-Agents) and Minnesota Mutual Life Insurance Company. The trial court also denied the Ex-Agents’ and Minnesota Life’s motion to strike certain affidavits and exhibits submitted by Columbia in support of its motions for summary judgment and in defense of the Ex-Agents’ and Minnesota Life’s summary judgment motions. The dispute arose over the Agents' purchase of Errors & Omissions insurance coverage. The Agents sold Minnesota Life insurance products, and found that one of their colleagues was embezzling funds from their agency. The Mississippi Secretary of State’s office began investigating the records of the Agency and, from that investigation, determined that an agent had misappropriated client funds. Cases were filed against the agent, the Agency, Minnesota Life, and the Ex-Agents. Each complaint alleged that the wrongful acts occurred while the Ex-Agents were employed by Minnesota Life. Each complaint alleged causes of action for breach of fiduciary duty, misrepresentation and concealment, breach of implied covenant of good faith, continuing breach of contract, negligence, negligent infliction of mental and emotional distress, misrepresentation, and malpractice. As to Minnesota Life, each complaint specifically alleged that Minnesota Life participated in and/or had knowledge of the intentional taking of monies. As to the Ex-Agents, the complaints specifically alleged that they should have known that Minnesota Life and/or the colleague were misappropriating funds. The agents and Minnesota Life made a claim on their E&O insurance policy to defend the suit. Upon review, the Supreme Court found that the trial court properly denied the motion to strike and properly granted summary judgment in favor of Columbia as to Minnesota Life’s claim but erred in granting summary judgment as to the Ex-Agents’ claims. Therefore, the Court affirmed in part and reversed in part and remanded. View "Minnesota Life Insurance Company v. Columbia Casualty Company" on Justia Law

The issue this case presented for the Supreme Court's review stemmed from a worker's compensation claim. Specifically, the issue the Court had to determine was whether a “wet floor” sign was a safety device and whether a nurse who slips on a recently mopped floor at work is entitled to a 10% increase in benefits when a “wet floor” sign was not posted near a mopped floor. The Court held that a “wet floor” sign is a safety device and that the nurse’s injury resulted from the negligence of the employer in failing to supply reasonable safety devices in general use. View "Benavides v. Eastern N.M. Med. Ctr." on Justia Law

Appellant North River Insurance Company appealed the Court of Chancery’s denial of its request for permanent injunctive relief. This multi-forum litigation concerned policies issued by North River to a safety products company, Mine Safety Appliances Company (“MSA”). North River issued thirteen policies to MSA covering periods from August 28, 1972 through April 1, 1986. MSA was defending against thousands of personal injury claims allegedly caused by defects in its mine safety equipment. MSA sought coverage under North River’s policies as well as from several other insurers. The issue this case presented for review was whether North River’s coverage under these policies was “triggered” (a matter of Pennsylvania law) was being litigated, along with its claims against other insurers, in federal and state courts in Pennsylvania, the Delaware Superior Court and in certain later-filed cases in West Virginia. North River requested that the Delaware Court of Chancery permanently enjoin MSA from prosecuting the later-filed claims in West Virginia and from assigning to any tort claimants the right to recover under any insurance policy issued by North River to MSA. During the course of this appeal, North River narrowed its focus to the assignment issue. Finding no reversible error in the Court of Chancery's denial, the Delaware Supreme Court affirmed that decision. View "The North River Insurance Co. v. Mine Safety Appliances Co." on Justia Law

Mary Erving filed suit against National Lloyds Insurance Company, alleging that National Lloyds had underpaid her insurance claims. During discovery, Erving requested production of all claims from the previous six years involving three individual adjusters along with claim files from the past year for properties involving two adjusting firms that handled her claims. National Lloyds objected to the requests as overbroad and unduly burdensome, after which Erving moved to compel production. The trial court ordered production of the majority of the files. National Lloyds unsuccessfully filed a petition for writ of mandamus with the court of appeals and, thereafter, sought mandamus relief in the Supreme Court. The Court conditionally granted mandamus relief and directed the trial court to vacate its discovery order, holding that because the information Erving sought was not reasonably calculated to lead to the discovery of admissible evidence, the trial court’s order compelling discovery of such information was overbroad. View "In re Nat’l Lloyds Ins. Co." on Justia Law

Jones was murdered, leaving no will. He owned a life insurance policy through his employer. He did not designate a beneficiary. The policy provided that the proceeds ($307,000) would go first to a surviving spouse (Jones never married), second to surviving children, third to surviving parents, and fourth to his estate. Quincy claimed to be Jones’s son; Moore, claimed to be his daughter. The insurance company filed an interpleader action. After paying $24,000 for funeral expenses and $137,000 to Quincy, the company deposited the remainder with the court. Jones’s biological sister also claimed the proceeds, arguing that Jones was homosexual and had not fathered children. Jones’s income tax returns showed that he had claimed various children as dependents, sometimes omitting Quincy. A DNA test established that Moore was not his daughter. The district judge declined to order a test for Quincy because Jones had held Quincy out as his biological son and had signed an order in 1996 acknowledging Quincy (then six years old) as his son. The judge awarded Quincy the deposited funds.. The Seventh Circuit affirmed. Rule 35 would have allowed, but did not require, the judge to order a DNA test, given the presumption of paternity under Illinois law. View "MN Life Ins. Co. v. Jones" on Justia Law