Justia Insurance Law Opinion Summaries

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

Appellant, a six-year-old boy diagnosed with an autism-spectrum disorder, was receiving applied behavior analysis (“ABA”), a type of autism-related service, in his home. ABA was covered by his family’s insurance policy with Appellee Independence Blue Cross. Appellant’s family requested that Blue Cross cover similar ABA services to be provided at Appellant’s elementary school in 2009. The insurer denied the request, pointing to a place-of-service exclusion in the policy which specified that no services would be covered if the care was provided at certain types of locations, including schools. This decision was unsuccessfully appealed internally. The dispute was then submitted to an independent external review agency appointed by the Pennsylvania Department of Insurance. In December 2009, that agency upheld the denial based on the policy’s place-of-service exclusion. Meanwhile, the General Assembly passed Act 62 of 2008, which, inter alia, required that health insurance policies provide coverage for the treatment of autism spectrum disorders. In 2010, Appellant filed suit seeking declaratory and injunctive relief in the form of a ruling that the policy’s place-of-service exclusion is null and void under Act 62, as well as an order directing the insurer to cover Appellant’s medically necessary treatments. Blue Cross filed responsive pleadings and Appellant requested judgment on the pleadings. The court ultimately rejected the argument that the policy’s place-of-service exclusion was a general exclusion as contemplated by Section 764h(c). Thus, it held that, under Section 764h(a), Blue Cross was required to provide coverage for school-based ABA services during the relevant time period. The common pleas court ordered the insurer to “take action consistent with this decision.” On appeal, the Superior Court, sua sponte, questioned whether the common pleas court should have entertained the appeal under Act 62. The Pennsylvania Supreme Court allowed review to consider whether individuals diagnosed with autism spectrum disorders have the right to judicial review of a denial of insurance coverage, considering the language of Act 62. "Here, we are faced with a situation in which a litigant sought a declaration of his rights under a legislative enactment, a task over which the common pleas court could have exercised jurisdiction, pursuant to the Declaratory Judgments Act, in response to the correct form of pleading. Furthermore, the complaint’s asserted basis for jurisdiction was deficient only because of the confusion created by an apparent drafting mistake by our General Assembly. Neither the court nor the defendant Insurer realized that anything was amiss in this regard and, if they had, Appellant could presumably have made any necessary formal corrections. Under these circumstances, we conclude that the common pleas court was permitted to reach the substantive claim forwarded in Appellant’s pleadings. It follows that the intermediate court should not have reversed the order of that court by sua sponte pointing to the language of Section 764h(k)(2) as a bar to Appellant’s ability to seek relief in a judicial forum, without first evaluating whether the common pleas court’s assessment of the substantive question could be justified on some other basis." View "Burke v. Independence Blue Cross" on Justia Law

Plaintiff Town of Ira brought this action to recover from its insurer, Vermont League of Cities and Towns Property and Casualty Intermunicipal Fund, Inc. (PACIF), certain losses related to the embezzlement of town funds by the Town's former treasurer. On summary judgment, the trial court found that the Town was entitled to interest on the embezzled amount up to the policy limit and that this amount mooted the Town's claim for audit and attorney's fees, as well as insurer's counterclaims to recoup certain sums already paid. It also granted judgment to insurer on the Town's claim that insurer acted in bad faith by not paying for all of the items it claimed. After review of the trial court record, the Supreme Court affirmed that judgment.View "Town of Ira v. Vermont League of Cities and Towns" on Justia Law

Roger Brock was passenger in a vehicle driven by Brian Mason, which was involved in an accident with a logging truck, driven by Ryan Stevens. At the time of the accident, Stevens was insured through the owner of the logging truck, Malachi Sanders' policy issued by Aequicap Insurance Company. Brock sustained severe injuries as a result of the wreck and filed suit. Soon after the litigation began, Brock settled his claim against Stevens and Sanders with Aequicap for $185,000 for the release of all claims. Shortly after the settlement was reached but before Brock received any payment, Aequicap was declared insolvent. Because Aequicap was an insurer licensed to do business in the State of South Carolina and the insured was a resident of South Carolina, the claim was referred to South Carolina Property and Casualty Insurance Guaranty Association (Guaranty). As a result, Brock made demand on Guaranty for payment of the full settlement amount of $185,000. The issue this case presented for the Supreme Court's review centered on the construction and application of the South Carolina Property and Casualty Insurance Guaranty Association Act (the Act), S.C. Code Ann. Secs. 38-31-10 to -170 (2002 and Supp. 2013), and specifically the exhaustion/non-duplication provision in section 38-31-100(1). Guaranty and Brock moved for summary judgment on the issue whether Guaranty may offset payments from solvent insurance carriers against Brock's settlement under section 38-31-100. The circuit court found section 38-31-100 was ambiguous and granted partial summary judgment to both parties, holding that Guaranty may offset some but not all of the benefits received by Brock from solvent insurance carriers. The Supreme Court disagreed that section 38-31-100 was ambiguous and hold that the unambiguous language of section 38-31-100 provides that Guaranty may offset all payments from all solvent insurers made to Brock as a result of this wreck.View "SC Property v. Brock" on Justia Law

In this case involving interpretation of an insurance policy under Georgia law, the court certified the following three questions to the Supreme Court of Georgia: (1) Under the facts of this case, and in the light of the Final Judgment and Order -- in the Underlying Suit -- approving of and authorizing and directing the implementation of the terms of the settlement agreement, is Piedmont “legally obligated to pay” the $4.9 million settlement amount, for purposes of qualifying for insurance coverage under the Excess Policy? (2) In a case like this one, when an insurance contract contains a "consent-to-settle" clause that provides expressly that the insurer's consent "shall not be unreasonably withheld," can a court determine, as a matter of law, that an insured who seeks (but fails) to obtain the insurer's consent before settling is flatly barred --whether consent was withheld reasonably or not-- from bringing suit for breach of contract or bad-faith failure to settle? Or must the issue of whether the insurer withheld unreasonably its consent be resolved first? (3) In this case, under Georgia law, was Piedmont's complaint dismissed properly?View "Piedmont Office Realty Trust, Inc. v. XL Specialty Ins. Co." on Justia Law

Hennessy, a car parts manufacturer, beset by asbestos-related personal injury claims, sought coverage by National Union. The companies entered into a cost sharing agreement in 2008. As claims occurred, Hennessy asked National Union to indemnify its settlement and defense costs. To resolve their differences about what was owed, Hennessy demanded arbitration under the agreement, which instructs arbitrators to apply Illinois law. Hennessy filed suit under the Illinois Insurance Code 215 ILCS 5/155(1), which provides that, in cases involving vexatious and unreasonable delay, the court may award reasonable attorney fees, other costs, plus an additional amount. Hennessy claimed that National Union’s delays in providing coverage were vexatious and unreasonable. The district judge declined to dismiss, acknowledging a provision that “the arbitrators shall not be empowered or have jurisdiction to award punitive damages, fines or penalties,” but expressing a belief that Hennessy’s claim arose under statutory law rather than under the cost-sharing agreement. National Union appealed under 9 U.S.C. 16(a)(1)(A), (B), the Federal Arbitration Act. The Seventh Circuit reversed. Hennessy waived any right to ask the arbitrator to award punitive damages, fines, or penalties for an allegedly unreasonable delay. Having submitted a dispute to arbitration that explicitly excludes a particular remedy, a party cannot sue in court for that remedy.View "Hennessy Indus., Inc. v. Nat'l Union Fire Ins. Co." on Justia Law

RNT appealed the trial court's grant of summary judgment on its claim for breach of insurance contract against RNT, arguing that the trial court erroneously determined that the claim failed in light of the terms of RNT's policy. The court concluded that summary judgment on RNT's claim for breach of insurance contract was properly granted on the basis of the undisputed facts; condition 10(b) of the policy, which terminates an insurer's liability when the loan is paid off or the related mortgage is released; and exclusion 3(a) of the policy, which precludes coverage for defects, liens, encumbrances, adverse claims or other matters created, suffered, assumed, or agreed to by RNT. Accordingly, the court affirmed the judgment.View "RNT Holdings v. United Gen. Title Ins." on Justia Law

Plaintiffs filed suit against Deputy Arnold and Sheriff Graves, alleging violations of federal and state law after Arnold fatally shot their father while responding to a 911 call that the father was threatening to commit suicide. Plaintiffs also filed suit against ReliaStar to recover $179,000 they allege ReliaStar owes them under the father's accidental death policy. The district court granted Arnold and Grave's motions for summary judgment and granted ReliaStar's motion for summary judgment. The court held that Arnold did not violate the father's Fourth Amendment rights when he entered the father's home without a warrant because he had an objectively reasonable belief that the father would imminently seriously injure himself, and the district court did not err in granting Arnold's motion for summary judgment on the warrantless entry claim because Arnold is entitled to qualified immunity; Arnold is entitled to qualified immunity because he did not violate the father's constitutional right to be free from excessive force; the district court did not err in granting summary judgment for Arnold on the assault and battery claims, the false imprisonment claims, and the intentional infliction of emotional distress claim; the district court correctly granted Graves's motion for summary judgment; and the district court did not err in granting summary judgment for ReliaStar where the record was replete with factual evidence that ReliaStar relied on in determining that the father's death was not accidental, demonstrating that ReliaStar could have reached its determination without resorting to the conflict of interest at issue. Accordingly, the court affirmed the judgment of the district court.View "Rice, et al. v. Reliastar Life Ins. Co." on Justia Law

This case concerned a dispute between an insurance carrier (Plaintiff) and its insured (Defendant) regarding Plaintiff’s obligation to pay underinsured motorist benefits. An arbitration panel concluded that the issue of whether the relevant policy provisions provided coverage for the claim should be resolved under the choice of law rules governing claims sounding in tort, rather than claims sounding in insurance and contract, and therefore, that New Jersey law rather than Connecticut law governed Defendant’s claim for uninsured motorist benefits under the policy. The trial court vacated the arbitration award, and the Appellate Court affirmed. The Supreme Court affirmed, holding that the Appellate Court, in its opinion adopting the decision of the trial court, properly applied sections 6(2), 188 and 193 of the Restatement (Second), contract choice of law, to determine that Connecticut law governed the claim.View "Gen. Accident Ins. Co. v. Mortara" on Justia Law

Gary Corgatelli sought worker's compensation benefits from his employer Steel West and the State of Idaho's Industrial Special Indemnity Fund (ISIF) for a 2005 back injury that he incurred as a result of his employment. The Idaho Industrial Commission concluded that Corgatelli had a permanent physical impairment of 15% of the whole person, attributing 5% to an earlier injury in 1994 and 10% to the 2005 injury, and that Corgatelli was totally and permanently disabled. The Commission further concluded that ISIF was liable for disability benefits because the effects of Corgatelli's preexisting impairment from the 1994 injury combined with his 2005 injury to cause total and permanent disability. The Commission subsequently issued an order to clarify that Steel West was entitled to credit on the disability award for permanent physical impairment benefits Steel West previously paid to Corgatelli for his 2005 injury. Corgatelli appealed the Commission's order to credit Steel West. ISIF cross-appealed the Commission's determination of ISIF liability. Upon review, the Supreme Court concluded the Commission erred when it allowed Steel West to offset its liability for total and permanent disability benefits with permanent physical impairment benefits previously paid to Corgatelli. Furthermore, the Court found no substantial evidence to support the Commission's finding that ISIF was liable to Corgatelli for benefit payment. The Commission's award to Steel West of a credit for permanent physical impairment benefits previously paid to Corgatelli in 2006 and 2007 for his 2005 back injury was vacated. The Commission's finding of ISIF liability was reversed. And this case was remanded for further proceedings.View "Corgatelli v. Steel West, Inc." on Justia Law