Justia Insurance Law Opinion Summaries

At issue in this case was whether an unpaid party who has brought an action for breach of contract against an automobile insurer and thereafter refused the insurer’s tender of personal injury protection (PIP) benefits due and payable, made prior to the entry of judgment, may proceed with the suit and obtain a judgment for those amounts, as well as its costs and attorney’s fees. Plaintiff here provided chiropractic services to a patient, who was injured while driving a vehicle insured by Defendant. Plaintiff sought payment from Defendant for its treatment of the patient, but Defendant determined it was liable for only a portion of Plaintiff’s submitted fees. Plaintiff then filed a complaint seeking, among other things, payment of the disputed amount plus costs and attorney’s fees pursuant to Mass. Gen. Laws ch. 90, 34M. Before trial, Defendant sent Plaintiff a check for the disputed amount, but Plaintiff rejected the offer. The district court granted summary judgment for Defendant, and the appellate division affirmed. The Supreme Judicial Court vacated the judgment in part, holding that an insurer’s late tender of PIP benefits, made after a claimant has filed suit and which the claimant denies to accept, does not entitle an insurer to summary judgment.View "Barron Chiropractic & Rehab., P.C. v. Norfolk & Dedham Group" on Justia Law

Susan and Rodney Drown filed a medical malpractice action against Associated Women’s Health Specialists, P.C. (Health Specialists) asserting vicarious liability claims arising from the acts or omissions of its physicians. During the relevant period, Health Specialists was insured through a professional liability policy issued by Medical Inter-Insurance Exchange (Exchange). Health Specialists settled for the full amount of the policy and assigned to the Drowns its rights to recover against Exchange. Health Specialists was subsequently declared insolvent, and the Connecticut Insurance Guaranty Association (Association) assumed liability for the Exchange’s obligations. The Association then commenced this declaratory judgment action seeking a declaration that it had no obligations for the Drowns’ claims. Defendants, the Drowns and Health Specialists, counterclaimed. The trial court granted summary judgment in favor of Defendants. The Appellate Court reversed. The Supreme Court affirmed, holding (1) the Exchange’s preinsolvency breach of its duty to defend Health Specialists did not estop the Association from challenging its liability under the policy; and (2) the policy unambiguously did not cover Health Specialists for its vicarious liability in this case.View "Conn. Ins. Guar. Ass’n v. Drown" on Justia Law

Miles Cobrun was killed after he was struck by a vehicle driven by Robert Shill. Peggy Spaeth, Cobrun’s wife, filed a wrongful-death action against Robert and his insurer. Robert sought additional coverage under the liability policy of his parents issued by Cincinnati Insurance Company (CIC). CIC denied coverage. Robert then filed this declaratory-judgment action seeking a declaration that CIC owed him a duty of indemnification in the wrongful-death case. The trial court consolidated the declaratory-judgment and underlying wrongful-death actions. The trial court granted summary judgment for CIC. The appellate court reversed. At issue before the Supreme Court was the meaning of the term “domicile,” the crucial policy term at issue in regard to coverage for Robert under his parents’ CIC umbrella policy. The Supreme Court reversed, holding (1) in accordance with this Court’s previous jurisprudence, the definition of domicile is where a person resides, where he intends to remain, and where he intends to return when away temporarily; and (2) under this definition, Robert was not an insured “resident relative” under the umbrella policy at issue.View "Schill v. Cincinnati Ins. Co." on Justia Law

Flintkote was a major supplier of asbestos-based products and was covered by insurance policies from London insurance firms, including Aviva, one of the world’s largest insurers. It became apparent that claims under these policies would result in protracted disputes regarding the scope of coverage. In 1985, Flintkote and several insurers, but not Aviva, entered into the Wellington Agreement, which required that coverage disputes be resolved through ADR consisting of open mediation, binding arbitration, and an expedited appellate process; that the insurers make payments to Flintkote; and that Flintkote reimburse with interest, if it also received those same payments from another insurer. In 1989, Flintkote and Aviva entered into a separate agreement, similar to the Wellington Agreement, including as to reimbursement for claims also paid by other insurers. The1989 Agreement explicitly reserves each party’s right to resolve disputes through litigation. Flintkote filed for bankruptcy in 2004. In 2006, invoking the Wellington Agreement, Flintkote initiated coverage-related mediation with the insurers. Aviva, although not obligated to participate, opted to join. During mediation, Flintkote reached settlements with some insurers, but not with Aviva. In 2012, Aviva and the remaining other insurers sought reimbursement or off-set with respect to prior payments and interest under the Wellington Agreement. Flintkote took no action. Aviva, acting separately, moved to lift the automatic bankruptcy stay. Before the Bankruptcy Court ruled on Aviva’s motion, Flintkote moved to compel arbitration pursuant the Federal Arbitration Act. The district court granted Flintkote’s motion to compel arbitration, concluding that Aviva was equitably estopped from avoiding arbitration by virtue of its participation in the lengthy mediation process. The Third Circuit reversed.View "Flintkote Co v. Aviva PLC" on Justia Law

In 1989, the Washington Legislature mandated coverage for neurodevelopmental therapies (neurodevelopmental therapies or NOT) (speech, occupational, and physical therapy) in employer-sponsored group plans for children under age seven (RCW 48.44.450). In 2005, the legislature enacted the mental health parity act, which mandated coverage for "mental health services" (RCW 48.44.341). The two named plaintiffs in this case, O.S.T. and L.H. were young children diagnosed with some form of neurodevelopmental issues. Both plaintiffs at some point were insured under health policies issued by Regence BlueShield that contained blanket exclusions for neurodevelopmental therapies. Regence BlueShield did not cover O.S.T.'s therapies, so O.S.T.'s parents paid for the services. It was unclear whether Regence BlueShield denied any of L.H.'s claims. Plaintiffs filed a class-action complaint, alleging breach of contract; declaratory relief; violation of the Washington Consumer Protection Act, chapter 19.86 RCW; and seeking injunctive relief. The trial court granted partial summary judgment to the plaintiffs in late 2012, holding that "any provisions contained in Regence BlueShield policies issued and delivered to Plaintiffs O.S.T. and L.H. on or after January 1, 2008 that exclude coverage of neurodevelopmental therapies regardless of medical necessity are declared invalid, void and unenforceable by Defendant and its agents." The Court of Appeals granted discretionary review, and the Supreme Court accepted transfer. Upon review, the Supreme Court held that the statutes did not conflict, and that neurodevelopmental therapies could constitute "mental health services" if the therapies are medically necessary to treat a mental disorder identified in the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (4th rev. ed. 2000) (DSM-IV-TR). Therefore, the blanket exclusions of neurodevelopmental therapies in the plaintiffs' health contracts were void and unenforceable.View "O.S.T. v. Regence BlueShield" on Justia Law

Hudson filed suit seeking a declaratory judgment that the Hired and Non-Owned Auto Liability endorsement to an insurance policy's Commercial General Liability Coverage Form provides no coverage to any defendant in the underlying lawsuit. The district court granted summary judgment to defendants. Hudson appealed. Defendants cross-appealed an earlier ruling that Hudson is not collaterally estopped to contest coverage by the state court judgment. In appeal No. 13-1688, the court concluded that Hudson is entitled to summary judgment on the coverage issue where, at the time of the accident, defendant Tyler Roush was not acting in the course of defendant Brash Tygr's business within the meaning of the Policy's Hired and Non-Owned Auto Liability endorsement. In appeal No. 13-1742, the court affirmed the judgment and dismissed the cross-appeal, concluding that defendants' cross-appeal is an alternative argument in support of the district court's decision. On the merits, the district court correctly ruled that defendants are not entitled to summary judgment on the basis of collateral estoppel.View "Hudson Specialty Ins. Co. v. Tygr, LLC, et al." on Justia Law

Lodholtz, injured in 2011 while working at a Pulliam plant in Indiana, filed suit against Pulliam in state court. Pulliam asked Granite State, its insurer, to defend and indemnify. Granite State declined, believing that Pulliam was not liable because Lodholtz could claim workers’ compensation. Lodholtz argued that he was employed by another firm although he was injured on Pulliam’s premises and obtained default judgment for $4 million. Pulliam assigned him its rights against Granite State, which had unsuccessfully moved to intervene in Lodholtz’s suit, then sought a federal declaratory judgment that it had no duty to indemnify. Meanwhile, the Indiana court of appeals affirmed, reasoning that Granite State had sought leave to intervene under a reservation of rights. Indiana courts forbid the insurer to control the defense of the insured without acknowledging coverage. The Indiana Supreme Court declined review. The federal district court subsequently ruled that because Lodholtz’s employer had “leased” Lodholtz to Pulliam, he had been Pulliam’s employee, and that the Indiana judgment should be “disregarded.” The Seventh Circuit granted a petition under 28 U.S.C. 1292(b) and dismissed Granite State’s suit. The U.S. Supreme Court is the only federal court with appellate authority over state courts, but would have had no authority in this case because it involved no issue of federal law.View "Lodholtz v. Granite State Ins. Co." on Justia Law

Plaintiff was employed as a massage therapist with HMWC when he was accused in an underlying action for sexually assaulting a client during a massage. In this case, plaintiff filed suit against Continental, HMWC's comprehensive general liability (CGL) insurer, alleging that Continental had a duty to defend and indemnify him in the underlying action. The court affirmed the trial court's conclusion that defendant was not entitled to a defense under the Continental policy where the intentional sexual assault alleged in the underlying action cannot not properly be characterized as within the scope of plaintiff's employment or having occurred while performing duties related to the conduct of HMWC's business. The trial court did not err in sustaining the demurrer without leave to amend.View "Baek v. Continental Casualty Co." on Justia Law

Plaintiff was employed as a massage therapist with HMWC when he was accused in an underlying action for sexually assaulting a client during a massage. In this case, plaintiff filed suit against Continental, HMWC's comprehensive general liability (CGL) insurer, alleging that Continental had a duty to defend and indemnify him in the underlying action. The court affirmed the trial court's conclusion that defendant was not entitled to a defense under the Continental policy where the intentional sexual assault alleged in the underlying action cannot not properly be characterized as within the scope of plaintiff's employment or having occurred while performing duties related to the conduct of HMWC's business. The trial court did not err in sustaining the demurrer without leave to amend.View "Baek v. Continental Casualty Co." on Justia Law

Acumen, the underwriter, filed suit against General Security, the reinsurer, for breach of a reinsurance underwriting agreement. The district court granted partial summary judgment for General Security, certified the judgment under Rule 54(b), and closed the case. The court dismissed Acumen's appeal, holding that the district court's entry of the Rule 54(b) order and judgment was erroneous because the district court did not address separate claims for relief. In the absence of a final judgment on a claim or an otherwise reviewable order, the court lacked jurisdiction over the appeal.View "Acumen Re Mgmt. Corp. v. General Security Nat. Ins. Co." on Justia Law