Justia Insurance Law Opinion Summaries

Cases consolidated cases for appellate review stemmed from alleged injuries suffered by plaintiff Faye Ainsworth while she was at defendant Charles Chandler’s business, Chandler Electric. Plaintiff sued claiming she was injured when she tripped on a coil of wires that had been placed in the stairway. Defendant sued his insurer, Concord Insurance Group, arguing that insurer had wrongfully and in bad faith failed to provide adequate coverage for the claim. The insurer filed a counterclaim seeking a declaration of noncoverage. The trial court granted summary judgment to defendant, concluding that plaintiff was a social guest of defendant at the time of her visit, that the duty of care defendant owed her was the lesser duty applicable to licensees under Vermont law (as opposed to that which is owed to business invitees), and that defendant did not breach this duty. The trial court also granted summary judgment to the insurer, on the basis that the underlying personal injury action had been dismissed and therefore no coverage was owed. Plaintiff and defendant both appealed, contesting the court’s order granting summary judgment in favor of defendant. Defendant contested the order granting summary judgment in favor of insurer. Upon review of the cases, the Supreme Court affirmed with respect to defendant’s motion to disqualify the trial judge, but reversed with respect to plaintiff’s suit and reversed and remanded for further proceedings with respect to defendant’s claim against the insurer and the insurer’s counterclaim for declaration of noncoverage. View "Ainsworth v. Chandler" on Justia Law

Homeowner lived in a house that she insured with Farmers Insurance Exchange. The policy contained a clause suspending dwelling coverage if the house was vacant for more than sixty days. Homeowner subsequently moved into a retirement community. While the policy was still effective, fire from a neighboring house spread to Homeowner’s house and damaged it. Farmers denied Homeowner’s claim on the basis that the house had been vacant for more than sixty days. Homeowner sued Farmers for breach of contract. The trial court granted summary judgment for Homeowner on the contract claim. The court of appeals reversed and rendered judgment for Farmers, concluding that Farmers was not required to establish that the vacancy contributed to cause the loss in order to assert the vacancy clause as a defense. The Supreme Court affirmed, holding that Farmers was not precluded from relying on language in the vacancy clause in response to Homeowner’s claim, and the vacancy provision must be applied according to its terms.View "Greene v. Farmers Ins. Exch." on Justia Law

Dr. Steven Hayne appealed the trial court’s grant of summary judgment in favor of his former medical malpractice insurer, The Doctors Company and The Doctors Company Insurance Services (collectively, “The Doctors”). The Doctors refused to cover Hayne for lawsuits brought by exonerated criminal defendants against whom Hayne had testified as a State’s witness. Kennedy Brewer sued Hayne for malicious prosecution, fraud, and negligent misrepresentation in the Circuit Court of Noxubee County, Mississippi, and later in federal district court. Hayne sought coverage under a medical malpractice insurance policy he had purchased from The Doctors. The Doctors declined to provide coverage, arguing that Brewer was not a "patient" under Hayne’s medical malpractice insurance policy, and that the company therefore was under no obligation to cover Hayne in relation to the suit brought by Brewer. Hayne argued in his suit against The Doctors that The Doctors knew when it issued the policy exactly what kind of medicine he practiced, and that the insurance policy covered him for the types of medical malpractice suits he might face, including the suit filed by Brewer. The Doctors moved for summary judgment, arguing that the policy language was clear and unambiguous in the kind of coverage provided, and that the suit by Brewer did not fall within the policy’s coverage. The Circuit Court agreed, and, despite a lack of in-depth discovery, granted the motion for summary judgment. Finding no reversible error, the Supreme Court affirmed. View "Hayne v. The Doctors Company" on Justia Law

Appellant injured his lower back in 2007 while working for Employer. Employer denied further treatment that same year. Appellant filed a petition for hearing in 2009, alleging that he was entitled to medical benefits. Based on a deposition of Dr. Dale Anderson, Employer filed an amended answer admitting that Appellant’s work activities were a major contributing cause to his need for medical treatment. The Department of Labor dismissed the case in 2010. In 2011, Employer denied further medical treatment based upon a recent independent medical evaluation by another doctor. Appellant petitioned for a hearing, arguing that res judicata applied to prevent Employer from changing its position from its previous admittance. The Department found res judicata inapplicable and that Appellant failed to meet his burden of proof on causation. The circuit court affirmed. The Supreme Court reversed, holding that because Dr. Anderson’s opinion was adopted by Employer and judicially accepted by the Department through its 2010 order of dismissal, Employer was judicially estopped from taking an inconsistent position; and (2) Appellant met his burden of proving that his work-related activities as of 2010 were a major contributing cause of his disability. Remanded.View "Hayes v. Rosenbaum Signs & Outdoor Advertising, Inc. " on Justia Law

At issue in this case was the fiduciary implications of a life insurance company’s decision to pay benefits through a retained asset account (RAA) that allows the insurance company to invest the retained assets for its own profit. In Merrimon v. Unum Life Insurance Co., decided also this year, the First Circuit held that an insurer, acting in the place and stead of a plan administrator, properly discharges its duties under ERISA when it pays a death benefit by establishing an RAA as long as that method of payment is called for by the terms of the particular employee welfare benefit plan. In this case, Appellant alleged that an Insurer’s use of RAAs as a method of paying death benefits transgressed its ERISA-inspired fiduciary duties. The district court granted summary judgment in the Insurer’s favor. The First Circuit affirmed largely on the basis of its opinion in Merrimon, holding that, under the circumstances of this case, the Insurer’s choice to pay by means of an RAA did not violate its fiduciary duties.View "Luitgaren v. Sun Life Assurance Co. of Canada " on Justia Law

While on duty, Dennis Harris, a patrolman with the Anderson County Sheriff’s Department, was struck by a pickup truck driven by Mickey Haynes. Harris received workers’ compensation benefits for his injuries. Harris and his wife (together, Plaintiffs) sued Haynes and Richard Furrow, neither of whom were insured. Plaintiffs also made a claim against Tennessee Risk Management Trust (TRMT), Anderson County’s motor vehicle liability coverage provider, for uninsured motorist coverage. The trial court granted summary judgment for TRMT. The Court of Appeals affirmed, concluding (1) TRMT was a “risk pool” and not an insurance policy, and therefore, the general statute relating to uninsured motorist coverage in liability insurance policies did not apply to the coverage document issued to Anderson County; and (2) therefore, under the terms of the coverage document, Harris was excluded from uninsured motorist coverage as an employee and a person who received workers’ compensation benefits. The Supreme Court affirmed, holding that because the coverage document TRMT issued to the County specifically excluded employees and those who receive workers’ compensation benefits from uninsured motorist coverage, and because TRMT was not otherwise required to offer such coverage, Plaintiffs could not recover from TRMT. View "Harris v. Haynes" on Justia Law

Defendant, a law firm, contracted with Plaintiff for Plaintiff to provide title insurance on two mortgages that Defendant took as security from a client indebted to Defendant. Upon foreclosure of liens that were superior to those of Defendant, Defendant sought coverage from Plaintiff under the insurance policies, which seemingly provided coverage for priority liens. Defendant requested indemnification, and Plaintiff sought declaratory judgment, arguing that coverage for priority liens was not intended by either party. A federal district court granted summary judgment in favor of Plaintiff, concluding that because Defendant was aware of the prior mortgages, it could not expect to receive coverage it did not bargain for. The First Circuit affirmed, holding that Plaintiff had conclusively shown that Defendant was aware that its bargain with the client for security of its debt would result in junior mortgages, and the insurance policies clearly excluded such encumbrances from coverage.View "First Am. Title Ins. Co. v. Lane Powell PC" on Justia Law

More than nine years ago, Butler checked into a substance-abuse treatment facility to obtain inpatient rehabilitation for her alcohol addiction. She sought coverage for the treatment through her husbandView "Butler v. United Healthcare of TN" on Justia Law

In this class action lawsuit, the trial court found that the State wrongfully denied health benefits to a number of its part-time employees. The issue this case presented for the Supreme Court's review was how to value the damages suffered by that group of employees when they were denied health benefits. The State argued that the only damages to the employees were immediate medical expenses paid by employees during the time they were denied health benefits. But evidence showed that people denied health care benefits suffer additional damage. They often avoid going to the doctor for preventive care, and they defer care for medical problems. This results in increased long-term medical costs and a lower quality of life. Based on this evidence, the trial court correctly rejected the State's limited definition of damages because it would significantly understate the damages suffered by the employees. The Supreme Court affirmed.View "Moore v. Health Care Auth." on Justia Law

In 1987, Joseph Bagley purchased a cancer and dread-disease policy through his friend and insurance agent, Jackie McPhail. The policy was issued by American Heritage Life Insurance Company. McPhail worked as an independent insurance broker, and she was a registered agent with American Heritage at the time the policy was written. The policy indicated that Bagley purchased coverage concerning cancer and dread disease, a home-recovery rider, and a hospital intensive-care rider. Bagley also had an option to purchase life insurance; however, McPhail testified that Bagley did not purchase life insurance under this policy because he had purchased a separate life-insurance policy. In 2008, Bagley was diagnosed with cancer. Bagley contacted McPhail to file a claim under the policy and to "change the beneficiary" of the policy from his estate to Michael and Betty Strait. McPhail testified that she had ceased writing policies for American Heritage; however, she still retained the authority to service Bagley's policy, and she acquired his written consent to receive information regarding his policy from the insurance company. While Bagley was in the hospital, McPhail presented an American Heritage change-of-beneficiary form, which Bagley ultimately signed. The signature was witnessed by Bagley's physician, a nurse, and McPhail. Bagley orally communicated that he wished for the beneficiary to be changed from his estate to the Straits. At the time that Bagley signed the form, the Straits had yet to be listed as beneficiaries on the form. McPhail met with the Straits after the form was signed to confirm their correct legal names to be placed on the change-of-beneficiary form at a later time. McPhail provided that she did not fully complete the form because she was attempting to contact American Heritage to confirm the correct procedure for completing the process; however, American Heritage's office was closed because of Hurricane Fay, and McPhail never succeeded in speaking with American Heritage regarding the matter. Bagley's physician, who witnessed Bagley signing the form, later communicated to Betty Strait that his attorney advised that the form could not be used because the Straits' names were not listed on the form prior to Bagley's signature. Betty Strait relayed this to McPhail, who then attempted to contact American Heritage's legal department. McPhail called the company on multiple occasions, but she never received a return phone call. Soon thereafter, Bagley passed away, and the form was never completed. The estate was probated and the Straits did not contest the passage of the policy proceeds to the estate at the time that the estate was being settled. The executor of Bagley's will, William Kinstley, petitioned for the approval of the estate's final accounting, which included the policy proceeds. The Straits initiated legal action against McPhail and American Heritage in Hinds County Circuit Court, arguing that Bagley intended for them to receive the proceeds from the cancer policy. The Straits alleged breach of contract, tortious breach of contract, negligence and gross negligence, breach of fiduciary duties and the duty of good faith and fair dealing, bad-faith refusal to pay benefits and to promptly and adequately investigate the claim, misrepresentation and/or failure to procure, promissory and/or equitable estoppel, and they sought a claim for declaratory relief. McPhail filed a motion to dismiss, which was granted by the circuit court. The circuit court found that the issue had been previously litigated and resolved in chancery court, and that no appeal had been taken from the chancery court judgment. Likewise, the circuit court granted American Heritage's motion for summary judgment, finding that there were no genuine issues of material fact to be resolved. The Court of Appeals reversed the judgment and remanded the case, finding that genuine issues of material fact did exist and that res judicata and collateral estoppel did not bar the Straits' claims. Because the Straits failed to raise any issues upon which relief may be granted, the circuit court's grant of McPhail's motion to dismiss was proper. However, the circuit court erred in granting the motion to dismiss based on res judicata and collateral estoppel. Furthermore, the circuit court properly granted American Heritage's motion for summary judgment: the Straits were never eligible to be third-party beneficiaries under the policy, and they have failed to show any equitable entitlement to reimbursement. For those reasons, the Supreme Court reversed the judgment of the Court of Appeals and reinstated the circuit court's judgment. View "Strait v. McPhail " on Justia Law