Justia Insurance Law Opinion Summaries

The Developer converted a vacant building into a residential condominium by gutting and refitting it. The Developer purchased Commercial Lines Policies covering bodily injury and property damage from Nautilus, covering periods from June 1998 through June 2000. The policies define occurrence as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” but do not define accident. The policies exclude damage to “that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations;” eliminate coverage for damage to “that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it;” and contain an endorsement entitled “Exclusion—Products-Completed Operations Hazard.’ Construction was completed in 2000; the Developer transferred control to a board of owners. By May 2000, one homeowner was aware of water damage. In 2005, the Board hired a consulting firm, which found that the exterior brick walls were not fully waterproofed and concluded that the deterioration had likely developed over many years, even prior to the condominium conversion, but that the present water penetration was the result of inadequate restoration of the walls. The Board sued the Developer. Nautilus denied coverage and obtained a declaratory judgment. The Seventh Circuit affirmed, reviewing the policy and finding that the shoddy workmanship, of which the board complained, was not covered by the policies; that Nautilus did not unduly delay pursuing its declaratory suit; and that the alleged damage to residents’ personal property occurred after the portions of the building were excluded from coverage.View "Nautilus Ins. Co. v. Bd. of Dirs. of Regal Lofts Condo Ass'n" on Justia Law

Delores Williams, the personal representative of the Estate of Edward Murry, and Matthew Whitaker, Jr., the personal representative of the Estate of Annie Mae Murry (PRs), brought a declaratory judgment action to determine whether a GEICO motor vehicle insurance policy issued to the Murrys provided $15,000 or $100,000 in liability proceeds for bodily injury for an accident in which both of the Murrys were killed. The circuit court concluded coverage was limited to the statutory minimum of $15,000 based on a family step-down provision in the policy that reduced coverage for bodily injury to family members from the stated policy coverage of $100,000 to the statutory minimum amount mandated by South Carolina law during the policy period. The PRs appealed, contending the step-down provision was ambiguous and/or violative of public policy. The Supreme Court affirmed in part and reversed in part. The Court agreed with the circuit court that GEICO's policy is not ambiguous, but concluded the family step-down provision, which reduced the coverage under the liability policy from the stated policy amount to the statutory minimum, was violative of public policy and was, therefore, void. "The provision not only conflicte[d] with the mandates set forth in section 38-77-142, but its enforcement would be injurious to the public welfare." View "Williams v. GEICO" on Justia Law

Illinois insurance regulators permitted WellPoint to acquire RightCHOICE health insurance. WellPoint caused RightCHOICE Insurance to withdraw from the Illinois market. WellPoint offered the policyholders costlier UniCare policies as substitutes. Those who chose not to pay the higher premiums had to shop for policies from different insurers, which generally declined to cover pre-existing conditions. Former RightCHOICE policyholders filed a purported class action. The district court declined to certify a class and entered judgment against plaintiffs on the merits. No one appealed. Absent certification as a class action, the judgment bound only the named plaintiffs. Their law firm found other former policyholders and sued in state court. Defendants removed the suit under 28 U.S.C. 1453 (Class Action Fairness Act); the proposed class had at least 100 members, the amount in controversy exceeded $5 million, and at least one class member had citizenship different from at least one defendant. Plaintiffs sought remand under section 1332(d)(4), which says that the court shall “decline to exercise” jurisdiction if at least two-thirds of the class’s members are citizens of the state in which the suit began and at least one defendant from which “significant relief” is sought is a citizen of the same state. The district court declined remand, declined to certify a class, and again rejected the case on the merits. The Seventh Circuit affirmed, stating that “Counsel should thank their lucky stars that the district court did not sanction them under 28 U.S.C. 1927 for filing a second suit rather than pursuing the first through appeal."View "Phillips v. Wellpoint Inc." on Justia Law

Hayden worked as an office manager at MMI beginning in 1997 and was covered by its long-term disability plan, insured and administered by Liberty and subject to the Employee Retirement Income Security Act, 29 U.S.C. 1001. Hayden suffers from chronic hepatitis C, pancreatitis, fibrocystic breast disease with breast implants, degenerative arthritis, breast carcinoma, hypothyroidism, hypotension, hypertension, and crepitation and decreased range of motion around her shoulders, cervical spine, hips, and knees. She stopped working in January 2010, and applied for benefits under the plan. She also submitted evidence from four doctors detailing general anxiety disorder, major depression, and insomnia. The district court affirmed the denial of benefits on Hayden’s physical-disability claim but remanded her mental-disability claim because the plan administrator failed to consider medical evidence from three doctors. On remand, the plan again rejected Hayden’s claim, and the district court affirmed. The Sixth Circuit affirmed with respect to Hayden’s physical-disability claim but reversed with respect to her mental-disability claim, instructing the district court to award Hayden mental-health benefits consistent with the terms of the plan.View "Hayden v. Martin Marietta Materials, Inc." on Justia Law

Plaintiff Helena Murphy appealed a superior court judgment in favor of defendant, Patriot Insurance Company, her homeowner’s insurer. The dispute between the parties stemmed from storm damage done to plaintiff's house in 2007, and the subsequent claims she made on her insurance policy. On appeal of the superior court's ruling in Patriot's favor, plaintiff argued: (1) Patriot was estopped from denying coverage for the removal and replacement of a chimney on her home; and (2) the trial court erred in dismissing claims for negligence and bad faith. Finding no reversible error, the Supreme Court affirmed. View "Murphy v. Patriot Insurance Company" on Justia Law

Travelers filed suit seeking a declaratory judgment that there is no coverage for and thus no duty to indemnify defendant under his employer's commercial automobile insurance policy for an incident which is the subject of underlying tort actions pending in state court. In the underlying actions, plaintiff is being sued for killing one individual and wounding another individual with a shotgun while defendant was chasing them in his employer's van as they were in the process of repossessing defendant's car. The court reversed the district court's grant of summary judgment in favor of defendants where there was no evidence from which a reasonable jury could find that defendant had his employer's permission to use its van as he did. Consequently, he was not insured under the Travelers insurance policy at issue and there can be no indemnity for him under the policy for the claims presented in the underlying state court actions. The court remanded for the district court to grant summary judgment in favor of Travelers and against defendants.View "Travelers Property Casualty Co. v. Moore, et al." on Justia Law

The City sought a writ of mandate challenging the trial court's order denying summary adjudication with respect to Mercury's inverse condemnation and nuisance claims based on damages to Mercury's insured's house caused by a tree the City owned. The court concluded that the trial court properly denied summary adjudication as to the inverse condemnation cause of action because there were triable issues of material fact as to whether the tree was part of a work of public improvement. Further the City failed to meet its burden on summary adjudication of establishing that Mercury could not show nuisance. Accordingly, the court denied the petition.View "City of Pasadena v. Super. Ct." on Justia Law

Encompass filed suit against Mid-Century and Coast National seeking contribution or subrogation for the expenses Encompass incurred in its defense and indemnification of its insured, Lisa Torti, in an underlying lawsuit. Alexandra Van Horn was a passenger in a wrecked car and, Torti, fearing that Van Horn might be in danger, grabbed Van Horn and physically removed her from the car. Van Horn suffered severe spinal injuries after the accident and became a paraplegic. Van Horn sued Torti, alleging that Torti caused her injuries when she removed her from the wrecked car. At issue on appeal was whether unloading an injured passenger from a motor vehicle constitutes "use" of that motor vehicle under California law. The court concluded that it does. As used in Mid-Century's and Coast National's insurance policies, the term "use" is defined by California Insurance Code 11580.06(g). As defined by California Insurance Code 11580.06(g), "use" of an automobile includes unloading that automobile. In this case, Torti "used" the vehicle when she unloaded Van Horn from that car. Accordingly, the court reversed the judgment of the district court in favor of Mid-Century and Coast National and remanded for further proceedings.View "Encompass Ins. Co. v. Coast Nat'l Ins. Co." on Justia Law

Employee suffered bilateral shoulder injuries and underwent separate surgeries on each shoulder. Employee later agreed to a voluntary buyout of his employment. Employee subsequently filed two separate suits for workers’ compensation benefits. The trial court determined that Employee’s permanent partial disability benefits were not capped at one and one-half times the impairment rating and awarded ninety percent permanent partial disability benefits. Employer appealed. A Special Workers’ Compensation Appeals Panel modified the award of permanent partial disability benefits to 37.5 percent as capped at one and one-half times the impairment rating, concluding that Employee’s decision to accept the buyout was not “reasonable” for purposes of the statutory cap. The Supreme Court reversed in part and reinstated the judgment of the trial court as to the award of ninety percent permanent partial disability benefits, holding that because Employee acted reasonably by accepting the voluntary buyout for reasons related to his work injuries, the award for permanent partial disability was not subject to the one-and-one-half-times multiplier.View "Yang v. Nissan N. Am., Inc." on Justia Law

In 2006, Lincoln T. Griswold purchased an $8.4 million life insurance policy. Griswold established a Trust for the sole and exclusive purpose of owning the policy and named Griswold LLP as the Trust’s sole beneficiary. In 2008, the Trust sold its policy to Coventry First LLC. The written purchase agreement contained an arbitration clause. After learning that the policy was sold for an allegedly inflated price that included undisclosed kickbacks to the broker, Griswold sued. Coventry moved to dismiss the case for lack of standing or, in the alternative, to compel arbitration. The district court denied the motion, concluding that both Griswold and the LLP had standing and that the arbitration clause was unenforceable as to the plaintiffs, who were non-signatories. Coventry appealed. The Third Circuit (1) concluded that it lacked appellate jurisdiction to review the district court’s denial of Coventry’s motion to dismiss; and (2) affirmed the district court’s denial of the motion to compel arbitration against the plaintiffs, as they never consented to the purchase agreement.View "Griswold v. Coventry First LLC" on Justia Law