Justia Insurance Law Opinion Summaries

Johnathon Alfson was injured when Jack McCoy rear-ended Alfson's truck. Because Alfson was unable to return to work he demanded that Allstate Property and Casualty Insurance Company, McCoy's insurer, pay his lost wages in advance of any settlement. Alfson then filed an action seeking a declaration requiring Allstate to issue advance payments for lost wages in the amount of $24,117. The district court granted summary judgment in Alfson's favor and issued a declaratory judgment requiring Allstate to advance pay Alfson's lost wages. The Supreme Court reversed, holding that because the district court considered and relied upon informal letters not supported by sworn affidavits or discovery responses, the court's grant of summary judgment in Alfson's favor and declaratory judgment based on that summary judgment grant were legally infirm. View "Alfson v. Allstate" on Justia Law

Anne Sullivan-Thorne (Defendant) executed a mortgage on her house in favor of IndyMac Bank, FSB. Cambridge Mutual Fire Insurance Company filed an action against Defendant relating to damage done to the home. As part of the litigation, Defendant filed an action against IndyMac seeking to have all insurance proceeds payable to her alone. IndyMac counterclaimed against Defendant, alleging that Defendant had breached the note and mortgage and that Defendant had caused IndyMac not to receive payment of insurance proceeds in an amount sufficient to repair the property. The superior court dismissed IndyMac's counterclaim and entered a final judgment in which the court ordered that Cambridge re-issue the insurance proceeds and make them payable to Defendant alone. IndyMac later assigned the mortgage to Wilmington Trust Company (Plaintiff), who filed this action seeking a judgment of foreclosure against Defendant. The district court entered summary judgment for Defendant, finding that the action was barred by the doctrine of res judicata. The Supreme Court vacated the judgment of the district court, holding that because Wilmington's foreclosure claim did not present matters that "were, or might have been, litigated" in the earlier action, the court erred in entering summary judgment for Defendant on claim preclusion grounds. View "Wilmington Trust Co. v. Sullivan-Thorne" on Justia Law

In a proposed class action, Schilke alleged that Wachovia, her lender and holder of a mortgage on her home, fraudulently placed insurance on her property when her homeowner’s policy lapsed. Wachovia secured the replacement coverage from ASI and charged her for it, as specifically permitted by her loan agreement. The premium was more than twice what she had paid for her own policy and included a commission to Wachovia’s insurance-agency affiliate, also as permitted under the loan agreement. Schilke calls the commission a “kickback” and asserted statutory and common-law claims, most sounding in fraud or contract. The district court dismissed based on federal preemption and the filed-rate doctrine. The Seventh Circuit affirmed. The loan agreement and related disclosures and notices conclusively show that there was no deception at work. Wachovia fully disclosed that lender-placed insurance could be significantly more expensive than her own policy and could include a fee or other compensation to the bank and its insurance-agency affiliate. Maintaining property insurance was Schilke’s contractual obligation and she failed to fulfill it. . View "Schilke v. Am. Sec. Ins. Co." on Justia Law

The issue before the Supreme Court in this case centered on whether Delaware’s personal injury protection (PIP) statute requires insurers to reserve PIP benefits for lost wages when requested. The plaintiff suffered severe injuries as a passenger in a car accident. While he was in a coma, his mother signed an assignment of insurance benefits in favor of the hospital. Plaintiff did not challenge the validity of the assignment. The hospital was promptly paid by the insurance company. When plaintiff later requested the insurers to reserve his PIP benefits for his past and future lost wages, he was informed that the benefits had been exhausted by the payment to the hospital. The Superior Court held sua sponte that the unchallenged assignment to the healthcare provider was invalid. Upon review of the facts of this case, the Supreme Court concluded the Superior Court erred as a matter of law in deciding that uncontested issue. Because the assignment on behalf of the plaintiff resulted in the exhaustion of his PIP benefits before the plaintiff requested the reservation of PIP benefits for his lost wages, the legal issue of whether the insurer was required to reserve PIP benefits for lost wages is moot. View "State Farm Mutual Automobile Insurance Co. v. Davis" on Justia Law

In a prior appeal, the court held that Travelers was entitled to receive $10 million from a primary insurer who had obtained a larger judgment through subrogation litigation against a third party. In this instance, the court concluded that the district court erred in holding that the court had decided the attorneys' fee issue in its prior opinion. However, the error was harmless because the court held that the equitable common-fund doctrine applied. The court also held that it was necessary to amend the amount of the common-fund offset; the district court erred in holding that the court's prior opinion precluded prejudgment and postjudgment interest; such error was not harmless and, therefore, the court reversed; the award to Travelers must be increased to reflect prejudgment and postjudgment interest; and the court directed the district court to enter judgment as detailed. View "Travelers Property Casualty Ins. v. National Union Ins." on Justia Law

The issue on appeal to the Supreme Court in this case centered on whether the Commonwealth Court erred by affirming the reversal by the Workers’ Compensation Appeal Board (“WCAB”) of the decision of a workers’ compensation judge (“WCJ”) that granted Appellant Philip Payes's claim application. The WCJ determined that Appellant was entitled to workers’ compensation disability benefits based on factual findings that Appellant established the existence of a mental disability that had been caused by abnormal working conditions. Upon review, the Court concluded that the Commonwealth Court erred in reversing the WCJ’s decision, and accordingly reversed the order. View "Payes v. WCAB (PA State Police)" on Justia Law

Sweet Valley Missionary Baptist Church filed a complaint against its insurance carrier, Alfa Insurance Corporation. Based on Sweet Valley’s failure to cooperate in discovery, the trial court entered an order of dismissal. Sweet Valley then filed a motion to set aside judgment, or, in the alternative, a motion for new trial. The trial court denied the motion, and, in response, Sweet Valley filed a second complaint against Alfa the same day. The trial court dismissed the second claim based on the expiration of the statute of limitations. Sweet Valley appealed. On rehearing, the Court of Appeals reversed the trial court’s judgment and remanded for further proceedings. Alfa filed a petition for writ of certiorari, and the Supreme Court granted it. Upon review, the Supreme Court held that a motion filed pursuant to Mississippi Rule of Civil Procedure 59(e) tolls the applicable statute of limitations, and it reversed the decision of the trial court. View "Sweet Valley Missionary Baptist Church v. Alfa Insurance Corporation" on Justia Law

This case involved an uninsured motorist benefits claim filed in connection with injuries allegedly sustained by the appellant in a 2001 motor vehicle accident. Appellant was driving a truck insured by Harleysville Insurance Company when he rear-ended another vehicle. The police report contained no mention of a phantom vehicle being involved in the accident. Appellant later reported the accident to his employer, explaining he momentarily took his eyes off the road, and when he looked again, a vehicle was stopped in front of him; he was unable to stop and rear-ended the vehicle. Twenty days later, appellant completed a written Workers’ Compensation Employee’s Statement in which he reported the accident occurred due to the other vehicle stopping suddenly in front of him. But again, no phantom vehicle was reported. Over eight months later, appellant filed a claim for uninsured motorist benefits, alleging the accident was caused by a phantom vehicle pulling out in front of the other vehicle, causing appellant to stop suddenly. Harleysville denied appellant’s claim and sought a declaratory judgment that he was not entitled to uninsured motorist benefits. The Superior Court reversed the order of the Court of Common Pleas of Luzerne County, which held appellee Harleysville Insurance Company did not suffer prejudice as a result of appellant’s failure to report the phantom vehicle within a 30-day time requirement established by the Motor Vehicle Financial Responsibility Law (MVFRL). Upon review, the Supreme Court affirmed the Superior Court decision. View "Vanderhoff v. Harleysville Ins. Co." on Justia Law

Steidl and Whitlock were convicted of 1987 murders, largely based on testimony by two supposed eyewitnesses. Long after the convictions, an investigation revealed that much of the testimony was perjured and that exculpatory evidence had been withheld. The revelations led to the release of the men and dismissal of all charges. Steidl had spent almost 17 years in prison; Whitlock had spent close to 21 years. They sued. By 2013, both had settled with all defendants. Because the defendants were public officials and public entities, disputes arose over responsibility for defense costs. National Casualty sought a declaratory judgment that it was not liable for the defense of former State’s Attorney, McFatridge, or Edgar County, agreeing to pay their costs under a reservation of rights until the issue was resolved. The Seventh Circuit ruled in favor of National Casualty. In another case McFatridge sought a state court order that the Illinois Attorney General approve his reasonable expenses and fees; the Illinois Supreme Court rejected the claim. In a third case, National Casualty sought a declaratory judgment that another insurer was liable for costs it had advanced. The Seventh Circuit affirmed that the other company is liable. It would be inequitable for that company to benefit from National’s attempt to do the right thing, especially since it did not do the right thing and contribute to the defense costs under a reservation of rights. View "Nat'l Cas. Co. v. White Mountains Reinsurance Co." on Justia Law

Plaintiff sought underinsured motorists (UIM) coverage from Respondent, Plaintiff's insurance carrier, after he was involved in an accident. Plaintiff and his wife eventually filed suit against Respondent seeking to recover the benefits. Plaintiff and Respondent settled the claim. Plaintiffs then amended their complaint against Respondent to allege a bad faith claim for violation of the Unfair Trade Practices Act, alleging that Respondent acted in bad faith by not paying their first-party claim for UIM. The jury returned a verdict in favor of Plaintiffs. Plaintiffs then moved for attorney fees and costs for substantially prevailing in the underlying bad faith award. The circuit court denied the costs and fees. The Supreme Court affirmed, holding that the circuit court did not abuse its discretion in concluding that there was no factual basis upon which to award fees on the bad faith claim. View "Lemasters v. Nationwide Mut. Ins. Co." on Justia Law