Justia Insurance Law Opinion Summaries

The New Mexico Supreme Court recognized a new tort called "malicious abuse of process," which subsumed causes of action for malicious prosecution and abuse of process. Nanodetex Corporation and two of its principals (the Insureds) were successfully sued for malicious abuse of process. They then sought indemnification from Carolina CasualtyInsurance Company, which covered the Insureds under a management liability policy (the Carolina Policy). Carolina denied the claim, relying on an exclusion in the policy for losses arising from claims for "malicious prosecution." It sought a declaratory judgment that it was not liable for the damages arising from the malicious-abuse-of-process judgment. On Carolina's motion for summary judgment, the district court agreed with Carolina and also rejected the Insureds' counterclaims. The Insureds appealed. Upon review, the Tenth Circuit reversed the declaratory judgment, holding that the term "malicious prosecution" in the exclusion does not encompass all claims of malicious abuse of process, but only claims whose elements are essentially those of the common-law cause of action for malicious prosecution. Because the judgment against the Insureds in the tort case was affirmed on appeal on a claim that was not substantially the same as common-law malicious prosecution, the exclusion in the Carolina Policy did not apply. View "Carolina Casualty Insurance v. Nanodetex Corporation, et al" on Justia Law

CareFirst, Inc., a nonstock, nonprofit Maryland corporation, is a holding company with two subsidiaries that provides health insurance for millions of Maryland residents. State law confers broad authority on the Maryland Insurance Commissioner to oversee its operation and adherence to its mission. This case arose from the termination of Leon Kaplan, a former executive of CareFirst. CareFirst declined to pay part of the post-termination compensation set forth in Kaplan's employment contract, reasoning that the compensation was not for "work actually performed," as that standard had been interpreted by the Commissioner. The Commissioner affirmed the decision not to pay the benefits, concluding that the payments would violate Md. Code Ann. Ins. 14-139. The Court of Appeals affirmed, holding (1) the Commissioner's determination was not preempted by ERISA; (2) the Commissioner's construction of the insurance code was legally correct; and (3) there was substantial evidence to support the Commissioner's determination in this case. View "Md. Ins. Comm'r. v. Kaplan" on Justia Law

Fifteen-year-old Kevin Michaud fired a single shot from a revolver belonging to his parents, killing one friend and seriously wounding another. The parents of the two victims sued Kevin, his parents, and their insurance company, United Services Automobile Association (USAA). The Michauds' liability policy provided a $300,000 limit for "Each Occurrence" of "Personal Liability." The superior court ruled that the policy afforded $900,000 of coverage because there had been a single occurrence and Kevin and his parents were each entitled to a separate per-occurrence policy limit. USAA appealed, arguing that the policy affords a single per-occurrence policy limit of $300,000 regardless of the number of insureds. The victims' parents also appealed, arguing that not only were there three individual coverage limits, one each for Kevin and his parents, but there were also multiple occurrences. Upon review, the Supreme Court concluded that USAA's position was most in accord with the express language of the policy, the reasonable expectations of an insured, and case law, and therefore reversed the superior court's decision. View "United Services Automobile Association v. Neary" on Justia Law

Appellant was placed on disability leave from work. Appellant was covered under a long term disability (LTD) policy that her employer obtained from Medical Group Insurance Services (MGIS). The policy was written by Sun Life Assurance Company (Sun Life). After leaving her job, Appellant filed a claim with MGIS seeing long term disability benefits. Sun Life denied Appellant's request for benefits. Appellant filed an action against Sun Life, asserting various state law claims. The federal district court dismissed the action based on ERISA preemption. Appellant then amended her complaint to add ERISA claims and asked the district court to apply de novo review in its evaluation of her ERISA claims. The court denied the motion and granted summary judgment for Sun Life, concluding that Sun Life's decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA's requirements. The First Circuit Court of Appeals vacated the judgment, holding (1) the safe harbor exception to ERISA did not apply to the policy covering Appellant, and therefore, Appellant's state law claims were preempted; but (2) the benefits denial was subject to a de novo review, rather than the highly deferential "arbitrary and capricious" review prescribed for certain ERISA benefits decisions. Remanded. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

Puerto Rico law operated to cause hundreds of thousands of motor vehicle owners to pay twice for liability insurance. Commonwealth law declared motor vehicle owners to be entitled to a refund of the excess premiums paid, but large amounts of unclaimed refunds accumulated. The Commonwealth subsequently placed the unclaimed refunds with its Treasury Secretary with the condition that, if not claimed within five years, the funds escheated to the Commonwealth without notice to the vehicle owners. In Garcia-Rubiera II, the First Circuit Court of Appeals held that the Commonwealth's failure to notify vehicle owners of their reimbursement rights violated their procedural due process rights. On remand, the district court ordered the Commonwealth to notify vehicle owners of their reimbursement rights, to publish notices in two newspapers alerting the owners of their rights, and to give owners a 120-day grace period for them to claim reimbursement. The First Circuit again remanded for the district court to craft with "the benefit of further guidance" an injunction that more fittingly remedied the Commonwealth's constitutional violations and ordered no duplicate premiums to escheat to the Commonwealth until it established and complied with a reimbursement procedure meeting the requirements of due process. View "Garcia-Rubiera v. Fortuno" on Justia Law

In 1997, Crum, a small company near insolvency, agreed to service Martin’s light-duty vehicles. Martin was a subsidiary of Massey Coal, a publicly-traded corporation. The agreement allowed Crum to enter Martin’s property to pick up vehicles; Martin required Crum to enter into an indemnification agreement and Crum agreed to Martin’s terms. Crum obtained insurance coverage required by the agreement from Universal. Philip, a Crum employee, rode with a Martin employee to pick up a truck from Martin property. A boulder rolled down hill, hit the vehicle, severely injuring Philip. The U.S. Mine Safety and Health Administration cited Martin for having loose rock above the roadway. Philip and Crum sued Martin; Martin counterclaimed based on the indemnification. Universal declined to defend on the counterclaim. After mediation, Martin agreed, without admitting liability, to pay $3,650,000. The parties also entered an “agreed judgment” against Crum for $3,650,000, on Martin’s counterclaim. Martin agreed not to pursue Crum for that judgment and sued Universal. The Sixth Circuit agreed with the district court that Universal had no duty to indemnify Martin because there was enough evidence to show that Crum was not actually liable to Martin. The indemnification was unenforceable as against public policy; it was the product of a significant disparity in bargaining power and attempted to shift liability for compliance with at least one mining-safety statute. View "Martin Cnty. Coal Corp. v. Universal Underwriters Ins. Co." on Justia Law

Plaintiffs filed a putative class action lawsuit against Black Hills Federal Credit Union and CUNA Mutual Insurance Society for changing their credit disability insurance policy. The complaint alleged that Defendants wrongfully switched the credit disability insurance policies of 4,461 borrowers. Plaintiffs filed a motion for class certification, but the trial court denied the motion, finding that Plaintiffs did not meet the adequacy requirement or the predominance and superiority requirements of the class certification statutes. The Supreme Court reversed, holding that the trial court erred in its application of the class certification statutes to the facts in this case. Remanded for certification of the class. View "Thurman v. CUNA Mut. Ins. Soc'y" on Justia Law

Respondent Francina Bardsley's home was hit by a speeding car. The car ran through the house, struck and killed her husband, Frederic Bardsley, and caused substantial property damage. The liability coverage of the driver was exhausted in settlement of the wrongful death action, and upon review, the Supreme Court was asked to consider the impact of the collateral source rule on underinsured motorist property damage coverage where the homeowners' policy has already paid for the property damage. The Court held the collateral source rule did not apply and there was no underinsured motorist property damage coverage available. View "Bardsley v. Government Employees Insurance" on Justia Law

At issue in this case was a worker’s compensation claim stemming from an accident at an onion processing plant. Petitioner James Clark was injured when his right forearm was caught in a roller machine which resulted in significant soft-tissue damage. The Industrial Commission determined that Clark suffered a compensable injury and that he was entitled to medical treatment for approximately one year. The Commission also found that Clark had a permanent partial impairment (PPI) of 10% of the whole person and a permanent partial disability rated at 25% of the whole person. Clark appealed that determination pro se, arguing the Commission relied on fraudulent evidence because his medical records were fraudulently obtained. Finding no error, the Supreme Court affirmed. View "Clark v. State Ins Fund" on Justia Law

A class of Plaintiffs brought suit against Insured, a hotel proprietor, alleging that Insured violated the Telephone Consumer Protection Act (TCPA). The class and Insured subsequently reached a settlement. The class then filed a garnishment action against Insurer. Insurer sought a declaratory judgment that its policy with Insured did not provide coverage because the policy did not cover damages awarded related to the TCPA. The trial found (1) Insurer owed Insured a duty to defend in the class actions because the class's claims were covered under the policy; and (2) Insurer had a duty to indemnify Insured for the full settlement plus interest. The Supreme Court affirmed, holding (1) the trial court correctly determined that Insurer wrongly refused to defend Insured under its policy coverage; (2) Insurer was not entitled to a reassessment of the reasonableness of the settlement; and (3) policy limits did not bar Insurer's indemnification of the settlement. View "Columbia Cas. Co. v. HIAR Holding, LLC" on Justia Law