Justia Insurance Law Opinion Summaries

Margrit Meier, owner of a restaurant called Hartland Inn, filed a coverage request with Wadena Insurance Company after a fire destroyed her business. The policy entitled her to the "actual cash value" of the property at the time of the fire, but the parties disagreed on how to calculate this. Wadena initially paid Meier $775,000, using a method called the "Broad Evidence Rule" to calculate actual cash value. Dissatisfied, Meier hired a third-party adjuster, who estimated a higher value. Wadena then increased its estimate and paid an additional $60,135.79. Still unsatisfied, Meier invoked the policy’s panel appraisal option.The appraisal process was completed, and the umpire arrived at an independent estimate of the building’s actual cash value. However, Meier filed a second lawsuit, alleging breach of contract and bad faith, and sought to set aside the appraisal award as invalid under state law. The district court dismissed the action, observing that Wadena complied with the alternative dispute resolution process and paid out the binding award.The United States Court of Appeals For the Seventh Circuit affirmed the district court's decision, stating there was no breach of contract or bad faith on Wadena's part. The court upheld that the Broad Evidence Rule was correctly applied to calculate the actual cash value of the property. The court also affirmed the district court’s denial of Wadena’s motion for sanctions under Federal Rule of Civil Procedure 11. View "Meier v. Wadena Insurance Company" on Justia Law

This case, decided by the United States Court of Appeals for the Eleventh Circuit, involved an insurance dispute concerning coverage for defects and delays in the construction of an office building. Riverside Avenue Partners, Ltd. contracted with the Auchter Company to construct the building. After experiencing delays and water intrusion, Riverside Avenue Partners sued Auchter and its surety, Arch Insurance Company. Auchter and Arch filed a third-party complaint against TSG Industries, the window subcontractor, and other subcontractors. TSG's insurer, Landmark American Insurance Company, initially recognized Auchter as an additional insured but later refused to defend them, leading Amerisure, Auchter’s primary insurance provider, to defend Auchter under a reservation of rights.Upon review, the Eleventh Circuit dismissed the appeal, concluding that it lacked jurisdiction. The court determined that the district court's purported final judgment in the case, which favored Amerisure, did not dispose of all claims against all parties, so it was not final. Specifically, Landmark's crossclaim against TSG, stating it had no duty to defend or indemnify TSG in the underlying action, remained unresolved. Despite Amerisure's post-argument briefing suggestion that the declaratory judgments issued below fully answered questions related to Landmark's obligations to TSG, the court maintained that the claims against TSG were still pending, thus lacking jurisdiction to hear the appeal. The court dismissed the appeal and recommended the unresolved matters to the attention of the district court on remand. View "Amerisure Insurance Company v. Landmark American Insurance Company" on Justia Law

In the case before the United States Court of Appeals for the Sixth Circuit, State Farm Mutual Automobile Insurance Company ("State Farm") brought a lawsuit against Michael Angelo, alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). The lawsuit claimed that Angelo submitted fraudulent bills to the insurance company. Angelo later filed a separate action against State Farm under the False Claims Act ("FCA"), alleging that the insurance company wrongfully avoided paying medical benefits. This action was unknown to State Farm at the time because FCA complaints are required to be filed under seal.The two parties entered into a settlement agreement in February 2021, resolving the RICO action. As part of the agreement, Angelo agreed to take all necessary steps to dismiss certain claims against State Farm. After the settlement agreement was signed, the FCA complaint was unsealed and served on State Farm. State Farm then sought to enforce the settlement agreement, arguing that it required Angelo to dismiss the FCA action as well.Angelo argued that the settlement agreement did not apply to the FCA action because the FCA claims were unrelated to the settled RICO claims. However, the district court disagreed and ordered Angelo to seek the government's consent to dismiss his FCA claims against State Farm. Angelo appealed this decision, claiming it violated his First Amendment rights and the FCA.The Court of Appeals affirmed the district court's decision, stating that the settlement agreement clearly encompassed the FCA action. The court also held that the district court had not erred in requiring Angelo to seek the government's consent to dismiss his FCA claims. Angelo's First Amendment claim was deemed forfeited as it was raised for the first time in a motion for reconsideration and was thus untimely. View "State Farm Mutual Automobile Insurance Co. v. Angelo" on Justia Law

In 2021, a warehouse developed by TriStar Companies, LLC but possessed by Amazon collapsed during a tornado, causing injuries and deaths. Several personal injury and wrongful death lawsuits were filed against TriStar, claiming negligence in the warehouse's construction. TriStar, insured by AXIS Surplus Insurance Company, sought coverage under their policy, but AXIS denied coverage and filed a complaint for a declaratory judgment that it had no duty to defend or indemnify TriStar for the resulting lawsuits. The district court granted AXIS's motion for summary judgment, ruling that the insurance policy did not cover the warehouse due to certain exclusions and limitations.Upon appeal, the United States Court of Appeals for the Eighth Circuit affirmed the lower court's decision. The Court of Appeals applied Missouri law, giving the insurance policy terms "the meaning which would be attached by an ordinary person of average understanding if purchasing insurance." The court found that the policy's language was clear and unambiguous. It limited coverage to premises owned, rented, or occupied by TriStar per a schedule of locations on file with AXIS. As the warehouse's location was not listed in the schedule, and TriStar did not own, rent, or occupy the warehouse when the incident occurred, the court concluded that the policy did not cover the incident.The court rejected TriStar's interpretation of the schedule of locations, which would have resulted in coverage extending to an entire city, as untenable and against common sense. Therefore, AXIS had no duty to defend or indemnify TriStar for the lawsuits arising from the warehouse collapse. View "Axis Surplus Insurance Company v. TriStar Companies, LLC" on Justia Law

The Eleventh Circuit Court of Appeals ruled on a class action lawsuit that involved a life insurance policy dispute between plaintiff Worth Johnson and defendant Protective Life Insurance Company. Johnson alleged that Protective breached its contract by not reassessing and adjusting its cost of insurance (COI) rates based exclusively on expectations of future mortality experience. The district court granted Protective’s motion for judgment on the pleadings, concluding that Protective did not breach its insurance contract.On appeal, the Eleventh Circuit affirmed the district court's decision in part, agreeing that the policy did not require Protective to reassess and redetermine its COI rates based exclusively on its expectations as to future mortality experience. However, the court reversed the district court's dismissal of Johnson's alternative claim that Protective did reassess and redetermine its COI rates, but ignored its expectations as to future mortality experience when doing so. The court remanded the case for further proceedings consistent with its ruling. View "Johnson v. Protective Life Insurance Company" on Justia Law

In this case, the United States Court of Appeals for the Eleventh Circuit had to apply Florida tort law to a dispute concerning the collapse of a crane boom. The plaintiff, NBIS Construction & Transport Insurance Services, Inc., an insurer of the crane's owner, sued the defendants, Liebherr-America, Inc., a distributor and servicer of the type of crane in question, for over $1.7 million in damages resulting from the collapse. The defendants argued that they were shielded from liability by Florida’s economic loss rule. The magistrate judge, after a five-day bench trial, rejected this argument. The court of appeals found Florida law unclear on this issue and certified a question to the Florida Supreme Court.The facts of the case involved a crane purchased by Sims Crane & Equipment Company from a non-party broker, which was manufactured by Liebherr Werk Ehingen GMbH. Two Sims crane operators received training from a Liebherr-America employee, which involved swapping out different configurations of the crane boom. However, the training was inadequate and did not provide sufficient information about the proper placement of specific pins which, if misadjusted, could cause the crane boom to collapse. When the crane boom did collapse during a construction project, causing a fatality and damage to the crane, NBIS filed a negligence suit against Liebherr-America.The key issue in the case was whether Florida’s economic loss rule, which generally limits recovery in tort cases to situations where there is damage to other property or personal injury, and not just economic loss, applied in this case. The defendants argued that the rule should apply because the plaintiff’s negligence claims were akin to failure to warn theories found in products liability law, which fall within the scope of the rule. The plaintiff argued that the rule should not apply because this was not a product liability case asserting a product defect, but rather a case alleging negligent services provided by the defendants. Because the court found Florida law unclear on this issue, it certified the question to the Florida Supreme Court. View "NBIS Construction & Transport Insurance Services, v. Liebherr-America, Inc." on Justia Law

In a dispute between Lexington Insurance Company ("Lexington") and the Suquamish Tribe ("Tribe"), the United States Court of Appeals for the Ninth Circuit affirmed the district court's summary judgment in favor of the Tribe. The dispute arose from several insurance companies and underwriters refusing to compensate the Tribe for its insurance claims for lost business and tax revenue and other expenses resulting from the suspension of business operations during the COVID-19 pandemic. The court held that the Suquamish Tribal Court had subject-matter jurisdiction over the Tribe’s claim against nonmember off-reservation insurance companies that participated in an insurance program tailored to and offered exclusively to tribes. The court concluded that the insurers' conduct occurred not only on the Suquamish reservation but also on tribal lands. The court further concluded that, under the Tribe’s sovereign authority over “consensual relationships,” as recognized under the first Montana exception to the general rule restricting tribes’ inherent sovereign authority over nonmembers on reservation lands, the Tribal Court had jurisdiction over the Tribe’s suit. View "LEXINGTON INSURANCE COMPANY V. SMITH" on Justia Law

The Supreme Court of the State of Montana affirmed a lower court's decision that an insurance agency, Rames Inc., formerly known as Central Insurance Agency, had a duty to procure additional insurance coverage for a construction company, TCF Enterprises Inc., also known as Malmquist Construction. Rames was found to have breached that duty, thereby breaching the standard of care and negligently misrepresenting that it had obtained the coverage. The court also found that the policy's professional services exclusion would not have barred coverage for defense and indemnity. The dispute arose after Malmquist was sued by a developer due to a construction defect and realized it wasn't covered as an additional insured under a subcontractor's insurance policy as it had believed. Rames had been told by the subcontractor to add Malmquist as an additional insured, but it failed to do so. The jury awarded damages to Malmquist in the amount of $1,022,257.85. Rames appealed, but the Supreme Court upheld the lower court's decision. View "TCF Enterprises, Inc. v. Rames, Inc." on Justia Law

In a dispute arising from a failed subdivision in Missoula County, Montana, a group of property purchasers, led by Gilbert and Judith Johnston, claimed that Flying S Title and Escrow, Inc., breached a purported contract to provide title insurance for the properties they bought. The properties were originally platted as lots, but the purchasers believed that they would eventually be reconfigured into larger parcels. However, the necessary infrastructure was not installed and the amended plat was never recorded, so the parcels never came into existence. The purchasers claimed that pro forma documents provided by Flying S constituted a contract to insure the parcels. The Supreme Court of Montana disagreed, ruling that the pro forma documents did not constitute a contract, but were merely an offer to issue a title insurance policy for the parcels, subject to the terms stated in the documents. The court noted that a contract for title insurance could not exist under the pro forma documents because the parcels, and the title thereto, never existed. Furthermore, the court found that Flying S had not been unjustly enriched by the purchasers' premium payments because it had provided, as agreed, title insurance for the transaction completed by the purchasers to buy the lots. Therefore, the court affirmed the lower court's decision in favor of Flying S Title and Escrow, Inc. View "Johnston v. Flying S Title & Escrow, Inc." on Justia Law

In this case, the Plaintiff, Barbara M. Parmenter, had subscribed to a long-term care insurance policy offered by her employer, Tufts University, and underwritten by The Prudential Insurance Company of America. The policy was governed by the Employee Retirement Income Security Act of 1974. After Prudential twice increased Parmenter's premium rate payments for her policy, she sued Tufts and Prudential, alleging each breached their respective fiduciary duties owed to her when Prudential increased those rates. The defendants responded with motions to dismiss for failure to state a plausible claim. The district court granted each of their motions and Parmenter appealed.The United States Court of Appeals For the First Circuit found that the language in the policy stating that premium increases would be "subject to the approval of the Massachusetts Commissioner of Insurance" was ambiguous, and could not be definitively interpreted based solely on the pleadings and contract documents currently available. Therefore, the court reversed the district court's decision to dismiss the case against Prudential and remanded it for further proceedings.However, the court affirmed the dismissal of the case against Tufts, as Parmenter's allegations that Tufts failed to prevent the premium rate increases or monitor Prudential did not fall into one of the categories of co-fiduciary liability set forth in section 1105(a) of the Employee Retirement Income Security Act. View "Parmenter v. Prudential Ins. Co. of America" on Justia Law