Justia Insurance Law Opinion Summaries

AEGIS, an insurer, appealed from the district court's denial of its motion to compel alternative dispute resolution in its dispute with UEC. The court agreed with the district court that by agreeing in the endorsement of the contract to submit to the jurisdiction of Missouri state courts, AEGIS agreed to have any dispute relating to the insurance or to the claim resolved in those courts. Thus, the endorsement entirely supplanted the condition's mandatory arbitration provision. Even if the policy as a whole were ambiguous as to the mandatory arbitration, the court concluded that UEC would still prevail because it would be entitled to have the ambiguity resolved in its favor. Accordingly, the court affirmed the judgment. View "Union Electric Co. v. AEGIS Energy Syndicate 1225" on Justia Law

The Doctors Company (TDC), a professional liability insurance company, sought a determination that its coverage of policyholder Women's Healthcare Associates (WHA) did not apply to a pending breach of contract action relating to WHA's participation in the Virginia Birth-Related Neurological Injury Compensation Act (the Birth Injury Fund). The Davidson family filed the underlying breach of contract action against WHA, alleging that they entered into an express contract with WHA partly in reliance on WHA's participation in the Birth Injury Fund, and WHA materially breached the contract by failing to pay into the fund as represented to the Davidsons. The circuit court ruled against TDC and in favor of WHA and the Davidsons, finding that the policy covered the claim alleged by the Davidsons in their complaint against WHA. The Supreme Court affirmed, holding (1) the underlying action was covered by the insurance policy; and (2) therefore, TDC must both defend and indemnify WHA in the underling breach of contract action. View "The Doctors Co. v. Women's Healthcare Assocs." on Justia Law

An intoxicated driver (Driver) struck and injured several children. Driver later pleaded guilty to two counts of vehicular battery. Driver's insurer (Insurer) brought a declaratory action seeking a ruling that it had no duty to defend or indemnify the driver in any negligence suit brought on the children's behalf. The circuit court granted summary judgment for Insurer, ruling that coverage had expired twelve hours prior to the accident. The Supreme Court affirmed, holding that by failing to accept the offer from Insurer to renew her insurance policy, Driver's coverage expired the day before the accident under the express and unambiguous terms of the insurance contract. View "Alpha Prop. and Cas. Ins. Co. v. Ihle" on Justia Law

Appellant, a medical doctor, challenged the partial denial of personal injury protection benefits after treating a patient insured by Appellee. While Appellant's request for an administrative hearing was pending in the Insurance Division of the State Department of Commerce and Consumer Affairs, the patient's available benefits under her policy were exhausted on account of payments to Appellant and other medical providers. Because of the exhaustion, the Insurance Division dismissed Appellant's claim. The circuit court and intermediate court of appeals (ICA) affirmed. The circuit court also denied Appellant's request for attorney's fees and costs under Haw. Rev. Stat. 431:10C-211(a), which allows fees and costs to be awarded even when a party does not prevail on its claim for benefits, finding Appellant's pursuit of the benefits to be unreasonable. The ICA affirmed. Appellant appealed the denial of attorney's fees. The Supreme Court vacated the ICA's judgment and the circuit court's final judgment, holding that the circuit court and ICA erred in concluding that Appellant's claim was unreasonable due to exhaustion of benefits where Plaintiff had made his claim prior to that exhaustion. Remanded. View "Jou v. Schmidt" on Justia Law

The US Airways health benefits plan paid $66,866 in medical expenses for injuries suffered by McCutchen, its employee, in a car accident caused by a third party. The plan entitled US Airways to reimbursement if McCutchen recovered money from the third party. McCutchen’s attorneys secured $110,000 in payments, and McCutchen received $66,000 after deducting the contingency fee. US Air¬ways demanded reimbursement of the full $66,866 and filed suit under section 502(a)(3) of the Employee Retirement Income Security Act, which authorizes health-plan administrators to bring a civil action “to obtain ... appropriate equitable relief ... to enforce .. the plan.” The district court granted US Airways summary judgment. The Third Circuit vacated, reasoning that equitable doctrines and defenses overrode the reimbursement clause, which would leave McCutchen with less than full payment for his medical bills and give US Airways a windfall. The Supreme Court vacated and remanded, holding that the plan’s terms govern. An administrator can use section 502(a)(3) to obtain funds that its beneficiaries promised to turn over. ERISA focuses on what a plan provides; section 502(a)(3) does not authorize “appropriate equitable relief” at large,” but only relief necessary to enforce “the terms of the plan” or the statute. While equitable rules cannot trump a reimbursement provision, they may aid in construing it. The plan is silent on allocation of attorney’s fees, and the common¬fund doctrine provides the appropriate default rule. View "US Airways, Inc. v. McCutchen" on Justia Law

The 401(k) services industry engages in “revenue sharing,” an arrangement allowing mutual funds to share a portion of the fees that they collect from investors with entities that provide services to the mutual funds, the investors, or both. Until recently the practice was opaque to individual investors and many 401(k) plan sponsors. As the existence and extent of revenue sharing has become more widely known, lawsuits were filed, alleging that the practice violates the Employee Retirement Income Security Act of 1974 (ERISA). The district court awarded summary judgment to AUL, an Indiana-based insurance company that offers investment, record-keeping, and other administrative services to 401(k) plans. The court ruled that AUL was not a fiduciary of the Leimkuehler Profit Sharing Plan with respect to AUL’s revenue-sharing practices. The Seventh Circuit affirmed. Although “very little about the mutual fund industry or the management of 401(k) plans can plausibly be described as transparent,” AUL is not acting as a fiduciary for purposes of 29 U.S.C. 1002(21)(A) when it makes decisions about, or engages in, revenue sharing. View "Leimkuehler v. Am. United Life Ins. Co." on Justia Law

Plaintiff, on behalf of herself and the Estate, challenged the district court's grant of summary judgment to Zenith on the Estate's breach of the insurance contract claim. After review and oral argument, the court certified questions to the Florida Supreme Court: (1) Does the estate have standing to bring its breach of contract claim against Zenith under the employer liability policy? (2) If so, does the provision in the employer liability policy which excludes from coverage "any obligation imposed by workers' compensation . . . law" operate to exclude coverage of the estate's claim against Zenith for the tort judgment? (3) If the estate's claim was not barred by the workers' compensation exclusion, does the release in the workers' compensation settlement agreement otherwise prohibit the estate's collection of the tort judgment? View "Morales v. Zenith Ins. Co." on Justia Law

Decedent died intestate as a result of a motor vehicle accident. Petitioner, the former spouse of Decedent, sought a share in the settlement proceeds from a wrongful death action based on her monthly receipt of payments from Decedent for a child support arrearage. The circuit court ruled that Petitioner was not entitled to a portion of the subject settlement funds because Petitioner could not demonstrate she was financially dependent on Decedent at the time of trial. The Supreme Court affirmed, holding that the trial court did not err in ruling that Petitioner was not entitled to a share of the wrongful death settlement proceeds, as Petitioner's receipt of monthly arrearage payments was not sufficient to demonstrate the statutory requirement of financial dependence. View "Ellis v. Swisher" on Justia Law

Petitioner was severely injured when he was assaulted by a stranger in the West End of the City of Providence. Petitioner had been sent to that location by his employer, Verizon New England. Petitioner subsequently filed a claim for workers' compensation benefits. The trial judge denied Petitioner's request, concluding that Petitioner's injuries were noncompensable under Rhode Island's actual-risk test, which requires that there be some causal connection between the injury suffered by the employee and the employment or the conditions of employment. The appellate division affirmed. The Supreme Court quashed the decree of the appellate division and remanded, holding that Petitioner's injuries were compensable under the street-peril doctrine. View "Ellis v. Verizon New England, Inc." on Justia Law

The issue before the Supreme Court in this case concerned the scope of Clackamas County's contractual obligation to provide health insurance benefits to command officer retirees of the County Sheriff's Office. A contract between the county and command officers, including Plaintiff Neil James, required the county to use a particular fund to pay for a certain level of benefits to command officers after they retired. The contract added that the obligation to pay benefits was "contingent upon the availability of sufficient funding in said fund to pay for the same." After plaintiff retired, the cost of insurance premiums increased to the point where the fund was and would for the foreseeable future continue to be insufficient to pay for the benefits required. The county entered into a new contract with certain union employees to provide lesser benefits from a more stable fund, and plaintiff (a retired officer, not a union employee) also was provided those lesser benefits. Plaintiff brought an action against the county, asserting breach of contract. He maintained that the first contract required the county to pay him full health insurance benefits and argued that the contingency provision did not apply because of the creation of the new fund, which had sufficient money to pay for those benefits. The trial court entered judgment in favor of plaintiff, but the Court of Appeals reversed. Upon review, the Supreme Court concluded that the new fund was the product of a contract that was separate and independent from the earlier contract. Because the prior fund was insufficient to provide the agreed level of benefits, the county did not breach its contractual obligation to provide that level of benefits. Accordingly, the Court affirmed the appellate court's decision. View "James v. Clackamas County" on Justia Law