Justia Insurance Law Opinion Summaries

The case involves Karen Frohn, who applied for and received a life insurance policy from Globe Life and Accident Insurance Company on behalf of her husband, Greg Frohn. After Greg's death, Karen submitted a claim for death benefits, which Globe denied. Karen then sued Globe, both individually and on behalf of a putative class of beneficiaries, challenging the denial of her claim.Globe moved for summary judgment, arguing that it was entitled to rescind the life insurance policy because Karen was not truthful in her application for insurance. The district court granted Globe’s motion, barring Karen from recovery on her claims against Globe. Karen also asked the court to redact certain portions of that order, but the district court published it without any redactions. Karen appealed these decisions.The United States Court of Appeals for the Sixth Circuit affirmed the district court's decision. The court found that Karen had voluntarily waived her husband's physician-patient privilege by signing an Authorization for Release, allowing Globe to access Greg's medical records. The court also found that Globe was entitled to rescind the policy under Ohio law because Karen had made material misrepresentations in the insurance application. The court concluded that Globe's defense barred Karen's breach-of-contract and bad-faith claims. View "Frohn v. Globe Life and Accident Ins Co" on Justia Law

In 2003, the City of Chicago contracted with Walsh Construction Company to manage the construction of a canopy and curtain wall system at O’Hare International Airport. Walsh subcontracted with LB Steel, LLC to fabricate and install steel columns to support the wall and canopy. Several years into the project, the City discovered cracks in the welds of the steel columns and sued Walsh for breaching its contract. Walsh, in turn, sued LB Steel under its subcontract. Walsh also asked LB Steel’s insurers to defend it in the City’s lawsuit, but they never did. Walsh eventually secured a judgment against LB Steel, which led it to declare bankruptcy. Walsh then sued LB Steel’s insurers to recover the costs of defending against the City’s suit and indemnification for any resulting losses.The district court granted summary judgment in favor of the plaintiff insurers on both issues. The court reasoned that, because the physical damage at issue was limited to LB Steel’s own products, it did not constitute “property damage” as that term appears in the policies, thereby precluding coverage. As for the duty to defend, the court determined that the Insurers had none, because the City’s underlying claims did not implicate potential coverage under LB Steel’s policies.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court concluded that the defects in the welds and columns do not constitute “property damage” under LB Steel’s commercial general liability (CGL) policies. The court also found that the insurers had no duty to defend Walsh in the City’s underlying suit. The court further affirmed the district court's denial of Walsh’s request for sanctions under § 155. View "St. Paul Guardian Insurance Company v. Walsh Construction Company" on Justia Law

A car accident occurred during Race Wars 2, an amateur drag racing event organized by Flyin’ Diesel Performance & Offroad, L.L.C. The accident resulted in injuries and deaths among spectators. The injured parties and representatives of the deceased sued Flyin’ Diesel, who turned to their insurer, Kinsale Insurance Company, for legal defense. The dispute centered on whether Kinsale owed a duty to defend Flyin’ Diesel under their commercial general liability insurance policy.The case was first heard in the United States District Court for the Western District of Texas. The district court found the insurance policy ambiguous and ruled that Kinsale owed Flyin’ Diesel a duty to defend. Flyin’ Diesel was granted partial summary judgment, and Kinsale's motion was denied. Kinsale appealed this decision.The case was then reviewed by the United States Court of Appeals for the Fifth Circuit. The appellate court disagreed with the district court's finding of ambiguity in the insurance policy. The court determined that the policy unambiguously excluded the claims made by the injured parties from coverage. Therefore, the court concluded that Kinsale was not obligated to defend Flyin’ Diesel in the lawsuit. The court reversed the district court's partial summary judgment for Flyin’ Diesel and remanded the case with instructions to grant summary judgment to Kinsale. View "Kinsale Ins v. Flyin' Diesel Performance" on Justia Law

The case revolves around a dispute over the amount of reimbursements for medical expenses that an insurer, Allstate Insurance Company, was required to pay under a personal injury protection (PIP) policy. The dispute arose when Revival Chiropractic, LLC, a medical provider, submitted charges for services rendered to two of Allstate's policyholders. Allstate paid 80% of the submitted charges, which was less than the amount that would have been reimbursable under the statutory schedule of maximum charges. Revival Chiropractic argued that Allstate was required to pay either 80% of the maximum charge under the schedule or the full amount of the submitted charge.The United States District Court for the Middle District of Florida agreed with Revival Chiropractic, ruling that Allstate violated Florida law by paying only 80% of the submitted charges when the charges were less than the amounts allowed under the statutory schedule of maximum charges. Allstate appealed the decision to the United States Court of Appeals for the Eleventh Circuit, which certified a question to the Supreme Court of Florida due to the lack of controlling precedent.The Supreme Court of Florida, after reviewing the relevant statutory provisions and the terms of Allstate's PIP policy, concluded that Allstate was entitled to pay 80% of the billed charges. The court found that the PIP policy expressly authorized such a payment and that nothing in the statutory scheme stood in the way of that policy provision. The court held that the PIP statute contemplates that an insurer providing notice that it may use the schedule of maximum charges will not thereby be precluded from paying 80% of reasonable charges as otherwise determined under the provisions of the statute. The court also rejected the argument that the statutory provision requiring an insurer to pay the full amount of the charge submitted when that amount is below the reimbursement payable under the schedule was mandatory. The court concluded that the provision was permissive and did not displace the statutory provision limiting reimbursements to 80% of reasonable charges. The court answered the certified question in the affirmative and returned the case to the Eleventh Circuit Court of Appeals. View "Allstate Insurance Company v. Revival Chiropractic, LLC" on Justia Law

The case involves a dispute between Stewart Kramer and Valerie Concinello (Parents) and Nationwide Property and Casualty Insurance Company (Nationwide) over the interpretation of their homeowners insurance policy. The dispute arose after the fatal drug overdose of Michael T. Murray, Jr. (Decedent) at Parents' home. The administrator of Decedent's estate sued Parents and their son, Adam Kramer, for wrongful death and survival actions. Parents sought coverage under their insurance policy with Nationwide, but Nationwide denied coverage based on a controlled substance exclusion in the policy. Parents then filed a declaratory judgment action, and the trial court ordered Nationwide to defend Parents.The Superior Court affirmed the trial court's decision but based its ruling on a different interpretation of the policy. The Superior Court concluded that the policy's controlled substance exclusion applied to the bodily injury claims in the underlying lawsuit but did not apply to emotional distress damages claimed in the wrongful death action.The Supreme Court of Pennsylvania reversed the Superior Court's decision. The Supreme Court held that the Superior Court's interpretation that Nationwide was potentially required to pay out for emotional and mental distress damages was contrary to the unambiguous provisions of the policy and erroneous as a matter of law. The Supreme Court concluded that Nationwide had no duty to defend the underlying lawsuit because emotional and mental distress damages in the wrongful death claims were not bodily injuries under the policy. View "Kramer v. Nationwide Insurance" on Justia Law

The case involves Earl John and Christine Dwyer, who sued Ameriprise Financial, Inc. for negligent and fraudulent misrepresentation. In 1985, Ameriprise fraudulently and negligently induced the Dwyers to purchase a universal whole life insurance policy by misrepresenting that their quarterly premium payments would remain the same for the life of the policy. The Dwyers surrendered life insurance policies they had purchased from other companies to facilitate this purchase. In reality, if the Dwyers’ premium payment had remained the same, the policy would have lapsed for insufficient funds in 2020.The trial court found Ameriprise guilty of violating Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (CPL) and awarded the Dwyers compensatory damages. However, the court declined to award treble damages under the CPL, reasoning that they would be duplicative of the punitive damages awarded by the jury on the common-law claims. The Superior Court affirmed this decision.The Supreme Court of Pennsylvania disagreed with the lower courts' decisions. The court held that treble damages under the CPL are a separate remedy available to the Dwyers and must be considered by the trial court without regard to a punitive damages award on related common-law claims. The court concluded that nullifying the availability of a statutory award because of a common-law award is not a permissible exercise of discretion. Therefore, the court reversed the order of the Superior Court and remanded the case for reconsideration of damages under the CPL. View "Dwyer v. Ameriprise Financial" on Justia Law

The plaintiffs, Saint James Apartment Partners, LLC, Central States Development, LLC, and John C. Foley, filed a civil action against Universal Surety Company, alleging that a notary public covered under Universal's bond engaged in negligent conduct. The plaintiffs did not include the notary public as a party to the action. Universal filed a motion to dismiss, arguing that the plaintiffs failed to join the notary public as a necessary party and that the complaint failed to state a claim upon which relief could be granted. The district court granted the motion to dismiss without prejudice, concluding that Nebraska law required the plaintiffs to join the notary public in the action.The Nebraska Supreme Court reversed the district court's decision. The court held that an involuntary dismissal for a lack of a necessary party, which leaves nothing remaining for the trial court to do, is a final order over which an appellate court may exercise jurisdiction. The court also held that Nebraska law does not require a person suing under the official bond of a notary public to join the notary as a necessary party to the action. The case was remanded for further proceedings consistent with the court's opinion. View "Saint James Apt. Partners v. Univeral Surety Co." on Justia Law

The case revolves around a patient, Tommy Harris, who contracted bacterial sepsis due to repeated infections from his dialysis treatment at a clinic in Belleville, Illinois. Harris filed a malpractice lawsuit against the operators of the clinic and later included a claim against Durham Enterprises, Inc., the janitorial company responsible for cleaning the facility. The case primarily concerns Durham’s insurance coverage. Durham submitted the lawsuit to Ohio Security Insurance Company, its insurer, which denied coverage based on the insurance policy’s exclusion for injuries caused by fungi or bacteria. Harris and Durham then negotiated an agreement in which Durham promised not to mount a defense and Harris promised to seek recovery only from the insurer. The state trial judge granted a motion to sever Harris's claim against Durham and set it for a bench trial. The judge held a short, uncontested bench trial and entered judgment against Durham for more than $2 million.Ohio Security was not a party to the state court proceedings and the insurance policy was not in the record. However, the consent judgment includes findings on insurance issues, notably, that the insurer breached its duty to defend and is estopped from asserting any policy defenses. After the judgment became final, Harris filed an amended complaint purporting to add Ohio Security as a defendant. Ohio Security removed the action to federal court and sought a declaration of its coverage obligations. The district court held that the bacteria exclusion precludes coverage.In the United States Court of Appeals for the Seventh Circuit, Harris and Durham jointly appealed, challenging the no-coverage ruling but also raising a belated challenge to subject-matter jurisdiction under the Rooker–Feldman doctrine. The court found the jurisdictional argument meritless, as the Rooker–Feldman doctrine does not block federal jurisdiction over claims by nonparties to state-court judgments. The court also affirmed the district court's ruling that the policy’s bacteria exclusion precludes coverage for this loss. View "Mitchell v. Durham Enterprises, Inc." on Justia Law

The case involves Christine Matlock Dougherty, who sued U.S. Behavioral Health Plan, California (USB) for claims related to her son's healthcare. Dougherty's son, Ryan, was enrolled in a UnitedHealthcare HMO health plan, which Dougherty had access to through her employer. Ryan admitted himself into a residential treatment facility for severe drug addiction, but USB denied coverage for his stay after three days, arguing that he could be treated at home. Ryan fatally overdosed shortly after his discharge from the facility. Dougherty then sued USB, claiming that its wrongful denial of coverage for Ryan's treatment caused his death. USB petitioned to compel arbitration of her claims, but the trial court denied the petition, stating that USB's arbitration agreement was not enforceable because it did not comply with the disclosure requirements imposed by Health & Safety Code section 1363.1.The trial court denied USB's petition to compel arbitration on the grounds that the arbitration agreement did not comply with the disclosure requirements of Health & Safety Code section 1363.1. The court found that there were two separate contracts, one between Dougherty and UnitedHealthcare, and another between Dougherty and USB. The court ruled that the arbitration agreement in the supplement, which governed Dougherty's claims against USB, did not comply with section 1363.1's disclosure requirements.The Court of Appeal of the State of California Fourth Appellate District Division Two reversed the trial court's decision. The appellate court concluded that USB forfeited its argument that the issue of whether the arbitration agreement was valid under the disclosure requirements of section 1363.1 was delegated to the arbitrator. However, the court agreed with USB that the trial court erroneously denied USB’s petition because USB complied with section 1363.1. The court found that the only "health care service plan" at issue that "includes terms that require binding arbitration" is Dougherty’s plan with UnitedHealthcare, which includes both the EOC and the supplement as components of the plan. Therefore, the court concluded that there was no section 1363.1 violation and reversed the trial court's order denying the petition to compel arbitration. View "Dougherty v. U.S. Behavioral Health Plan" on Justia Law

The case involves an insurance dispute between Travelers Casualty Insurance Company of America and A-Quality Auto Sales, Inc., along with its owners, Felicia and Shawn Richesin. The Richesins purchased a Subaru for resale through their dealership, A-Quality Auto Sales. After having the car inspected and repaired by RNS Auto Services, they experienced mechanical issues while driving it. Ms. Richesin was severely injured when she exited the vehicle on the side of the highway and was struck by another car. RNS had a garage insurance policy with Travelers, which provided commercial general liability coverage with a per-occurrence limit of $500,000 and a general aggregate limit of $1,000,000. The Richesins sought additional compensation from RNS and Travelers for Ms. Richesin's injuries.In the lower courts, the Richesins filed a suit against Travelers and other parties in New Mexico state court. The state court dismissed all claims against Travelers, citing a lack of privity between the injured party and the insurer. Later, the Richesins and RNS entered into agreements that led to Travelers paying the Richesins $500,000, which Travelers believed to be the policy limit. The Richesins, however, argued that there were multiple occurrences and therefore the policy's aggregate limit of $1,000,000 was available. Travelers then filed a complaint in federal district court seeking a judicial declaration that the accident was a single occurrence and the policy coverage limit for the accident was $500,000.The United States Court of Appeals for the Tenth Circuit affirmed the district court's entry of declaratory judgment. The court held that the dispute was ripe for resolution under Article III of the Constitution. It also ruled that the district court did not err by declining to abstain under the Brillhart and Younger abstention doctrines. The court further held that the district court did not err by denying the Richesins' Rule 56(d) motion, thereby denying them discovery needed to meaningfully oppose Travelers' motion for summary judgment. The court concluded that the accident was a single occurrence and the policy coverage limit for the accident was $500,000. View "Travelers Casualty Insurance Co. of America v. A-Quality Auto Sales" on Justia Law