Justia Insurance Law Opinion Summaries

Plaintiff sought insurance coverage under an all-risks commercial insurance policy for business income losses during the COVID-19 pandemic. Finding no “direct physical loss of or damage to property” caused by COVID-19, the Louisiana Supreme Court reversed the appeal court and reinstated the trial court judgment denying coverage. View "Cajun County, LLC et al. v. Certain Underwriter at Llloyd's, London, et al." on Justia Law

In this case concerning the term "physical abuse" as used in an "abuse and molestation" policy exclusion the Supreme Judicial Court reversed the order of the superior court granting summary judgment in favor of Insurer on its action for declaratory relief, holding that the abuse and molestation exclusion did not exempt coverage under the circumstances of this case.The homeowners' insurance policy at issue precluded coverage under a policy exclusion exempting coverage for "[b]odily injury...arising out of sexual molestation, corporal punishment or physical or mental abuse." Insured initiated an unprovoked attack on Leonard Miville by punching and kicking him repeatedly. When Insurer denied coverage Miville commenced an action against Insured. Insurer brought this action seeking a judgment declaring that it had no duty to defend or indemnify Insured for the personal injury claims. The judge granted summary judgment for Insurer. The Supreme Judicial Court reversed, holding that a reasonable insured would not expect the abuse and molestation exclusion to preclude coverage for the incident. View "Dorchester Mutual Insurance Co. v. Miville" on Justia Law

The Supreme Court reversed the judgment of the appeals officer denying Claimant's request to reopen his industrial claim, holding that the appeals officer misapplied Nev. Rev. Stat. 616C.065(7) and failed to properly consider whether Claimant satisfied the requirements of Nev. Rev. Stat. 616C.390.Claimant, a high school teacher, was injured while diverting a student altercation and requested workers' compensation from the school district's industrial insurer (Insurer). Insurer's acceptance of coverage was restricted to Claimant's cervical strain and thoracic sprain. Insurer, however, did not expressly deny coverage for treatment to Claimant's lumber spine. Claimant later sought the reopening of his industrial claim under Nev. Rev. Stat. 616C.390 for treatment to his lumbar spine. Insurer denied the request, and a hearing officer affirmed. The appeals officer also affirmed. The Supreme Court reversed, holding (1) the appeals officer misapplied section 616C.065(7) to find that the lumbar spine was not within the scope of Claimant's accepted industrial claim; and (2) Claimant's failure to appeal after receiving Insurer's determination of claim acceptance or closure did not preclude him from subsequently seeking to reopen his claim under section 616.390. View "Gilman v. Clark County School District" on Justia Law

The Supreme Court affirmed the judgment of the circuit court entering a declaratory judgment finding that the death benefit of a term life insurance policy owned by Dr. James Rocconi was payable to his children and not to Teresa James, Rocconi's ex-wife, holding that James was not entitled to relief on her allegations of error.After Rocconi died, his children and the executor of his estate brought a declaratory judgment action asking the circuit court to find that they were the beneficiaries of Rocconi's life insurance policy. James counterclaimed, seeking a declaratory judgment that the policy provided for payment of the death benefit to her. The circuit court entered judgment for Rocconi's children and executor. The Supreme Court affirmed, holding that James was not entitled to relief on her allegations of error. View "James v. Mounts" on Justia Law

S.D. lost control of his van while driving on a divided highway in Pasco County, Florida. The van jumped the center median and landed directly on top of an oncoming car driven by Plaintiff. Plaintiff was seriously injured in the resulting wreck. S.D.’s insurer, USAA General Indemnity Company, immediately began investigating. But despite learning that Plaintiff had suffered grievous injuries so that his damages would almost surely exceed S.D.’s $10,000 policy limit, and despite determining that S.D. was solely at fault for the accident, USAA delayed initiating settlement negotiations for over a month. Then, USAA failed to confirm for Plaintiff’s attorney that S.D. lacked additional insurance coverage with which to satisfy a judgment. Plaintiff then commenced this action to hold USAA responsible for the judgment, bringing a single claim for bad faith under Florida common law. USAA moved for summary judgment, arguing that no reasonable jury could find that its conduct amounted to bad faith.   The Eleventh Circuit reversed and remanded. The court held that the district court improvidently granted summary judgment to USAA. Material issues of fact as to bad faith and causation remain in dispute, and Plaintiff is entitled to have a jury resolve them. The court explained had USAA complied with its “duty to initiate settlement negotiations” sooner or provided Plaintiff’s attorney with a coverage affidavit before Plaintiff filed suit, the case may have settled before rising costs changed the calculus. View "Daniel Ilias v. USAA General Indemnity Company" on Justia Law

The Office of Personnel Management (OPM) administers retirement benefits for civilian employees of the U.S. government. OPM typically pays retirement benefits to retirees themselves. But when a retiree’s benefits are subject to division pursuant to a divorce decree, OPM divides them between the retiree and his or her former spouse according to the terms of the decree. The Federal Law Enforcement Officers Association (Association) brought this action against OPM in district court, claiming that OPM’s method of apportioning one type of retirement benefit, the Annuity Supplement, violates the Administrative Procedure Act. OPM moved to dismiss the complaint on jurisdictional grounds.   The district court acknowledged that federal employees’ claims for retirement benefits are generally routed through that system of review, but held that the Association’s claims fell within an exception allowing pre-enforcement challenges to agency rules to proceed in district court. Exercising jurisdiction, the district court dismissed one of the Association’s counts for failure to state a legally cognizable claim and, after the administrative record was filed, granted summary judgment to OPM as to the others.   The DC Circuit vacated the district court’s orders and remanded with instructions to dismiss for lack of jurisdiction. The court held that the CSRA’s system of review—which channels disputes about FERS retirement benefits through an administrative process, subject to direct review in the Federal Circuit—precludes district court review of the Association’s claims. View "Federal Law Enforcement Officers Association v. Kiran Ahuja" on Justia Law

Plaintiff is a former federal employee and participant in a health-insurance plan (“Plan”) that is governed by the Federal Employees Health Benefits Act (“FEHBA”). The Plan stems from a contract between the federal Office of Personnel Management (“OPM”) and Blue Cross Blue Shield Association and certain of its affiliates (together, “Blue Cross”). Blue Cross administers the Plan under OPM’s supervision. Plaintiff suffered from cancer, and she asked Blue Cross whether the Plan would cover the proton therapy that her physicians recommended. Blue Cross told her the Plan did not cover that treatment. So Plaintiff chose to receive a different type of radiation treatment, one that the Plan did cover. The second-choice treatment eliminated cancer, but it also caused devastating side effects. Plaintiff then sued OPM and Blue Cross, claiming that the Plan actually does cover proton therapy. As against OPM, she seeks the “benefits” that she wanted but did not receive, as well as an injunction directing OPM to compel Blue Cross to reform its internal processes by, among other things, covering proton therapy in the Plan going forward. As against Blue Cross, she seeks monetary damages under Texas common law. The district court dismissed Plaintiff’s suit.   The Fifth Circuit affirmed. The court held that neither the advance process nor the proton-therapy guideline poses an immediate threat of injury, so injunctive relief is therefore unavailable. Further, the court found that FEHBA preempts Plaintiff’s common-law claims against Blue Cross. Accordingly, the court held that no relief is available under the relevant statutory and regulatory regime. View "Gonzalez v. Blue Cross Blue Shield" on Justia Law

Almost two decades prior to this decision, the Mississippi Supreme Court handed down Farmland Mutual Insurance Co. v. Scruggs, 886 So. 2d 714 (Miss. 2004). In that opinion, the Court held that Farmland Mutual Insurance Co., the liability insurer for Mitchell Scruggs, Eddie Scruggs, Scruggs Farms & Supplies LLC, and Scruggs Farm Joint Venture (collectively, Scruggs), had no duty to defend Scruggs in a federal lawsuit by Monsanto Company. The reason no coverage applied was because Monsanto had alleged that Scruggs committed the intentional act of conversion by saving and using unlicensed seeds. Eight years later, a district court judge overturned a jury’s verdict that Scruggs had willfully violated Monsanto’s patents. Consequently, Scruggs was not liable for treble damages and attorney’s fees. Scruggs returned to state court in 2013. Citing Rule 60(b) of the Mississippi Rules of Civil Procedure, Scruggs asked the Lee County Circuit Court to reopen and vacate the final judgment entered in 2004 in favor of Farmland on the coverage issue. Scruggs asserted the Mississippi Supreme Court’s opinion had been erroneously decided based on facts that came to light in the federal case. The state court rejected the motion as untimely under Rule 60(b). Scruggs appealed. While Scruggs asserted the motion was timely, the Mississippi Supreme Court found the motion’s timing is irrelevant: Rule 60(b) was not a procedural vehicle for a trial court to overturn a mandate issued from the Mississippi Supreme Court. Because the trial court lacked jurisdiction to grant Scruggs’s request, the Supreme Court affirmed the circuit court’s denial of the motion. View "Scruggs, et al. v. Farmland Mutual Insurance Co." on Justia Law

Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates. Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which Plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.   The Ninth Circuit affirmed the district court’s dismissal for lack of Article III standing. The court held that Plaintiffs failed to establish Article III standing as to either of their two theories of injury. The panel held, as to the out-of-pocket-injury theory, Plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. And Plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief. View "RACHAEL WINSOR, ET AL V. SEQUOIA BENEFITS & INSURANCE, ET AL" on Justia Law

National Union Fire Insurance Co. of Pittsburgh (National Union) filed suit to obtain a declaration that it owed no payment to Cargill, Inc. under the employee theft clause of the insurance policy held by Cargill. Cargill counterclaimed for breach of contract. The district court granted judgment on the pleadings for Cargill, ruling that Cargill had suffered a covered loss resulting directly from an employee’s theft. National Union appealed.   The Eighth Circuit affirmed and held that the district court did not err by concluding there were no disputes as to any material facts that precluded granting Cargill’s Rule 12(c) motion. Further, the court wrote that Cargill’s insurance policy provided coverage for employee “theft,” which was defined in the policy as “the unlawful taking of property to the deprivation of the Insured.” Additionally, the insured’s loss must have resulted “directly from” employee theft to be covered by the policy. Finally, the court concluded that the date of Cargill’s notice letter was the appropriate date to begin calculating prejudgment interest. View "National Union v. Cargill" on Justia Law