Justia Insurance Law Opinion Summaries

The Supreme Court held that S.D. Codified Laws 58-29B-56 provides a state insurance liquidator an additional 180 days to provide a notice of a claim under a claims-made professional liability policy.The South Dakota Director of Insurance filed a petition for an order of liquidation of ReliaMax Surety Company (RSC), a subsidiary of ReliaMax Holding Company (RHC). The circuit court declared RSC to be insolvent and directed the company's liquidation. The state insurance liquidator (Liquidator) later commenced the underlying action against the directors and officers (D&O) of RSC and RHC. Under a settlement agreement, the Liquidator was granted a final judgment, agreeing not to execute upon and instead receiving an assignment of the D&Os' claims for coverage under a policy issued by SL Specialty. The Liquidator then brought this action against XL Speciality. At issue was the timeliness of the Liquidator's claim seeking D&O coverage. The district court certified questions of law to the Supreme Court. The Court held that section 58-29B-56 provides a state insurance liquidator an additional 180 days to provide notice of a claim under a claims-made professional liability policy. View "Deiter v. XL Specialty Insurance Co." on Justia Law

The Supreme Court quashed the decision of the court of appeal issuing a writ of prohibition to prevent the circuit court from exercising jurisdiction over certain claims, holding that the court of appeal erred in issuing the writ.Plaintiff brought this lawsuit against an insurance company and the law firm representing the company in the underlying suit Plaintiff brought against the insurer, arguing that Defendants violated confidentiality requirements applicable to a mediation. After the circuit court denied Defendants' motions to dismiss Defendants petitioned the Third District relief. The Third District granted a writ of prohibition, concluding that the circuit court had exceeded its jurisdiction by entertaining Defendants' collateral estoppel affirmative defense. The Supreme Court quashed the decision below, holding that the writ of prohibition was used in an improper manner here. View "Mintz Truppman, P.A. v. Cozen O'Connor, PLC" on Justia Law

The relevant consolidated appeals constitute the latest chapter of a long-running legal battle over attempts to satisfy a 2010 default judgment of $318 million under the Anti-Terrorism Act, 18 U.S.C. Section 2333, against the Revolutionary Armed Forces of Colombia (the Fuerzas Armadas Revolucionarias de Colombia or FARC) for murder and kidnapping.   In the first appeal (Case No. 20-11736), Appellant appealed the district court’s orders directing certain garnishees to liquidate and/or distribute their assets to Plaintiffs who obtained the $318 million judgment. In the second appeal(Case No. 20-12467) Appellant appealed the denial of their motion for a preliminary injunction to stop the sale of real property located at 325 Leucadendra Drive in Coral Gables, Florida. In the third appeal(Case No. 20-12545) Appellant’s wife appealed the district court’s denial of her motion to intervene in the proceedings concerning the sale of real property located at 325 Leucadendra Drive (and owned by Leucadendra 325, one of the Appellants in Case Nos. 20-11736 and 20-12467).   In Case No. 20-11736, the Eleventh Circuit concluded that a jury must decide whether Appellant and his companies qualify as agencies or instrumentalities of the FARC such that their assets can be garnished by Plaintiffs to satisfy their $318 million judgment. The court, therefore, reversed and remanded that appeal. In Case No. 20-12467, the court dismissed the appeal as moot because 325 Leucadendra has been sold and the court lacks the ability to grant the requested relief. In Case No. 20- 12545, the court affirmed the district court’s order denying Appellant’s wife’s motion to intervene as untimely and therefore dismiss the appeal. View "Keith Stansell, et al v. UBS Financial Services, Inc., et al" on Justia Law

Corwell’s insurance broker told him that Coventry would essentially provide free life insurance for a couple of years before an assignment of the policy to those who had funded it from the beginning, at no expense or risk to the insured. In 2006, Corwell, age 78, applied to Sun Life for a $5 million life insurance policy, indicating that his family L.P. would be the primary beneficiary and Corwell would be the owner. The annual premium, $300,000 per year, exceeded Corwell’s income almost every year. Corwell falsely stated that the premiums would not involve premium financing. Sun would not have issued the policy if it had known that Corwell would be using a non-recourse loan to pay the premiums. At the end of the loan’s 30-month term, Coventry notified Corwell that the balance was $569,572; Corwell could either repay it or relinquish the policy. As expected, Corwell relinquished the policy, which the lender sold to Coventry. Sun Life rejected a 2017 death claim and sought a declaratory judgment that the policy was void as an illegal wagering contract, procured for the benefit of strangers who lacked an insurable interest, in violation of Illinois law. The district court granted Sun summary judgment and allowed it to keep almost all of the premiums.The Seventh Circuit affirmed with the exception of part of the premiums. Illinois law looks beyond the form of the transactions and considers the substance to determine whether a purchase was supported by an insurable interest. This funding arrangement was an unlawful wager by strangers on Corwell’s life. View "Sun Life Assurance Company of v. Wells Fargo Bank, N.A." on Justia Law

Circle Block owns and operates a downtown Indianapolis hotel with more than 200 guest rooms, a business center, and spa and fitness facilities. In March 2020, state and county governments adopted public health measures in response to the spread of COVID-19, prohibiting public gatherings of more than 50 people. An Indiana stay-at-home order restricted travel and mandated the closure of all non-essential businesses. Hotels were considered essential businesses “to the extent they are used for lodging and delivery or carryout food services.” By March 19, only six guest rooms were occupied. A month later, the hotel suspended operations, while continuing to incur expenses. Circle Block filed an unsuccessful claim under its commercial property insurance policy, which included business income and extra expense coverage, civil authority coverage, dependent property coverage, communicable disease coverage, and business access coverage; each required “direct physical loss or damage” to property. The policy had a “mortality and disease” exclusion.The Seventh Circuit affirmed the dismissal of the case and denied a motion to certify questions of state law to the Indiana Supreme Court. Circle Block did not allege any direct physical loss or damage; a mere loss of use or functionality was not sufficient. Nor were allegations that virus particles had attached to surfaces at the hotel enough to show direct physical loss or damage. View "Circle Block Partners, LLC v. Fireman's Fund Insurance Co." on Justia Law

Larry Nassar, who was affiliated with USAG, sexually assaulted hundreds of female athletes. After Nassar’s conduct was revealed, USAG faced multiple lawsuits and investigations. USAG and its insurers, including Liberty, litigated questions about insurance coverage in an adversary proceeding before a bankruptcy court. In a previous appeal, the Seventh Circuit affirmed the decision that Liberty had a duty to defend USAG. There were ancillary disputes over the amounts of attorneys’ fees that Liberty owed USAG. While an appeal was pending, USAG sought to enforce the order entitling it to reimbursement. Liberty resisted, asserting that large portions of the fees USAG claimed were not reasonable and necessary. The bankruptcy court recommended that the district court award USAG nearly all the requested fees. The district court adopted most of the bankruptcy court’s findings and entered judgment for USAG.The Seventh Circuit affirmed. The lower courts correctly concluded that USAG was entitled to a presumption that the fees it incurred were reasonable and necessary despite Liberty’s challenges to the nature of USAG’s supervision of outside counsel and the proportion of fees paid by USAG. The particular form of supervision suggested by Liberty and the policyholder’s full payment of all the fees it incurred are not prerequisites for that presumption. Liberty failed to rebut the presumption. View "USA Gymnastics v. Liberty Insurance Underwriter, Inc." on Justia Law

TIG Insurance Company (“TIG”) appeals from a judgment and order of the district court. TIG asserts that Judge Ramos erred in ordering it to arbitrate a coverage dispute with ExxonMobil Oil Corporation (“Exxon”). Even if it was required to arbitrate, TIG contends that Judge Ramos erred in awarding Exxon prejudgment interest when confirming the arbitral award. After entering judgment, and after TIG had appealed, the district court clerk notified the parties that it was brought to Judge Ramos’s attention that he owned stock in Exxon when he presided over the case. Nothing in the record suggests that Judge Ramos was aware of his conflict at the time he rendered his decisions, and the parties do not suggest otherwise. TIG moved in the district court to vacate the judgment. The case was reassigned to a different judge, who denied the motion to vacate. TIG appealed from that denial as well.The Second Circuit affirmed the district court’s denial of Appellant’s motion to vacate and the district court’s order compelling arbitration, reversed in part its decision granting Exxon’s request for prejudgment interest, and remanded to the district court for further proceedings. The court explained that vacatur was not required because this case presents only questions of law, and a non-conflicted district judge reviewed the case de novo. As to the merits, the court held that the district court did not err in compelling arbitration because the parties were subject to a binding arbitration agreement, but that the district court erred in ordering TIG to pay pre-arbitral-award interest. View "ExxonMobil Oil Corporation v. TIG Insurance Company" on Justia Law

The issue this interlocutory appeal presented for the New Hampshire Supreme Court’s review was filed by appellant Zurich Insurance plc, German Branch (Zurich). Zurich sought to challenge a superior court order that granted the motion of the Insurance Commissioner of the State of New Hampshire, as Liquidator (Liquidator) of the Home Insurance Company (Home), for approval of the Claim Amendment Deadline pursuant to the Insurers Rehabilitation and Liquidation Act (Act). Policyholders Bridgestone Americas Tire Operations, LLC, Eli Lilly and Company, ViacomCBS Inc., and the Archdiocese of Saint Paul and Minneapolis Settlement Trust (policyholders), submitted a brief in support of the Claim Amendment Deadline. The two questions presented were whether the superior court acted within its discretion: (1) “in granting the Liquidator’s motion and approving the Claim Amendment Deadline on the law, facts and circumstances presented”; and (2) in concluding that the Claim Amendment Deadline struck “a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims” in accordance with RSA 402-C:46, I (2018). The Supreme Court answered both questions in the affirmative. View "In the Matter of the Liquidation of The Home Insurance Company" on Justia Law

The United States Federal District Court for the Western District of Washington certified a question of law to the Washington Supreme Court. Cox Construction was the general contractor of a remodeling project. Cox hired Baker & Son Construction, Inc. as a subcontractor. A Baker employee allegedly caused a two-by-four to fall from a railing and strike Ronnie Cox, owner of Cox Construction, who later died from his injury. Baker allegedly called an insurance agent to alert them of the incident. The agent told Baker that no action needed to be taken because at that time, no claim existed. A few months later, Baker received a wrongful death claim from an attorney representing Cox’s widow. Baker notified its insurer, Preferred Contractors Insurance Company (PCIC) of the claim. PCIC denied coverage, but agreed to defend Baker under a reservation of rights. The certified question to the Washington Supreme Court related to the “claims-made” nature of the policy and the timing of Baker’s tender of Ms. Cox’s claim. The Supreme Court replied to the certified question that in light of RCW 18.27, a contractor’s commercial general liability insurance policy that requires the loss to occur and be reported within the same policy year, and provides neither neither prospective nor retroactive coverage violates Washington’s public policy. View "Preferred Contractors Ins. Co. v. Baker & Son Constr., Inc." on Justia Law

The Court of Appeals affirmed the judgment of the circuit court ruling that a household exclusion in umbrella policy issued by The Travelers Indemnity Company (TIC) was valid and enforceable, holding that the circuit court properly granted summary judgment to Travelers on Count VIII of Plaintiffs' complaint.Michael Buarque de Macedo and his wife and child died in a two-vehicle collision in Montgomery County and a remaining child suffered permanent injuries. Michael and his wife were the named insureds of a primary automobile liability insurance policy issued by TIC. The policy contained a household exclusion purporting to preclude coverage for bodily injury or personal injury suffered by Michael or related individuals who resided in Michael's household. Plaintiffs (collectively, the Macedos) brought this action asserting several claims against Michael's estate and the State. Count VIII of the complaint sought a declaratory judgment that the household exclusion was void as against public policy and contrary to statute. The circuit court declared the household exclusion valid and enforceable. The court of special appeals affirmed. The Court of Appeals affirmed, holding that the circuit court correctly ruled that the household exclusion in TIC's umbrella policy was valid and enforceable. View "Macedo v. Automobile Insurance Co." on Justia Law