Justia Insurance Law Opinion Summaries

Jane held a minority stake in Du-Kane and Crush-Crete, companies owned by her husband, Paul, and other family members. The couple divorced in 2009. Jane died in 2017. Paul died months later. In 2017 Jane’s estate sued, alleging that Jane’s ownership interest was wrongfully diluted after the divorce. The complaint named only Du-Kane as the defendant, though the allegations concerned the actions of the couple's four sons as officers, directors, and shareholders. An amended complaint filed in 2018 added Crush-Crete and the Dunteman brothers as codefendants. The codefendants were insured under “claims made” liability policies issued in 2017 and 2018 by Hanover. With “claims made” insurance, the insured must notify the insurer of a “claim” in the policy period in which it is first “made.” If a claim goes unreported in the relevant policy period, the insurer owes no duty to defend or indemnify. The defendants notified Hanover and sought coverage under the 2018 policy. Hanover denied the request because the claim was first made in 2017 and had not been timely reported during that policy period.Hanover sought a declaration that it owed no defense or indemnity. The insureds counter-claimed breach of contract. The Seventh Circuit affirmed judgment for Hanover. The original complaint triggered a reportable claim during the 2017 policy period. Subsequent amendments to that complaint did not commence a new, distinct claim first made in 2018. View "Hanover Insurance Co. v. R.W. Dunteman Co." on Justia Law

The Supreme Court reversed the opinion of the court of appeals determining that the prior notice of events exclusion (Exclusion 15) contained in the insurance policies applied to deny the coverage sought by King's Daughters Medical Center (KDMC) for claims made against it and that Insurers were entitled to recoupment of expenses, holding that the court of appeals erred as to both issues.Multiple medical malpractice claims were asserted against KDMC alleging unnecessary cardiac operations and lack of informed consent, among other allegations. Insurers subsequently filed a declaratory action in circuit court to determine their rights and coverage under the relevant policies. The circuit court granted summary judgment in favor of KDMC. The court of appeals reversed, ruling that Exclusion 15 applied to bar professional liability and excess coverage for the underlying litigation and that Insurers were entitled to recoupment of their expenses thus far in defending the litigation. The Supreme Court reversed, holding (1) Exclusion 15 did not bar coverage; and (2) the court of appeals lacked jurisdiction to rule on recoupment. View "Ashland Hospital Corp. v. Darwin Select Insurance Co." on Justia Law

Bernacchi was a passenger in a taxicab insured by First Chicago when an uninsured driver struck the cab. In February 2021, an Illinois court concluded that Bernacchi was covered under the First Chicago policy up to $350,000. On February 11, 2021, Bernacchi sent First Chicago documentation, requesting $350,000, though she valued her entire loss at $680,000. On May 11, 2021, Bernacchi filed suit in federal court, alleging that First Chicago had still not done anything to adjust her claim.The district dismissed, reasoning that Bernacchi’s complaint failed to cite any contract language creating an obligation to adjust her claim or to do so within a certain timeframe; Bernacchi’s claim relied upon the Illinois Insurance Code, which does not provide a private right of action. The Seventh Circuit affirmed. The district court did not violate the party presentation rule. The parties squarely argued about Illinois insurance statutes and administrative regulations; 215 ILCS 5/215 ILCS 5/154.6 enumerates a list of acts that constitute improper claims practice, but neither it nor its surrounding statutes provide a private right of action. View "Bernacchi v. First Chicago Insurance Co." on Justia Law

The Supreme Court vacated the opinion of the court of appeals affirming the judgment of the trial court, after a jury trial, in this tort action for first-party insurance bad faith, holding that the trial court erred in instructing the jury on waiver and mitigation of damages.Plaintiff sued Defendant for insurance bad faith. Defendant denied liability and asked the trial court to instruct the jury on waiver, in the form of a contract waiver instruction, and mitigation of damages. The trial court granted Defendant's request for both jury instructions, and the jury returned a verdict for Defendant. The court of appeals affirmed. The Supreme Court reversed, holding that the waiver jury instruction was misleading and prejudicial to Plaintiff, requiring a remand for a new trial. View "Cavallo v. Phoenix Health Plans, Inc." on Justia Law

The Court of Appeals reversed the order of the appellate division reversing the judgment of Supreme Court concluding that Petitioners did not establish that the recently amended Insurance Regulation 187, 11 N.Y.C.R.R. part 224, which provides protections to consumers engaging in life insurance and annuity transactions, was invalid, holding that there was no basis to invalidate the regulation.Petitioners commenced this N.Y. C.P.L.R. 78 proceeding alleging that the amended regulation was unconstitutionally vague because certain terms did not satisfy the test for constitutional vagueness and that the Department of Financial Services (DFS) exceeded its authority in promulgating the amendment. Supreme Court held that the amendment was a proper exercise of the powers granted to DFS. The appellate division reversed, ruling that the amended regulation was unconstitutionally vague. The Court of Appeals reversed, holding that DFS appropriately exercised its authority "to create a carefully considered and clear regulation." View "Independent Insurance Agents & Brokers of N.Y., Inc. v. New York State Dep't of Financial Services" on Justia Law

In 2012, a competitor sued Creation for trademark violations. Creation requested that Selective Insurance provide coverage. Selective refused. Creation’s settlement with its competitor prevented Creation from selling one of its primary lines. Creation struggled financially. Selective sought a declaration in Illinois state court that it had no duty to defend. Creation countersued and also alleged breach of the insurance policy. The Illinois court entered partial summary judgment for Creation on its duty-to-defend claim, limited to fees Creation incurred before the original trademark litigation was settled.In 2014—in the middle of the state-court litigation—Creation sued Selective in federal court for breach of contract and under the Illinois Insurance Code. In 2016, Creation voluntarily dismissed its state-court breach-of-contract claim with leave to refile. The Illinois court expressly reserved Creation’s right to maintain its federal action on its contract claim. After the 2017 state court award, the federal district court awarded Creation nearly $3 million in damages on the Insurance Code claim. After remand, Creation unsuccessfully sought to amend its complaint to seek punitive damages. The district court then concluded that the doctrines of claim and issue preclusion barred Creation’s remaining contract claim.The Seventh Circuit reversed, noting that the case is an “anomaly.” The state court expressly reserved Creation’s right to file the claim in federal court, so the suit is not precluded by its earlier state-court litigation. View "Creation Supply, Inc. v. Selective Insurance Co. of the Southeast" on Justia Law

A declaratory judgment action was filed in the context of two insurance- company liquidation matters. The parties asserted they informally agreed, among themselves, and the single Commonwealth Court Judge overseeing the cases, to a procedure for a three-judge panel of the Commonwealth Court to render a decision to be reviewable via exceptions by the Commonwealth Court, en banc. However, as the agreement was not memorialized as of record, the party aggrieved by the panel opinion, the statutory liquidator, lodged an immediate appeal with the Pennsylvania Supreme Court after that opinion and order were filed, and then filed exceptions with the Commonwealth Court, en banc. After the Commonwealth Court, en banc, rendered a second opinion and order, overruling the exceptions and confirming the panel’s initial decision, the statutory liquidator filed a second appeal with the Supreme Court parallel to the first. This raised a jurisdictional question. The Supreme Court found two of four petitions filed were properly dismissed for want of jurisdiction. The other two were properly before the Court, and on the merits, the Court affirmed the Panel's July 9, 2021 order: “[t]here is simply no statutory authority for this well-intentioned proposal [or] any standard to guide the Liquidator’s establishment [of the proposal] or [the Commonwealth Court’s] evaluation thereof.” View "In Re: American Network Ins. Co." on Justia Law

Appellant is a self-described “watchdog association” that brings actions for injunctive relief against immigration consultants under section 22446.5, which provides a right of action against an immigration consultant to anyone who suffers damages by reason of the immigration consultant’s fraud, misrepresentation, or failure to provide services.In October 2017, Appellant brought over 90 actions against immigration consultants, two of whom had bonds issued by Appellee insurance company. After Appellant prevailed at trial against the consultants, it filed suit against Appellee to recover its attorney fees and costs against the Immigration Consultant Act bond. The trial court granted summary judgment in the insurance company's favor.On appeal, the Second Appellate District affirmed, explaining a surety issuing a statutory bond is liable only to the extent indicated in the code section under which the surety executes the bond and under the plain language of the relevant bond statutes, a non-aggrieved person who suffers no damages is not entitled to recovery from an Immigration Consultant Act bond. View "Immigrant Rights Defense etc. v. Hudson Insurance Co." on Justia Law

Plaintiff sought accidental death benefits under an employee benefit plan governed by the Employee Retirement Income and Security Act of 1974 (ERISA) after his wife died from injecting herself with a cocktail of unprescribed narcotics. The district court upheld the Life Insurance Company of North America’s (LINA) decision to deny benefits based on a policy exclusion for the “voluntary ingestion of any narcotic, drug, poison, gas or fumes unless prescribed or taken under the direction of a Physician.” Plaintiff appealed, contending that the district court erred because LINA’s decision was unreasonable and not supported by substantial evidence.   The Eighth Circuit affirmed. The court decided that LINA’s interpretation of “ingestion” was reasonable. The court then turned to whether LINA’s application of its interpretation to the facts is supported by substantial evidence. Here, the wife undisputedly died because she willingly injected herself with a combination of unprescribed narcotics. Therefore, there is sufficient evidence to support LINA’s application of the voluntary ingestion exclusion to the wife’s death. Thus, because the court agreed with the district court’s conclusion that LINA’s denial of benefits was justified in light of the voluntary ingestion exclusion, the court wrote it need not address LINA’s assertion that the wife’s death was not accidental. View "Jay Richmond v. Life Insurance Company" on Justia Law

Olson and Zdroik sustained injuries while volunteering at municipal fireworks displays in 2018. Fireworks distributed by Spielbauer Fireworks exploded prematurely at both events, severely burning the two. Both towns used teams of volunteers to operate their Fourth of July displays. Olson opened and closed a bin from which other volunteers retrieved fireworks during the Rib Lake show. Zdroik worked at the Land O’Lakes event as a “shooter,” manually lighting the fuses on mortar shells.Spielbauer’s insurer, T.H.E. Insurance, contested coverage under Spielbauer’s general and excess liability policies, which stated: This policy shall NOT provide coverage of any kind ... for any claims arising out of injuries or death to shooters or their assistants hired to perform fireworks displays or any other persons assisting or aiding in the display of fireworks whether or not any of the foregoing are employed by the Named Insured, any shooter or any assistant. The issue was whether the exclusion extends to all volunteers or only to those assisting hired shooters or hired assistants.The Seventh Circuit affirmed, in favor of T.H.E. Insurance. The Shooters Endorsement plainly and unambiguously excludes from coverage hired shooters and their hired assistants and “any other persons” who assist the fireworks display, regardless of whether they assist hired persons. View "T.H.E. Insurance Co. v. Olson" on Justia Law