Justia Insurance Law Opinion Summaries

MNDKK, LLC’s insurer, Great Lakes Insurance, sent subrogation demands through an assignee to Dingmann Brothers Construction (“Dingmann”) due to alleged dust-related property damage. Grinnell Mutual Reinsurance Company (“Grinnell”), Dingmann’s insurer, commenced a declaratory-judgment action to determine coverage under the insurance policy issued to Dingmann. The district court granted Grinnell’s motion for summary judgment, holding that two policy exclusions unambiguously apply due to the presence of silica in the dust and that coverage is foreclosed. Defendants argued that the two exclusions do not apply, meaning Grinnell is responsible for covering the cost of the property damage caused by the dust.   The Eighth Circuit affirmed the district court’s ruling and held that there is no genuine dispute of material fact about whether the dust contained silica. Further, Defendants argued that the cleanup provision does not apply because the damage was due to silica or silica-related dust itself, not its effects. Defendants claimed that there is a misplaced comma between “effects of” and “silica.” The court held that the comma before “silica” indicates that the phrase “the effects of” belongs with the phrase immediately preceding it, rather than with “‘silica’ or ‘silica-related dust.’” So, the last verb phrase in the series is “or in any way responding to or assessing the effects of,” and the comma separates the series from the noun phrase that is its direct object. Finally, the court held overlapping provisions can exist in an insurance policy and that both the cleanup and property-damage provisions apply. View "Grinnell Mutual Reinsurance Co v. Great Lakes Insurance SE" on Justia Law

Plaintiff-appellant Nshan Simonyan had a dispute with his insurer, Nationwide Insurance Company of America ("Nationwide") over the company's handling of his defense arising out of a three-car accident in which Simonyan was a driver. Simonyan asked Nationwide to appoint, as "Cumis" counsel, a law firm that he had already hired to advance his affirmative claim against the driver who hit him. Nationwide refused. Simonyan appealed the dismissal of his case after the trial court sustained Nationwide’s demurrer to his second amended complaint without leave to amend. Simonyan argued his allegations were sufficient to state claims for breach of contract and breach of the implied covenant of good faith and fair dealing, and that the trial court abused its discretion in denying his motion to reconsider based on new allegations. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Simonyan v. Nationwide Ins. Co. of America" on Justia Law

Comegys, an independent insurance agency, had an independent contractor relationship with Safeco, a liability insurer. Comegys marketed Safeco insurance policies to the public. Comegys was allegedly negligent in procuring automobile insurance for one of its clients. Comegys had provided the client with an automobile insurance policy from Safeco, which the client eventually needed to rely on when he caused a car accident that ended in a motorcyclist’s death. Comegys offered to settle (and did settle through the errors and omissions policy it had with Endurance) the potential negligence claims the client had against it.   Relying on the indemnification provision between Safeco and Comegys, Endurance sued Safeco. Endurance wants to be indemnified by Safeco because the attorney Safeco provided to the client after the car accident pointed out the potential negligence claim the client had against Comegys.   The Eleventh Circuit reversed and remanded the district court’s judgment finding in favor of Endurance’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing. The court held that Safeco was entitled to judgment as a matter of law. The court reasoned that under Florida law, “[i]ndemnity contracts are subject to the general rules of contractual construction . . . [and] must be construed on the [express] intentions of the parties.” Here, there is no breach because Endurance never carried its burden at trial of explaining how Safeco breached the indemnification provision of the Limited Agreement. Further, Endurance did not argue that there is any express term of the Limited Agreement (besides the indemnification provision, which requires breach of an independent contract provision) that has been violated. View "Endurance American Specialty Insurance Company v. Safeco Insurance Company of Illinois, et al." on Justia Law

Petitioner Lisa French went to respondents Centura Health Corporation and Catholic Health Initiatives Colorado d/b/a St. Anthony North Health Campus (collectively, “Centura”) for surgery. Upon reviewing French’s insurance information prior to surgery, Centura advised her that she would personally be responsible for $1,336.90 of the amounts to be billed. After the surgery, however, Centura determined that it had misread French’s insurance card and that she was, in fact, an out-of-network patient. Centura then billed French $229,112.13 and ultimately sued her to collect. The Colorado Supreme Court granted certiorari to review: (1) whether here, Centura’s database used by listing rates for specific medical services and supplies, was incorporated by reference into hospital services agreements (“HSAs”) that French had signed; and (2) if so, whether the price term in the HSAs was sufficiently unambiguous to render the HSAs enforceable. The Court concluded that because French neither had knowledge of nor assented to the chargemaster, which was not referenced in the HSA or disclosed to her, the chargemaster was not incorporated by reference into the HSA. Accordingly, the HSA left its price term open, and therefore, the jury appropriately determined that term. The Court reverse the judgment of the division below, and did not decide whether the price that French was to pay was unambiguous, even if the HSA incorporated the chargemaster. View "French v. Centura Health" on Justia Law

Reserve Mechanical Corp. appealed a Tax Court judgment affirming the decision of the Commissioner of Internal Revenue that it did not qualify for an exemption from income tax as a small insurance company and that the purported insurance premiums it received must therefore be taxed at a 30% rate under I.R.C. section 881(a). After review, the Tenth Circuit held that the record supported the Tax Court’s decision that the company was not engaged in the business of insurance. The court had two grounds for deciding that Reserve was not an insurance company: (1) Reserve had not adequately distributed risk among a large number of independent insureds; and (2) the policies issued by Reserve were not insurance in the commonly accepted sense. In addition, Reserve argued that if it was not an insurance company, the premiums it received should have been treated as nontaxable capital contributions. The Tenth Circuit also rejected that argument. View "Reserve Mechanical Corp. v. CIR" on Justia Law

Plaintiff and his son’s mother met with the insurance company’s producer seeking insurance covering the life of their adult son. The producer filled out the application, as well as a temporary insurance agreement (the “TIA”) to cover the son’s life while the application was pending. After completing the application and the TIA, the producer gave Plaintiff the opportunity to review. The producer subsequently submitted the application and authorized the TIA. After receiving notice of the death, Defendant sent Plaintiff a letter notifying him that the application had not been processed. Defendant subsequently denied coverage. Its basis for doing so was the misrepresentation and omission of key parts of the son’s medical history. Plaintiff then filed suit in state court against the producer and insurance company. The district court determined that Defendant denied coverage without just cause.The Fifth Circuit affirmed the district court’s ruling holding that the life insurance company was bound by its producer’s errors and omissions. The court reasoned that the district court acted within its discretion to deny Defendant’s pretrial motion in limine. Further, Defendant forfeited its argument related to the contractual element of “cause,” by not first presenting it to the district court. As for the insured’s “consent” to the contracts, the producer’s actions, errors and omissions in completing the insurance application and TIA were properly imputed to Defendant such that Defendant was estopped from raising the son’s lack of consent. Finally, the district court acted within its discretion in assessing penalty interest against Defendant. View "Thomas v. Ameritas Life Insurance" on Justia Law

Canter worked as a premises technician, installing wires, lifting heavy loads, and climbing tall ladders. After he began to suffer from severe migraines, lightheadedness, and dizziness, Canter concluded that he no longer could perform that work. He applied for short-term disability benefits in February 2017 through an AT&T plan. The plan administrator granted benefits for a few months, but AT&T terminated benefits after an independent medical reviewer concluded that Canter’s medical tests were normal and that his symptoms had improved. After Canter unsuccessfully appealed this decision using AT&T’s internal processes, he sued under the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1132.The district court granted the defendants summary judgment in favor of the defendants. The Seventh Circuit affirmed the decision but reversed the court’s award of $181 in pro hac vice fees to the defendants as not taxable “costs” under 28 U.S.C. 1920. Extensive medical testing consistently yielded normal results, even though the medical providers and reviewers thought that a significant problem would have shown up in one or more concrete, physiological ways. Canter himself reported that he was experiencing improvement. View "Canter v. AT&T Umbrella Benefit Plan No.3" on Justia Law

In September 2016, Legend’s Creek filed a claim with Travelers for hail and wind damage that had occurred in May 2016 to the north-facing sides of insured condominium buildings. Legend’s Creek retained Kassen to negotiate the claim with Travelers’ agent Knopp. The two initially agreed to repair the north-facing sides of the buildings. Travelers issued a $644,674.87 check. In January 2017, Kassen informed Knopp that the repairs were unacceptable. Travelers investigated and submitted additional checks of $238,766.88 and $28,438.02. Kassen told Knopp that the north-facing sides had to be completely replaced. Travelers agreed and, in February 2018, submitted an estimate. Less than three weeks before the contractual deadline to file suit Kassen demanded the replacement of all sides of the buildings because the new sides did not match to his satisfaction the undamaged ones. Knopp informed Kassen that Travelers would only replace the damaged north-facing sides and paint them to match.Legend’s Creek sued, alleging breach of contract and bad faith. Travelers argued that the lawsuit was brought outside the two-year contractual window and later moved to compel Travelers to submit to an appraisal. The magistrate compelled an appraisal for discovery purposes. The appraiser granted an “award” to Legend’s Creek based on the mismatched sides. The district court granted Travelers summary judgment. The Seventh Circuit affirmed, citing the limitations clause and rejecting claims of waiver. View "Legend's Creek Homeowners Associaton, Inc. v. Travelers Indemnity Co. of America" on Justia Law

The Court of Chancery granted Defendants' partial motion to dismiss Plaintiffs' amended complaint, holding that Plaintiffs did not satisfy the statutory definition of "creditor" as required to have standing to pursue their amended claims under the Delaware Uniform Fraudulent Transfer Act (DUFTA).Defendant Genworth Life Insurance Company (GLIC) wrote a line of long-term care (LTC) insurance policies. Plaintiffs, a putative class of GLIC LTC policyholders and GLIC insurance agents who sold LTC policies, alleged that fraudulent transfers jeopardized GLIC's ability to pay LTC claims to its policyholders and LTC commissions to its insurance agents. Plaintiffs later amended their complaint to add three new claims challenging the distribution of certain proceeds as intentional and constructive fraudulent transfers. The Court of Chancery granted Defendants' partial motion to dismiss, holding that Plaintiffs' new DUFTA claims failed because they were not "claims" under DUFTA. View "Burkhart v. Genworth Financial, Inc." on Justia Law

National Western Life Insurance Company (NWL) appealed after a jury found the company liable for negligence and elder abuse arising from an NWL annuity sold to plaintiff-appellant Barney Williams by Victor Pantaleoni. In 2016, Williams contacted Pantaleoni to revise a living trust after the death of Williams’ wife, but Pantaleoni sold him a $100,000 NWL annuity. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages totaling almost $3 million. In a prior opinion, the Court of Appeal reversed judgment, concluding that Pantaleoni was an independent agent who sold annuities for multiple insurance companies and had no authority to bind NWL. Williams petitioned the California Supreme Court for review, which transferred the matter back to the Court of Appeal to consider the agency relationship in light of Insurance Code sections 32, 101, 1662, 1704 and 1704.5, and O’Riordan v. Federal Kemper Life Assurance Company, 36 Cal.4th 281, 288 (2005). After the appellate court issued its opinion on transfer from the California Supreme Court, both Williams and NWL filed petitions for rehearing on various grounds. Upon consideration of those petitions, the Court of Appeal “remain[ed] confident” its prior opinion was correct and reissued that opinion with minor modifications. The Court affirmed the judgment finding NWL liable for negligence and financial elder abuse. However, punitive damages assessed against NWL were reversed. View "Williams v. National Western Life Insurance Co." on Justia Law