Justia Civil Procedure Opinion Summaries

Nicholas and Stacy Boerson, owners of New Heights Farm I and II in Michigan, faced a disappointing corn and soybean harvest in 2019. They submitted crop insurance claims to Great American Insurance Company, which were delayed due to an ongoing federal fraud investigation. The Boersons sued Great American, the Federal Crop Insurance Corporation, and the U.S. Department of Agriculture for breach of contract, bad faith adjustment, and violations of insurance laws.The United States District Court for the Western District of Michigan dismissed the Boersons' claims. It ruled that claims related to Great American's nonpayment were unripe due to the ongoing investigation, while claims alleging false measurements and statements by Great American were ripe but subject to arbitration. The court also dismissed claims against the federal defendants on sovereign immunity grounds.The United States Court of Appeals for the Sixth Circuit affirmed the district court's dismissal. It held that the claims related to nonpayment were unripe because the insurance policy barred payment until the investigation concluded. The court also found that the arbitration agreement in the insurance policy covered the ripe claims against Great American, requiring those disputes to be resolved through arbitration. Additionally, the court ruled that sovereign immunity barred the claims against the federal defendants, as there was no clear waiver of immunity for constructive denial claims under the Federal Crop Insurance Act. View "New Heights Farm I, LLC v. Great American Insurance Co." on Justia Law

A motor vehicle collision occurred in Sussex County, Delaware, involving Joanne Dudsak, a New Jersey resident insured by New Jersey Manufacturers (NJM), and Christopher Koester, a Maryland resident insured by Allstate Insurance Company. NJM paid Personal Injury Protection (PIP) benefits to Dudsak and sought inter-company arbitration in Delaware to recover these costs. Allstate opposed, arguing that NJM's policy, being from New Jersey, did not qualify for arbitration under Delaware law, which requires the vehicle to be registered in Delaware for PIP subrogation rights.The arbitrator ruled in favor of NJM, awarding the full amount and rejecting Allstate's jurisdictional challenge. Allstate then filed a Petition to Vacate the Arbitration Award in the Delaware Chancery Court, arguing that the arbitrator exceeded his authority. NJM moved to dismiss the petition, claiming the issue was moot because Allstate had agreed to tender its policy limits, which would extinguish NJM's subrogation rights under Delaware law.The Delaware Chancery Court denied NJM's Motion to Dismiss, finding that a real dispute remained. The court then addressed the merits of Allstate's Motion for Summary Judgment. The court applied the standard of review under 10 Del. C. §5714(a)(5), which allows vacating an arbitration award if the arbitrated claim was barred by limitation and the objection was raised from the outset. The court found that §2118 of the Delaware PIP statute applies only to vehicles required to be registered in Delaware and does not cover out-of-state policies like NJM's. Consequently, the arbitrator exceeded his authority by accepting jurisdiction over the case. The court granted Allstate's Motion for Summary Judgment, vacating the arbitration award. View "Allstate Insurance Co. v. New Jersey Manufacturers Insurance Co." on Justia Law

In October 2020, Elliot Fama, employed by Sanford Contracting, was working on a project in Scarborough, Maine. After work, he and his co-worker, Robert Clarke, consumed alcohol at a hotel and a tavern. Later, in the hotel parking lot, Clarke struck Mr. Fama, causing him to fall and sustain fatal injuries. Laureen Fama, Mr. Fama’s widow, settled a workers’ compensation claim in Massachusetts for $400,000.Laureen Fama then filed a lawsuit in Cumberland County Superior Court against Bob’s LLC, which operated the tavern, and Clarke. She alleged liquor liability, wrongful death, loss of consortium, and battery. The defendants moved for summary judgment, arguing that the workers’ compensation settlement precluded the lawsuit. The Superior Court denied these motions, leading to the current appeal.The Maine Supreme Judicial Court reviewed the case. It held that under Maine’s Workers’ Compensation Act (MWCA), Ms. Fama’s settlement barred her from suing Clarke, as the Act’s immunity provisions extend to co-employees. Consequently, Clarke was exempt from the lawsuit. The court further held that because Clarke could not be retained as a defendant, the claims against Bob’s LLC failed under the “named and retained” provisions of Maine’s Liquor Liability Act (MLLA).The court vacated the Superior Court’s order denying summary judgment and remanded the case for entry of judgment in favor of Bob’s LLC and Clarke. View "Fama v. Bob's LLC" on Justia Law

A school bus owned by First Student, Inc., and insured by National Union Fire Insurance Company of Pittsburgh, PA, collided with two underinsured vehicles in Rhode Island, injuring Tiffany Briere and her minor daughter. Briere submitted a claim for underinsured motorist benefits to National Union, which was denied on the grounds that First Student had rejected such coverage. Briere then sued National Union, arguing that Rhode Island law required the policy to offer underinsured motorist coverage.The United States District Court for the District of Rhode Island granted summary judgment to National Union and First Student. The court found that the Rhode Island statute requiring underinsured motorist coverage did not apply because the insurance policy was not "delivered or issued for delivery" in Rhode Island. The policy had been issued by a New York-based broker and delivered to FirstGroup's headquarters in Ohio. Consequently, the court ruled that the policy was exempt from the statutory requirement.The United States Court of Appeals for the First Circuit reviewed the case and vacated the district court's summary judgment. The appellate court held that National Union had waived its defense based on the delivery requirement because it had not mentioned this ground in its initial denial letter to Briere. The court emphasized that insurers must notify their insureds of all grounds for denying coverage in their denial letters. Since National Union failed to do so, it could not later rely on the delivery requirement defense. The case was remanded for further proceedings to address other potential defenses and issues not considered by the district court. View "Briere v. National Union Fire Insurance Co. of Pittsburgh, PA" on Justia Law

Elizabeth Holt, a former insurance agent for Medicare Medicaid Advisors, Inc. (MMA), alleged that MMA and several insurance carriers (Aetna, Humana, and UnitedHealthcare) violated the False Claims Act (FCA). Holt claimed that MMA engaged in fraudulent practices, including falsifying agent certifications and violating Medicare marketing regulations, which led to the submission of false claims to the Centers for Medicare and Medicaid Services (CMS).The United States District Court for the Western District of Missouri dismissed Holt's complaint. The court found that no claims were submitted to the government, the alleged regulatory violations were not material to CMS’s contract with the carriers, and the complaint did not meet the particularity standard required by Federal Rule of Civil Procedure 9(b). The court also denied Holt's motion for reconsideration, which introduced a fraudulent inducement theory and requested leave to amend the complaint.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court's dismissal, agreeing that Holt's allegations did not meet the materiality requirement under the FCA. The court applied the materiality standard from Universal Health Services, Inc. v. United States ex rel. Escobar, considering factors such as whether the government designated compliance as a condition of payment, whether the violations were minor or substantial, and whether the government continued to pay claims despite knowing of the violations. The court found that the alleged violations did not go to the essence of CMS’s contract with the carriers and were not material to the government's payment decisions.The Eighth Circuit also upheld the district court's denial of Holt's motion for reconsideration and request to amend the complaint, concluding that adding a fraudulent inducement claim would be futile given the immateriality of the alleged violations. View "United States ex rel. Holt v. Medicare Medicaid Advisors" on Justia Law

A fire damaged a hotel owned by Shri Ganesai, LLC, which had an insurance policy with AmGuard Insurance Company. The policy also covered the mortgagee, Academy Bank, N.A. AmGuard denied Shri's claim, suspecting arson by Shri's principal, Alex Patel. During the investigation, the building suffered additional damage from vandalism and frozen pipes. Shri and Academy sued AmGuard for breach of contract and vexatious refusal to pay. The jury found in favor of the plaintiffs, awarding damages for the fire, vandalism, and freeze damage.The United States District Court for the Western District of Missouri denied AmGuard's motions for judgment as a matter of law and a new trial. AmGuard appealed, challenging the viability of Academy's vexatious-refusal claim, the exclusion of certain evidence, and the sufficiency of the evidence regarding damages from vandalism and frozen pipes. The district court had granted summary judgment to AmGuard on Shri's vexatious-refusal claim but allowed the remaining claims to proceed to trial.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decisions. The court held that Academy's vexatious-refusal claim was viable despite the settlement of the underlying breach-of-contract claim, as AmGuard's delay in payment constituted vexatious conduct. The court also found no abuse of discretion in the district court's exclusion of certain evidence, including the testimony of a witness and parts of Patel's deposition. Additionally, the court ruled that sufficient evidence supported the jury's findings on the timing and extent of the vandalism and freeze damage, and that the expert testimony admitted was reliable. The court concluded that the district court did not err in denying AmGuard's motions for judgment as a matter of law or a new trial. View "Academy Bank, N.A. v. Amguard Insurance Company" on Justia Law

Levi Werley was seriously injured while riding an uninsured dirt bike. After the insurance of the driver who struck him did not fully compensate for his injuries, Levi’s parents sought underinsured motorist (UIM) benefits under their own automobile insurance policies. Their insurer, Mid-Century Insurance Company, paid $250,000 under one policy but denied an additional $250,000 under another policy, citing a household vehicle exclusion. The Werleys argued that this exclusion was invalid and unenforceable.The United States District Court for the Eastern District of Pennsylvania agreed with the Werleys, ruling that the household vehicle exclusion was invalid under Pennsylvania’s Motor Vehicle Financial Responsibility Law (MVFRL). The court held that the exclusion acted as a de facto waiver of stacking, which is not permissible under the MVFRL. Consequently, the court granted summary judgment in favor of the Werleys, entitling them to the additional UIM benefits.The United States Court of Appeals for the Third Circuit reviewed the case and vacated the District Court’s order. The Third Circuit held that the household vehicle exclusion in the Multi-Vehicle Policy was valid and enforceable. The court distinguished this case from precedents like Gallagher v. GEICO Indemnification Co. and Donovan v. State Farm Mut. Auto. Ins. Co., noting that the Werleys had never paid premiums for UIM coverage on the dirt bike. The court emphasized that exclusions limiting UIM coverage are generally enforceable unless they act as impermissible de facto waivers of stacking, which was not the case here. The Third Circuit remanded the case with instructions to enter judgment in favor of Mid-Century. View "Mid-Century Insurance Co v. Werley" on Justia Law

A fire damaged a malt beverage store owned by A Maxon Company, LLC (AMC). Acuity Insurance Company sought a declaratory judgment to determine coverage under an insurance policy listing Greg and Tammy Weatherspoon as additional loss payees. The Weatherspoons counterclaimed for breach of contract. The circuit court granted Acuity’s motion for judgment as a matter of law on the Weatherspoons’ counterclaim, determining that the insurance policy terms prevented the Weatherspoons from recovering damages unless AMC successfully asserted a claim. The jury found that AMC principal, Russel Maxon, had intentionally started the fire, excluding coverage under AMC’s policy. The Weatherspoons appealed.The Circuit Court of the Fourth Judicial Circuit, Corson County, South Dakota, initially denied the Weatherspoons’ motion for summary judgment, ruling that the insurance contract was unambiguous and that the Weatherspoons’ claim was dependent on AMC’s claim. The court also denied Acuity’s motion for summary judgment, finding that there were factual disputes suitable for a jury. At trial, the court granted Acuity’s motion for judgment as a matter of law, concluding that the Weatherspoons could not recover under the policy because AMC’s claim was excluded due to Russel’s intentional act.The Supreme Court of the State of South Dakota affirmed the circuit court’s decision. The court held that the insurance policy’s Loss Payable Clause only allowed the Weatherspoons to collect if AMC could collect, and since the jury found that Russel intentionally started the fire, AMC was precluded from recovering. The court also found no abuse of discretion in admitting expert testimony from Special Agent Derek Hill and allowing the impeachment of Tracy Maxon with prior inconsistent statements. The court concluded that the Weatherspoons’ arguments regarding ambiguity and third-party beneficiary status were unavailing. View "Acuity Insurance V. A Maxon Company" on Justia Law

Mychal Byrd was injured in an automobile accident caused by an unknown motorist and subsequently died from his injuries. Byrd's medical expenses, totaling $474,218.24, were covered by the Gilster-Mary Lee Corporation Group Health Benefit Plan, a self-funded plan subject to ERISA. Byrd had an automobile insurance policy with Nationwide Insurance Company, which provided $50,000 in uninsured-motorist coverage. After Byrd's death, his family sued Nationwide in state court to collect the insurance proceeds. The Plan intervened, removed the case to federal court, and claimed an equitable right to the insurance proceeds.The United States District Court for the Eastern District of Missouri granted summary judgment in favor of the Plan, determining that the Plan was entitled to the insurance proceeds under the plan document. The plaintiffs, initially proceeding pro se, did not respond to the motion for summary judgment. After obtaining counsel, they moved for reconsideration, which the district court denied. The plaintiffs then appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and concluded that the district court lacked subject-matter jurisdiction. The appellate court determined that the plaintiffs' claim did not fall within the scope of ERISA's civil enforcement provisions because the plaintiffs were neither plan participants nor beneficiaries. Consequently, the claim was not completely preempted by ERISA, and the federal court did not have jurisdiction. The Eighth Circuit vacated the district court's judgment and remanded the case with instructions to return it to Missouri state court. View "Kellum v. Gilster-Mary Lee Corporation Group Health Benefit" on Justia Law

In 2013, Johnny Ray Penegar, Jr. was diagnosed with mesothelioma, and Medicare partially covered his treatment costs. He filed a workers' compensation claim against his employer, UPS, and its insurer, Liberty Mutual. After his death, his wife, Carra Jane Penegar, continued the claim and added a death benefits claim. The North Carolina Industrial Commission (NCIC) ruled in her favor, ordering Liberty Mutual to cover all medical expenses related to the mesothelioma and reimburse any third parties, including Medicare. The NCIC's decision was affirmed by the North Carolina Court of Appeals and the Supreme Court of North Carolina denied further review. In 2020, Penegar and Liberty Mutual settled, with Liberty Mutual agreeing to pay $18,500 and to handle any Medicare liens.Penegar filed a class action lawsuit in the Western District of North Carolina under the Medicare Secondary Payer Act (MSP Act), alleging that Liberty Mutual failed to reimburse Medicare, leading to a collection letter from the Centers for Medicare and Medicaid Services (CMS) demanding $18,500. Liberty Mutual moved to dismiss, arguing Penegar lacked standing and that the settlement precluded her claims. The district court agreed, finding Penegar lacked standing and dismissed the case.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's decision. The court held that Penegar did not suffer a cognizable injury in fact at the time she filed the lawsuit. The NCIC had ordered Liberty Mutual to reimburse Medicare directly, not Penegar, distinguishing her case from Netro v. Greater Baltimore Medical Center, Inc. Additionally, the CMS letter only posed a risk of future harm, which is insufficient for standing in a damages suit. Finally, any out-of-pocket expenses Penegar incurred were already compensated by Liberty Mutual before she filed the lawsuit, negating her claim of monetary injury. View "Penegar v. Liberty Mutual Insurance Co." on Justia Law