Justia Civil Procedure Opinion Summaries

Plaintiffs, representing a class of drivers, alleged that Progressive Specialty Insurance and Progressive Advanced Insurance systematically underestimated the actual cash value (ACV) of their totaled vehicles, thereby breaching their insurance agreements. The plaintiffs claimed that Progressive's method of calculating ACV, which included a "Projected Sold Adjustment" (PSA) to account for the fact that used cars often sell for less than their listed prices, was improper and resulted in underpayment.The United States District Court for the Eastern District of Pennsylvania certified two damages classes, finding that the plaintiffs' claims centered on the legitimacy of the PSAs and that this issue could be resolved on a class-wide basis. The court held that the plaintiffs had standing and rejected Progressive's arguments against commonality, predominance, superiority, and adequacy.The United States Court of Appeals for the Third Circuit reviewed the case and concluded that the District Court had abused its discretion in certifying the classes. The Third Circuit held that proving whether Progressive undercompensated each class member was an individual issue that could not be resolved on a class-wide basis. The court emphasized that the key issue was whether each class member received less than the true ACV of their vehicle, which would require individualized inquiries. As a result, the court found that common issues did not predominate over individual ones, and the District Court's certification of the classes was reversed and remanded for further proceedings. View "Drummond v. Progressive Specialty Insurance Co." on Justia Law

Jose Cruz-Muniz and Sandra Cruz were injured in a car accident in 2018 and received treatment from C-Spine Orthopedics, PLLC. They assigned their rights to seek personal protection insurance (PIP) benefits from Progressive Michigan Insurance Company to C-Spine. C-Spine then assigned its accounts receivable, including the claims for unpaid benefits, to several factoring companies. Progressive argued that C-Spine lacked standing to seek payment because it had assigned its rights to the factoring companies. C-Spine countered with signed counter-assignments from the factoring companies, purportedly restoring its right to bring suits. The trial court initially denied Progressive's motion but later granted it, concluding that C-Spine lacked standing when the complaints were filed.In a separate case, Parie Wallace was injured in a bus accident and received treatment from several providers, including C-Spine. Wallace assigned her rights to seek PIP benefits to these providers. She later filed a lawsuit against Suburban Mobility Authority for Regional Transportation (SMART) seeking payment of PIP benefits. SMART argued that Wallace could not bring the action because she had assigned her rights to the providers. The trial court allowed Wallace to obtain revocations of the assignments, which she did, and then denied SMART's motion for summary disposition. The Court of Appeals reversed, holding that Wallace was not the real party in interest when she filed her complaint and that her claims were barred by the one-year-back rule.The Michigan Supreme Court held that both C-Spine and Wallace had standing to file their lawsuits but were not the real parties in interest at the time they filed suit because they had assigned their claims. The Court ruled that defects in real party in interest status could be cured after filing a lawsuit. In C-Spine's case, the Court of Appeals' judgment was affirmed on alternate grounds, and the case was remanded to the trial court for further proceedings. In Wallace's case, the Court of Appeals' judgment was affirmed in part, reversed in part, and vacated in part, and the case was remanded for the trial court to consider whether equitable rescission was warranted and whether the real party in interest defect could be cured. View "C-Spine Orthopedics PLLC v. Progressive Michigan Insurance Company" on Justia Law

C-Spine Orthopedics, PLLC, filed two actions in the Macomb Circuit Court against Progressive Michigan Insurance Company to recover personal protection insurance (PIP) benefits for care provided to Jose Cruz-Muniz and Sandra Cruz, who were injured in a 2018 car accident. Jose and Sandra assigned their rights to seek PIP benefits to C-Spine, which then assigned its accounts receivable, including these claims, to factoring companies. Progressive moved for summary disposition, arguing C-Spine lacked standing as it had assigned its rights. The trial court initially denied but later granted the motion, concluding C-Spine lacked standing when the complaints were filed. The Court of Appeals reversed, holding C-Spine retained its claims for PIP benefits under MCL 500.3112.Parie Wallace filed an action in the Wayne Circuit Court against Suburban Mobility Authority for Regional Transportation (SMART) seeking PIP benefits after being injured in a bus accident. Wallace assigned her rights to PIP benefits to her medical providers. SMART moved for summary disposition, arguing Wallace could not bring the action due to the assignments. The trial court allowed Wallace to obtain revocations of the assignments, which she did, and then denied SMART’s motion. The Court of Appeals reversed, holding Wallace was not the real party in interest when she filed her complaint and that her claims were barred by the one-year-back rule.The Michigan Supreme Court held that both C-Spine and Wallace had standing to file their lawsuits but were not real parties in interest at the time of filing due to their assignments. The Court ruled that defects in real party in interest status could be cured after filing. In C-Spine’s case, the Court of Appeals’ judgment was affirmed on alternate grounds, and the case was remanded to the trial court to consider whether C-Spine could cure the defect. In Wallace’s case, the Court of Appeals’ judgment was affirmed in part, reversed in part, and vacated in part, and the case was remanded for the trial court to consider whether equitable rescission was warranted and whether the real party in interest defect could be cured. View "Wallace v. Smart" on Justia Law

A general contractor, Keluco General Contractors, Inc., secured a workers’ compensation and employers’ liability policy through Travelers Property Casualty Company of America. The policy was set to last one year, expiring on March 5, 2017. After the policy expired, a Keluco employee was injured at work. Keluco attempted to make a claim on its workers’ compensation policy and discovered it had expired. Travelers claimed to have sent a notice of nonrenewal to Keluco and its insurance agent, Gretchen Santerre, but Keluco claimed it never received the notice.Keluco sued Santerre and her employer, Country Mutual Insurance Company, for failing to inform it of the nonrenewal notice. Santerre filed a third-party complaint against Travelers. The Superior Court of Alaska granted partial summary judgment against Travelers, ruling that it failed to send the nonrenewal notice in the manner required by statute, specifically by not obtaining a certificate of mailing from the United States Postal Service (USPS). The court found that Travelers breached its contract with Keluco.The Supreme Court of the State of Alaska reviewed the case. The court affirmed the Superior Court’s rulings on summary judgment, agreeing that Travelers violated AS 21.36.260 by not obtaining a certificate of mailing from USPS and thus breached its contract with Keluco. The court also affirmed the dismissal of Travelers’ contribution claim against Santerre, noting that Alaska law allows for the allocation of fault to a party who has settled out of a case.However, the Supreme Court reversed the Superior Court’s determination of when prejudgment interest began to accrue. The Supreme Court held that prejudgment interest should begin to accrue on September 20, 2017, the date the Keluco employee was injured and entitled to workers’ compensation benefits, rather than January 9, 2017. The case was remanded for recalculation of prejudgment interest. View "Travelers Property Casualty Company of America v. Keluco General Contractors" on Justia Law

James Cooper was injured in a car accident in August 2019 while riding as a passenger in a car owned by Rick Huffman. Both Cooper and Huffman were employees of Pison Management, LLC, and were driving to a jobsite for work. Cooper's injuries exceeded the third-party driver's insurance limits, so he sought underinsured motorist (UIM) coverage under Pison's commercial automobile policy issued by Erie Insurance Property & Casualty Company. The policy provided $1 million in liability coverage for two vehicles owned by Pison and a class of non-owned vehicles but only offered UIM coverage for the owned vehicles. Erie denied Cooper's claim for UIM coverage.The United States District Court for the Southern District of West Virginia granted summary judgment in favor of Cooper, holding that West Virginia Code § 33-6-31 required Erie to offer UIM coverage for all vehicles covered by the liability policy, including non-owned vehicles. The court issued a declaratory judgment that Cooper was entitled to $1 million in UIM coverage. Erie appealed the decision.The United States Court of Appeals for the Fourth Circuit reviewed the case and certified a question of law to the West Virginia Supreme Court of Appeals. The West Virginia court concluded that West Virginia Code § 33-6-31 did not require Erie to offer UIM coverage for non-owned vehicles. The court determined that Cooper was not an "insured" under the statute because Pison, the named insured, did not own the vehicle in which Cooper was riding and thus could not consent to its use for UIM purposes.Applying the West Virginia court's interpretation, the Fourth Circuit vacated the district court's judgment in favor of Cooper and remanded the case with instructions to enter judgment in favor of Erie. View "Erie Insurance Property & Casualty Company v. Cooper" on Justia Law

After Hurricane Maria damaged its business, Coco Rico, LLC sued its insurer, Universal Insurance Company, for failing to pay its insurance claim and won. The jury awarded Coco Rico higher damages for its business interruption loss claim than it had requested, plus extra, consequential damages. This appeal centers on the district court's rulings on several post-verdict motions: Universal sought to eliminate or reduce the jury's damages awards, while Coco Rico sought attorneys' fees and prejudgment interest from Universal. After the district court denied the motions, both parties appealed.The United States District Court for the District of Puerto Rico denied Universal's renewed motion for judgment as a matter of law on the consequential damages claim and its motion for a new trial or reduction of the contractual damages award. The court reduced the jury's BI & EE award from $873,000 to $750,000, in line with the insurance policy maximum, but rejected Universal's argument that the award should be further reduced to $686,098. The court also denied Coco Rico's motion to amend the judgment to add attorneys' fees and prejudgment interest.The United States Court of Appeals for the First Circuit reviewed the case. The court agreed with Universal that there was no evidentiary basis for the jury to award consequential damages or higher business interruption loss damages than Coco Rico had established at trial. The court reversed the district court's ruling denying Universal's motions regarding the damages awards and affirmed its ruling denying Coco Rico's motion for attorneys' fees and prejudgment interest. The court held that the jury's award of $873,000 for business interruption loss exceeded the evidence presented, which supported only $686,098, and that there was no evidence to support the $250,000 consequential damages award. The court remanded the case for further proceedings consistent with its opinion. View "Coco Rico, LLC v. Universal Insurance Company" on Justia Law

Eric Jackson, a commercial tractor-trailer driver, was injured in a motor-vehicle collision in Morgan County, Alabama, on December 20, 2020. Jackson's personal vehicles were insured by State Farm Mutual Automobile Insurance Company under policies issued in Kentucky, which included uninsured/underinsured-motorist (UIM) coverage. In April 2022, Jackson sued the alleged at-fault driver in the Morgan Circuit Court. Later, he sought to amend his complaint to add State Farm as a defendant to recover UIM benefits. State Farm denied the claim, asserting that Jackson failed to file his UIM claim within the two-year period required by Kentucky law, as stipulated in the insurance policies.The Morgan Circuit Court granted State Farm's motion for judgment on the pleadings, concluding that Kentucky law governed the claim and that Jackson did not file his complaint within the required two-year period. Jackson appealed, arguing that Alabama's six-year statute of limitations should apply and that any contractual provision shortening this period was void under Alabama law.The Supreme Court of Alabama reviewed the case de novo. The court noted that Alabama enforces choice-of-law provisions in contracts unless they violate public policy. Jackson's policies explicitly incorporated Kentucky's two-year statute of limitations for filing accident-related tort claims. The court found that the policies were clear and unambiguous in this regard and that Kentucky law, which allows such contractual limitations, applied. The court distinguished this case from others where no specific choice-of-law provision was present or where the provision did not explicitly include procedural laws like statutes of limitations.The Supreme Court of Alabama affirmed the lower court's judgment, holding that the contractual provision incorporating Kentucky's two-year statute of limitations was valid and enforceable, thus barring Jackson's UIM claim. View "Jackson v. State Farm Mutual Automobile Insurance Co." on Justia Law

Casey Cotton rear-ended Caleb Crabtree, causing significant injuries. Cotton, insured by Allstate, faced potential liability exceeding his policy limit. Allstate allegedly refused to settle with Crabtree and failed to inform Cotton of the settlement negotiations or his potential liability, giving Cotton a potential bad-faith claim against Allstate. The Crabtrees sued Cotton, who declared bankruptcy. The bankruptcy court allowed the personal-injury action to proceed, resulting in a $4 million judgment for the Crabtrees, making them judgment creditors in the bankruptcy proceeding. Cotton’s bad-faith claim was classified as an asset of the bankruptcy estate. The bankruptcy court allowed the Crabtrees to purchase Cotton’s bad-faith claim for $10,000, which they financed through Court Properties, Inc.The Crabtrees sued Allstate, asserting Cotton’s bad-faith claim. The United States District Court for the Southern District of Mississippi dismissed the action for lack of subject matter jurisdiction, holding that the assignments of Cotton’s claim to Court Properties and then to the Crabtrees were champertous and void under Mississippi law. Consequently, the court found that the Crabtrees lacked Article III standing as they had not suffered any injury from Allstate.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court certified a question to the Supreme Court of Mississippi regarding the validity of the assignments under Mississippi’s champerty statute. The Supreme Court of Mississippi held that the statute prohibits a disinterested third party engaged by a bankruptcy creditor from purchasing a cause of action from a debtor’s estate. Based on this ruling, the Fifth Circuit held that the assignment of Cotton’s claim to Court Properties was void, and thus, the Crabtrees did not possess Cotton’s bad-faith claim. Therefore, the Crabtrees lacked standing to sue Allstate, and the district court’s dismissal was affirmed. View "Crabtree v. Allstate Property" on Justia Law

UnitedHealthCare Insurance Company and its affiliates (collectively, United) were sued by Fremont Emergency Services and other emergency medical providers (collectively, TeamHealth) for underpaying claims for emergency medical services provided to United’s members. TeamHealth alleged that United failed to adequately reimburse them for services rendered under the Emergency Medical Treatment and Labor Act (EMTALA) after their contract with United expired, leaving them as out-of-network providers. TeamHealth claimed United was unjustly enriched and breached an implied-in-fact contract, also asserting statutory claims under the Prompt Pay and Unfair Claims Practices Acts.The case was initially removed to federal court, which found no ERISA preemption and remanded it to state court. The Eighth Judicial District Court of Nevada ruled in favor of TeamHealth, awarding them compensatory and punitive damages, prejudgment interest, and attorney fees. United appealed the judgment and petitioned to seal certain court documents.The Supreme Court of Nevada reviewed the case and found substantial evidence supporting the jury’s verdict on unjust enrichment but not on the implied-in-fact contract or statutory claims. The court held that ERISA did not preempt TeamHealth’s claims and that United was entitled to judgment as a matter of law on the Unfair Claims Practices Act claim, as the statute did not provide a private right of action for medical providers. The court affirmed the compensatory damages for unjust enrichment but vacated the punitive damages award, remanding for recalculation to a 1:1 ratio of compensatory to punitive damages. The court also reversed the prejudgment interest and attorney fees awards under the Prompt Pay Act and remanded for a new determination of prejudgment interest.Additionally, the court denied United’s petition to seal certain documents, finding that United failed to meet its burden to demonstrate the necessity of sealing. The court concluded that the district court did not abuse its discretion in refusing to seal parts of the record. View "UnitedHealthCare Insurance Company v. Fremont Emergency Services" on Justia Law

Union Pacific Railroad Company, as the corporate successor to a dissolved coal mining company, periodically received mine subsidence claims from the Illinois Mine Subsidence Insurance Fund. The Fund, acting as a reinsurer for primary insurers offering mine subsidence coverage, sought to recover its reinsurance payments from Union Pacific. After years of litigation, Union Pacific sued the Fund for declaratory and injunctive relief to preclude future cases. The Fund moved to dismiss, and the district court allowed the complaint seeking injunctive relief to proceed on certain theories but not others. Union Pacific brought an interlocutory appeal.The United States District Court for the Central District of Illinois had previously ruled that Union Pacific could seek declaratory and injunctive relief for subsidence claims acquired by the Fund before the Gillespie case and the 2019 Opinion but not for future claims. Union Pacific amended its complaint, and the district court reiterated its earlier decision, dismissing the request for future injunctive relief while allowing the case to proceed on the earlier claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and concluded that it lacked appellate jurisdiction. The court determined that the district court's order was a narrowing of the injunctive relief rather than a definitive refusal. The court also found that the injunctive relief sought on appeal was not substantially different from the relief still pending in the district court. As a result, the appeal was dismissed. View "Union Pacific Railroad Co. v. Illinois Mine Subsidence Insurance Fund" on Justia Law