Justia Civil Procedure Opinion Summaries

Martin Brauner transmitted HPV to M.O. through sexual activity in Brauner’s GEICO-insured automobile. M.O. threatened to sue Brauner for negligence and demanded $1,000,000 from GEICO, which denied the claim and sought a federal court declaration that the policy did not cover M.O.’s injuries. Brauner and M.O. settled the threatened lawsuit, agreeing that M.O. would collect only from GEICO if an arbitrator found Brauner negligent. The arbitrator awarded M.O. $5,200,000, which M.O. sought to confirm in Missouri state court. The Supreme Court of Missouri vacated the confirmation and remanded the case to allow GEICO to intervene.The United States District Court for the District of Kansas initially handled the case but transferred it to the United States District Court for the Western District of Missouri due to lack of personal jurisdiction over M.O. The district court granted GEICO’s motion for summary judgment, ruling that the policy required bodily injury to arise out of the use of the automobile, and that sexual activity in an automobile did not constitute “use” under Kansas insurance law. Brauner and M.O. appealed.The United States Court of Appeals for the Eighth Circuit reviewed the grant of summary judgment de novo. The court affirmed the district court’s decision, holding that the insurance policy unambiguously required bodily injury to arise out of the ownership, maintenance, or use of the automobile. The court found that sexual activity in an automobile did not meet this requirement, as the automobile was merely the situs of the injury and not causally connected to the negligent act. Therefore, M.O.’s injuries were not covered under the policy. View "GEICO General Insurance Co. v. M.O." on Justia Law

Daniel Graff purchased a life insurance policy from Brighthouse Life Insurance Company for his father, with Graff as the beneficiary. Over the years, Graff paid more in premiums than the policy's death benefit. He sued Brighthouse, claiming the policy violated Minnesota's Readability of Insurance Policies Act (RIPA) and the implied covenant of good faith and fair dealing, and also sought recovery for unjust enrichment. Brighthouse removed the case to federal court, which dismissed Graff's claims for failing to state a claim.The United States District Court for the District of Minnesota dismissed Graff's complaint with prejudice. The court found that the RIPA did not provide a private cause of action, the implied-covenant claim was untimely, and Graff could not recover under unjust enrichment because a valid contract governed the parties' relationship.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's dismissal. The appellate court held that the RIPA does not create a private cause of action, as enforcement authority is vested exclusively in the Minnesota Commissioner of Commerce. The court also determined that Graff's implied-covenant claim could not proceed because it was based on a statute that does not provide a private remedy. Lastly, the court upheld the dismissal of the unjust enrichment claim, noting that equitable remedies are unavailable when a valid contract governs the parties' rights, and Brighthouse was entitled to the premiums under the policy. View "Daniel Graff v. Brighthouse Life Ins. Co." on Justia Law

The plaintiffs, EB Holdings II, Inc. and QXH II, Inc., sought coverage from their insurers for legal fees and expenses incurred in defending against a lawsuit alleging fraudulent inducement in the purchase of notes backed by their long-term debt. The insurers denied coverage, claiming the plaintiffs made material misrepresentations in their insurance renewal application by failing to disclose significant long-term debt.The United States District Court for the District of Nevada granted summary judgment in favor of the insurers, concluding that Nevada law governed the affirmative defense of material misrepresentation. The court found that the plaintiffs had indeed made a material misrepresentation by not disclosing their long-term debt, thus barring coverage under the insurance policies.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's decision. The appellate court held that the district court erred in its choice-of-law analysis. The Ninth Circuit determined that Texas law, not Nevada law, should govern the affirmative defense of material misrepresentation. The court reasoned that the substantial relationship test set forth in the Restatement (Second) of Conflict of Laws § 188 pointed to Texas law, given that the underwriting process largely occurred through agents based in Texas and the plaintiffs were headquartered there.Applying Texas law, the Ninth Circuit found that there were material disputes of fact regarding the elements of the affirmative defense, including the plaintiffs' intent to deceive and whether the insurers provided timely notice of their refusal to be bound by the policy. Consequently, the court reversed the summary judgment and remanded the case to the district court for further proceedings. View "EB HOLDINGS II, INC. V. ILLINOIS NATIONAL INSURANCE COMPANY" on Justia Law

This case involves a catastrophic wildfire that occurred in 2016 in the Great Smoky Mountains National Park in Eastern Tennessee. The fire spread into Gatlinburg and Sevier County, resulting in the destruction of over 2,500 structures and the death of 14 people. The appellant insurance companies paid claims to policy holders and then filed claims under the Federal Tort Claims Act (FTCA) against the National Park Service (NPS), alleging negligence for failure to follow multiple mandatory fire-management protocols and for the failure to issue mandatory warnings to the public.The government moved to dismiss the case for lack of subject-matter jurisdiction, arguing that it was immune from suit under the discretionary-function exception to the FTCA. The district court granted the motion on all three claims relating to fire-management protocols, but denied the motion on claims relating to the duty to warn. The insurance companies appealed, and the government cross-appealed.The United States Court of Appeals for the Sixth Circuit reversed the district court's order granting the government's motion to dismiss the insurance companies' incident-command claim. The court affirmed the district court's dismissal of the fire-monitoring claim and the Wildland Fire Decision Support System (WFDSS) claim as part of the discretionary fire-suppression decision-making process. The court also affirmed the district court's denial of the government's facial challenge to the insurance companies' duty-to-warn claims, and remanded these claims for further proceedings. View "American Reliable Insurance Co. v. United States" on Justia Law

The case involves First Baptist Church of Iowa, Louisiana (FB Church) and Church Mutual Insurance Company, S.I. (CM Insurance). FB Church sued CM Insurance for failing to pay benefits for property damage caused by Hurricane Laura under an insurance policy. The property included three buildings: the main church, a parsonage, and a vacant building. After the hurricane, FB Church reported the loss to CM Insurance, which then hired a third-party administrator to adjust the loss. The administrator estimated the total loss at $630,000 before deductibles. However, FB Church was dissatisfied with how its claim was being handled and hired a public adjuster, who prepared an estimate of over $1 million in damages. FB Church then sued CM Insurance, alleging claims for additional covered losses and for statutory penalties, costs, and attorney’s fees under Louisiana Revised Statutes § 22:1892.The United States District Court for the Western District of Louisiana found in favor of FB Church, awarding it damages, statutory penalties, attorney’s fees, and costs. CM Insurance appealed the decision to the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit affirmed in part and reversed in part. The court agreed with the district court that CM Insurance failed to adjust the claim and that FB Church was entitled to statutory penalties. However, the court found that the district court erred in calculating damages based on prices in January 2023 instead of at the time of loss, and in awarding any damages for slab repair and damages in excess of $4,500 for the sanctuary’s electrical repair. The case was remanded for recalculation of damages. View "First Baptist Church of Iowa, Louisiana v. Church Mutual Insurance, S.I." on Justia Law

The case involves a putative class action of approximately 2,000 payees who received structured settlement annuities to resolve personal injury claims. The plaintiffs, Renaldo White and Randolph Nadeau, alleged that defendants Symetra Life Insurance Company and Symetra Assigned Benefits Service Company wrongfully induced them to cash out their annuities in individualized “factoring” arrangements, whereby they gave up their rights to periodic payments in return for discounted lump sums.The district court certified two nationwide classes under Federal Rule of Civil Procedure 23. The first class consisted of all persons who were annuitants of a structured settlement annuity (SSA) issued by Symetra and who subsequently sold to a Symetra affiliate the right to receive payments from that SSA in a factoring transaction. The second class was a subclass of the first, consisting of all members of the class whose contract defining the annuity at issue included language explicitly stating that the annuitants lack the power to transfer their future SSA payments.The United States Court of Appeals for the Ninth Circuit reversed the district court’s certification of the two nationwide classes. The court held that individual issues of causation will predominate over common ones when evaluating whether defendants’ acts and omissions caused the plaintiffs to enter factoring transactions and incur their alleged injuries. The court also held that the district court erred in certifying the nationwide subclass of plaintiffs whose original settlement agreements with their personal injury tortfeasors contained structured settlement annuity (SSA) anti-assignment provisions. The record indicates that the annuitants hail from a wide array of different states, and some of the settlement agreements have choice of law provisions denoting the law of a state other than the location where the contract was executed. The apparent variations in state law on the enforceability of anti-assignment provisions in SSAs and the need to apply multiple state laws to the subclass raised a substantial question of whether individual issues predominate and how the matter can be fairly managed as a class action. View "WHITE V. SYMETRA ASSIGNED BENEFITS SERVICE COMPANY" on Justia Law

This case involves a dispute over insurance coverage for continuous injury claims. The plaintiff, Truck Insurance Exchange, was a primary insurer for Kaiser Cement and Gypsum Corporation. Truck filed an equitable contribution claim against several insurers that had issued first-level excess policies to Kaiser for policy years where the directly underlying primary policy had been exhausted. Truck argued that the excess insurers’ indemnity obligations were triggered immediately upon exhaustion of the directly underlying primary policies. The excess insurers, however, argued that they had no duty to indemnify Kaiser until it had exhausted every primary policy issued during the period of continuous damage. The trial court and the Court of Appeal agreed with the excess insurers, interpreting the excess policies as requiring horizontal exhaustion of all primary insurance.The Supreme Court of California disagreed, concluding that the language of the first-level excess policies at issue in this case is essentially identical to the policy language in the higher-level excess policies that it considered in a previous case, Montrose III. The Court held that the first-level excess policies are most reasonably construed as requiring only vertical exhaustion. However, the Court also noted that its conclusion does not fully resolve the questions presented in this appeal, which involves a contribution claim between coinsurers. The Court remanded the matter to allow the Court of Appeal to address these alternative arguments in the first instance. View "Truck Ins. Exchange v. Kaiser Cement & Gypsum Corp." on Justia Law

The case revolves around a car accident that occurred on November 4, 2015, involving Donna Powers and Fendol Carruthers, Jr. Carruthers was charged and pleaded guilty to operating a motor vehicle under the influence of alcohol or drugs. Powers claimed to have sustained serious, permanent injuries from the crash. Carruthers was insured by State Farm Mutual Automobile Insurance Company (State Farm) with a policy limit of $50,000. Powers began receiving Personal Injury Protection (PIP) benefits from her own insurance carrier, Kentucky Farm Bureau (KFB). The Kentucky Motor Vehicle Reparations Act (MVRA) imposes a two-year statute of limitations for tort actions arising from motor vehicle accidents. Powers received her last PIP payment on August 4, 2016, meaning any tort claim she wished to assert arising from her accident with Carruthers must have been filed by August 4, 2018.Powers filed a complaint in McCracken Circuit Court on April 3, 2018, asserting a negligence claim against Carruthers and an underinsured motorist (UIM) claim against KFB. However, Carruthers had died two years earlier in March 2016, unbeknownst to Powers or her attorneys. The case remained stagnant for the next year, with Powers failing to take any action to rectify the portion of her complaint that was a nullity against Carruthers. It wasn't until August 2019 that Powers successfully moved the district court to appoint the Public Administrator to act as Administrator of Carruthers’s Estate.The Supreme Court of Kentucky affirmed the decisions of the lower courts, which had dismissed Powers’s negligence claim against Carruthers, denied Powers’s motions for substitution and revival, denied Powers’s motion for leave to amend her complaint to raise a new claim, and granted summary judgment in favor of KFB. The court held that Powers’s claim against Carruthers was null, and her attempted claim against the Estate was untimely. Furthermore, Powers’s inability to recover from Carruthers or the Estate foreclosed her underinsured motorist claim against KFB. View "Powers v. Kentucky Farm Bureau Mutual Insurance Co." on Justia Law

The case involves Brian Frye, a homeowner who claimed that his property had suffered damage due to underground mine subsidence. He submitted a claim to his home insurer, Erie Insurance Company, and notified the Board of Risk Insurance and Management (BRIM) of the damages. Both Erie and BRIM investigated the claim, but both denied it, stating that the damage was not due to mine subsidence. Frye then sued Erie for breach of contract and other claims. The Circuit Court of Ohio County granted summary judgment to Erie, concluding that Erie functioned as BRIM’s agent in the adjustment of Frye’s claim. Frye moved the court to alter or amend that judgment, arguing that it threatened the constitutionality of certain West Virginia statutes.The Supreme Court of Appeals of West Virginia vacated the lower court's decision and remanded the case for further proceedings. The court found that the lower court erred by failing to notify the Attorney General of the constitutional questions raised in Frye’s motion to alter or amend the summary judgment order. The court concluded that the appropriate remedy was to vacate the lower court’s order denying Frye’s motion and to remand the matter to permit the lower court to notify the Attorney General of these proceedings in accordance with Rule 24(c) of the West Virginia Rules of Civil Procedure. View "Frye v. Erie Insurance Company" on Justia Law

The case involves Continental Indemnity Company (Continental) and its attempt to collect a default judgment against BII, Inc. (BII) from Starr Indemnity & Liability Company (Starr), BII's insurer. Continental had paid a workers' compensation claim for an employee injured at a construction site where BII was a subcontractor. Continental then sought reimbursement from BII, which had failed to maintain its own workers' compensation insurance. When BII did not pay, Continental secured a default judgment against BII and sought to collect from Starr under Illinois garnishment procedures.The district court in the Northern District of Illinois dismissed the garnishment proceeding against Starr, finding that it lacked subject matter jurisdiction. The court reasoned that the dispute over the scope of coverage under the Starr-BII insurance policy was too distinct from the underlying suit between Continental and BII. Continental appealed this decision to the United States Court of Appeals for the Seventh Circuit.The Seventh Circuit affirmed the district court's decision. The court found that the garnishment proceeding introduced new factual and legal issues, making it essentially a new lawsuit. The court explained that while federal courts have ancillary enforcement jurisdiction to consider proceedings related to an underlying suit, the subject of those proceedings must still be sufficiently related to the facts and legal issues of the original action. In this case, the court found that the garnishment proceeding fell outside the scope of ancillary enforcement jurisdiction. The court suggested that Continental could file a new civil action against Starr to litigate the dispute over the insurance policy's coverage. View "Continental Indemnity Company v. BII, Inc." on Justia Law