Justia Civil Procedure Opinion Summaries

A district court ordered Jackson National Life to pay about $191,000 on a policy of life insurance. The court added that the insurer had litigated unreasonably and ordered it to reimburse Cooke’s legal fees under 215 ILCS 5/155. The insurer paid the death benefit and appealed the attorneys’ fees. Because the district court had not specified the amount, the Seventh Circuit dismissed the appeal as premature. The district court then awarded $42,835 plus interest. The district judge concluded that there had been a good faith coverage dispute, so the insurer could not be penalized for insisting that a judge resolve the parties’ dispute, but added, “Jackson’s behavior in this litigation has been much less reasonable.” The Seventh Circuit reversed, first rejecting Cooke’s appeal on the merits award. Cooke did not appeal within 30 days of the order specifying the amount payable on the policy, and a later award of fees did not reopen that subject. The court erred in applying Illinois state law to the conduct of litigation in federal court and Jackson’s litigation conduct did not violate the Federal Rules of Civil Procedure. View "Cooke v. Jackson National Life Insurance Co." on Justia Law

The Georgia Supreme Court granted certiorari in this case to review whether the Court of Appeals erred in reversing the grant of summary judgment to the insurer on the insured’s failure-to-settle claim. The Court also asked the parties to address whether an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits or whether, even absent such an offer, a duty arises when the insurer knows or reasonably should know that settlement within the insured’s policy limits is possible. As to this threshold issue, the Court concluded an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits. Applying the applicable rules of contract construction to correspondence from two injured parties in the instant case, the Court concluded the injured parties presented to the insurer a valid offer to settle within the insured’s policy limits but that the offer did not include any deadline for accepting the offer. Based on the undisputed evidence, as a matter of law, the insurer did not act unreasonably in failing to accept the offer before it was withdrawn by the injured parties. As the insurer was entitled to summary judgment, the Court reversed the decision of the Court of Appeals. View "First Acceptance Insurance Company of Georgia, Inc. v. Hughes" on Justia Law

The Ninth Circuit affirmed the district court's denial of plaintiffs' motion to remand to state court. The panel joined the Fourth Circuit in holding that receipt of an initial pleading by a statutorily designated agent does not begin the thirty-day removal clock under 28 U.S.C. 1446(b)(1), and that it was instead actual receipt by State Farm that started the removal clock. The panel applied this rule and held that State Farm timely removed the case where removal was calculated from when the forwarded copy of the complaint reached State Farm's designated recipient. View "Anderson v. State Farm Mutual Automobile Insurance Co." on Justia Law

Tony Kourianos worked as a coal miner for more than 27 years before filing a claim for benefits under the Black Lung Benefits Act (“BLBA”). His claim was reviewed through a three-tiered administrative process. Ultimately, the Benefits Review Board (“BRB”) found that he was entitled to benefits. The BRB also found that Kourianos’s last employer, Hidden Splendor Resources, Inc., was the “responsible operator” liable for paying those benefits. Hidden Splendor’s insurer, Rockwood Casualty Insurance Company, petitioned the Tent Circuit Court of Appeal for review of the BRB’s decision: (1) challenging the administrative law judge’s (“ALJ”) decision prohibiting Hidden Splendor from withdrawing its responsible operator stipulation; and (2) contending the BRB incorrectly found that Kourianos was totally disabled and entitled to benefits. Finding no abuse of discretion in the BRB decision, the Tenth Circuit denied Rockwood's petition. View "Rockwood Casualty Insurance v. Director, OWCP" on Justia Law

Timothy Hinton died from injuries sustained in a fall from a tree stand. At the time of his fall, Timothy was wearing a fall-arrest system which included a full-body harness, tether and tree strap. Timothy had purchased the tree stand and fall-arrest system from The Sportsman’s Guide, Inc. (“TSG”), in 2009. C&S Global Imports, Inc. (“C&S”) had manufactured the items and marketed them to TSG. Pekin Insurance Company insured C&S at the time of Timothy’s injury and death. After filing their third amended complaint, the Hintons filed a motion for partial summary judgment against Pekin, claiming Pekin waived its defenses to coverage or should have been estopped from asserting any coverage defenses. Among other arguments, the Hintons maintained that Pekin failed to defend C&S, did not file a declaratory-judgment action and allowed a default judgment against C&S. The circuit court denied the Hintons’ motion. Pekin then moved for summary judgment, arguing the insurance policy excluded coverage for tree or deer stands and related equipment. The circuit court granted Pekin’s motion and entered a final judgment dismissing Pekin from the suit. The Hintons appealed both of the circuit court’s rulings. After review, the Mississippi Supreme Court affirmed the order denying partial summary judgment to the Hintons, the order granting summary judgment to Pekin and the final judgment dismissing Pekin from the suit. View "Hinton v. Pekin Insurance Company" on Justia Law

The Supreme Court reversed the decision of the court of appeals to grant Dr. Robert Kleinfeld’s writ petition precluding the discovery of certain information, holding that the court of appeals did not properly apply the extraordinary writ petition standard.The case began as an insurance dispute. At issue was the insurer’s discovery request for information from Kleinfeld, individually and as corporate representative for Louisville Sports Injury Center, P.S.C. The trial court entered an order compelling LSIC, through Kleinfeld, to produce the requested discovery. Thereafter, LSIC, through Kleinfeld, filed a petition for a writ of prohibition seeking protection from the trial court’s order. The court of appeals granted the petition. The Supreme Court reversed, holding that the court of appeals abused its discretion when it concluded that the extraordinarily high writ petition standard was met in this case because the court’s decision was unsupported by sound legal principles. View "Allstate Property & Casualty Insurance Co. v. Kleinfeld" on Justia Law

The Fifth Circuit Court of Appeals certified a question of state law to the Mississippi Supreme Court pertaining to an incident at Omega Protein Corporation’s (Omega) facility that resulted in the death of an employee of Accu-Fab & Construction, Inc. (Accu-Fab). Although Colony Insurance Company (Colony) continually maintained that it did not insure Omega, Colony negotiated and paid a settlement claim under a reservation of rights on Omega’s behalf. Because Colony took the position that it had no duty to defend Omega at all, the district court concluded that Mississippi’s voluntary-payment doctrine precluded Colony’s claims for equitable subrogation and implied indemnity. Pursuant to Mississippi case-law, an insurer is barred from seeking indemnity for a voluntary payment. In order to recover, the indemnitee must prove that it both paid under compulsion and that it was legally liable to the person injured. The question certified from the federal court posited whether an insurer acts under “compulsion” if it takes the legal position that an entity purporting to be its insured is not covered by its policy, but nonetheless pays the settlement demand in good faith to avoid potentially greater liability that could arise from a future coverage determination, and whether the insurer satisfies the “legal duty” standard if it makes such a payment. The Supreme Court found an insurer does not act under compulsion if it takes the legal position that an entity purporting to be its insured is not covered by its policy but nonetheless pays a settlement demand in good faith to avoid potentially greater liability that could arise from a future coverage determination. Because the first certified question is dispositive, the Court declined to address the second certified question. View "Colony Insurance Company v. First Specialty Insurance Corporation" on Justia Law

Appellants Ryan and Kathryn McFarland owned real property in Garden Valley, Idaho, which feathred three structures insured through Liberty Mutual Insurance Group: a main cabin; a detached garage with an upstairs “bonus room”; and a pump house containing a geothermal well. The policy provided two types of coverage for structures. Coverage A (“Dwelling Coverage”) provided up to $188,500 in coverage for “the dwelling on the ‘residence premises’. . . including structures attached to the dwelling . . .” and Coverage B (“Other Structures Coverage”) provided up to $22,350 for “other structures on the ‘residence premises’ set apart from the dwelling by clear space.” In February 2017, a radiant heater burst in the bonus room and damaged the garage and its contents. After the McFarlands filed a claim, Liberty stated that the damage was covered under the policy. Believing the damage to fall under the Dwelling Coverage, the McFarlands hired contractors to repair the damage. However, after Liberty paid out a total of $23,467.50 in March 2017, Liberty stated that the coverage was exhausted because the damage fell under the Other Structures Coverage. This led the McFarlands to sue, alleging among other claims, breach of contract based on Liberty’s interpretation of the policy. The parties filed cross motions for summary judgment on the issue of whether the damage fell under the Dwelling Coverage or the Other Structures Coverage. Ruling that the policy unambiguously provided coverage for the garage under the Other Structures Coverage, the district court denied the McFarlands’ motion and granted Liberty’s. The McFarlands appealed. Finding that the policy at issue here failed to define the term "dwelling", and the term was reasonably subject to differing interpretations, the Idaho Supreme Court reversed the award of summary judgment and remanded for further proceedings. View "McFarland v. Liberty Insurance Corp" on Justia Law

Plaintiff Oklahoma Schools Risk Management Trust (OSRMT) brought a declaratory judgment action seeking a declaration it was not liable for losses sustained by McAlester Public Schools resulting from a ruptured water pipe in one of its schools. McAlester Public Schools answered, alleged breach of contract by plaintiff, and sought indemnification for its losses. A trial court granted summary judgment for Oklahoma Schools Risk Management Trust on its request for declaratory relief and against McAlester Public Schools on its indemnity claim. McAlester Public Schools appealed the judgment. The Oklahoma Supreme Court agreed with McAlester Schools that OSMRT failed to show a policy-based exclusion to coverage, reversed summary judgment and remanded for further proceedings. View "Okla. Schools Risk Management Trust v. McAlester Pub. Schools" on Justia Law

In 2002, Charles Herron, who was under the influence of alcohol and not old enough to legally possess or consume it, was involved in a single-vehicle accident in Bethel, Alaska A 15-year-old passenger in Herron’s vehicle, Angelina Trailov, was injured. Herron was insured by Allstate Insurance Company. Allstate filed a complaint for declaratory relief in the U.S. District Court in anticipation of Herron confessing judgment in the accident-related personal injury suit. Allstate requested a declaration that “its good faith attempt to settle Trailov and Mary Kenick's (Trailov's mother) claims satisfied its obligation to its insured, and a further declaration that Allstate [wa]s not obligated to pay any portion of the confessed judgment that exceed[ed] the limit of the bodily injury coverage afforded Herron under the [p]olicy.” Due to Herron’s April confession of judgment and assignment of claims, Allstate amended its federal complaint for declaratory relief. The only material addition was the statement that Herron had confessed judgment and assigned his rights against Allstate. The issue this case presented for the Alaska Supreme Court's review centered on the preclusive effect of that declaratory judgment in favor of the insurance company against its insured in federal court in a subsequent state court proceeding. The superior court concluded that the declaratory judgment had no preclusive effect on a negligent adjustment action brought in state court by the insured’s assignees against the insurance company and its claims adjuster. The state action proceeded to an 11-day jury trial ending with a multi-million dollar verdict against the insurance company and its claims adjuster. The declaratory judgment determined that the insurance company and the adjuster acted reasonably when they offered policy limits to settle the underlying claim against the insured. Because the insurance company’s and adjustor’s reasonableness in adjusting the insurance claim was a necessary element of a negligent adjustment tort, the Supreme Court held that the assignees of the insured were precluded from relitigating this issue. The superior court therefore erred in denying the insurance company’s and claims adjuster’s motions for summary judgment. View "Allstate Insurance Company v. Kenick" on Justia Law