Justia Civil Procedure Opinion Summaries

This appeal required the Pennsylvania Supreme Court to determine whether a “household vehicle exclusion” contained in a motor vehicle insurance policy violated Section 1738 of the Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa.C.S. 1738, because the exclusion impermissibly acted as a de facto waiver of stacked uninsured and underinsured motorist (“UM” and “UIM,” respectively) coverages. In 2012, Appellant Brian Gallagher was riding his motorcycle when William Stouffer ran a stop sign in his pickup truck, colliding with Gallagher’s motorcycle, causing Gallagher to suffer severe injuries. At the time of the accident, Gallagher had two insurance policies with GEICO; one included $50,000 of UIM coverage, insured only Gallagher’s motorcycle; the second insured Gallagher’s two automobiles and provided for $100,000 of UIM coverage for each vehicle. Gallagher opted and paid for stacked UM and UIM coverage when purchasing both policies. Stouffer’s insurance coverage was insufficient to compensate Gallagher in full. Consequently, Gallagher filed claims with GEICO seeking stacked UIM benefits under both of his GEICO policies. GEICO paid Gallagher the $50,000 policy limits of UIM coverage available under the Motorcycle Policy, it denied his claim for stacked UIM benefits under the Automobile Policy. GEICO based its decision on a household vehicle exclusion found in an amendment to the Automobile Policy. The exclusion states as follows: “This coverage does not apply to bodily injury while occupying or from being struck by a vehicle owned or leased by you or a relative that is not insured for Underinsured Motorists Coverage under this policy.” According to Gallagher, by denying him stacked UIM coverage based upon the household vehicle exclusion, GEICO was depriving him of the stacked UIM coverage for which he paid. The Pennsylvania Supreme Court held the household vehicle exclusion violated the MVFRL, and vacated the Superior Court’s judgment, reversed the trial court’s order granting summary judgment in favor of GEICO, and remanded to the trial court for further proceedings. View "Gallagher v. GEICO" on Justia Law

Dennis Woolman, former president of The Clemens Coal Company, challenged a district court’s determination that Liberty Mutual Fire Insurance Company didn’t breach a duty to him by failing to procure for Clemens Coal an insurance policy with a black-lung disease endorsement. Clemens Coal operated a surface coal mine until it filed for bankruptcy in 1997. Woolman served as Clemens Coal’s last president before it went bankrupt. Federal law required Clemens Coal to maintain worker’s compensation insurance with a special endorsement covering miners’ black-lung disease benefits. Woolman didn’t personally procure insurance for Clemens Coal but instead delegated that responsibility to an outside consultant. The policy the consultant ultimately purchased for the company did not contain a black-lung-claim endorsement, and it expressly excluded coverage for federal occupational disease claims, such as those arising under the Black Lung Benefits Act (the Act). In 2012, a former Clemens Coal employee, Clayton Spencer, filed a claim with the United States Department of Labor (DOL) against Clemens Coal for benefits under the Act. After some investigation, the DOL advised Woolman that Clemens Coal was uninsured for black-lung-benefits claims as of July 25, 1997 (the last date of Spencer’s employment) and that, without such coverage, Woolman, as Clemens Coal’s president, could be held personally liable. Woolman promptly tendered the claim to Liberty Mutual for a legal defense. Liberty Mutual responded with a reservation-of-rights letter, stating that it hadn’t yet determined coverage for Spencer’s claim but that it would provide a defense during its investigation. Then in a follow-up letter, Liberty Mutual clarified that it would defend Clemens Coal as a company (not Woolman personally) and advised Woolman to retain his own counsel. Liberty Mutual eventually concluded that the insurance policy didn’t cover the black-lung claim, and sued Clemens Coal and Woolman for a declaration to that effect. In his suit, Woolman also challenged the district court’s rejection of his argument that Liberty Mutual should have been estopped from denying black-lung-disease coverage, insisting that he relied on Liberty Mutual to provide such coverage. Having considered the totality of the circumstances, the Tenth Circuit Court of Appeals concluded the district court didn’t err in declining Woolman’s extraordinary request to expand the coverages in the Liberty Mutual policy. “Liberty Mutual never represented it would procure the coverage that Woolman now seeks, and the policy itself clearly excludes such coverage. No other compelling consideration justifies rewriting the agreement— twenty years later—to Woolman’s liking.” View "Liberty Mutual Fire Insurance v. Woolman" on Justia Law

The employer, Luxor Cabs, obtained workers' compensation insurance through AUCRA under an EquityComp program. The EquityComp workers’ compensation insurance program has garnered nationwide attention from administrative agencies and judicial tribunals. In 2016, the California Insurance Commissioner issued an administrative decision concluding that the EquityComp program violated state insurance laws and that the reinsurance participation agreement (RPA) between AUCRA and the insured employer, in that case, was void as a matter of law. In 2018, the Fourth Appellate District came to a similar decision in a case essentially identical to this one involving arbitrability under an RPA. Luxor, unhappy with AUCRA's handling of claims, filed suit. The court of appeal affirmed the denial of AUCRA’s motion to compel arbitration pursuant to the terms of an RPA between an employer, Luxor Cabs, and AUCRA. The trial court properly rejected an argument that the validity of the arbitration clause should, itself, have been referred to arbitration in accordance with the RPA’s “delegation clause.” Both the delegation clause and the arbitration provision in the RPA were void and unenforceable because they each separately constituted an “endorsement” to the Policy which was not properly vetted and approved as required by Insurance Code section 11658. View "Luxor Cabs, Inc. v. Applied Underwriters Captive Risk Assurance Co." on Justia Law

American Family filed suit seeking a declaratory judgment against Vein Centers, its insured, disputing American Family's duty to defend and indemnify Vein Centers in a class action. St. Louis was the class representative in the underlying action against Vein Centers and later joined as a defendant in the declaratory judgment action.The Eighth Circuit affirmed the district court's grant of summary judgment for American Family, holding that the district court did not err in concluding that American Family satisfied its burden of establishing the minimum amount in controversy and summary judgment was proper because St. Louis Heart failed to provide any evidence that adequate notice of the policy exclusion was not provided to Vein Centers. View "American Family Mutual Insurance Co. v. St. Louis Heart Center, Inc." on Justia Law

Ace American Insurance Company ("Ace"), an intervenor in the action below, appeals from the Baldwin Circuit Court's dismissal of the action filed by Ace's insured, Willie James Westbrook, against Rouse's Enterprises, LLC, d/b/a Rouses Markets ("Rouses Markets"). In August 2016, Westbrook sued Rouses Markets seeking to recover damages for injuries he sustained as the result of the allegedly negligent operation of a pallet jack by a Rouses Markets' employee while Westbrook was delivering goods to the Rouses Markets' location in Spanish Fort during the course of his employment with Cardinal Logistics Management Corporation ("Cardinal"). The Alabama Supreme Court has stated previously that, "'since dismissal with prejudice is a drastic sanction, it is to be applied only in extreme situations' and that, as a result, 'appellate courts will carefully scrutinize such orders and occasionally will find it necessary to set them aside.'" The Court could not say that the circumstances presented by this case presented an extreme situation in which dismissal of Ace's claim for want of prosecution was warranted. Accordingly, it reversed the judgment of the trial court dismissing Ace's claim and remanded the case for further proceedings. View "Ace American Insurance Company v. Rouse's Enterprises, LLC, d/b/a Rouses Markets" on Justia Law

Billy Hamilton appealed a district court’s order granting summary judgment in favor of defendant Northfield Insurance Company as to Hamilton’s claim for breach of the implied duty of good faith and fair dealing and his accompanying request for punitive damages. In March 2015, Hamilton purchased a Northfield insurance policy for a commercial building in Council Hill, Oklahoma. Northfield had a third party inspect the property for underwriting purposes; the underwriting survey report concluded the risk was “Satisfactory with Recommendation Compliance” and identified eight recommendations for repairs. A tenant informed him the roof was leaking in December 2015, and Hamilton reported the leak and the resulting interior damage to Northfield. Northfield denied the claim because a claims adjuster saw no evidence of damage. Hamilton had made repairs, but the adjuster did not see evidence of them, and did not ask whether any were made. A week after receiving the denial, Northfield informed Hamilton it would not renew his policy when it expired. Hamilton was unsuccessful in his suit against Northfield, challenging on appeal the outcome with respect to breach of the implied duty of good faith and fair dealing (he won a jury verdict on his breach of contract claim). The Tenth Circuit found no abuse of the trial court’s discretion in its rulings on Hamilton’s claims, and affirmed. View "Hamilton v. Northfield Insurance Company" on Justia Law

At issue in this case was whether full faith and credit required Washington courts to enforce an Illinois class action judgment by dismissing subsequent local cases based on the same facts. An Illinois medical provider brought a nationwide consumer protection class action against Liberty Mutual Insurance Company in Illinois. The suit was settled and approved by an Illinois trial court. Chan Healthcare group, a Washington provider, received reasonable notice of the suit, but neither opted out of the class nor objected to the settlement. Chan sought to collaterally challenge the Illinois judgment in Washington courts, arguing the interests of Washington class members were not adequately represented in Illinois. The Washington Supreme Court concluded Chan failed to show its due process rights were violated, thus full faith and credit required Washington courts to enforce the Illinois judgment. View "Chan Healthcare Grp. v. Liberty Mut. Fire Ins. Co." on Justia Law

The issue this case presented for the Colorado Supreme Court's review were the insurance proceeds owed to petitioners Rosalin Rogers and Mark Thompson because of a failed property investment orchestrated by their broker-dealer, United Securities Alliance. Ten years into litigation, the issue of the amount of debt at issue has remained at issue, and unresolvable by the courts. United's insurer, Catlin Insurance, was ordered to pay petitioners under a professional liability policy; an appellate court upheld a district court's determination of attorney fees and costs that Catlin could deduct from the liability limit under the policy. The Supreme Court first addressed whether the "Thompson IV" division erred when it upheld the district court’s decision to consider new evidence on remand from Thompson v. United Securities Alliance, Inc. (Thompson III), No. 13CA2037, (Colo. App. Oct. 16, 2014). And Secondly, the Supreme Court addressed whether the Thompson IV division erred when it held that there was no legal basis for awarding prejudgment interest in a garnishment proceeding. As to the first issue, the Supreme Court affirmed the court of appeals; as to the second, it reversed and remanded for further proceedings. View "Thompson v. Catlin" on Justia Law

Beginning in 2009, plaintiffs sued defendants, including Associated Insulation, for injuries arising out of plaintiffs’ alleged asbestos exposure. Plaintiffs served Associated with the complaints. Associated, which apparently ceased operating in 1974, did not respond. The court entered default judgments, ranging from $350,000 to $1,960,458. Plaintiffs served notice of the judgments on Associated, but not on Fireman’s Fund. After entry of the judgments, Fireman’s located insurance policies appearing to provide coverage for Associated, retained counsel, and moved to set aside the defaults. Fireman’s argued “extrinsic mistake” because service of the complaint on Associated did not provide notice to Fireman’s and that it “never had the opportunity to participate in [the] lawsuit.” Plaintiffs noted that in two cases, they sent a “demand seeking coverage” to Fireman’s which was “acknowledged and denied” in 2012. Fireman’s had responded that it had searched all available records without locating any reference or policies of insurance issued to Associated. Plaintiffs did not respond with evidence of coverage. The court set aside the defaults. The court of appeal affirmed, noting that Fireman’s has a meritorious case and articulated a satisfactory excuse for not presenting a defense. Fireman’s established diligence in “seeking to set aside the default” judgments once they were discovered. View "Mechling v. Asbestos Defendants" on Justia Law

Scott and Shannon Dahms appealed the grant of summary judgment which dismissed their action against Nodak Mutual Insurance Company to obtain additional insurance payments, and against their insurance agent, Mike Bruckbauer, for damages resulting from his alleged violation of professional duties owed to them. Because the district court correctly interpreted the insurance policy as applied to the undisputed facts, and because the Dahms failed to raise a genuine issue of fact to support their professional negligence claim, the North Dakota Supreme Court affirmed dismissal. View "Dahms v. Nodak Mutal Insurance Co." on Justia Law