Justia Insurance Law Opinion Summaries

The case involves Sherry and David Lewis, who sued their auto insurer, GEICO, for allegedly breaching their insurance contract when their car was totaled. The Lewises claimed that GEICO undercompensated them by applying a "condition adjustment" that artificially reduced its valuation of their car and by failing to reimburse them for taxes and fees necessary to replace the car. They sought to certify a class of similarly underpaid insureds for each instance of underpayment.The District Court certified both classes under Federal Rule of Civil Procedure 23. GEICO appealed the decision, challenging the certification of the classes.The United States Court of Appeals for the Third Circuit affirmed the order certifying the class for the taxes-and-fees claim. However, the court found that the Lewises lacked standing to bring the condition-adjustment claim as they failed to show that GEICO caused them concrete harm when it applied the condition adjustment. Therefore, the court vacated the District Court’s order in part and remanded with instructions to dismiss the condition-adjustment claim.Regarding the taxes-and-fees claim, the court found that the Lewises met the requirements for standing as they alleged financial harm stemming from GEICO's pre-2020 practice of declining to pay taxes and fees to lessee insureds. The court also found that the class was ascertainable, meeting the requirements for class certification. View "Lewis v. GEICO" on Justia Law

The case involves the Government Employees Insurance Company (GEICO) and its affiliates, who sued several medical practices in separate actions in the District of New Jersey. GEICO alleged that the practices defrauded them of more than $10 million by abusing the personal injury protection (PIP) benefits offered by its auto policies. The practices filed exaggerated claims for medical services, billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO's suits against the practices each included a claim under the New Jersey’s Insurance Fraud Prevention Act (IFPA).The practices sought arbitration of GEICO’s IFPA claim, arguing that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. However, each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated. The practices appealed to the United States Court of Appeals for the Third Circuit.The Third Circuit Court of Appeals reversed the lower courts' decisions and compelled arbitration. The court found that the IFPA does not implicitly prohibit arbitration. The court also found that the IFPA claims before them should be compelled to arbitration under a different New Jersey law. Furthermore, the court concluded that GEICO’s IFPA claims must be compelled to arbitration under the Federal Arbitration Act (FAA). The court held that the arbitration agreement in the Plan covers the IFPA claims and therefore, must compel arbitration. The court also addressed practice-specific issues in the Mount Prospect and Precision Spine appeals. The court concluded that the District Court should not have granted GEICO leave to amend its complaint in the Mount Prospect case. In the Precision Spine case, the court held that the District Court abused its discretion by denying Precision Spine’s motion sua sponte because it was addressed to the unamended complaint. View "GEICO v. Mount Prospect Chiropractic Center PA" on Justia Law

The case involves Dennis Neate, a former employee of the James B. Oswald Company (Oswald), an insurance firm. Neate left Oswald to work for Hylant Group, Inc., another insurance firm, and some of his clients followed him. Oswald accused Neate of violating his non-solicitation agreement and sued in federal district court. The court issued a preliminary injunction ordering Neate and others to comply with Oswald’s non-solicitation agreement. Neate appealed.Previously, the district court granted a preliminary injunction after an evidentiary hearing. The injunction prohibited Neate and others from violating their agreements with Oswald, retaining or using Oswald's confidential information, and soliciting or accepting business from Oswald's clients. The injunction also required all defendants to return all of Oswald's property.The United States Court of Appeals for the Sixth Circuit vacated and remanded the case. The court found that the district court failed to properly apply Ohio law in determining the reasonableness of the non-solicitation agreement. The court also found that the injunction did not meet the specificity requirements of Federal Rule of Civil Procedure 65(d)(1), as it incorporated the non-solicitation agreement by reference. However, the court agreed with the district court that Oswald had shown a likelihood of success on its trade-secrets claims. View "James B. Oswald Co. v. Neate" on Justia Law

Yasmin Varela filed a class action lawsuit against State Farm Mutual Automobile Insurance Company (State Farm) after a car accident. Varela's insurance policy with State Farm entitled her to the "actual cash value" of her totaled car. However, she alleged that State Farm improperly adjusted the value of her car based on a "typical negotiation" deduction, which was not defined or mentioned in the policy. Varela claimed this deduction was arbitrary, did not reflect market realities, and was not authorized by Minnesota law. She sued State Farm for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of the Minnesota Consumer Fraud Act (MCFA).State Farm moved to dismiss the complaint, arguing that Varela's claims were subject to mandatory, binding arbitration under the Minnesota No-Fault Automobile Insurance Act (No-Fault Act). The district court granted State Farm's motion in part, agreeing that Varela's claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment fell within the No-Fault Act's mandatory arbitration provision. However, the court found that Varela's MCFA claim did not seek the type of relief addressed by the No-Fault Act and was neither time-barred nor improperly pleaded, and thus denied State Farm's motion to dismiss this claim.State Farm appealed, arguing that Varela's MCFA claim was subject to mandatory arbitration and should have been dismissed. However, the United States Court of Appeals for the Eighth Circuit dismissed the appeal for lack of jurisdiction. The court found that State Farm did not invoke the Federal Arbitration Act (FAA) in its motion to dismiss and did not file a motion to compel arbitration. The court concluded that the district court's order turned entirely on a question of state law, and the policy contained no arbitration provision for the district court to "compel." Therefore, State Farm failed to establish the court's jurisdiction over the interlocutory appeal. View "Varela v. State Farm Mutual Automobile Insurance Co." on Justia Law

The case revolves around a dispute over insurance coverage following a fatal jet ski accident. The owner of A.C. Watercraft Rental, Sayed Mohammed, had sought liability insurance for all his business-owned watercraft through Farm Bureau Property and Casualty Insurance Company, which connected him with Great Divide Insurance Company. However, a Yamaha watercraft involved in a fatal accident was not listed in the policy schedule. Following the accident, Mohammed filed a claim with Great Divide for defense and indemnification, which was denied due to the jet ski not being listed in the policy. Subsequently, the deceased's father, Garbis Satamian, sued A.C. Watercraft, which had to bear its own defense costs.The Superior Court in Maricopa County dismissed Satamian's claims against Great Divide, Farm Bureau, and Risk Placement Services (RPS) on the grounds of statute of limitations. The court found that A.C. Watercraft learned of the negligent procurement of insurance when Great Divide denied coverage in January 2016, and that it “sustained injury in May 2017, when [A.C. Watercraft] incurred attorneys’ fees and costs defending itself.” The court ruled that both the negligent procurement of insurance claim and the promissory estoppel claim were time-barred because each accrued no later than May 2017.Satamian appealed the dismissal, arguing that the discovery rule should have tolled the statute of limitations and that the claims could not have accrued until his underlying action against A.C. Watercraft was final and non-appealable. The Court of Appeals rejected Satamian’s arguments and affirmed the lower court's decision.The Supreme Court of the State of Arizona affirmed the lower courts' decisions, holding that the negligent procurement of insurance and promissory estoppel claims accrued when an insured incurs its own litigation costs for defense against a claim due to an insurer’s negligent failure to obtain insurance coverage. The court found that A.C. Watercraft knew or should have known both the “who” and the “what” of the negligent procurement cause of action by May 2017, and expired by May 2019. The promissory estoppel claim began to accrue by May 2017, and expired by May 2020. Because Satamian filed this lawsuit in June 2021, both claims were time-barred. View "Satamian v. Great Divide Insurance Co." on Justia Law

The case involves Bryar Johnson, who was seriously injured in a traffic accident while riding his motorcycle. After the other drivers' insurance policies paid out their liability limits, Johnson sought additional uninsured motorist (UM) coverage from his parents' automobile policy with Metropolitan Property and Casualty Insurance Company (MetLife). MetLife denied Johnson's claim under an exclusion in his parents' policy that denies coverage to resident-relative insureds injured while operating their own motor vehicle that is not insured by a motor vehicle insurance policy. Johnson had liability insurance on his motorcycle but had declined to purchase the offered UM coverage.The United States District Court for the Western District of Oklahoma ruled in favor of MetLife. The court found that although Johnson was a resident relative and insured under his parents' policy, he had the opportunity to purchase his own UM coverage but declined it. The court interpreted Oklahoma law as requiring Johnson to either obtain liability insurance and UM coverage on his motorcycle policy or forego UM coverage under his parents' policy.On appeal, the United States Court of Appeals for the Tenth Circuit reversed the lower court's decision. The court concluded that MetLife's exclusion does not defeat UM coverage for Johnson. Because Johnson carried liability insurance on his motorcycle, the court held that his motorcycle was "insured by a motor vehicle insurance policy." The court found that MetLife's exclusion did not require that resident-relative insureds carry UM coverage on their own motor vehicles to be eligible for UM benefits on other applicable policies. Therefore, MetLife owes Johnson UM coverage from his parents' policy. The case was remanded for further proceedings. View "Johnson v. Metropolitan Property and Casualty Insurance Company" on Justia Law

The case revolves around a car accident that occurred on February 6, 2016, involving Melissa A. Keller and her daughter, Caroline Keller, who were insured by State Farm Mutual Automobile Insurance Company. The Kellers were hit by Xavier Blanchard, who ran a red light. Xavier's vehicle was owned by his father, Harvey Blanchard, and was also insured by State Farm. The Kellers filed a complaint against the Blanchards on January 8, 2018, alleging negligence and wantonness. However, the complaint did not state any claim against State Farm. On January 26, 2023, the Kellers settled their claims with the Blanchards and subsequently filed an "Amended Complaint for Underinsured Motorist Coverage" against State Farm on January 27, 2023.State Farm moved to dismiss the new complaint, arguing that it was filed outside the six-year statute-of-limitations period applicable to contract-based claims. The insurer contended that the claim did not relate back to the original complaint as Keller knew or should have known that State Farm was her insurer. Keller, on the other hand, argued that her claim for underinsured-motorist coverage did not accrue until the date she settled with the Blanchards. The trial court denied State Farm's motion to dismiss on June 12, 2023, without making specific findings of fact or law.The Supreme Court of Alabama granted State Farm's petition for a writ of mandamus, directing the trial court to dismiss Keller's underinsured-motorist claim against it. The court held that the accrual date for a direct uninsured/underinsured-motorist claim against an insurer is the date of the accident. Since Keller did not assert her direct claim for underinsured-motorist benefits against State Farm until more than six years after the date of the accident, that claim was time-barred. View "Ex parte State Farm Mutual Automobile Insurance Company" on Justia Law

The case involves Century Aluminum Company and its subsidiaries (Century), and Certain Underwriters at Lloyd's, London (Lloyd's). Century uses river barges to transport alumina ore and other materials for its aluminum smelting operations. In 2017, the Army Corps of Engineers closed key locks on the Ohio River, causing Century to seek alternative transportation. Century filed a claim with Lloyd's, its maritime cargo insurance policy provider, for the unanticipated shipping expenses. While Lloyd's paid $1 million under the policy's Extra Expense Clause, it denied coverage for the rest of the claim.The case was first heard by the United States District Court for the Western District of Kentucky. Century sought a declaration that its denied claims were covered by the insurance policy and requested damages for Lloyd's alleged breach of contract among other violations of Kentucky insurance law. Lloyd's sought summary judgment, arguing that the policy did not cover the claims. The district court sided with Lloyd's.The appeal was heard before the United States Court of Appeals for the Sixth Circuit. Century argued that the policy's All Risks Clause, Risks Covered Clause, Shipping Expenses Clause, and Sue and Labour Clause required Lloyd's to cover the additional shipping expenses. The court rejected these arguments, affirming the district court's ruling. The court held that under the All Risks Clause and Risks Covered Clause, Century's alumina did not suffer any physical loss or damage. As for the Shipping Expenses Clause, it covered the risk of a failed delivery, not an untimely one. Lastly, under the Sue and Labour Clause, Century was required to mitigate Lloyd's exposure under the policy, but it did not obligate Lloyd's to pay anything for reducing losses that fall outside the policy. View "Century Aluminum Co. v. Certain Underwriters at Lloyd's, London" on Justia Law

The case involves Indemnity Insurance Company of North America ("Indemnity") and Unitrans International Corporation ("Unitrans"). Indemnity, as the insurer of Amgen, a pharmaceutical company, paid for the loss of a pallet of pharmaceutical drugs that was damaged while being unloaded from a truck at an airport. The pallet was being transported from Amgen's facility in Dublin, Ireland to Philadelphia, and Unitrans, a logistics company, had been engaged to arrange the transportation. Indemnity, as Amgen's subrogee, sued Unitrans for breach of contract, negligence, and breach of bailment.The United States District Court for the Eastern District of New York granted Unitrans's motion for summary judgment, ruling that Unitrans qualified as a contracting carrier under the Montreal Convention, and therefore, Indemnity's action was time-barred by the Convention's statute of limitations.The United States Court of Appeals for the Second Circuit agreed that contracting carriers are subject to the Montreal Convention, but found that there was a genuine dispute of material fact as to whether Unitrans was a contracting carrier. The court vacated the judgment and remanded the case for further proceedings. The court held that a contracting carrier, as defined by Article 39 of the Montreal Convention, is a person that, as a principal, makes a contract of carriage governed by the Montreal Convention with a consignor, and an actual carrier performs the whole or part of the carriage by virtue of authority from the contracting carrier. The court found that there was enough evidence cutting both ways to create a genuine question as to whether Unitrans qualifies as a contracting carrier. View "Indemnity Inssurance Co. of North America v. Unitrans International Corp." on Justia Law

In this case, the plaintiffs, Carl and Mary Ellen Schnell, filed an insurance claim with their home insurer, State Farm Lloyds, after a hailstorm damaged their home's roof. State Farm accepted coverage for some claims but denied others, including the claim that the City of Fort Worth required the Schnells to replace their entire roof, rather than just the damaged tiles. The Schnells sued, and the district court ruled in favor of State Farm. The Schnells appealed this decision.The United States Court of Appeals for the Fifth Circuit found that there were genuine issues of material fact that prevented the case from being resolved through summary judgment. The court found conflicting evidence regarding whether a building code administrator had flatly denied the Schnells' request for spot repairs or had conditioned his decision on the Schnells confirming that the old and new tiles on their roof did not interlock. The court also found a genuine dispute of fact about whether the Schnells' roof tiles were damaged by a covered risk like wind or hail, which would have triggered their insurance coverage.Thus, the court vacated the district court's summary judgment in favor of State Farm on the Schnells' breach of contract and Texas Prompt Payment of Claims Act claims. The court affirmed the remainder of the district court's judgment and remanded the case for further proceedings consistent with its opinion. View "Schnell v. State Farm Lloyds" on Justia Law