Articles Posted in Insurance Law

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Purnell hired Plaintiffs (Gabarette and Castillo) as independent contractors to deliver furniture in Virginia. Because it was a last-minute request, Plaintiffs did not have a vehicle available, so Purnell permitted them to use a truck that Purnell had rented from Penske. Driving to their destination, Plaintiffs stopped on the side of the interstate so Castillo could check on the security of the furniture load. Another driver struck the rented truck, killing Castillo and injuring Gabarette. Purnell’s motor vehicle insurance policy, issued by Wausau, included an uninsured/underinsured motorists (UIM) endorsement required by Virginia law, with coverage limited “to those autos shown as covered autos.” For UIM coverage—as opposed to liability coverage—the policy restricted coverage to “Owned Autos Only” and listed three vehicles on the “Schedule of Covered Autos You Own,” not including the rented Penske truck. The Declarations Pages provided that Wausau would “pay in accordance with the Virginia Uninsured Motorists Law, all sums the insured is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.” For UIM purposes, an insured party is “[a]nyone . . . occupying a covered auto.” The UIM endorsement defines “covered auto” as “a motor vehicle, or a temporary substitute, with respect to which the bodily injury or property damage liability coverage of the policy applies.” The district court granted Wausau summary judgment regarding UIM coverage. The Fourth Circuit affirmed, based on the plain language of the policy. View "Levine v. Employers Insurance Co. of Wausau" on Justia Law

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At issue in this appeal was whether claims in an underlying personal injury suit against two contractors were covered under policies issued by Amerisure, in which the contractors were additional insureds. The Fourth Circuit affirmed the district court's judgment that Amerisure improperly relied on a policy exclusion to avoid its duty to defend, and that Amerisure was liable under the terms of its policies to pay the full cost of the settlement plus prejudgment interest. The court vacated the district court's judgment with respect to defense fees and costs, and held that Amerisure was liable for the full amount of those fees and costs because Continental did not have an independent duty to defend in the underlying lawsuit. View "Continental Casualty Co. v. Amerisure Insurance Co." on Justia Law

Posted in: Insurance Law

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The Fourth Circuit held that the main questions at issue in this appeal —concerning both the scope and limit of the Insurers' duties to defend and indemnify WECCO—were answered over a decade ago in In re Wallace & Gale Co., 385 F.3d 820, 833–34 (4th Cir. 2004). The court denied WECCO's request to either consider these questions anew or certify them to the Maryland Court of Appeals. Therefore, the court affirmed the district court's judgment and rejected WECCO's challenges to the district court's interpretation of the completed-operations hazard to apply to bodily injury stemming from an individual's exposure to asbestos during a WECCO operation that was completed at the time the insurance policy took effect, regardless of whether such operation was ongoing when the individual was first exposed; decision to place the burden on WECCO to prove that an asbestos related bodily injury claim was not subject to a policy's aggregate limit; determination that St. Paul properly classified certain claims as "completed operations" claims; declaration that the aggregate limits of St. Paul's policies had been exhausted; and conclusion, in the alternative, that most of WECCO's breach-of-contract claims were time-barred. View "The Walter E. Campbell Co. v. United States Fire Insurance Co." on Justia Law

Posted in: Insurance Law

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Plaintiff filed suit against ASIC, alleging that its conduct in handling her insurance claim constituted an unfair claims settlement practice in violation of N.C. Gen. Stat. 58-63-15(11), and, as a matter of law, an unfair and deceptive trade practice in violation of N.C. Gen. Stat. 75-1.1. The Fourth Circuit held that because North Carolina law required ASIC to appoint and authorize the Commissioner as its agent for service of process as a condition of writing insurance in the state, and because this was the only authority ASIC provided the Commissioner, the Commissioner was merely ASIC's statutory agent for service of process; service on a statutory agent was not service on the defendant within the meaning of 28 U.S.C. 1446(b); the district court did not err in determining that ASIC timely filed notice of removal and in denying plaintiff's motion for remand based on her allegations of untimely filing; diversity jurisdiction existed and the district court did not err in denying plaintiff's motion for remand based on an alleged lack of subject matter jurisdiction; and the district court did not err in granting ASIC's Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted. View "Elliott v. American States Insurance Co." on Justia Law

Posted in: Insurance Law

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Plaintiff filed suit against ASIC, alleging that its conduct in handling her insurance claim constituted an unfair claims settlement practice in violation of N.C. Gen. Stat. 58-63-15(11), and, as a matter of law, an unfair and deceptive trade practice in violation of N.C. Gen. Stat. 75-1.1. The Fourth Circuit held that because North Carolina law required ASIC to appoint and authorize the Commissioner as its agent for service of process as a condition of writing insurance in the state, and because this was the only authority ASIC provided the Commissioner, the Commissioner was merely ASIC's statutory agent for service of process; service on a statutory agent was not service on the defendant within the meaning of 28 U.S.C. 1446(b); the district court did not err in determining that ASIC timely filed notice of removal and in denying plaintiff's motion for remand based on her allegations of untimely filing; diversity jurisdiction existed and the district court did not err in denying plaintiff's motion for remand based on an alleged lack of subject matter jurisdiction; and the district court did not err in granting ASIC's Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted. View "Elliott v. American States Insurance Co." on Justia Law

Posted in: Insurance Law

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The Fourth Circuit held that the district court correctly denied Applied Underwriters' motion to compel arbitration in a suit alleging that Applied Underwriters engaged in the business of insurance in Virginia without complying with Virginia insurance and workers' compensation laws. However, the court held that the district court reversibly erred in applying the doctrine of judicial estoppel to hold that the agreement between Applied Underwriters and plaintiff constituted an insurance contract for purposes of Virginia law. Therefore, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Minnieland Private Day School v. Applied Underwriters Captive Risk Assurance Co." on Justia Law

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Plaintiffs filed suit in state court against Allstate after it denied coverage for damages caused by Hurricane Irene to plaintiffs' waterfront home. Allstate removed to federal court, raising a statute of limitations defense. The district court did not address the limitations issue and ultimately entered judgment for plaintiffs. The Fourth Circuit concluded that plaintiffs' breach of contract claim was time barred because they did not file the complaint within one year of the denial of coverage, as required by the National Food Insurance Act of 1968 (NFIA), 42 U.S.C. 4001(a), and its regulations. Plaintiffs' argument that the statute should be tolled by their filing of a complaint in state court is foreclosed by Shofer v. Hack Co. Furthermore, the facts neither support a forfeiture or a waiver on behalf of Allstate. The Fourth Circuit also concluded that plaintiffs' claim for bad faith handling of their insurance claim under the North Carolina Unfair and Deceptive Trade Practices Act N.C. Gen. Stat. 75-1.1 et seq., was preempted by federal law and therefore barred. Accordingly, the Fourth Circuit reversed the judgment of the district court. View "Woodson v. Allstate Insurance Co." on Justia Law

Posted in: Insurance Law

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Favorite Healthcare Staffing is an employment agency that provides nurses and other health care professionals to Laurel Regional Hospital. The contract between the Agency and the Hospital (the “Staffing Agreement”) states that the Agency-provided practitioners assigned to the Hospital are the employees of the Agency, not the Hospital. At issue in this case is whether a nurse employed by a staffing agency and assigned to work at a hospital qualifies as an “employee” of the hospital under the hospital’s insurance policy (the "Dimensions Policy"). The district court answered in the negative and granted summary judgment in favor of the hospital's insurer. The court concluded, however, that the term “employee” as used in the Dimensions Policy is not ambiguous and that it includes those workers who qualify as employees under the right-to-control test. Therefore, Dimensions has an independent obligation to provide coverage to those workers who meet the definition of “employee,” without regard to how those workers may be classified under the Staffing Agreement executed by the Hospital and the Agency. Because the evidence contained in the record establishes that the nurse is the Hospital’s employee under the right-to-control and the borrowed-servant standards, the court concluded that she is a “protected person” who qualifies for coverage under the professional-liability portion of the Dimensions Policy. Accordingly, the court vacated and remanded. View "Interstate Fire and Casualty v. Dimensions Assurance Ltd." on Justia Law

Posted in: Insurance Law

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Because of an internal oversight, American Bank failed to respond to a summons and the state court entered a $98.5 million default judgment against it. Eight months after receipt of the summons, American Bank notified its insurer, St. Paul, of the lawsuit and St. Paul denied coverage due to late notice. American Bank was subsequently able to have the default judgment vacated and the suit dismissed, but at an expense of $1.8 million. St. Paul now seeks a declaratory judgment that it had no duty to pay for American Bank's defense, and American Bank counterclaims. The court affirmed the district court's entry of judgment for St. Paul where, among other things, American Bank did not provide St. Paul with notice as soon as practicable, as required by the terms of its insurance policy, and because the late notice caused St. Paul prejudice. Therefore, St. Paul was within its right to deny coverage. View "St. Paul Mercury Ins. Co. v. American Bank Holdings, Inc." on Justia Law

Posted in: Insurance Law

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Citizens Insurance appealed the district court's ruling that it had a duty to defend Liberty University in an underlying action. In the underlying action, Janet Jenkins filed suit against Liberty University, alleging that the school participated in a scheme to kidnap Jenkin's daughter in order to disrupt the parent-child relationship. The court concluded that the district court erroneously interpreted the Jenkins Complaint, the Separation of Insureds provision, and Virginia law. In this case, the Jenkins Complaint does not allege an "occurrence," and it triggers the policy's coverage exclusions. Accordingly, Citizens Insurance has no duty to defendant Liberty University. The court vacated and remanded. View "Liberty Univ. v. Citizens Ins. Co." on Justia Law

Posted in: Insurance Law