Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Millennium, processor of titanium dioxide, filed suit contending that the Insurers had wrongfully denied Millennium's claim for coverage under contingent business interruption provisions of commercial liability insurance policies issued by the Insurers. After an explosion occurred at Apache's, a gas producer, Varanus Island facility, it notified Alinta, a retail gas supplier, which in turn sent a notice of "force majeure" to Millennium and other customers. On appeal, National Union and the Insurers challenged the district court's grant of partial summary judgment in favor of Millennium. The court found the term "direct" to be clear as used in the Policies and without ambiguity and, therefore, rejected Millennium's claim to the contrary. The court concluded that, on the plain language of the Policies, Apache could not be considered a direct contributing property to Millennium. The court rejected Millennium's alternative argument that it could also receive coverage under the "for the account of" clause of the Endorsements because coverage was triggered only by damage to or destruction of contributing properties. Accordingly, the court reversed and remanded where Millennium presented no plausible reading of the Policies under which it could receive coverage for its contingent business interruption losses. View "Millennium Inorganic Chemicals v. National Union Fire Ins." on Justia Law

PTJV filed suit against ACE claiming coverage under primary and excess insurance policies with regard to a large-scale construction project in Maryland. The court affirmed the district court's grant of summary judgment in favor of ACE, holding that under Maryland and Tennessee law, PTJV violated the terms of both the primary and excess policies by not obtaining ACE's consent before settlement, and as such, could not now claim reimbursement under those policies. View "Perini/Tompkins Joint Venture v. ACE American Ins. Co." on Justia Law

This action arose out of allegedly defective roofing work performed by defendant. At issue was whether defendant, an insured contractor, was a nominal party in a contribution suit between its insurers. The court affirmed the district court's holding that defendant was a nominal party for purposes of the nominal party exception to the rule of unanimity governing removal where defendant did not possess a sufficient stake in the proceeding at issue to rise above the status of a nominal party. View "Hartford Fire Ins. Co. v. Harleysville Mutual Ins." on Justia Law

Plaintiff filed suit against Prudential, the plan administrator, and BioMerieux, her employer, after Prudential denied her long-term disability and short-term disability benefits. The district court entered summary judgment in favor of Prudential and BioMerieux. Plaintiff appealed. The court concluded that the language at issue in both plans was ambiguous and did not clearly confer discretionary decision-making authority on the plan administrator. Therefore, the administrator's eligibility determinations denying benefits to a covered employee were subject to de novo judicial review, and the district court erred in reaching a contrary conclusion. The court further held that the district court erred in concluding that the employer's group insurance plan required objective proof of disability in order for an employee to qualify for plan benefits. Accordingly, the court vacated and remanded for further proceedings. View "Cosey v. The Prudential Ins. Co." on Justia Law

Plaintiff, the widow of the insured, filed this action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B), after AUL, the insurer, refused to pay accidental death and dismemberment (AD&D) benefits. The district court affirmed the denial of benefits on the grounds that the death was not accidental because the fatal crash was an "anticipated and expected" result of driving while intoxicated. The insurance policies did not define the term "accident" despite its critical importance for determining eligibility for AD&D benefits. Because "accident" was susceptible to more than one reasonable interpretation, the court construed it against AUL, the drafting party, and concluded that a reasonable plan participant under similar circumstances would have understood the insurer's alcohol-related crash to be an "accident" under the policy language. Accordingly, the court reversed and remanded. View "Johnson v. American United Life Ins." on Justia Law

Plaintiff, the insured, appealed the district court's holding that his Hartford insurance policy prohibited plaintiff from "stacking," or combining the uninsured/underinsured motorist coverage (UM/UIM) for each insured vehicle, when the policy failed to specify any particular amount of UM/UIM coverage afforded. The court concluded that because Virginia Code 38.2-2206(A) mandated that UM/UIM coverage "shall equal" the general liability coverage, this provision by operation of law provided plaintiff an equal amount of UM/UIM coverage under the Hartford policy. Accordingly, the court held that the anti-stacking provision in plaintiff's policy unambiguously prevented the stacking of UM/UIM coverage, and affirmed the district court's award of summary judgment in favor of Hartford. View "Dooley v. Hartford Accident & Indemnity Co." on Justia Law

Plaintiffs brought this action in Maryland state court seeking a declaration as to Allstate's duty under a renters insurance policy to defend and indemnify plaintiffs in a tort suit brought against them, and others. On appeal, defendant challenged the district court's grant of summary judgment to Allstate, concluding that Allstate did not have a duty to defend. The court held that Maryland law applied to the issue of whether Allstate had a duty to defend plaintiffs if Maryland law would apply without the choice-of-law provision in the policy; according to Maryland's lex loci contractus rule for choice-of-law decisions, California law governed the analysis of whether Allstate had a duty to defend plaintiffs in the underlying action; and the court rejected plaintiffs' argument that Allstate nonetheless owed them a duty to defend under the policy. Accordingly, the court affirmed the judgment. View "Francis v. Allstate Ins. Co." on Justia Law

Plaintiff brought this declaratory judgment action, asserting that the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., preempted a state court order requiring him to turn over benefits received under ERISA retirement and life insurance plans owned by his deceased ex-wife. At issue was whether ERISA prohibited a state court from ordering plaintiff, who had previously waived his right to those benefits, to relinquish them to the administrators of the ex-wife's estate. The court held that ERISA did not preempt post-distribution suits against ERISA beneficiaries because the court detected no conflict with either ERISA's objectives or relevant Supreme Court precedent. Accordingly, the court affirmed the judgment. View "Andochick v. Byrd" on Justia Law

MASC filed an action in the district court seeking a declaration that South Carolina municipalities were entitled to assess municipal business license taxes based on, or measured by, the total flood insurance premiums collected in the particular municipality by insurance companies under an arrangement with FEMA. The district court denied the insurance companies' motion for summary judgment on grounds of preemption and sovereign immunity. The flood insurance premiums were federal property that could not be taxed and the participating private insurance companies, in their operation of and participation with the National Flood Insurance Program, were federal instrumentalities so closely connected with the federal government that they were immune from taxation. The federal government did not consent to this tax, and it was therefore invalid. Accordingly, the court reversed the district court's grant of partial summary judgment to MASC and denial of summary judgment to the insurance companies. View "Municipal Assoc. of SC v. USAA General Indemnity Co." on Justia Law

The Trustee in bankruptcy of ESA appealed from the affirmance by the district court of the award of summary judgment by the bankruptcy court to Hanover. The bankruptcy court concluded that ESA's transfer of $1.375 million to Hanover within 90 days of ESA's filing a petition for bankruptcy was not an avoidable preference under 11 U.S.C. 547(b). The court held that, although the bankruptcy court erred in finding that the earmarking defense applied in this case, the court found no error in its determination that Hanover was entitled to the new value defense under section 547(c) to the Trustee's claim of a preferential transfer. Therefore, the court affirmed the judgment of the bankruptcy court awarding summary judgment to Hanover. View "ESA Environmental Specialists, Inc. v. The Hanover Ins. Co." on Justia Law