Justia Contracts Opinion Summaries

Corey worked as a machine operator in Eaton’s Ohio factory. Corey has long suffered from cluster headaches— extremely painful attacks that strike several times per day for weeks on end. In 2014, Corey applied for short-term disability benefits under Eaton’s disability plan after a bout of headaches forced him to miss work. After granting a period of disability, the third party administering Eaton’s disability plan discontinued benefits because Corey failed to provide objective findings of disability. Under the plan, “[o]bjective findings include . . . [m]edications and/or treatment plan.” Corey’s physicians treated his headaches by prescribing prednisone, injecting Imitrex (a headache medication), administering oxygen therapy, and performing an occipital nerve block. The district court upheld the denial. The Sixth Circuit reversed, citing the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). Corey’s medication and treatment plan satisfy the plan’s objective findings requirement. View "Corey v. Sedgwick Claims Management Services, Inc." on Justia Law

The Colorado Supreme Court concluded here that nothing in the language of the Colorado uninsured/underinsured motorist statute, 10-4-609 C.R.S. (2016) precluded an agent from exercising either apparent or implied authority to reject UM/UIM coverage on behalf of a principal. In line with this reasoning, the agent’s rejection of UM/UIM coverage was indeed binding on the principal. Respondent Brian Johnson tasked a friend with purchasing automobile insurance for the new car that he and the friend had purchased together. The friend did so, and in the course of that transaction, she chose to reject uninsured/underinsured motorist (UM/UIM) coverage on the new car. After an accident in that car with an underinsured motorist, Johnson contended that his friend’s rejection of UM/UIM coverage was not binding on him. View "State Farm v. Johnson" on Justia Law

After a fatal vehicular accident, Christina Varvel asserted a declaratory judgment action against Universal Underwriters Insurance Co. and Zurich American Insurance Co. (collectively, Zurich) to determine the amount of insurance coverage available. Varvel also sued Salvatore Cava, Daniel Cava, and Dan’s Car World, LLC (collectively, the Cava defendants). The Cava defendants filed individual cross-claims against Zurich, their insurer. Zurich filed a motion to dismiss the Cava defendants’ cross-claims under W. Va. R. Civ. P. 12(b)(6). The circuit court denied Zurich’s motion to dismiss, determining that the Cava defendants asserted recognized causes of action against Zurich. Zurich sought a writ of prohibition to prevent enforcement of the circuit court’s order. The Supreme Court granted a writ of prohibition, as moulded, holding that the Cava defendants’ cross-claims against Zurich were not ripe for adjudication. Therefore, the circuit court lacked subject matter jurisdiction, and the order denying Zurich’s motion to dismiss the Cava defendants’ cross-claims was void and unenforceable. View "State ex rel. Universal Underwriters Insurance v. Honorable Patrick N. Wilson" on Justia Law

Pacific Bay treated an individual who was a subscriber to a Blue Shield health plan. It submitted invoices to Blue Shield for payment for the services rendered to the subscriber. Pacific Bay contends it was underpaid and brought suit against Blue Shield to recover the additional amount it claimed to be owed. The court sustained Blue Shield's demurrer to the first amended complaint (FAC) without leave to amend, finding that Pacific Bay had not shown that it was entitled to any payment from Blue Shield. As an out-of-network, nonemergency service provider, Pacific Bay was entitled to payment for treating Blue Shield's subscriber under the terms of the applicable evidence of coverage (EOC). Pacific Bay did not allege Blue Shield paid it improperly under the EOC, nor did it argue that it could allege additional facts to support such a claim. Pacific Bay claimed it was underpaid. Against this backdrop, Pacific Bay's other allegations did not give rise to any valid cause of action. View "Pacific Bay Recovery v. Cal. Physicians' Services" on Justia Law

Some four years after Plaintiff suffered a casualty loss to his property, Plaintiff sued Nationwide Mutual Fire Insurance Company (Defendant), which insured the property pursuant to a policy that it had issued to Plaintiff, alleging breach of contract and bad faith. Defendant moved for judgment on the pleadings, arguing that the claim must fail because Plaintiff did not fully comply with the provisions of the policy and because Plaintiff brought suit more than two years after the date of loss, in contravention of the terms of the insurance contract. The hearing justice granted Defendant’s motion for judgment on the pleadings. The Supreme Court affirmed, holding that because Plaintiff failed to adhere to the two-year limitation provision, Plaintiff was not entitled to relief. View "Chase v. Nationwide Mutual Fire Insurance Co." on Justia Law

Lamar Ragland appeals the dismissal of his bad-faith claim against State Farm Mutual Automobile Insurance Company. Ragland sought punitive damages from State Farm based on State Farm's alleged bad-faith failure to pay and related failure to subject his claim for underinsured-motorist ("UIM") benefits to a cognitive review. State Farm moved to dismiss Ragland's claims, because Ragland had filed a separate civil action in 2014 that had not yet been resolved. After review, the Alabama Supreme Court dismissed Ragland's claim as being from a nonfinal judgment. View "Ragland v. State Farm Mutual Automobile Ins. Co." on Justia Law

Plaintiff filed suit against U.S. Specialty for breach of contract, based on its denial of coverage of fraudulent transfer claims in an underlying suit. The district court entered summary judgment for U.S. Specialty and entered judgment against plaintiff. The Eleventh Circuit affirmed, holding that, in light of Florida law, plaintiff's fraudulent conveyance claims "arose from" wrongful acts that predate November 10, 2008, and thus fell within the scope of the Prior Acts Exclusion of the U.S. Specialty policy. Furthermore, the policy's terms were unambiguous and its coverage was not illusory. Therefore, U.S. Specialty did not breach the insurance contract. View "Zucker v. U.S. Specialty Insurance" on Justia Law

In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law

The Idaho Supreme Court concluded the district court erred in determining that the insurer did not breach its insurance contract with its insureds, and in dismissing the insureds’ bad faith claim that resulted from that determination. Plaintiffs Joel and Kathleen Harmon filed a claim with their insurance company, State Farm Mutual Automobile Insurance Co., after their motorhome was broken into and damaged. The Harmons subsequently brought suit against State Farm in district court, claiming that State Farm breached the insurance agreement by failing to pay the amount required to actually repair the vehicle or pay the cash value. The Harmons also brought a claim for bad faith. State Farm moved for summary judgment on both claims, which the district court granted. The case was remanded for further proceedings. View "Harmon v. State Farm Mutual Auto Ins Co." on Justia Law

Plaintiffs filed suit alleging that defendants unlawfully used WCTL to calculate the base value of total loss vehicles. Plaintiffs alleged that using WCTL, instead of lawful sources such as the National Automobile Dealers Association (NADA) Guidebook or the Kelly Blue Book (KBB), resulted in their vehicles being assigned a lower base value and accordingly resulted in plaintiffs receiving lower payouts on their insurance claims. Plaintiffs contended that damages can be calculated by replacing defendants' allegedly unlawful WCTL base value with a lawful base value, derived from either NADA or KBB, and then adjusting that new base value using defendants' current system for condition adjustment. The Fifth Circuit found that plaintiffs' damages methodology was sound and did not preclude class treatment. The Fifth Circuit reversed the district court's certification of a fraud class where plaintiff failed to show that class issues will predominate. Defendant argued for the first time on appeal that by accepting defendants' condition score calculation as is, plaintiffs may have impermissibly waived unnamed class members' ability to assert a future claim contesting defendants' computation of the condition factor. Because this argument was not expressly raised to the district court, and may present important certification questions, the Fifth Circuit remanded the certification order as to the contract and statutory claims. View "Slade v. Progressive Security Insurance" on Justia Law