Articles Posted in Insurance Law

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Mack truck’s primary insurer refused to contribute more than $1 million toward the settlements of the final three auto collisions, claiming that they were part of a single "accident" under its policy and that $1 million was the primary insurer's limit of liability per accident. The Fifth Circuit applied Texas law and held that there was one accident under the policy. In this case, the chain of causation remained unbroken and the ongoing negligence of the runaway Mack truck was the single proximate, uninterrupted, and continuing cause of all the collisions. Therefore, the court reversed the district court's decision that there were two accidents and rendered judgment in favor of the primary insurer. View "Evanston Insurance Co. v. Mid-Continent Casual" on Justia Law

Posted in: Insurance Law

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In a case arising from a fee dispute about litigation expenses that an arbitration panel found attorneys had improperly allocated to their clients, the Fifth Circuit affirmed the district court's judgment that there was no coverage under the terms of the excess policy. The court applied Texas law and held that Lexington, the excess carrier, was not liable for any portion of the judgment and for any attorneys' fees as defense costs expended in the underlying litigation. In this case, the excess policy's provisions expressly stated that there was no coverage for the type of breach of contract found by the arbitrators in the underlying action. Furthermore, the definition of "Loss" did not cover the remedy that the arbitration panel imposed as a consequence of the breach of fiduciary duty. View "John M. O'Quinn, P.C. v. Lexington Insurance Co." on Justia Law

Posted in: Insurance Law

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The Fifth Circuit affirmed the district court's summary judgment determination that Nature's Way, as the owner of a tugboat, was also "operating" an oil barge that the tugboat was moving at the time of a collision, as the term was used in the Oil Pollution Act of 1990 (OPA). The court held that the ordinary and natural meaning of "operating" under the statute would apply to the exclusive navigational control that Nature's Way exercised over the barge at the time of the collision. Therefore, the National Pollution Funds Center violated the Administrative Procedures Act by determining that Nature's Way was an operator of the barge and thus denying reimbursement on the grounds that its liability should be limited by the tonnage of the tugboat and not the tonnage of the barges. View "United States v. Nature's Way Marine, LLC" on Justia Law

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The Fifth Circuit withdrew its prior opinion and substituted the following opinion in light of the Texas Supreme Court's opinion on rehearing in USAA Texas Lloyds Co. v. Menchaca, 545 S.W.3d 479 (2018). This case involved issues of Texas law relating to an insurer's duty to defend and the damages that an insured may recover when an insurer beaches that duty. The court affirmed the district court's grant of summary judgment in LSB's favor on the duty to defend and OSC's breach of that duty and held that there were no genuine issues of material fact and LSB was entitled to judgment as a matter of law. The court also affirmed the district court's denial of OSC's motion for partial summary judgment based on the anti-stacking rule; affirmed summary judgment in favor of LSB under the Prompt Payment Claims Act; reversed the district court's judgment with respect to LSB's Chapter 541 of the Texas Insurance Code claim and remanded for further proceedings in light of Menchaca; and reversed the district court's judgment to the extent it imposed an 18% statutory penalty after the date of judgment. View "Lyda Swinerton Builders, Inc. v. Oklahoma Surety Co." on Justia Law

Posted in: Insurance Law

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At issue in this appeal was a statutory scheme that dictates how to calculate farmers' crop insurance policies. Determining that it had jurisdiction over the appeal, the Fifth Circuit held that farmers were permitted to exclude the historical data for the 2015 crop year, even though the FCIC had not completed its data compilation. In this case, the FCIC has not provided any textual or contextual clues that would cast doubt on the plain language of the Federal Crop Insurance Act, 7 U.S.C. 1508(g)(4). Therefore, the farmers prevailed at Chevron step one. View "Adkins v. USDA" on Justia Law

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Doe, an 18-year-old, met Kreka at Sports Bar, to interview for a position at Kreka’s restaurant. Kreka introduced Doe to Deari, who owned another restaurant, Pastazios. Deari tried to order Doe an alcoholic beverage. Sports Bars’s server refused because Doe was underage. Deari suggested that the three go to Pastazios. Along the way, Deari purchased liquor. Neither he nor Pastazios was licensed to serve hard liquor. At Pastazios, Deari placed a beer in front of Doe and encouraged her to drink it then served shots of Crown Royal Black. Doe alleged that, over several hours, Deari and “Pastazios” “continued to encourage and provide [Doe] with more and more alcoholic products from within and owned by Pastazios, despite [Doe] telling them she did not want anymore,” that “[Doe] was effectively detained,” and that “Pastazios” then “allowed” Deari and Kreka to load Doe into a car. A urine test would later reveal that Doe had been given a date-rape drug. Doe regained consciousness in a hotel room. Deari was sexually assaulting her. Deari infected Doe with herpes. Doe sued. Against Pastazios, Doe alleged negligence, gross negligence, Dram Shop liability, false imprisonment, and premises liability. The Fifth Circuit affirmed summary judgment that Pastazio's insurer did not breach a contractual duty to defend and indemnify Pastazios, noting the insurance policy’s liquor-liability and intentional-harm exclusions. All of Doe’s injuries arose out of the restaurant’s criminal act of giving alcohol to a minor, so the criminal-act exclusion bars all coverage claims. View "Century Surety Co. v. Deari" on Justia Law

Posted in: Insurance Law

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The Fifth Circuit reversed the district court's judgment in favor of LINA, the insurer and plan administrator of a life insurance policy. Plaintiff, the beneficiary of the policy, was denied benefits because LINA determined that the insured's death was caused in part by intoxication or drug abuse. The court took into account LINA's conflict of interest, its procedural unreasonableness, its denial of a full and fair review, and the counter-balanced nature of the evidence, and held that LINA abused its discretion in denying benefits. The court remanded with instructions to enter judgment for plaintiff and for any further proceedings. View "White v. Cigna Group Insurance Co." on Justia Law

Posted in: Insurance Law

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The Fifth Circuit affirmed the district court's grant of summary judgment for an insurer, in an action seeking a declaratory judgment that the insurer owed no coverage under a commercial property insurance policy. The insured then counterclaimed for declaratory judgment, breach of the insurance contract, and violations of the Texas Insurance Code. The court held that the insured failed to meet its burden to offer evidence that would allow a trier of fact to segregate covered losses from non-covered losses. Therefore, because the insured failed to meet its burden to show what portion, if any, of the claimed damage occurred during the coverage period, the insurer was entitled to summary judgment on its claim seeking declaratory judgment. The insured's counterclaims failed for the same reason. View "Certain Underwriters at Lloyd's of London v. Lowen Valley View, LLC" on Justia Law

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The Fifth Circuit affirmed the district court's grant of summary judgment for Axis and grant of Axis's motion to strike an affidavit submitted in support of its motion for summary judgment as untimely. The court held that this case presented no unusual or exceptional circumstances and the district court did not abuse is discretion in striking the affidavit where Hartford did not not seek modification of the scheduling order so that it may apprise the district court of its intent to offer another witness's testimony so as to give Axis an opportunity to depose the witness, nor did Hartford provide any valid justification for its failure to secure the affidavit before all discovery deadlines had passed. The court held that the policy unambiguously provided coverage in this case because the Hartford policy provided liability coverage for any auto and because the CRB Endorsement did not conflict with the liability coverage provision of the policy. Finally, the court declined to take judicial notice of Dana Transport's "admission." View "Bennett v. Hartford Insurance Company of the West" on Justia Law

Posted in: Insurance Law

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In the Fifth Circuit's previous ruling, Aldous v. Darwin Nat'l Assurance Co., 851 F.3d 473, 485 (5th Cir. 2017), the court determined that plaintiff's claims under the Texas Insurance Code Chapter 541 were barred because she did not claim damages beyond the loss of policy benefits. Since that ruling, the Supreme Court of Texas decided USAA Texas Lloyds Co. v. Menchaca, No. 14-0721, 2018 WL 1866041, at 10 (Tex. Apr. 13, 2018), and repudiated the independent-injury rule. Therefore, the court granted plaintiff's motion for leave to file her petition out of time because the court retained jurisdiction over the appeal and because plaintiff had good cause for her late filing. View "Charla Aldous, P.C. v. Darwin National Assurance Co." on Justia Law

Posted in: Insurance Law