Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

The Fifth Circuit affirmed the district court's judgment in favor of Principal in an action brought by plaintiff, alleging that Principal abused its discretion by denying her benefits. The court held that Principal's benefits denial was supported by substantial evidence. The court held that, at bottom, there was no abuse of discretion in Principal's reliance on its own treating physicians' reports detailing an absence of plaintiff's impairments. The court also held that, although Principal had a structural conflict of interest that it both evaluates and pays claims, this factor had little weight in light of the extensive investigation that Principal conducted. View "Foster v. Principal Life Insurance Co." on Justia Law

Mid-Continent filed a declaratory judgment action seeking a declaration that it did not owe coverage for a judgment assessed against its insured, PSI. The district court ruled that the Cooperation Clause in the policy applied to PSI's third-party claim in the underlying lawsuit and that only parts of the judgment were covered.The Fifth Circuit affirmed in part and held that, regardless of whether the Cooperation Clause applied to affirmative claims, the Cooperation-Clause jury instruction was not an abuse of discretion. The court reversed the district court's conclusion that the Professional Liability Endorsement did not cover the entire judgment and held that it did. View "Mid-Continent Casualty Co. v. Petroleum Solutions, Inc." on Justia Law

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

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

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

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

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

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

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

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