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

LINA appealed the decision of the district court holding that it abused its discretion in its denial of benefits to plaintiff under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiff alleged that LINA wrongly denied her the benefits of her common-law husband's ERISA-governed Group Accident Policies where her husband participated in two accidental death and dismemberment policies. The court affirmed the district court's holding that the common law definition of "accident" adopted in Todd v. AIG Life Insurance Co., was controlling in all ERISA accidental death and dismemberment plans where the term "accident" was undefined, irrespective of whether the plan administrator was given discretion to interpret the plan. View " Firman v. Beacon Construction Co., Inc." on Justia Law

Mid-Continent appealed the district court's final judgment that it had a duty to indemnify Davis Construction in the underlying wrongful death action brought by the family of decedent Jorge Serrato. The court affirmed the district court's ruling, finding that the district court did not abuse its discretion in determining that Serrato was an independent contractor and not an employee of Davis Construction. View "Mid-Continent Casualty Co. v. Davis, et al." on Justia Law

Plaintiff appealed the district court's summary judgment dismissing her suit to recover health insurance benefits under an employee plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001-1461. Aetna, a Texas health maintenance organization (HMO), provided and administered the plan's health insurance benefits under an agreement giving Aetna discretion to interpret the plan's terms. Aetna refused to reimburse plaintiff for care she received from a specialist outside of the Aetna HMO to whom she had been referred by a physician in the HMO. Aetna denied her claim because the referral was not pre-authorized by Aetna. The district court found as a matter of law that Aetna did not abuse its discretion in denying coverage. The court found, however, that the plan was ambiguous and the need for pre-authorization was not clearly stated in Aetna's summary description of the plan. And under the circumstances of the case, it could not be said as a matter of law that Aetna did not abuse its discretion in denying coverage. View "Koehler v. Aetna Health, Inc." on Justia Law

Three primary insurers and one excess carrier appealed the district court's determination on summary judgment of their duties to defend a contractor who allegedly was responsible for a fire that occurred during construction. The district court held that the three primary insurers must split the costs initially spent by one of them defending the insured, while the excess insurer could not recover any of its defense costs from the primary insurers. The court concluded that National Union could seek reimbursement for its defense costs from Continental, Columbia, and North American through contractual subrogation. The district court did not err in its allocation of Continental's defense costs among Continental, Columbia, and North American. Therefore, the court affirmed the district court's judgment in part and reversed in part, and the court remanded for further proceedings. View "Continental Casualty Co. v. North American Specialty Ins., et al." on Justia Law

Following the destruction of his home in Hurricane Katrina, plaintiff sued Liberty Mutual for negligent misrepresentation to recover the difference between his flood insurance coverage he had and the coverage he could have purchased under the preferred riskier insurance policy. The district court concluded that plaintiff's claim was not preempted by federal law and sent the case to the jury which awarded plaintiff in compensatory damages. Because plaintiff's dispute with Liberty Mutual related to his renewal of a policy already in place, Campo v. Allstate Ins. Co. did not control and the court held that plaintiff's state law claim was preempted. Because the Federal Emergency Management Agency (FEMA) was presumed to be paying both the litigation expenses and any resulting damage award, the district court erred in submitting this case to the jury. Because Liberty Mutual was not offering insurance advice, was not a fiduciary of plaintiff, and did not offer any statement to plaintiff to imply the lack of alternative insurance options, Mississippi law would not recognize negligent misrepresentation as a cause of action against Liberty Mutual and the submission of negligent misrepresentation to the jury was error. Accordingly, the court reversed with instructions to dismiss plaintiff's claim View "Grissom v. Liberty Mutual Fire Ins. Co." on Justia Law

LRK, an architect firm, brought this action for copyright infringement against a former client and his affiliated building companies (collectively, Bryan defendants). Lafayette and State Farm, insurers of Bryan's Cypress Lake Development, sought declaratory judgments that, by virtue of exclusions set forth in their respective insurance policies, they have no obligation to provide coverage or duty to defend in LRK's suit. LRK appealed the district court's summary judgment ruling that Lafayette and State Farm have no duty to provide coverage, and Lafayette and State Farm appealed the district court's summary judgment ruling that they have a duty to defend. The court concluded that the exclusions relied upon by the insurers did not preclude coverage of LRK's copyright infringement claim and therefore, that the insurers owed both coverage and defense under their respective policies. Accordingly, the court reversed in part and affirmed in part. View "Looney Ricks Kiss Architects v. Bryan, et al." on Justia Law

In 2008, BEPCO sued Santa Fe in Louisiana state court, alleging claims for indemnity and contribution in an attempt to recover money it had paid out in a settlement. Santa Fe and a group of subsequently named defendants then filed cross-claims and third-party claims against a multitude of insurers and underwriters, including Lloyd's London. Among the Lloyd's London insurers named by defendants was ICAROM. In January 2011, ICAROM exercised its right to removal under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1441(d), 1447(c). After BEPCO objected to removal, the district court remanded the case to state court. ICAROM appealed the district court's remand order. The court held that BEPCO's timely motion to remand, combined with a remand order based on permissible section 1447(c) grounds, denied the court jurisdiction to review the district court's order on appeal or on petition for writ of mandamus. Accordingly, the court dismissed the appeal for want of appellate jurisdiction.

Liberty appealed the summary judgment awarded to its insured, Technical Automation, holding that Liberty had a duty to defend Technical Automation in an underlying lawsuit. The court held that, notwithstanding Stern v. Marshall, the magistrate had jurisdictional authority under Article III to try and enter judgment in the state law counterclaim. The court also held that the magistrate judge erred in not resolving whether a mutual mistake existed as to coverage and whether the policy should be reformed to expunge the disputed provision. Therefore, the court reversed and vacated the summary judgment in favor of Technical Automation and remanded for further proceedings.

Two insurers disputed whether their respective insurance policies required them to defend the insured against allegations regarding an accidental death. Both insurers sought a declaratory judgment from the district court that their policies did not cover the underlying lawsuit. Alma Batie, daughter of Darline Rigsby, sued Preferred Ambulance in Texas state court on behalf of herself and as a representative of Rigsby's estate (the underlying lawsuit). After the district court ruled that each insurer must provide primary coverage for the accident, both insurers appealed. The court held that, for purposes of defining the scope of each insurer's duty to defendant, both Western World and National Casualty must provide primary coverage of the underlying lawsuit. Neither the exclusions in their respective policies nor the "other insurance" provision in the Western World policy limited either insurer's duty to defendant. Accordingly, to the extent that National Casualty had paid more than half of the defense costs in the underlying lawsuit to this point, it was entitled to contribution from Western World.

SLM appealed the district court's grant of summary judgment in favor of IFIC, a surety, against SLM, the principal on a bond pursuant to which IFIC paid Customs import duties assessed against SLM. The court held that the district court had jurisdiction to adjudicate IFIC's claims against SLM; exclusive jurisdiction over these claims did not lie in the Court of International Trade (CIT). The court also held that the district court did not abuse its discretion in refusing to dismiss or abate IFIC's action until the proceedings in the CIT have concluded. With regard to the merits of IFIC's claims against SLM, the court affirmed the district court's grant of summary judgment in favor of IFIC, concluding that SLM was required to pay IFIC the amounts that IFIC had paid to Customs pursuant to its bond obligations.