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

Plaintiffs filed suit alleging that Allstate breached the terms of their insurance policies by not using either the "Cost Approach" or "Comparable Sales Approach" to determine the "Actual Cash Value" (ACV) of their automobiles. The Fifth Circuit affirmed the district court's grant of Allstate's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), concluding that neither the contract nor Texas state law requires either the Cost or the Comparable Sales Approach. View "Cody v. Allstate Fire and Casualty Insurance Co." on Justia Law

This appeal stems from a dispute between Great American and Employers Mutual regarding their respective obligations to contribute to a $7 million settlement of a wrongful death suit arising out of a motor-vehicle accident. The district court assumed without deciding that the Employers Mutual policy was required to provide coverage before the Great American policy. However, the district court granted summary judgment in favor of Employers Mutual and concluded that Great American failed to allocate damages between covered and non-covered claims.The Fifth Circuit reversed and remanded, concluding that the district court was correct in its assumption that the EMC Umbrella Policy had priority of coverage but erred in granting summary judgment for Employers Mutual because Great American's evidence created a factual dispute on allocation. In this case, if true, the affidavits at issue established that the covered claims Great American paid on behalf of Employers Mutual were worth at least $7 million—thereby triggering and exhausting the EMC Umbrella Policy. View "Great American Insurance Co. v. Employers Mutual Casualty Co." on Justia Law

Guzman applied for an Allstate life insurance policy in 2017. In his application, Guzman disclosed his history of seizures but denied using tobacco or nicotine products. After receiving some of Guzman’s medical records and the results of his blood and urine tests, Allstate issued him a $250,000 policy at a “Standard Non-Tobacco” annual premium rate. Guzman, then 28 years old, died in 2019, after suffering a seizure at work. Allstate began a contestable-claims investigation and obtained additional medical records, most of which described Guzman as a smoker. Two underwriting referrals determined that Guzman would not have been issued the same policy as a smoker. Allstate informed Gusman’s wife, Mirna, that it was rescinding the contract and gave her a $433 premium refund.Mirna sued Allstate for breach of contract and violations of the Texas Deceptive Trade Practice–Consumer Protection Act, and the Texas Insurance Code. Mirna denied that her husband was a smoker and submitted an affidavit from Guzman’s sister, Martha. The district court granted Allstate summary judgment. The Fifth Circuit reversed. Mirna’s and Martha’s affidavits are competent summary judgment evidence. Though self-serving, their testimony created a genuine dispute of material fact. Allstate’s evidence was insufficient to carry its summary judgment burden. The medical records were inconsistent and Allstate has not identified definitively the sources of the medical records information. View "Guzman v. Allstate Assurance Co." on Justia Law

The Fifth Circuit affirmed the district court's issuance of a declaratory judgment that an automobile driver's death was not covered by the terms of the defendant insurance company's policy. In this case, as the driver was driving his personal vehicle to a logging site owned by V & B, he collided with a sawmill's metal gate that had swung out across the road. The driver sustained multiple traumatic injuries and died at the scene. The court agreed with the district court's well-reasoned and thorough order on summary judgment concluding that the policy unambiguously excludes coverage for any injury arising from an automobile accident, regardless of the car's ownership. View "Colony Insurance Co. v. Wright" on Justia Law

The Fifth Circuit affirmed the denial of insurance benefits in an action brought by plaintiff, seeking benefits in the amount of $300,000 following her husband's death. The court concluded that plaintiff's estoppel claim failed where her reliance on NOV's statements and deductions were not reasonable because the provision of the group life insurance policy that required her husband to complete an Evidence of Insurability form before coverage could begin was unambiguous. In this case, plaintiff's husband was on notice that coverage applied for during an annual enrollment period began at midnight following the later of two conditions: (1) the first day of the next plan year; and (2) the date Unum approved his evidence of insurability form for life insurance. Furthermore, the Summary of Benefits made clear that this was also the case for changes in coverage, and that NOV's representations were not Unum's. Therefore, the district court did not err in granting summary judgment to NOV on plaintiff's estoppel claim. View "Talasek v. National Oilwell Varco, LP" on Justia Law

The Fifth Circuit reversed the district court's grant of summary judgment in favor of the insurer in an insurance coverage dispute regarding flood damage to the property at issue. The insureds interpreted the flood deductible in the policy as covering most of the damage to the property, but the district court determined that the policy is unambiguous and adopted the insurer's interpretation.The court applied Louisiana law and concluded that the policy is ambiguous. The court explained that the predominant use of "Total Contract Value" to denote the value of the entire project indicates that the policy, read in its entirety, does not provide clarity regarding the term "total insured values at risk . . . as respects flood." The court remanded for the district court to determine whether extrinsic evidence resolves the ambiguity. View "Jung v. Starr Surplus Lines Insurance Co." on Justia Law

The Fifth Circuit reversed the district court's grant of summary judgment in favor of Twin City in an action brought by HMI, alleging that Twin City had breached its duty to indemnify. HMI provides various accounting and financial services for Greg and Kathy Geib. The district court interpreted the policy as not covering settlement payments made after limitations for the underlying negligent conduct had expired.The court concluded that the district court erred for two reasons: first, the district court did not account for the policy's definition of the term "claim," instead treating it as synonymous with "cause of action;" and second, the district court interpreted the phrase "legally liable to pay" to mean effectively that HMI actually lost or would have lost had the Geibs filed suit. With these two clarifications, the court concluded that HMI's settlement payment constitutes a loss because it is an amount that HMI is legally liable—through contract—to pay to the Geibs as a result of the demand letter. Furthermore, the fact that the Geibs never filed their threatened suit and that the limitations period had seemingly run does not change that. Finally, the court rejected Twin City's two alternative arguments. View "HM International, LLC v. Twin City Fire Insurance Co." on Justia Law

Plaintiffs filed suit against OSIC after OSIC denied their claim seeking coverage under plaintiffs' policy for damage caused by a hailstorm. The district court ultimately granted OSIC summary judgment.The Fifth Circuit certified the following questions to the Supreme Court of Texas: (1) Whether the concurrent cause doctrine applies where there is any non-covered damage, including "wear and tear" to an insured property, but such damage does not directly cause the particular loss eventually experienced by plaintiffs; (2) If so, whether plaintiffs alleging that their loss was entirely caused by a single, covered peril bear the burden of attributing losses between that peril and other, non-covered or excluded perils that plaintiffs contend did not cause the particular loss; and (3) If so, whether plaintiffs can meet that burden with evidence indicating that the covered peril caused the entirety of the loss (that is, by implicitly attributing one hundred percent of the loss to that peril). View "Frymire Home Services, Inc. v. Ohio Security Insurance Co." on Justia Law

The Fifth Circuit withdrew its prior opinion and substituted the following opinion.In this insurance coverage dispute, at issue is who counts as an "employee" under the Texas Anti-Indemnity Act (TAIA). The Fifth Circuit concluded that Zurich was not required to file a cross-appeal and thus dismissed the cross-appeal. The court also concluded that the Maxim Policy does not assign Maxim's rights to Zurich, and thus Maxim can pursue this claim against Zurich under the Berkel Policy.The court certified the following question to the Supreme Court of Texas: Whether the employee exception to the TAIA, Texas Insurance Code 151.103, allows additional insured coverage when an injured worker brings a personal injury claim against the additional insured (indemnitee), and the worker and the indemnitee are deemed "co-employees" of the indemnitor for purposes of the TWCA. View "Maxim Crane Works, LP v. Zurich American Insurance Co." on Justia Law

In this insurance coverage dispute, at issue is who counts as an "employee" under the Texas Anti-Indemnity Act (TAIA). The Fifth Circuit certified the following question to Supreme Court of Texas: Whether the employee exception to the TAIA, Texas Insurance Code 151.103, allows additional insured coverage when an injured worker brings a personal injury claim against the additional insured (indemnitee), and the worker and the indemnitee are deemed "co-employees" of the indemnitor for purposes of the TWCA. View "Maxim Crane Works, LP v. Zurich American Insurance Co." on Justia Law