Justia U.S. 11th Circuit Court of Appeals Opinion SummariesArticles Posted in Insurance Law
Whiteside v. GEICO Indemnity Co.
The Eleventh Circuit certified three questions of insurance law to the Georgia Supreme Court: 1) When an insurer has no notice of a lawsuit against its insured, does O.C.G.A. 33-7-15 and a virtually identical insuring provision relieve the insurer of liability from a follow-on suit for bad faith? 2) If the notice provisions do not bar liability for a bad-faith claim, can an insured sue the insurer for bad faith when, after the insurer refused to settle but before judgment was entered against the insured, the insured lost coverage for failure to comply with a notice provision? 3) Does a party have the right to contest actual damages in a follow-on suit for bad faith if that party had no prior notice of or participation in the original suit? View "Whiteside v. GEICO Indemnity Co." on Justia Law
MSP Recovery Claims, Series LLC v. Ace American Insurance Co.
Plaintiffs, collection agencies, appealed the district court's dismissals with prejudice of their claims against defendants, seeking double damages against defendants under the Medicare Secondary Payer Act and alleging that actors within the Medicare Advantage system, including Medicare Advantage Organizations (MAOs) and various "downstream actors" that contracted with MAOs, had assigned their Medicare Secondary Payer Act claims to plaintiffs for collection.The Eleventh Circuit vacated the dismissals of plaintiffs' claims based on assignments from downstream actors, holding that the district court erred by narrowly construing 42 U.S.C. 1395y(b)(3)(A) to categorically exclude claims by downstream actors. The court explained that both the text and the objective of section 1395y(b)(3)(A) support allowing downstream actors to bring suit, or assign their right to bring suit, against primary payers. Therefore, the court remanded these claims for further proceedings.The court found that the district court erred insofar as it dismissed MSPRC's HFAP claims with prejudice, and ordered that the district court's dismissal be without prejudice. The court also found that the district court erred in dismissing MSPA's FHCP and IMC claims based on the purported cancellation and validity of MSPA's assignments. Finally, defendants' alternative claims are without merit. The court vacated the dismissal of plaintiffs' remaining claims in case number 18-12149. In case number 18-13049, the court affirmed the dismissal of plaintiffs' claims but modified the dismissal of these claims to be without prejudice. View "MSP Recovery Claims, Series LLC v. Ace American Insurance Co." on Justia Law
Sellers v. Nationwide Mutual Fire Insurance Co.
Nationwide appealed both the district court's order denying Nationwide's motion in limine and the final judgment entered in favor of plaintiff, as assignee of Gary Gardner & Gary Gardner Builders, Inc. At issue is the preclusive effect of a judgment entered by a federal court exercising diversity jurisdiction on a nonparty to an earlier federal action.The Eleventh Circuit held that when determining the preclusive effect of an earlier judgment rendered by a federal court exercising diversity jurisdiction, federal common law adopts the rules of issue preclusion applied by the State in which the rendering court sits. In this case, the court held that the district court was required to apply Alabama's rules of issue preclusion. Instead, the district court applied a federal rule of issue preclusion and that federal rule is not substantively similar to Alabama's rule on nonparty issue preclusion. Therefore, the court reversed the district court's order denying Nationwide's motion in limine, vacated the final judgment in favor of plaintiff, and remanded for further proceedings. View "Sellers v. Nationwide Mutual Fire Insurance Co." on Justia Law
AEGIS Electric & Gas International Services Ltd. v. ECI Management LLC
AEGIS filed suit alleging that it does not have a duty to defend or indemnify its insured ECI in an underlying state court action brought by a former tenant against ECI. In the underlying action, the tenant alleged that ECI wrongfully withheld the security deposits of current and former tenants in violation of Georgia's security deposit law.The Eleventh Circuit reversed the district court's grant of summary judgment in favor of AEGIS, holding that AEGIS has a duty to defend ECI in the underlying state court lawsuit against it because that action and certain relief sought, if proved, would constitute a covered "Loss" under the insurance policy. Although an award of the allegedly wrongfully withheld security deposit would not constitute a "Loss" under the policy, the court explained that any award of attorney's fees that ECI might become obligated to pay as part of the judgment in the underlying litigation would also fall within the policy's definition of "Loss." The court held that any award of attorney's fees under Georgia's security deposit law could constitute a potential "Loss" under the policy, and thus AEGIS maintains a duty to defend ECI. The court declined to offer any opinion as to whether AEGIS, in addition to its duty to defend, has any duty to indemnify ECI. View "AEGIS Electric & Gas International Services Ltd. v. ECI Management LLC" on Justia Law
Genworth Life and Annuity Insurance Co. v. TVPX ARS, Inc.
In 2018, TVPX filed an amended class action complaint in the Eastern District of Virginia against Genworth, alleging that Genworth violated the terms of one of its life insurance policies by imposing inflated "cost of insurance" (COI) charges on its insureds. Genworth brought this action in district court seeking to enjoin TVPX's Virginia lawsuit, arguing that TVPX's claims were barred by a 2004 agreement settling a prior class action about the same life insurance policies. The district court then granted Genworth's motion to enjoin TVPX's Virginia action, finding that TVPX's complaint was barred by the doctrine of res judicata.The Fifth Circuit vacated the district court's order enjoining TVPX's Virginia lawsuit. Although the primary right and duty at issue in TVPX's complaint were also at issue in the settlement, the court held that the record does not support the district court's finding that Genworth's "cost of insurance" (COI) practices remain unchanged since the settlement. The court remanded to the district court for limited discovery on whether Genworth has in any way changed how it calculates and charges COI since the settlement. Finally, the court held that, when read in its entirety, the Pre-Settlement Policy Administration does not constitute a preservation of rights, but instead clarifies that Genworth may continue administering its policies in the same manner that it did before the settlement. View "Genworth Life and Annuity Insurance Co. v. TVPX ARS, Inc." on Justia Law
Robinson v. Liberty Mutual Insurance Co.
Plaintiffs filed suit against Liberty Mutual for breach of contract and bad faith under Alabama law after the insurer denied coverage for an infestation of brown recluse spiders in plaintiffs' home. The court held that the homeowners insurance policy excluded coverage for property damage caused by insects or vermin, and that brown recluse spiders are both "insects" and "vermin" under the ordinary meaning of those terms. Furthermore, the district court did not err by consulting dictionaries to determine these legislative facts. View "Robinson v. Liberty Mutual Insurance Co." on Justia Law
Grange Mutual Casualty Co. v. Baisden
This case arose when a truck driver driving a truck owned by FST collided with two vehicles. Grange, the insurer of the truck, filed suit against the driver of one of the impacted vehicles, FST, and T&G, asking the district court to declare its obligations under three insurance policies—two issued to FST and one issued to T&G. At issue was whether there was a change in the truck's legal status, such that FST could have "borrowed" its own truck back from T&G. The district court determined that coverage existed under the T&G policy but not the FST policies.The Eleventh Circuit affirmed the district court's judgment, holding that defendants failed to introduce evidence showing that a written lease gave exclusive use rights to T&G. Therefore, the district court correctly held that no reasonable factfinder could have found in defendants' favor. Although defendants introduced new evidence purporting to establish that the lease granted T&G exclusive use rights in their motion for reconsideration, the court held that the district court properly denied that motion, because the evidence could have been produced earlier. Finally, the court agreed with the district court that, under the policies and under Georgia law, the events here constituted a single accident. View "Grange Mutual Casualty Co. v. Baisden" on Justia Law
MSPA Claims 1, LLC v. Kingsway Amigo Insurance Company
Of two people injured in a car wreck in April 2012, one was a Medicare beneficiary who received her benefits from an MAO-Florida Healthcare Plus, which later assigned its claims to appellant MSPA Claims 1, LLC. The other party involved in the accident was insured by appellee Kingsway Amigo Insurance. The Medicare beneficiary obtained medical treatment for her accident-related injuries between April 29, 2012 and July 26, 2012, and Florida Healthcare made $21,965 in payments on her behalf. On March 28, 2013, the beneficiary settled a personal-injury claim with Kingsway and received a $6,667 settlement payment. The issue this case presented for the Eleventh Circuit’s review centered on the timeliness requirement with which the government had to comply as a prerequisite to filing suit to seek reimbursements that it made on behalf of the Medicare beneficiary, and whether filing suit beyond a statutory three-year period beginning on the date on which medical services were rendered was fatal to the government’s claim. The district court held that MSPA’s claim was stale because it didn’t comply with what the court (somewhat confusingly) called “the three-year limitation requirement.” The Eleventh Circuit disagreed and reversed. “The Medicare Secondary Payer Act’s private cause of action, and our cases interpreting it lead us to conclude that the Act’s claims-filing provision, doesn’t erect a separate bar that private plaintiffs must overcome in order to sue. A closer look at the claims-filing provision’s text and the Act’s structure confirms that conclusion. Accordingly, the district court erred in granting Kingsway’s motion for judgment on the pleadings.” View "MSPA Claims 1, LLC v. Kingsway Amigo Insurance Company" on Justia Law
Crawford’s Auto Center, Inc. v. State Farm Mutual Automobile Insurance Co.
Two auto body collision repair shops filed a class action against dozens of insurance defendants, alleging claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and state law fraud and unjust enrichment theories.The Eleventh Circuit affirmed the district court's grant of defendants' motion to dismiss each of plaintiffs' claims. The court held that plaintiffs failed to allege at least two predicate acts of racketeering activity, fraud or extortion. The court also held that plaintiffs have not sufficiently pleaded their state law fraud and unjust enrichment claims; the district court did not err by excluding exhibits E1-E7; and the district court did not err by dismissing the complaint with prejudice. View "Crawford's Auto Center, Inc. v. State Farm Mutual Automobile Insurance Co." on Justia Law
Hallums v. Infinity Insurance Co.
The Eleventh Circuit affirmed the district court's grant of summary judgment to defendants in a putative class action seeking damages and a declaration that vehicle insurance purchased by plaintiffs was not valid. Plaintiffs alleged that the endorsement in the policy was illusory because it only provides coverage for vicarious liability against lessors, and that liability was foreclosed by the Graves Amendment. Determining that plaintiffs had Article III standing, the court held that the endorsement was not illusory because it imposed on defendants a duty to defend lessors from claims of vicarious liability. View "Hallums v. Infinity Insurance Co." on Justia Law