Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

Articles Posted in Insurance Law
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While driving the co-plaintiffs car, the plaintiff negligently changed lanes and caused a collision, seriously injuring another driver. At the time of the incident at-fault car’s owner had a GEICO insurance policy that provided bodily-injury coverage up to $100,000 per person. The victim and Geico assert they made offers to settle, but the parties never agreed. After the conclusion of the victim's lawsuit, plaintiffs sued GEICO for bad faith, seeking to recover the amounts of the final judgments entered against them that exceeded the $100,000 policy limit. They contended that GEICO had breached its fiduciary duty to them by failing to settle the victim’s case within the policy limit. Plaintiffs challenge Cawthorn v. Auto-Owners Insurance Co 791 F. App’x 60, 65 (11th Cir. 2019), arguing that Florida law doesn’t require that a verdict precede an excess judgment as a prerequisite to proving the causation element of an insurer-bad-faith claim. The court reasoned that plaintiffs' available coverage and final judgments entered against them constituted excess judgments. Thus, plaintiffs could prove causation in their bad-faith case because they were subject to excess judgments. Finally, the court declined to follow Cawthorn because that court incorrectly analyzed Florida's bad-faith law and is unpersuasive. View "Erika L. McNamara v. Government Employees Insurance Company" on Justia Law

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The Eleventh Circuit dismissed based on lack of jurisdiction A.B.'s appeal of a declaratory judgment that an insurer has no duty to defend the insured man that sexually abused her. The court explained that the declaratory judgment relieved the insurance company of any obligation to defend the insured which helps, rather than harms, A.B. Furthermore, if A.B. cannot obtain review of the declaratory judgment, it lacks preclusive effect on her. Therefore, A.B. lacks appellate standing as she suffered no injury from the judgment in favor of the insurance company. View "Nationwide Mutual Insurance Co. v. A.B." on Justia Law

Posted in: Insurance Law
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Couch falsely represented that he was not HIV positive. Jackson issued Couch a $500,000 life insurance policy. At the time, HIV-positive individuals had a greatly diminished life expectancy, resulting in high demand for HIV-positive insureds willing to engage in viatical settlements. Couch worked with a brokerage, which, months later, found a purchaser, Crum. The premiums were paid through the broker's premium reserve fund until after the two-year contestability period policy expired. Crum paid the premium for eight more years, letting the policy lapse in 2009. In 2016, Crum learned that Couch had died in 2005 and made a claim.Jackson sought a declaration that, under Georgia law, the policy was void as an illegal human life wagering contract. The district court found that Couch took out the policy with the intent to sell it to one without an insurable interest and that the policy was unenforceable as an illegal human life wagering contract under Georgia law. Crum argued that an illegal human life wagering contract involves the knowing, direct involvement of an identified third-party beneficiary at the time of its procurement. The Eleventh Circuit certified, to the Georgia Supreme Court, the question: whether a life insurance policy is void if it is procured by an individual on his own life for the sole purpose of selling the policy to a third party without an insurable interest in the insured, but without the complicity of the ultimate purchaser at the time of procurement. View "Jackson National Life Insurance Co. v. Crum" on Justia Law

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The Eleventh Circuit affirmed the district court's order granting summary judgment in part in favor of defendants and holding that James River has a duty to defend the insureds: Ultratec, MST, and Ultratec's employee. The underlying action stemmed from a pyrotechnic explosion at a work place that killed two employees and injured others. The employees filed suit against Ultratec, Ultratec's employee, and MST. James River is Ultratec entities' insurer.The court concluded that it has jurisdiction over the appeal despite its lack of finality because of its injunctive qualities. The court applied Alabama's contract interpretation principles and case law before applying that law to the insurance policy at issue, holding that James River has a duty to defend defendants because the employer's liability exclusion in the policy is ambiguous. The court explained that, because the exclusion did not unambiguously exclude coverage, James River had a duty to defend the insureds. View "James River Insurance Co. v. Ultratec Special Effects Inc." on Justia Law

Posted in: Insurance Law
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In 1999, Kristina drugged her sons and put them, and herself, in a running car in a closed garage. Matthew died; Adam and Kristina survived. Kristina was convicted of second-degree murder and remained in prison until 2016. In 1999, Kristina had State Farm automobile and homeowners insurance policies. In 2001, Matthew’s estate, Adam, and their father (the Rotells) sued Kristina for wrongful death and bodily injury.Kristina tendered her defense to State Farm, which filed state court declaratory judgment actions, seeking determinations that her policies did not cover the incident. The Rotells allege that State Farm rejected a settlement offer even though Kristina wished to accept it. The state court then held that the policies did not cover the incident. State Farm withdrew from the wrongful-death lawsuit. The state court entered a default judgment against Kristina; a jury entered a $505 million verdict. Kristina was insolvent, so the Rotells petitioned for involuntary Chapter 7 bankruptcy. The bankruptcy court entered an order subjecting Kristina’s assets (claims against State Farm for bad faith and malpractice) to its control and appointed Carapella as trustee. The verdict is Kristina’s only liability. Carapella sued State Farm in Florida state court. State Farm then sought to intervene, post-judgment, in the wrongful-death action and moved to vacate the judgment, arguing that the Rotells’ fifth amended complaint was untimely and that the default judgment was void.The district court and the Eleventh Circuit affirmed the denial of the motion. The Bankruptcy Code’s “automatic stay” provision, 11 U.S.C. 362(a), precluded State Farm’s motion to intervene. View "State Farm Florida Insurance Co. v. Carapella" on Justia Law

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Anderson, the lead plaintiff in a putative class action against her life insurance provider, Wilco, alleged that in 2011-2016, the company breached the terms of her universal life insurance policy by increasing her monthly rate for impermissible reasons. Her policy provides for a “guaranteed maximum monthly cost of insurance rate” and a “current monthly cost of insurance rate.” The guaranteed rate is calculated “based on” Anderson’s “age, sex, and premium class.” The current rate, by contrast, “will be determined by the Company” but cannot exceed the guaranteed rate. As a typical universal life insurance policy, Anderson’s policy was a hybrid investment vehicle and life insurance policy. As her policy aged, Wilco began to increase Anderson’s current rate sharply; her policy’s accumulation value (essentially the investment earnings from which Anderson could cover her monthly payments) was wiped out, and Anderson failed to make the monthly payments out-of-pocket. Her policy lapsed, and Anderson sued.The Eleventh Circuit affirmed the dismissal of her complaint. The policy gave Wilco discretion to set Anderson’s current rate as long as that rate was less than the guaranteed rate and unambiguously gave Wilco discretion to set Anderson’s current monthly rate. View "Anderson v. Wilco Life Insurance Co." on Justia Law

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The Eleventh Circuit affirmed the district court's grant of summary judgment in favor of GEICO and its rejection of claimant's attempt to obtain a $14,900,000 bad faith judgment from the insurer. The court concluded that, under the totality of the circumstances, no reasonable jury could conclude that GEICO acted in bad faith before, during, or after sending the proposed release to claimant. The court noted that it was not allowing GEICO to escape liability merely because claimant and his attorney's actions could have contributed to the failure to settle. Rather, the court discussed claimant and his attorney's actions because they show how, in the totality of these circumstances, GEICO did fulfill its good faith duty to the driver and his mother. The court explained that they show how the failure to settle the lawsuit against the insureds did not result from bad faith of the insurer. View "Pelaez v. Government Employees Insurance Co." on Justia Law

Posted in: Insurance Law
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The Eleventh Circuit affirmed the district court's order dismissing National Trust's federal declaratory judgment action without prejudice. Plaintiff filed a wrongful death action against Southern Heating and others in Alabama state court after his parents died from carbon monoxide poisoning. National Trust, Southern Heating's insurer, filed suit in federal court seeking a declaration that it has no duty to defend or indemnify Southern Heating because there is no coverage under its policy. The district court found that the Alabama state court action was parallel to the federal declaratory judgment action and that the non-exhaustive guideposts set out in Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331 (11th Cir. 2005), weighed in favor of not hearing National Trust's action.The court concluded that, when relevant, the degree of similarity between concurrent state and federal proceedings is a significant consideration in deciding whether to entertain an action under the Declaratory Judgment Act. In this case, the district court properly took into account that similarity in its consideration of the Ameritas guideposts. The court explained that the district court's perspective may not be the only way to view the two proceedings at issue, but it is a permissible way to look at them, and that is enough to constitute a reasonable exercise of discretion. View "National Trust Insurance Co. v. Southern Heating and Cooling Inc." on Justia Law

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In the underlying action, a citrus grove owner filed suit against defendant in Florida state court, alleging claims for breach of contract, breach of fiduciary duty, and an equitable accounting. Almost a year later, and two days after finding out that defendant had an insurance policy issued by Travelers, the owner moved to amend the complaint to add a claim for negligence. After the motion was granted, Travelers disclaimed coverage. In state court litigation, the owner and defendant entered into a settlement agreement.Travelers filed this declaratory judgment action seeking a declaration that, based on the insurance policy's provision, it had not duty to defend or indemnify defendant against the owner's claims. The Eleventh Circuit affirmed the district court's grant of summary judgment in favor of Travelers. The court concluded that, because the insurance policy excluded coverage for the damages alleged in the owner's amended state court complaint, Travelers had no duty to defend or indemnify, and the Coblentz agreement is unenforceable for that reason. View "The Travelers Indemnity Company of Connecticut v. Richard McKenzie & Sons, Inc." on Justia Law

Posted in: Insurance Law
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The Association sought to recover for the damage caused by Hurricane Irma from its insurer, Rockhill. After Rockhill denied coverage and the parties went to trial before a jury, the Association received a little over $2.6 million—a fraction of the $16 million it initially asked for. Both parties appealed, Rockhill challenged the final judgment entered in favor of the Association, and the Association challenged the damages award.The Eleventh Circuit affirmed, concluding that it need not discuss the merits of Rockhill's summary judgment challenge because the court's precedent clearly bars review of an order denying summary judgment after a full trial and judgment on the merits. In regard to the three remaining issues on appeal, the court concluded that the district court did not abuse its discretion by striking Rockhill's expert; the district court did not abuse its discretion by denying Rockhill's Daubert motion; and Rockhill did not preserve its challenge to the denial of its motion for judgment as a matter of law.In regard to the Association's cross-appeal, the court concluded that the evidence is sufficient to support the jury's preexisting damage finding. The court also concluded that Rockhill's failure to comply with Florida Statute 627.701(2) does not render the hurricane deductible unenforceable. View "St. Louis Condominium Association, Inc. v. Rockhill Insurance Co." on Justia Law

Posted in: Insurance Law