Justia U.S. D.C. Circuit Court of Appeals Opinion SummariesArticles Posted in Insurance Law
Vantage Commodities Financial Services v. Assured Risk Transfer PCC
In this insurance coverage dispute, Plaintiff, an insured company, sought to sidestep its insurer by collecting a $22 million claim from ten insurance brokers and reinsurers. The district court dismissed Plaintiff’s claims for breach of contract and declaratory judgment. The D.C. Circuit affirmed the district court’s dismissal. The court held that Plaintiff failed to plead facts to establish a contractual relationship with reinsurers. Plaintiff’s evidence of the reinsurance binders did not create a contractual relationship between Plaintiff and reinsurers. Further, the court held that summary judgment for reinsurers was proper; finding that Plaintiff’s claims of implied contract, promissory estoppel, and unjust enrichment are wholly unsupported by record evidence. The court further held that the “economic loss doctrine” bars Plaintiff’s claims against the other defendants. The economic loss doctrine prohibits claims of negligence where, as here, a claimant seeks to recover purely economic losses. View "Vantage Commodities Financial Services v. Assured Risk Transfer PCC" on Justia Law
UnitedHealthcare Insurance Co v. Becerra
UnitedHealthcare Medicare Advantage insurers challenged the Overpayment Rule, promulgated by the Centers for Medicare and Medicaid Services (CMS) under 42 U.S.C. 1301-1320d-8, 1395-1395hhh, in an effort to trim costs. The Rule requires that, if an insurer learns that a diagnosis submitted to CMS for payment lacks support in the beneficiary’s medical record, the insurer must refund that payment within 60 days. UnitedHealth claims that the Overpayment Rule is subject to a principle of “actuarial equivalence,” and fails to comply. Two health plans that pay the same percentage of medical expenses are said to have benefits that are actuarially equivalent.The D.C. Circuit rejected the challenge. Actuarial equivalence does not apply to the Overpayment Rule or the statutory overpayment-refund obligation under which it was promulgated. Reference to actuarial equivalence appears in a different statutory subchapter from the requirement to refund overpayments; neither provision cross-references the other. The actuarial-equivalence requirement and the overpayment-refund obligation serve different ends. The actuarial-equivalence provision requires CMS to model a demographically and medically analogous beneficiary population in traditional Medicare to determine the prospective lump-sum payments to Medicare Advantage insurers. The Overpayment Rule, in contrast, applies after the fact to require Medicare Advantage insurers to refund any payment increment they obtained based on a diagnosis they know lacks support in their beneficiaries’ medical records. View "UnitedHealthcare Insurance Co v. Becerra" on Justia Law
Feld v. Fireman’s Fund Insurance Co.
Plaintiff filed suit against FFIC to recover disputed expenses, largely attorney fees, that he incurred in an underlying action brought by his sister. The district court granted summary judgment for FFIC. The DC Circuit reversed in part and held that there were disputes of material fact as to whether the parties entered into a binding, enforceable rate agreement. In this case, the disputed communications to which FFIC points did not unambiguously show that the parties entered a rate agreement as asserted by FFIC. However, the court affirmed the district court's denial of plaintiff's motion to compel certain communications between FFIC and its attorneys. View "Feld v. Fireman's Fund Insurance Co." on Justia Law
Katopothis v. Windsor-Mount Joy Mutual Insurance Co.
The DC Circuit vacated its previous opinion and substituted the following opinion.Homeowners filed suit against their insurance company for breach of contract when the company refused to cover flood damage to homeowners' residence. Homeowners also filed suit against their cleaning-and-restoration company for failing to adequately remedy the damage and prevent mold. The district court granted summary judgment for the insurance company and transferred the remaining claim to the district court based on lack of personal jurisdiction. The DC Circuit held that it lacked jurisdiction to review the transfer order. The court affirmed the grant of summary judgment, holding that homeowners' claim against the insurance company failed under Delaware law where there was no dispute that homeowners were away from their beach home for over 72 hours, which under the clear terms of the policy means the flooding occurred while the house was "unoccupied." View "Katopothis v. Windsor-Mount Joy Mutual Insurance Co." on Justia Law
Katopothis v. Windsor-Mount Joy Mutual Insurance Co.
The DC Circuit affirmed the district court's grant of summary judgment in favor of an insurance company in a breach of contract dispute over a homeowners insurance policy. The court held that plaintiffs could not recover under the clear terms of their insurance policy where plaintiffs were away from their beach home for ten days and failed to shut off the water supply where it entered the house. In this case, there was no question that the damage for which they sought coverage was caused by flooding from the plumbing. The court also affirmed the district court's transfer of the claims against the cleaning-and-restoration company to the district court in Delaware based on lack of personal jurisdiction. View "Katopothis v. Windsor-Mount Joy Mutual Insurance Co." on Justia Law
American Council of Life Ins. v. District of Columbia Health
The Authority faced a funding shortfall for at least the period immediately after its opening in 2014. To cover the shortfall, the Authority, with emergency authorization from the District’s Council, levied a charge on all insurance policies above a certain premium threshold sold by health carriers in the District. American Council raised statutory and constitutional challenges to that charge and the district court rejected Council's arguments, dismissing the complaint for failure to state a claim. The court agreed with the District that the district court lacked jurisdiction to hear this case because the charge levied by the Authority was a tax rather than a fee. Therefore, the court vacated the district court's judgment for lack of jurisdiction and remanded with instructions to dismiss the case for lack of jurisdiction because the assessment is a tax. View "American Council of Life Ins. v. District of Columbia Health" on Justia Law
Cincinnati Ins. Co. v. All Plumbing, Inc.
Cincinnati filed suit seeking a declaratory judgment that it does not owe a duty to defendant or indemnify claims brought against its insured, All Plumbing, for sending unsolicited faxed advertisements alleged to be in violation of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227. The district court ruled that Cincinnati could not assert any of its defenses to coverage under the primary liability provision of the policy because it had failed to reserve its rights, but could assert such defenses under the excess liability provision. However, the district court did not address the asserted defenses under that provision. The court dismissed the appeal for lack of a final decision as to all requested relief where the district court's decision did not resolve all of Cincinnati’s rights and liabilities under the excess liability provision of the policy. View "Cincinnati Ins. Co. v. All Plumbing, Inc." on Justia Law
Chicago Ins. Co. v. Paulson & Nace, PLLC
In 2004 the law firm was engaged to bring a medical malpractice action on behalf of a 14-year-old girl who had become paralyzed after surgery. The firm filed two complaints in Virginia state court. Each was dismissed: the first without prejudice for failure to correctly caption a pleading; the second with prejudice for filing outside the statute of limitations. Shortly thereafter, the firm applied for and obtained a new professional liability insurance policy. Asked whether there were “any circumstances which may result in a claim being made,” the firm responded “no.” The firm informed the insurer of the incident in 2009, but represented that it had occurred in 2008. In 2011, the insurance company noticed that the firm had made the caption error in 2006, before the policy period. In 2012, it notified the firm that it reserved its rights to deny coverage under the known risk exclusion. The girl filed a legal malpractice action in 2012, and was awarded $1,750,000 in 2013. The court found, as a matter of law and without expert testimony, that the firm was on notice of the potential malpractice claim and rejected arguments that the insurer had forfeited or waived its right to deny coverage. The D.C. Circuit affirmed. View "Chicago Ins. Co. v. Paulson & Nace, PLLC" on Justia Law
Holland v. Bibeau Construction Co.
Bibeau appealed the district court's grant of summary judgment and order directing it, as a related person to a disabled miner's former employer, to pay health insurance premiums, interest, and liquidated damages to the United Mine Workers of America 1992 Benefit Plan. The court concluded that Bibeau's laches claim was precluded under Petrella v. Metro-Goldwyn-Mayer, Inc. because each premium installment gives rise to a separate cause of action for legal relief for which Congress has enacted a statute of limitations to govern timeliness. Further, under the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. 9701-9722, which incorporates the Employee Retirement Income Security Act's (ERISA), 29 U.S.C. 1451(a)(1), enforcement scheme, the district court did not err in awarding interest and liquidated damages. Accordingly, the court affirmed the judgment. View "Holland v. Bibeau Construction Co." on Justia Law
Interstate Fire & Casualty Co v. Washington Hospital Center Corp., et al.
Interstate Fire filed suit against Greenspring and others, alleging that defendants owed a duty under a Greenspring general liability policy to provide primary insurance coverage for a nurse hired by a staffing agency and assigned to work at a hospital on a temporary basis. Greenspring had issued an insurance policy providing coverage to employees of the hospital for claims arising out of medical incidents within the scope of their employment. The court agreed with the district court that the dictionary definition and a common law test supports the conclusion that the nurse qualified as an "employee" of the hospital. The court rejected defendant's remaining arguments and concluded that Interstate Fire was entitled to reimbursement from Greenspring for the amounts paid to defend and settle the underlying action. Accordingly, the court affirmed the judgment of the district court. View "Interstate Fire & Casualty Co v. Washington Hospital Center Corp., et al." on Justia Law