Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Highland Bank made a loan to FPC, an equipment lease finance company, based on an assignment of leases. The underlying leases, guaranteed by individuals, were ultimately discovered to be a Ponzi scheme. A guarantor claimed her signature was a forgery. Highland lost more than a million dollars. BancInsure denied Highland’s claim under a Financial Institution Bond that covered “Loss resulting directly from the Insured having . . . acquired, sold or delivered, given value, extended credit or assumed liability on the faith of any original . . . personal Guarantee . . . which bears a signature of any . . . guarantor . . . which is a Forgery.” BancInsure sought a declaratory judgment that Highland's claim was not covered. The district court granted summary judgment to BancInsure, finding that the loss did not “result directly from” a forged personal guaranty because the guaranty was worthless to the bank when it entered into the transactions. While appeal was pending, BancInsure was placed into receivership with the Oklahoma Insurance Commissioner as Receiver under a final order of liquidation. The Eighth Circuit affirmed. Highland failed to show the “direct relation between the injury asserted and the injurious conduct alleged” that the doctrine of proximate cause demands. View "BancInsure, Inc. v. Highland Bank" on Justia Law

Brooks was riding her bicycle when Lawrence negligently struck her with his car. Lawrence later died of unrelated causes. Brooks sued Lawrence’s estate, which settled for the $50,000 limit of Lawrence’s auto insurance policy. Brooks agreed not to seek additional recovery from Lawrence’s estate, heirs, or insurer, but retained the right to seek recovery from the Brookses’ auto insurance policy (Midwestern), which provides underinsured motorist (UIM) bodily injury coverage. On the declarations page for the UIM endorsement, the policy states, “Insurance is provided where a premium entry is shown for the coverage.” This page lists “Underinsured Motorist Bodily Injury” with liability limits of $100,000 per-person and $300,000 per-accident. A premium amount appears for each of five vehicles, indicating the Brookses pay a premium for UIM coverage for each vehicle. Midwestern paid $100,000, declaring this per-person limit the maximum amount for a single application of the policy’s UIM coverage, then sought declaratory judgment that its UIM coverage limits for multiple vehicles do not stack to multiply the per-person limit. Granting Midwestern summary judgment, the district court determined the plain language of the policy makes it “quite clear” intra-policy stacking is prohibited and the per-person limit for one accident is $100,000. The Eighth Circuit affirmed. View "Midwestern Indem. Co. v. Brooks" on Justia Law

Argonaut filed suit against ACJC, alleging that ACJC's negligence in monitoring a security alarm panel caused or contributed to damages arising out of the burglary and fire of a grocery store insured by Argonaut. The district court denied summary judgment to ACJC, finding that ACJC had waived its sovereign and statutory immunity by purchasing insurance. ACJC filed an interlocutory appeal. The court concluded that it lacked jurisdiction to address the question whether ACJC's purchase of insurance also waived any statutory immunity it might enjoy under Section 190.307 of the Missouri Revised Statutes as a 911 call center where the statute does not extend to ACJC a substantive right to be free from the burdens of litigation. The court found no clear error in the district court's determination that ACJC did not prove the existence of a pre-existing agreement between itself and the insurer to include the sovereign immunity endorsement with the original policy. Accordingly, the court affirmed the district court's determination that ACJC waived the common law sovereign immunity provided by Section 537.600 of the Missouri Revised Statutes through its purchase of insurance. The court dismissed the remaining portions of the interlocutory appeal based on lack of jurisdiction. View "Argonaut Great Central Ins. v. Audrain Cnty. Joint Commc'n" on Justia Law

Johnson’s trucking business operated 1986 and 1987 semi-tractor trucks, with one truck at a time insured through Acuity. In 2009, Johnson called Acuity’s agent, Holden, to switch insurance coverage to the 1987 truck. The 1987 truck broke down the next day. Johnson called Holden to switch the insurance back to the 1986 truck. A year later, Johnson's 1986 truck, pulling a J&B trailer, collided with Marlow’s vehicle, causing her death. Western insured the trailer. Holden claimed that Johnson had called in February 2010 and requested to switch coverage to the 1987 truck. Johnson denied ever making that request. At trial, Johnson pointed out that the 1987 truck remained inoperable; Johnson operated the 1986 truck throughout 2010. Johnson’s February 2010, renewal policy identified the 1986 International as covered. Johnson advised J&B that he would use the 1986 truck. Acuity and Johnson settled. The court denied Acuity’s motion to dismiss Johnson. Western's cross-claim against him remained pending; Johnson had assigned his claims against Western to Acuity and Acuity agreed to indemnify Johnson. Acuity paid $561,000 to Marlow’s estate and sought reimbursement. The court viewed the dispute as whether Johnson instructed Holden to change the coverage and rejected Acuity’s claim that Western lacked standing. The jury found that Johnson did not request a change. The court declared that Acuity had to provide primary insurance coverage. The Eighth Circuit affirmed, agreeing that the controversy did not concern contract reformation and upholding the district court's decision to allow Johnson to participate at trial. View "ACUITY v. Johnson," on Justia Law

In 2002 an uncontrolled, runaway commercial aircraft at Las Vegas’s McCarran International Airport came to a rest at the bottom of an embankment. A maintenance worked had failed to properly engage the parking brake. The resulting property damage and loss-of-use of the aircraft totaled more than $10 million. The aircraft’s owner, Northwest Airlines, obtained a default judgment in Minnesota state court against PALS, the maintenance company responsible for the wreck, then commenced a garnishment action to recover part of the amount from PALS’s insurer, Westchester, which argued that PALS’s failure to provide notice and to cooperate extinguished Westchester’s payment obligation. While acknowledging unanswered questions of state law, the Eighth Circuit affirmed judgment in favor of Northwest. A Clark County ordinance mandates hangar-keepers liability insurance to protect parties like Northwest. Given this purpose, insurance coverage could not be avoided for an insured’s simple failure to satisfy the technical post-loss conditions on statutorily mandated coverage. View "NW Airlines, Inc. v. Westchester Fire Ins. Co." on Justia Law

PIC sought a declaratory judgment to determine whether PIC was required to defend and indemnify its insured, LSi, a computer and technology company with respect to a lawsuit filed by Hodell, concerning business software developed and sold by LS. The district court found LSi did not have coverage under either of its consecutive policies with PIC because it did not provide notice of Hodell’s claims or potential claims to PIC as required. There were regular email references to possible legal action as early as March, 2007. On November 21, 2008, Hodell filed suit against LSi. On December 8, 2008, LSi first notified PIC of Hodell’s claims. The Eighth Circuit affirmed judgment in favor of PIC, reasoning that a claim was made while the 2007 policy was in place, but LSi did not properly give notice under that policy. View "Philadelphia Cons. Holding Corp. v. Hodell-Natco Indus., Inc." on Justia Law

From 1995-2009, Johnson worked for CRE. In the last three years, Johnson worked from home, 8 hours a day at a computer. Johnson was covered under CRE’s United disability insurance policy. In 1999, Johnson was diagnosed with fibromyalgia. In 2004, she underwent neck surgery for nerve injuries. On the day she resigned, Johnson visited MacDonald, her primary care physician, who diagnosed anxiety, depression, fibromyalgia, and chronic pain. Johnson completed a short-term disability form. MacDonald completed an Attending Physician’s Statement. United denied the application. Based on the recommendations of its doctor, United denied Johnson’s appeal. Johnson sought long-term disability benefits. MacDonald completed a Physician’s Statement that imposed multiple limitations. United denied the claim. Johnson appealed. United referred Johnson’s file and medical records to Boscardin, an orthopedic surgeon, who determined that, although Johnson experienced chronic pain in her neck and spine, Johnson’s complaints were not supported by “conclusive, objective evidence.” McClellan, Johnson’s surgeon, responded that he “[o]verall” agreed with Boscardin. United denied the appeal. Johnson sued under ERISA. The district court granted Johnson summary judgment, finding that United failed to consider Johnson’s condition as a whole. The Eighth Circuit reversed, finding the denial supported by substantial evidence. View "Johnson v. United of Omaha Life Ins. Co." on Justia Law

In 1988, Brake began working at Hutchinson. She was diagnosed with multiple sclerosis (MS) in 2000, but continued to work. Brake purchased disability insurance through Hutchinson’s plan in 1988. Hutchinson, as the plan administrator, ceded discretionary authority to Hartford to construe the plan and make eligibility determinations. In 2007, Brake purchased "buy-up" coverage that excluded a disability if medical treatment for that condition was rendered within 12 months prior to the effective date. The limitation ended after a year without a claim: if Brake was treated for MS between April 1, 2006, and April 1, 2007, and then became disabled as a result of MS before April 1, 2008, the exclusion would limit her benefits to core plan coverage. Brake began experiencing problems with her MS in 2007 and received benefits from a separate short-term disability plan. On March 25, 2008, she stopped working at Hutchinson. In May, she applied for LTD benefits, stating her onset of disability as July 27, 2007. Hartford informed her that her LTD benefits were approved, but not at the buy-up plan rate. Brake claimed that doctor visits during the 12 months were for a pap smear and a yearly routine MRI. Hartford cited the same records which indicated that Brake was increasingly less able to manage her MS conditions during the 12 months before her purchase of buy-up coverage. In Brake’s suit under ERISA, 29 U.S.C. 1001, the district court found that Hartford did not abuse its discretion. The Eighth Circuit affirmed summary judgment in favor of Hartford. View "Brake v. Hutchinson Tech., Inc.," on Justia Law

Paulino suffered a spinal-cord injury in a work-related accident that left him permanently paraplegic. Employer's workers’ compensation insurer was Chartis. After medical treatment and intensive rehabilitation, Paulino moved to CCS for post-acute rehabilitation. When Paulino was capable of basic self-care, CCS set a discharge date of April 30. Paulino had workers’ compensation income of less than $400 per week and was ineligible for other assistance as an undocumented Mexican national. He required wheelchair-accessible housing, an electric hospital bed, and access to public transportation. His case manager was unable to locate suitable, affordable housing acceptable to Paulino. CCS refused to discharge Paulino to a residence not adequately adapted to Paulino’s needs. Chartis continued to pay medical bills and was prepared to pay for modifications to a permanent home, but notified Paulino that it would not pay his CCS living expenses (rent, utilities, groceries, cable television) after April 30. On May 6, Chartis withdrew those payments. Paulino continued to reside at CCS. A court affirmed the Iowa Workers’ Compensation Commissioner's conclusion (Ia Code 85.27) that special circumstances case made Paulino's continued stay at CCS appropriate and compensable. Paulino sued, alleging bad-faith denial of benefits as of May 6, seeking consequential and punitive damages. The Eighth Circuit affirmed the district court’s grant of summary judgment for Chartis. View "Paulino v. Chartis Claims, Inc." on Justia Law

Ibson and her family were insured by UHS through a policy available to her to as a member of her law firm. Due to an error, UHS began informing Ibson’s medical providers that Ibson and her family no longer had insurance coverage. Although UHS eventually paid the claims it should have paid all along, Ibson sued, raising state law claims of breach of contract, negligence, and bad faith, and seeking punitive damages. UHS responded that Ibson’s claims were preempted by the Employee Retirement Income Security Act (ERISA) and barred by the policy’s three-year contractual limitations period. The district court agreed and entered summary. The Eighth Circuit reversed and remanded, agreeing that Ibson’s state law claims are preempted under ERISA, but rejecting entry of summary judgment on the basis of the three-year contractual limitations period. View "Ibson v. United Healthcare Servs., Inc." on Justia Law