Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Articles Posted in Insurance Law
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The First Circuit affirmed the judgment of the district court in favor of an employee's widow in this insurance dispute, holding that the employee did not lose life insurance coverage under his employer's group policy after he developed a brain tumor that disrupted his usual work.Plaintiff, the employee's widow, submitted a statement to Insurer claiming approximately $1 under her late husband's life insurance policy. Insurer denied the claim. Plaintiff then sued, alleging wrongful denial of benefits under section 502(a) of ERISA, 29 U.S.C. 1132(a)(1)(B), (a)(3). The insurance company denied life insurance coverage on the grounds that the employee's coverage under the policy had lapsed. The district court granted summary judgment for Plaintiff. The First Circuit affirmed, holding (1) because the policy language invoked by Insurer in this case was less than clear the rule that ambiguous terms in an insurance policy should be read in favor of coverage applied; and (2) the employee was covered at the time of his demise. View "Ministeri v. Reliance Standard Life Insurance Co." on Justia Law

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The First Circuit affirmed the decision of the district court granting summary judgment in favor of Acadia Insurance Company in this action brought by Railroad Avenue Properties, LLC for breach contract to recover additional insurance proceeds for property damage sustained from a fire at one of Railroad's commercial buildings, holding that there was no error.Although Acadia insured the building at issue and paid Railroad for damages arising out of the fire Railroad claimed that it was entitled to additional payment under the terms the insurance policy in the form of a depreciation holdback and code upgrade coverage. The district court granted summary judgment for Acadia. The First Circuit affirmed, holding that Railroad was not entitled to relief on any of its allegations of error. View "Railroad Avenue Properties, LLC v. Acadia Insurance Co." on Justia Law

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The First Circuit certified to the Massachusetts Supreme Judicial Court (SJC) a question regarding whether Massachusetts recognizes a common-law duty for insurers to cover costs incurred by an insured party to prevent imminent covered loss.Ken's Foods incurred extensive losses from an accidental discharge at one of its processing facilities caused wastewater to enter Georgia waterways. Ken's Foods filed a claim with Steadfast Insurance Company seeking clean-up expenses and business losses resulting from a "pollution event" that cause a "suspension of operations." When Steadfast refused to reimburse Ken's Foods for the cost of its prevention efforts Ken's Foods sued in Massachusetts federal court. At issue was whether Ken's Foods could recover from Steadfast the costs it incurred to avoid suspending its operations after the pollution discharge. The district court granted summary judgment for Steadfast. The First Circuit concluded that certification was necessary and certified to the SJC the issue. View "Ken's Foods, Inc. v. Steadfast Insurance Co." on Justia Law

Posted in: Insurance Law
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The First Circuit affirmed the decision of the district court granting Defendant's motion to dismiss as to count one of Plaintiffs' complaint and reversed the dismissal and remanded for further proceedings on counts two through four, holding that dismissal was improper as to the remaining three counts.Plaintiffs, S.R. and T.R. and their child N.R., brought this action against Raytheon Company, T.R.'s employer, after United Healthcare, which administered the company's health insurance plan, refused to pay for N.R.'s speech therapy, alleging various violations of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001, et seq. The district court granted Defendant's motion to dismiss in full. The First Circuit held (1) the district court properly dismissed count one of the complaint; but (2) the dismissal of Plaintiffs' remaining claims was improper. View "N.R. v. Raytheon Co." on Justia Law

Posted in: ERISA, Insurance Law
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The First Circuit affirmed the decision of the district court granting summary judgment for Defendants in this personal injury action, holding that the district court properly granted summary judgment as to all claims.This case arose from a car accident in Rhode Island involving Horace Johnson, the driver, and Carlton Johnson, a passenger. Carlton and his mother sued to recover damages for Carlton's injuries. The district court granted summary judgment for Defendants - Horace, his insurer, and the company from which Horace had leased the vehicle. The First Circuit ultimately certified to the Rhode Island Supreme Court a question regarding the definition of "civil action" in Rhode Island's Rejected Settlement Offer Interest Statute, R.I. Gen. Laws 27-7-2.2. After the Rhode Island Supreme Court supplied its answer, this Court affirmed the district court's judgment in its entirety, holding that the district court (1) correctly concluded that section 27-7-2.2 was inapplicable; (2) properly concluded that an enforceable settlement agreement existed; and (3) was right to grant summary judgment as to Carlton's insurer bad faith claims. View "Johnson v. Johnson" on Justia Law

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The First Circuit affirmed the judgment of the district court granting two summary judgment motions in favor of Defendants in this class action lawsuit, holding that Defendants' actions in this case could not support a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO).In granting the two summary judgment motions at issue, one filed on behalf of all Defendants and on filed behalf of certain Defendants, the district court adopted the findings of law of the Court of Appeals of Puerto Rico in Collazo Burgos v. La Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio, No. K AC2010-0179, 2017 WL 6884428 (P.R. Cir. Nov. 30, 2017). The court further held that Defendants' actions were required under Puerto Rico law and thus could not support a RICO claim. The First Circuit affirmed, holding that the district court did err under the Erie doctrine in adopting the reasoning of the court of appeals in Collazo Burgos. View "Torres-Ronda v. Nationwide Mutual Insurance Co." on Justia Law

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The First Circuit affirmed the judgment of the district court ruling against defendant Massachusetts Mutual Life Insurance Company (MassMutual) and against Plaintiff's class action claims in this insurance dispute, holding that the district court did not err.In 2003, MassMutual decided to cut the minimum guaranteed interest rates paid to purchasers of some of its annuities. MassMutual chose to change the interest rate by an endorsement that its staff warned would result in consumer confusion and introduce ambiguity into its annuity certificate. Plaintiff in this case believed that he had bought an annuity that guaranteed him three percent annual interest, but MassMutual claimed that it promised only 1.5 percent annual interest. The district court ruled against MassMutual and against Plaintiff's class action claims. The First Circuit affirmed, holding (1) the annuity did not unambiguously set the minimum guaranteed interest rate at 1.5 percent; (2) the district court did not err in denying Plaintiff's motion for class certification; and (3) MassMutual waived its challenge to prejudgment interest. View "Aronstein v. Massachusetts Mutual Life Insurance Co." on Justia Law

Posted in: Insurance Law
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The First Circuit affirmed the decision of the district court granting summary judgment to Insurer and dismissing Insureds' suit seeking to force Insurer to pay for damages Hurricane Maria inflicted on their property, holding that Insureds' claims on appeal failed.Hurricane Maria struck Puerto Rico on September 20, 2017. Insureds brought this suit on January 9, 2019. In granting summary judgment in favor of Insurer, the district court concluded that this suit was time-barred under the terms of the insurance contract. Under Puerto Rico law, prescription of actions is interrupted by their institution before the courts, by extrajudicial claim of the creditor, and by act of acknowledgement of the debt by the debtor. The First Circuit affirmed, holding (1) the district court did not err by crediting Insurer's declarations but not Insureds' declarations; (2) Insureds' claims lacked the specificity required to meet their burden of proving prescription; and (3) the remainder of Insureds' claims on appeal were barred. View "Marcano-Martinez v. Cooperative de Seguros Multiples de Puerto Rico" on Justia Law

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The First Circuit affirmed the order of the Title III court denying relief from an automatic stay under 11 U.S.C. 362(d), holding that the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) Title III court in Puerto Rico did not abuse its discretion in denying relief from the stay.These companion cases from the Title III court involved bonds issued by the Puerto Rico Infrastructure and Financing Authority (PRIFA) and the Puerto Rico Highways and Transportation Authority (HTA). Appellants had insured millions of dollars of these bonds against default. When HTA and PRIFA defaulted on the bonds, causing Appellants to make payments to their insureds, Appellants brought this suit against Puerto Rico, HTA, and PRIFA. Thereafter, Puerto Rico petitioned to begin Title III proceedings under PROMESA, triggering an automatic stay of certain claims against them. Appellants sought relief from the automatic stay under section 362, as incorporated by PROMESA. The Title III denied relief. The First Circuit affirmed, holding that there was no cause to lift the stay as to any of Appellants' claims. View "Assured Guaranty Corp. v. Commonwealth of Puerto Rico" on Justia Law

Posted in: Insurance Law
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In this dispute between a boat owner and his insurance company, the First Circuit affirmed the judgment of the district court in favor of the insurer, holding that the district court properly applied the doctrine of uberrimae fidei in this case.When Defendant applied for an insurance policy for his yacht from an entity later acquired by Plaintiff he failed to disclose that he had grounded a forty-foot yacht in Puerto Rico. Plaintiff later sought a declaratory judgment voiding the policy on the grounds that Defendant had failed to honor his duty of utmost good faith, known as uberrimae fidei in maritime law, in acquiring the policy and had therefore breached the warranty of truthfulness contained in the policy. The district court concluded that Plaintiff was entitled to void the policy. The First Circuit affirmed, holding that the district court correctly concluded that the uberrimae fidei doctrine entitled Plaintiff to a declaration that the policy was void. View "QBE Seguros v. Morales-Vazquez" on Justia Law