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

Puerto Rico law operated to cause hundreds of thousands of motor vehicle owners to pay twice for liability insurance. Commonwealth law declared motor vehicle owners to be entitled to a refund of the excess premiums paid, but large amounts of unclaimed refunds accumulated. The Commonwealth subsequently placed the unclaimed refunds with its Treasury Secretary with the condition that, if not claimed within five years, the funds escheated to the Commonwealth without notice to the vehicle owners. In Garcia-Rubiera II, the First Circuit Court of Appeals held that the Commonwealth's failure to notify vehicle owners of their reimbursement rights violated their procedural due process rights. On remand, the district court ordered the Commonwealth to notify vehicle owners of their reimbursement rights, to publish notices in two newspapers alerting the owners of their rights, and to give owners a 120-day grace period for them to claim reimbursement. The First Circuit again remanded for the district court to craft with "the benefit of further guidance" an injunction that more fittingly remedied the Commonwealth's constitutional violations and ordered no duplicate premiums to escheat to the Commonwealth until it established and complied with a reimbursement procedure meeting the requirements of due process. View "Garcia-Rubiera v. Fortuno" on Justia Law

The Knowles owned rental property in Clinton, Massachusetts that was mortgaged with Fidelity Co-operative Bank (Fidelity) and insured by Nova Casualty Company (Nova). In 2008, a tropical storm brought heavy rain that caused substantial damage to the interior of the Knowles' building. The Town of Clinton ordered the building to be closed. Because the Knowles could not afford to make repairs to the building, it remained vacant. The Knowles submitted a claim for reimbursement for the water damage with Nova, which denied the claim. The building was later vandalized, causing further damage. Nova also refused coverage on this damage. The Knowles subsequently defaulted on their mortgage. In 2010, Fidelity, individually and as assignee of the Knowles, filed a complaint against Nova seeking a declaration that the physical losses suffered by the property and the loss of business income to the Knowles was covered by their all-risk insurance policy. The district court granted summary judgment for Nova. The First Circuit Court of Appeals reversed, holding that the water damage was covered under the policy because the policy's coverage extended to both damage "caused by" or "resulting from" rain as well as damage resulting from the entry of "surface water." Remanded. View "Fidelity Coop. Bank v. Nova Cas. Co." on Justia Law

Plaintiff was withdrawing money from an ATM when Tortfeasor struck her with his car. Tortfeasor was insured under a policy written by Insurer to a limit of $100,000 for bodily injury to one person. Plaintiff and several of her family members brought this action against Tortfeasor and his brother, the named insured on the policy, (collectively, Tortfeasor) and Insurer. The district court originally entered judgment ordering Insurer and Tortfeasor to pay one-and-a-half million dollars to Plaintiffs. Insurer paid into court $75,000, the remainder of its policy limit. The district court later amended its judgment, holding Tortfeasor and Insurer liable for six million dollars in damages. Plaintiffs then unsuccessfully sought to compel Insurer to pay postjudgment interest on the full judgment. The First Circuit Court of Appeals reversed the deniial of Plaintiff's request for postjudgment interest, holding that Insurer was responsible for postjudgment interest from the date of entry of the original judgment and the date of the deposit of the policy limit. View "Vazquez-Filippetti v. Cooperativa de Seguros Multiples de P.R." on Justia Law

Doctor, a licensed podiatrist, was driving alone in her husband's vehicle when she was injured in a collision caused by an underinsured motorist. Doctor sought payment from Peerless Indemnity Insurance Co. and Peerless Insurance Co. (collectively, Peerless), who issued business owner's and excess/umbrella policies to Doctor's podiatric practice (Lake Region). Peerless sought a declaratory judgment in federal district court that it had no duty to pay for Doctor's injuries or damages. The district court granted summary judgment for Peerless. The First Circuit Court of Appeals affirmed, holding that Maine's uninsured/underinsured motorist statute did not apply to the Peerless policies issued to Lake Region, thus precluding Doctor's recovery from Peerless. View "Peerless Indem. Ins. Co. v. Frost " on Justia Law

Pruco Life Insurance Company sought rescission of a life insurance policy, owned by the Paul E. L'Archevesque Special Revocable Trust on the life of Paul L'Archevesque, after it discovered that the policy application contained material misrepresentations about the health of Paul. Pruco tendered to Wilmington Trust Company, a co-trustee of the trust, a check in the amount of the policy premiums paid along with a letter stating Pruco was rescinding the policy. Wilmington cashed the check. Pruco subsequently filed a complaint seeking a rescission of the policy and a declaration that the policy was void ab initio. The district court granted summary judgment to Pruco, concluding that, under the circumstances, a mutual rescission had taken place as a matter of law. The First Circuit Court of Appeals affirmed, holding (1) the district court properly interpreted Rhode Island law regarding the standard for mutual rescission; (2) there were no genuine issues of material fact concerning whether Pruco made material misrepresentations in its rescission letter that could have prevented summary judgment; and (3) the district court did not err in finding that the issue of whether Pruco acted in bad faith was irrelevant to the rescission analysis. View "Pruco Life Ins. Co. v. Wilmington Trust Co." on Justia Law

This case involved an insurance-coverage dispute governed by Massachusetts substantive law. Plaintiffs filed a claim with their insurance company after a storm caused a pile of soil to slide down a hill and into and over a retaining wall, damaging one of the buildings on Plaintiffs' property. The insurance company denied coverage. Plaintiffs sued for breach of the insurance contract and violation of the Massachusetts consumer-protection act. The insurance company counterclaimed, seeking a declaration that the policy did not cover the claimed loss. The magistrate judge granted the insurance company's motion for summary judgment, noting that the policy excluded damages from landslides. The First Circuit Court of Appeals affirmed, holding that the insurance company acted well within its rights in denying coverage, and the magistrate judge properly granted summary judgment for the insurance company on all claims. View "Stor/Gard, Inc. v. Strathmore Ins. Co." on Justia Law

Plaintiff, an insurance company, filed an equitable action in the U.S. district court for Rhode Island seeking a declaratory judgment that a life insurance policy was rescinded ab initio due to the fraudulent misrepresentations of Defendant, an irrevocable trust. Plaintiff also sought to retain the premium paid by the trust as an offset against the damages it had suffered in connection with the policy. The district court (1) found that Defendant, by and through its trustee, had made false representations to induce Plaintiff to issue the policy and that this fraud caused Plaintiff damages that would not be fully compensated by rescission alone; and (2) allowed Plaintiff to retain the policy premium paid by Defendant. The First Circuit Court of Appeals affirmed, holding that the district court (1) did not err, under Rhode Island law, in allowing Plaintiff to both rescind the policy and retain the premium; (2) did not err in finding that Plaintiff was a victim of a fraudulent insurance scheme; and (3) appropriately exercised its equity powers. View "PHL Variable Ins. Co. v. Bowie 2008 Irrevocable Trust " on Justia Law

Aetna, Inc. filed a coordinated complaint with Kaiser Foundation Health Plan and Kaiser Foundation Hospitals (together, Kaiser) and Guardian Life Insurance Company (Guardian) against Pfizer, Inc. and Warner-Lambert Company (together, Pfizer). The coordinated plaintiffs asserted that they had suffered injury from the fraudulent marketing of Neurontin for off-label uses, and alleged violations of, inter alia, the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Pennsylvania Insurance Fraud Statute (PIFS). The district court dismissed the claims of Guardian and Aetna but denied summary judgment as to Kaiser's claims. The court then entered judgment against Guardian and Aetna and in favor of Pfizer. The First Circuit Court of Appeals (1) reversed the dismissal of Aetna's RICO claim, as Aetna presented evidence of causation and damages sufficient to survive summary judgment; and (2) vacated the district court's dismissal of Aetna's claim under the PIFS. Remanded. View "Aetna, Inc. v. Pfizer, Inc." on Justia Law

Brothers Thomas and Michael Tessier allegedly swindled brothers Frederick and Thaddeus Jakobiec and the estate of their mother out of millions of dollars. This lawsuit covered the Tessiers' theft of almost $100,000 in life insurance proceeds due to a trust benefitting Thaddeus. Thaddeus and various persons affiliated with the trust and estate (collectively, Plaintiffs) filed this action against Merrill Lynch, the company that issued the life insurance policy, claiming that Merrill Lynch made out the insurance proceeds check to the wrong trust entity in breach of the insurance contract, thus allowing the Tessiers to steal the money. The First Circuit Court of Appeals granted summary judgment for Merrill Lynch, concluding that even if Merrill Lynch did breach the contract, its breach was not the cause of Plaintiffs' losses because the Tessiers would have stolen the money even if the check had been made out correctly. The First Circuit Court of Appeals affirmed, holding (1) because the extensive groundwork laid by the Tessiers for their criminal scheme, they could have and would have stolen the insurance money regardless of how Merrill Lynch made out the check; and (2) therefore, the district court correctly granted summary judgment for Merrill Lynch. View "Jakobiec v. Merrill Lynch Life Ins. Co." on Justia Law

Plaintiff here was Boston Gas Company and Defendant was Century Indemnity Company, one of Boston Gas's insurers. Environmental contamination was later found at many of Boston Gas's former gas plant sites. Boston Gas filed this action seeking a declaratory judgment as to Century's obligations under policies issued to Boston Gas. Jury trials were held with respect to two sites included in the cleanup, the Everett and Commercial Point sites. The Everett site litigation first went to trial. Before the parties reached a settlement, the supreme judicial court (SJC) found a pro rata allocation method applied for allocating liability for the contamination where Century had provided coverage for the risk for only a portion of the time during which the contamination took place. Meanwhile, the jury found Century liable for $1,699,145 in the Commercial Point litigation. The trial judge deferred entry of final judgment pending the outcome of the Everett appeal. The district court ultimately (1) concluded that in the wake of the SJC ruling in the Everett litigation, by allocating damages across a 121-year span in the case of the Commercial Point site, this reduced Century's share of damages from 100 percent to less than fifteen percent; and (2) vacated the damages award and ordered a new trial on the issue of which of the costs were subject to an exclusion in the GCL policy. The First Circuit Court of Appeals affirmed. View "Boston Gas Com. v. Century Indem. Co." on Justia Law