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

While keeping perishable foodstuffs at Economy International Systems, Inc., a cold-storage facility, Appellants lost more than one million dollars when the walk-in freezers at Economy malfunctioned. Appellants sought recovery under Economy’s insurance policy issued by Triple-S Propiedad, Inc. (“Triple-S”). The parties agreed that the policy provided coverage in this case, but the parties disagreed as to the amount of coverage. Appellant believed it was entitled to $500,000, and Triple-S stated that Appellant was only entitled to $25,000. Invoking diversity jurisdiction, Appellant filed suit against Triple-S seeking a ruling that it may recover $500,000 under the policy. The magistrate judge concluded that the policy’s coverage for losses caused by equipment breakdown was limited to $25,000. The First Circuit affirmed, holding that the most Appellant could recover for Economy’s loss of Appellant’s perishable goods was $25,000. View "AJC Logistics, LLC v. Triple-S Propiedad" on Justia Law

An employee of Progression, Inc. suffered a serious work-related injury. Progression, a corporation headquartered in Massachusetts, had two insurance policies from two different insurers that covered this work-related injury, one with Insurance Company of the State of Pennsylvania (ISOP) and one with Great Northern Insurance Company. Progression tendered the claim only to ISOP. ISOP made payments pursuant to the policy and defended the claim. When ISOP learned of Progression’s policy with Great Northern, ISOP filed suit in federal district court declaring that the Massachusetts doctrine of equitable contribution required Great Northern to share equitably in covering the loss. The district court granted summary judgment to Great Northern, concluding that Progression’s decision to have only ISOP cover the entire loss defeated ISOP’s action for equitable contribution. Because the Massachusetts Supreme Judicial Court (SJC) had not spoken on the issue, the First Circuit certified to the SJC the question of whether, under the circumstances presented in this case, the insured may opt to have one insurer cover the entire loss or whether either insurer may insist that both share equitably in covering the loss. View "Ins. Co. of the State of Penn. v. Great Northern Ins. Co." on Justia Law

In 2013, Plaintiff, a private middle school in Canaan, New Hampshire, received a demand letter asserting a claim concerning events that allegedly occurred during the 1967-1968 academic year. In response, Plaintiff asked Defendant, an insurance company, to defend against the claim under an insurance policy that Defendant allegedly issued to Plaintiff nearly fifty years ago. Defendant rejected the request on the grounds that it had not been able to locate any policy covering the school for the relevant time period. Plaintiff filed suit seeking a judgment adjudicating and decreeing the existence of, and Plaintiff’s rights under, the policy issued by Defendant. The case was removed to federal district court. The district court granted Defendant’s motion to dismiss the suit for failure to state claim, concluding that the school’s complaint did not plausibly show the existence of the policy. The First Circuit reversed, holding that Plaintiff’s complaint proved a plausible basis, beyond a mere possibility, for believing Defendant issued the policy in question. Remanded. View "Cardigan Mountain Sch. v. N.H. Ins. Co." on Justia Law

Plaintiff obtained an Standard Flood Insurance Policy from Middlesex Mutual Assurance Company that afforded flood coverage for Plaintiff’s home. The Policy excluded coverage for damage occurring in a “basement.” After a flood caused damaged to the lower level of his home, Plaintiff filed two flood claims claims to the adjuster retained by Middlesex Mutual. Middlesex Mutual paid the smaller claim but rejected the larger claim, concluding that the lower level of Plaintiff’s home was a “basement” under the Policy. Plaintiff appealed. The district court granted summary judgment for Middlesex Mutual. The First Circuit affirmed, holding that the lower level of Plaintiff’s home qualified as a “basement” under the Policy, and thus Middlesex Mutual appropriately denied his claim of loss for damages sustained during the flood. View "Matusevich v. Middlesex Mut. Assurance Co." on Justia Law

First State Insurance Company and New England Reinsurance Corporation (collectively, First State) entered into several reinsurance and retrocession agreements with a reinsurer, National Casualty Company (National). First State demanded arbitration under eight of these agreements to resolve disputes about billing disputes and the interpretation of certain contract provisions relating to payment of claims. The arbitrators handed down a contract interpretation award that established a payment protocol under the agreements. First State filed a petition pursuant to the Federal Arbitration Act to confirm the contract interpretation award, and National filed a cross-petition to vacate the award. A federal district court summarily confirmed both the contract interpretation award and the final arbitration award. After noting that “a federal court’s authority to defenestrate an arbitration award is extremely limited,” the First Circuit affirmed, holding that the arbitrators “even arguably” construed the underlying agreements and, thus, acted within the scope of their contractually delineated powers in confirming the contract interpretation award. View "First State Ins. Co. v. Nat’l Cas. Co." on Justia Law

A tractor-trailer was involved in an auto collision that caused serious bodily injury. The owner of the tractor (Owner) obtained primary insurance for the tractor through Old Republic Insurance Company (Old Republic). The operator of the tractor (Operator) obtained separate insurance through Stratford Insurance Company (Stratford). Old Republic filed suit against Stratford seeking a determination as to Stratford’s insurance obligations. The First Circuit (1) affirmed the district court’s conclusion that the Operator and Stratford never intended Stratford to provide primary coverage to the tractor, leaving Old Republic as the primary insurer and Stratford as the excess insurer; and (2) as to the question regarding Stratford’s duty to defend as an excess insurer of the tractor, the best course of action is to certify this question of New Hampshire law to the New Hampshire Supreme Court. View "Old Republic Ins. Co. v. Stratford Ins. Co." on Justia Law

Appellant, a former plumbing inspector for the Town of Sangerville, sued a Town Selectman, asserting claims of common law slander and violations of his constitutional right to due process. The claims stemmed from the Selectman’s statement at a public meeting that Appellant had made “less than quality decisions” while serving as plumbing inspector. The Selectman filed an offer of judgment, which Appellant accepted. After judgment was entered, Appellant initiated this reach and apply action against Argonaut Insurance Company seeking to recover for the slander count and due process claims. The district court granted summary judgment for Argonaut, concluding that the exclusions in the insurance policies for “employment-related” practices barred Appellant’s recovery. The district court agreed and denied Appellant’s motion. The First Circuit affirmed, holding that because Appellant’s judgment against the Selectman arose from an employment-related dispute, the insurance policies unambiguously excluded coverage for claims arising from employment-related practices. View "Ruksznis v. Argonaut Ins. Co." on Justia Law

Russ Irwin brought an arbitration proceeding against Lyman Morse Boatbuilding, Inc. (LMB) of Maine and Cabot Lyman, the controlling owner of LMB, claiming damages related to the allegedly defective construction of a luxury yacht. After Northern Assurance Company of America, the insurer for LMB and Lyman, refused the insureds’ request for defense, LMB and Lyman filed this federal suit seeking to recover the costs and attorneys’ fees they incurred in the arbitration proceeding. The district court concluded that Northern Assurance had a duty to defend Lyman but did not have a duty to defend LMB. The First Circuit affirmed in part, reversed in part, and remanded for entry of judgment in favor of Northern Assurance, holding that, under Maine law, the insurer did not owe a duty to defend LMB or Lyman in the underlying arbitration proceeding. View "Lyman Morse Boatbuilding Inc. v. N. Assurance Co." on Justia Law

At issue in this case was the fiduciary implications of a life insurance company’s decision to pay benefits through a retained asset account (RAA) that allows the insurance company to invest the retained assets for its own profit. In Merrimon v. Unum Life Insurance Co., decided also this year, the First Circuit held that an insurer, acting in the place and stead of a plan administrator, properly discharges its duties under ERISA when it pays a death benefit by establishing an RAA as long as that method of payment is called for by the terms of the particular employee welfare benefit plan. In this case, Appellant alleged that an Insurer’s use of RAAs as a method of paying death benefits transgressed its ERISA-inspired fiduciary duties. The district court granted summary judgment in the Insurer’s favor. The First Circuit affirmed largely on the basis of its opinion in Merrimon, holding that, under the circumstances of this case, the Insurer’s choice to pay by means of an RAA did not violate its fiduciary duties.View "Luitgaren v. Sun Life Assurance Co. of Canada " on Justia Law

Defendant, a law firm, contracted with Plaintiff for Plaintiff to provide title insurance on two mortgages that Defendant took as security from a client indebted to Defendant. Upon foreclosure of liens that were superior to those of Defendant, Defendant sought coverage from Plaintiff under the insurance policies, which seemingly provided coverage for priority liens. Defendant requested indemnification, and Plaintiff sought declaratory judgment, arguing that coverage for priority liens was not intended by either party. A federal district court granted summary judgment in favor of Plaintiff, concluding that because Defendant was aware of the prior mortgages, it could not expect to receive coverage it did not bargain for. The First Circuit affirmed, holding that Plaintiff had conclusively shown that Defendant was aware that its bargain with the client for security of its debt would result in junior mortgages, and the insurance policies clearly excluded such encumbrances from coverage.View "First Am. Title Ins. Co. v. Lane Powell PC" on Justia Law