Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Whiteside represented the County of Camden in a lawsuit brought by Anderson, which resulted in a jury award paid, in part, by the County’s excess insurer, National. According to National, the County did not notify it of the lawsuit until several months after it was filed. Whiteside initially informed National that the case was meritless and valued it at $50,000. During trial, Whiteside changed her valuation and requested the full $10 million policy limit to settle Anderson’s claims. National conducted an independent review and denied that request. The jury awarded Anderson $31 million, which was remitted to $19 million. Days later, National sought a declaratory judgment that it was not obligated to provide coverage because the County had breached the policy contract by failing to timely notify National of the case and by failing to mount an adequate investigation and defense. National also asserted claims against Whiteside for legal malpractice, breach of fiduciary duty, and breach of contract. The court dismissed those claims because National could not demonstrate that Whiteside’s actions proximately caused it to suffer any damages. The Third Circuit dismissed and appeal for lack of jurisdiction, finding National’s notice of appeal untimely under Federal Rule of Appellate Procedure 4(a)(1), View "State Nat'l Ins. Co v. County of Camden" on Justia Law

Ramara engaged Sentry as a general contractor to perform work at its Philadelphia parking garage. Sentry engaged a subcontractor, Fortress, to install concrete and steel components. As required by its agreement with Sentry, Fortress obtained a general liability insurance policy from Westfield naming Ramara as an additional insured. In April 2012, Axe, a Fortress employee, was injured in an accident. Axe filed a tort action against Ramara and Sentry but did not include Fortress as a defendant as it was immune from actions by its employees if they were entitled to compensation for their injuries under the Pennsylvania Workers’ Compensation Act. Ramara tendered its defense to Westfield, which declined to defend, claiming that Axe’s complaint did not include allegations imposing that obligation under its policy. The district court granted partial summary judgment to Ramara, and later entered a second order, a quantified judgment against Westfield for Ramara’s counsel fees and costs incurred to date. The Third Circuit first held that the district court lacked jurisdiction to alter its first order with respect to the aspects of that order already on appeal. The court affirmed that Westfield has a duty to defend Ramara in the underlying Axe action. View "Ramara Inc v. Westfield Ins. Co" on Justia Law

In 2012 Navajo Nation sued for trademark infringement, alleging that Urban Outfitters “advertised, promoted, and sold goods under the ‘Navaho’ and ‘Navajo’ names and marks” on the Internet and in retail stores “[s]ince at least March 16, 2009.” Urban Outfitters tendered the complaint to its insurers. OneBeacon provided commercial general and umbrella liability coverage to Urban Outfitters until July 7, 2010, with “personal and advertising injury” coverage. On July 7, 2010, Hanover became the responsible insurer under a “fronting policy.” On July 7, 2011 Hanover issued separate commercial general liability and umbrella liability policies to Urban Outfitters. The “fronting policy” and Hanover-issued policies excluded coverage for “personal and advertising injury” liability “arising out of oral or written publication of material whose first publication took place before the beginning of the policy period.” After providing a reservation of rights letter, informing Urban Outfitters of Hanover and OneBeacon’s joint retention of defense counsel, Hanover obtained a judicial a declaration that it was not responsible for defense or indemnification. The Third Circuit affirmed.The “prior publication” exclusion of liability insurance contracts prevents a company from obtaining ongoing insurance coverage for a continuing course of tortious conduct. Urban Outfitters engaged in similar liability-triggering behavior both before and during Hanover’s coverage period. View "Hanover Ins. Co v. Urban Outfitters Inc" on Justia Law

In 2001, Furnival and its insurer agreed to a Pollution and Remediation Legal Liability Policy, detailing $10 million in liability protection; a 10-year coverage period; and insurance coverage for 12 Furnival locations, including the Elizabethtown Landfill Site, which Furnival was obligated to clean up under a consent decree with the federal government. Insurer knew about the consent decree when the Policy issued. The Policy Endorsements list five reasons for which insurer may “refuse to offer a renewal extension of coverage,” and states that insurer “shall not cancel nor non-renew this Policy except for the reasons stated above.” None of the listed reasons for non-renewal occurred. In 2006, the parties increased the Policy’s limit to $14 million. After the term expired, insurer sent Furnival’s insurance broker its version of a renewal offer, providing $5 million of coverage over a one-year term, omitting coverage for Elizabethtown, the only previously insured site for which Furnival had made a claim, refusing to renew the same terms. The Third Circuit vacated a ruling in favor of insurer, holding that, for a contract to be considered a renewal, it must contain the same, or nearly the same, terms as the original contract. View "Indian Harbor Ins. Co v. F&M Equip., Ltd" on Justia Law

Witasick was covered by a disability policy and a business overhead expense policy. His claims against both policies were honored. A dispute arose concerning coverage of some claimed business expenses. After years of negotiation, the parties settled: the insurer agreed to pay more than $4 million and Witasick agreed to release known, unknown, and future claims. The settlement contained a covenant not to sue, based on “any conduct prior to the date the Parties sign this document, or which is related to, or arises out of” the policies. During negotiations, the U.S. Government notified Witasick that he was the target of a grand jury investigation related to fraud and business expense claims on his income tax returns. Witasick was indicted in 2007. To support its charge of mail fraud, the government relied on information and documents Witasick had submitted to the insurer. An employee of the insurer testified before the Grand Jury and at Witasick’s trial. Witasick was convicted on most counts, but acquitted of mail fraud, and was sentenced to 15 months’ imprisonment. In 2011, Witasick sued the insurer based on the policies and cooperation with the prosecution. The Third Circuit affirmed dismissal, finding the claims prohibited by the settlement agreement. View "Witasick v. Minn. Mut. Life Ins, Co." on Justia Law

NJBSC is a Bergen County neurosurgical medical practice. NJBSC treated three patients who were members of health-care plans governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and administered by Aetna. Before surgery, each patient executed an assignment to NJBSC. Following treatment, Aetna allegedly underpaid or refused to pay claims for each of the patients. NJBSC filed suit The district court dismissed NJBSC’s complaint, holding that the assigned rights to payment did not give NJBSC standing to sue under ERISA. The Third Circuit reversed, holding that a patient’s explicit assignment of payment of insurance benefits to her healthcare provider, without direct reference to the right to file suit, is sufficient to give the provider standing to sue for those benefits under ERISA. View "N. Jersey Brain & Spine Ctr., v. Aetna Inc" on Justia Law

A Challenge employee consulted Dr. Mirza about back pain, agreed to undergo an endoscopic discectomy, and executed an assignment of her benefits under Challenge’s plan. Mizra completed the procedure and submitted a claim for $34,500, which was denied. Mirza submitted additional documents. The claim was denied again. Mirza went through internal review and, on August 12, 2010, received a letter denying his final appeal, indicating that the procedure was not covered because it was medically investigational, and notifying Mirza of his right to bring a civil action under the Employee Retirement Income Security Act, 29 U.S.C. 1001. Neither the letter nor the earlier denials mentioned that, under the plan, Mirza had one year from the final denial to seek judicial review. While the parties debate the substance of an earlier phone call, the first time Mirza received written notice of the one-year deadline was April 11, 2011. On March 8, 2012, Mirza sued. The district court granted defendants summary judgment. The Third Circuit vacated. Plan administrators must inform claimants of plan-imposed deadlines for judicial review in their notifications denying benefits. The appropriate remedy is to set aside the plan’s time limit and apply the limitations period from New Jersey’s six-year deadline for breach of contract claims. View "Mirza v. Ins. Admin. of Am., Inc" on Justia Law

During his employment with a subsidiary of Santander Holdings, Stevens received treatment for ankylosing spondylitis, a chronic inflammatory disease, and participated in a short-term disability plan (STD) and a long-term disability plan (LTD). When Stevens’ condition worsened, Liberty Mutual, the administrator of Santander’s plans, initially awarded STD benefits to Stevens, then determined that Stevens no longer suffered from a qualifying disability and terminated his benefits. Stevens sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The district court found that Liberty Mutual’s decision to terminate Stevens’s STD benefits was arbitrary and capricious and remanded with instructions to reinstate Stevens’s STD benefit payments retroactively and to determine his eligibility for LTD benefit payments. The Third Circuit dismissed an appeal for lack of jurisdiction, finding that the remand order to the plan administrator was not a “final decision” appealable pursuant to 28 U.S.C. 1291 at that time. The district court retained jurisdiction over the case and the order is not yet appealable. View "Stevens v. Santander Holdings USA Inc." on Justia Law

Zierle was driving and rear-ended Wolfe. Zierle’s blood alcohol level tested at 0.25%. Zierle had three prior DUIs. Wolfe required treatment at the emergency room. Zierle was insured by Allstate. Zierle’s policy stated that Allstate would not defend an insured for damages not covered by the policy. Zierle’s policy excluded coverage for punitive damages. Wolfe made a settlement demand of $25,000. Allstate counteroffered $1200. Wolfe filed suit. Allstate informed Zierle that he could face damages above the $50,000 policy limit and would be personally liable for the excess. During discovery, Wolfe learned of the extent of Zierle’s intoxication and added a claim for punitive damages. During settlement conferences, judges placed a value of $7500 on the compensatory damage claim. After trial, Allstate paid $15,000 in compensatory damages, but not a $50,000 punitive damages award. Zierle assigned his rights against Allstate to Wolfe, who sued, alleging breach of contract; bad faith; and violation of Pennsylvania’s Unfair Trade Practices Consumer Protection Law. The court denied Allstate’s motions for summary judgment, which argued that, since it had no duty to indemnify for punitive damages, it was not required to consider potential punitive damages when deciding whether to settle and that indemnification for punitive damages was impermissible under Pennsylvania law. The jury found violation of Pennsylvania’s bad faith statute and breach of contract; it awarded no compensatory damages, but $50,000 in punitive damages. The Third Circuit vacated and remanded for a new trial at which Wolfe will be barred from introducing evidence of the punitive damages award, affirming the denials of summary judgment. View "Wolfe v. Allstate Prop. & Cas. Ins. Co." on Justia Law

Insurance companies allegedly refused to honor claims for payment of blood-clotting-factor products. After they paid the claims in full, the district court dismissed a complaint under the Employees Retirement Income Security Act (ERISA) and state law. Following dismissal, both the plaintiffs and defendants sought attorney’s fees and costs. The Third Circuit affirmed denial, but remanded one issue: whether the plaintiffs were entitled to interest on the delayed payment of benefits. On remand, they sought interest of $1.5 to $1.8 million, primarily under the Maryland Code, with $68,000 based on the federal Treasury bill rate. The companies agreed to pay $68,000.00 in interest and the district court dismissed the case. Plaintiffs then sought attorney’s fees and costs of $349,385.15. The district court denied the motion, finding that plaintiffs had failed to achieve “some degree of success on the merits” as required for an award of fees under ERISA. The Third Circuit reversed, holding that the court used an incorrect legal standard to evaluate eligibility for attorney’s fees and misapplied the “Ursic” factors. The “catalyst theory” of recovery is available to the plaintiffs and judicial action is not required under that theory in order to establish some degree of success. View "Templin v. Independence Blue Cross" on Justia Law