Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

In 2005 Truman and partners purchased a vacant commercial building for $175,000, insured for $4,250,000 in fire-related losses. The property, without the building, was worth more than with the building. After a minor accidental fire, Truman told an employee that if it ever caught fire again, just get out. Considering leasing, Truman stated that it would make more money if it burnt. By late 2006, Truman had less than $5,000 in personal bank accounts. Premiums were paid through November 17. The building burned down November 12. Truman, Jr. confessed that he had burned the building at his father’s direction. State charges were dismissed because of inability to corroborate junior’s testimony, as required under New York law. Truman was charged with aiding and abetting arson, 18 U.S.C. 844(i); mail fraud, 18 U.S.C. 1341; use of fire in commission of a felony, 18 U.S.C. 844(h); and loan fraud, 18 U.S.C. 1341. Following a guilty verdict the district court granted acquittal and conditionally granted a new trial. The Second Circuit vacated and remanded for sentencing. Junior’s refusal to answer certain questions did not render his testimony incredible as a matter of law, and his prior state testimony was nonhearsay. Truman was not prejudiced by improper cross-examination or summation argument references to the cooperation agreement. View "United States v. Truman" on Justia Law

Plaintiffs purchased furniture from the Fortunoff store and purchased a furniture protection plan. Defendant sold the plans to Fortunoff, which in turn sold them to plaintiffs. After the Fortunoff store closed and the company went into bankruptcy, defendant rejected plaintiffs’ claims under the plan. Plaintiffs filed a putative class action alleging breach of contract, that the store closing termination clause in the plan violated New York General Business Law 395-a, and deceptive business practices in violation of General Business Law 36 349. The district court dismissed, holding that there was no implied cause of action under 395-a. The Second Circuit certified to the New York Court of Appeals: May parties seek to have contractual provisions that run contrary to General Business Law 395-a declared void as against public policy? May plaintiffs bring suit pursuant to 349 on the theory that defendants deceived them by including a contractual provision that violates 395-a and later enforcing this agreement? View "Schlessinger v. Valspar Corp." on Justia Law

Defendants are title insurance companies, members of TIRSA, a rate service organization. Plaintiffs purchased title insurance from defendants. Rates are established and regulated by the New York Insurance Department, N.Y. Ins. Law 2305, 2306, which reviews loss experience and financial data submitted by individual insurers and rate service organizations, licensed by the Insurance Department. TIRSA annually submits data from its members and prepares the New York Title Insurance Rate manual, which is submitted to the Insurance Department for approval and sets forth collectively-fixed rates, which are based on: value of property insured; cost of insuring risk associated with issuing the policy; costs associated with examination of records; and agency commissions. While title agents do provide actual services, commissions exceed the value of the services. Plaintiffs alleged that title insurers get business by encouraging those making purchasing decisions to direct business to that insurer. The complaint alleged claims under the Real Estate Settlement Procedures Act, 12 U.S.C. 2607(a); the Sherman Act; New York General Business Law; and unjust enrichment. The district court dismissed. The Second Circuit affirmed. The complaint did not allege facts that would allow a plausible inference that defendants paid kickbacks for business referrals in violation of RESPA. View "Galiano v. Fid. Nat'l Title Ins." on Justia Law

Plaintiff, who dealt with Chicago Title sued both Chicago Title and Ticor, on behalf of herself and similarly situated individuals, alleging that they qualified for a reduced refinance rate, but paid more, and that the practice of overcharging on title insurance for refinanced properties violates the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. 42-110b(a). She also claimed unjust enrichment, breach of implied contract, and money had and received. The complaint alleged that the companies are “juridically linked,” coordinated drafting their premium rate schedules, and operate in the same manner with respect to overcharging. The district court dismissed the Ticor defendants, holding that plaintiff lacked standing. The Second Circuit affirmed, rejecting plaintiff’s argument concerning standing. View "Mahon v. Chicago Title Ins. Co." on Justia Law

Plaintiffs were awarded a judgment in August 2006 in a state-court negligence action against TFD, one of whose buses had struck a vehicle operated by one of the plaintiffs. Plaintiffs subsequently appealed the district court's dismissal of their complaint seeking a judgment declaring that defendant Lancer, an insurer of TFD, was obligated to pay each plaintiff $5 million or more in satisfaction of the essentially unpaid Negligence Action Judgment, and ordering Lancer to pay those amounts. The court affirmed the judgment of the district court dismissing the complaint on the ground that the relevant insurance overage was limited to interstate trips and that the TFD bus trip that resulted in the injury at issue was a trip wholly within New York State. The court considered plaintiffs' remaining arguments and found them to be without merit. View "Lyons v. Lancer Ins. Co." on Justia Law

This case arose from a longstanding insurance dispute between plaintiffs and their excess insurers. Plaintiffs appealed an order of appraisal in the district court and that court's subsequent order confirming the appraisal award and granting defendants' motion for partial summary judgment. Plaintiffs argued that: (1) defendants waived their appraisal rights by failing to invoke them within a reasonable time, (2) the appraisers exceeded their power by deciding legal issues, and (3) the appraisal was improperly conducted in violation of plaintiffs' due process rights. The court found these arguments to be without merit and affirmed the district court's judgment. View "Amerex Group, Inc. v. Lexington Ins. Co." on Justia Law

This case required the court to address the scope of federal bankruptcy jurisdiction over suits against non-debtor third parties, as well as the scope of a stay issued pursuant to 11 U.S.C. 524(g)(4). Pfizer and Quigley appealed from a judgment in the district court reversing the Clarifying Order of the bankruptcy court and holding that the Law Offices of Peter G. Angelos (Angelos) could bring suit against Pfizer for claims based on "apparent manufacturer" liability under Pennsylvania law. The court determined that it had jurisdiction to hear the appeal; that the bankruptcy court had jurisdiction to issue the Clarifying Order; and that the Clarifying Order did not bar Angelos from bringing the suits in question against Pfizer. Accordingly, the court affirmed the judgment of the district court. View "In re: Quigley Company, Inc." on Justia Law

Plaintiff challenged defendant's denial of coverage under the terms of an insurance policy provided under the National Flood Insurance Program, a program created by Congress that subsidized flood insurance for individuals and businesses in areas of high flood risk. Plaintiff argued that defendant's denial of coverage excused compliance with the terms of the policy. Because the court must strictly interpret the terms of governmental insurance policies backed by federal funds, and because the policy required compliance with a proof of loss requirement that plaintiff admitted he did not follow, the court affirmed the district court's grant of summary judgment to defendant.

St. Paul appealed from the district court's grant of a petition by Scandinavian to vacate an arbitral award in St. Paul's favor and denying a cross-petition by St. Paul to confirm the same award. St. Paul had initiated the arbitration to resolve a dispute concerning the interpretation of the parties' reinsurance contract. The principal issue on appeal was whether the failure of two arbitrators to disclose their concurrent service as arbitrators in another, arguably similar, arbitration constituted "evident partiality" within the meaning of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a)(2). The court concluded, under the circumstances, that the fact of the arbitrators' overlapping service in both the Platinum Arbitration and the St. Paul Arbitration did not, in itself, suggest that they were predisposed to rule in any particular way in the St. Paul Arbitration. As a result, their failure to disclose that concurrent service was not indicative of evident partiality. Therefore, the court reversed and remanded with instruction to the district court to affirm the award.

Plaintiff sued defendant, with which she had a catastrophic medical insurance policy, because defendant told her that she had not yet "incurred" sufficient charges to satisfy its deductible. Plaintiff claimed that defendant's refusal to pay benefits rested on a deliberate misinterpretation of "incurred" and breached the insurance contract. The district court held that plaintiff, a Medicare recipient, could not have incurred charges that her physicians had agreed with Medicare to forgo prior to providing treatment. On appeal, plaintiff argued that the district court incorrectly read "incurred" in the insurance policy as including only those amounts that the insured paid or was legally obligated to pay. The court held, however, that the district court correctly interpreted "incurred," and therefore affirmed.