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

In the underlying case, employees of SAIC, the lead contractor on New York's CityTime project, were convicted of conspiring to obtain bribes and kickbacks from one of SAIC's subcontractors. Federal, the insurer of SAIC, petitioned for mandamus relief to challenge the district court's denial of its application for restitution under the Crime Victims' Rights Act (CVRA), 18 U.S.C. 3771. The Second Circuit denied the petition and held that, assuming Federal could overcome various procedural obstacles, its petition would nonetheless fail on the merits because the district court did not abuse its discretion when it concluded that SAIC's own criminal conduct precluded it—and, by extension, Federal—from obtaining restitution. The court vacated the district court's order summarily dismissing Federal's petition in an SAIC employee's forfeiture proceedings, holding that the district court failed to make adequate factual findings regarding whether SAIC's allegedly unclean hands should bar it from obtaining an equitable remedy, and if such a remedy remained available, whether the property was traceable to bribes and kickbacks actually obtained at SAIC's expense. Accordingly, the court remanded for further proceedings. View "Federal Insurance Co. v. United States" on Justia Law

The Second Circuit reversed the district court's judgment declaring that Citizens was obligated to defend and, if necessary, indemnify Risen Foods under a businessowners policy and an umbrella policy in an underlying suit for damages arising out of a motor vehicle accident. The court held that Risen Foods' vehicle was not covered by either policy. NGM Insurance Co. v. Blakely Pumping, Inc., 593 F.3d 150 (2d Cir. 2010), was controlling in this case where the operative language of the endorsement in NGM was identical to the operative language in the endorsement added to the Citizens businessowners policy in the pending case. Here, the Risen Foods vehicle was not a "covered auto" under the policies. View "Citizens Insurance Co. v. Risen Foods, LLC" on Justia Law

Plaintiff, as assignees of its customers against the insurer, appealed the district court's grant of summary judgment for the insurer. Plaintiff alleged that the insurer failed to pay sufficient funds to fulfill its obligations to return damaged vehicles to pre‐accident condition, and engaged in deceptive practices in claims processing. The Second Circuit held that the district court erred in part in granting summary judgment to the insurer on plaintiff's breach of contract claims, because the insurer failed to show its entitlement to judgment for costs relating to labor hours, parts, labor rates, electronic database access, and hazardous waste removal charges, and the absence of genuine disputes of material fact on these issues. The district court erred in granting summary judgment to the insurer on plaintiff's New York General Business Law 349 claims, because there was a question of material fact regarding plaintiff's claim that the insurer engaged in deceptive practices concerning its labor rates payments and that claim was not precluded by N.Y. Ins. Law 2601. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Nick's Garage, Inc. v. Progressive Casualty Insurance Co." on Justia Law

Olin, a large chemical manufacturing company, filed suit against its insurers, including OneBeacon, seeking indemnification for environmental contamination at its manufacturing sites. On appeal, OneBeacon challenged two judgments entered pursuant to Federal Rule of Civil Procedure 54(b) in favor of Olin, awarding it over $80 million in indemnification costs. The Second Circuit held that, because it was not disputed that the damages at each site far exceed OneBeacon's attachment point of $300,000 when apportioned to a single policy year, OneBeacon's policies have been triggered. The court affirmed the denial of summary judgment with respect to the McIntosh site; affirmed the district court's ruling as to the special verdict form; vacated and remanded for entry of a new damages judgment on the basis of the methodology dictated by In re Viking Pump, Inc., 52 N.E.3d 1144 (N.Y. 2016); remanded for further proceedings on the prior insurance provision issue; and remanded as to the issue of prejudgment interest. In regard to Olin's cross-appeal, the court affirmed and held that summary judgment in its favor on Olin's Chapter 93A claim was proper because Olin's Chapter 93A claim was barred by the applicable statute of limitations. View "Olin Corp. v. OneBeacon American Insurance Co." on Justia Law

The Second Circuit held that, when applied, Section 5‐335 of the New York General Obligations Law prohibited Aetna's reduction of plaintiff's disability benefits. In this case, neither the Employee Retirement Income Security Act's, 29 U.S.C. 1001 et seq., preemptive force nor the Plan's choice of law provision compelled a different conclusion; and the court rejected Aetna's forfeiture argument. Therefore, the district court erred in granting Aetna's motion for summary judgment and denying plaintiff's motion for summary judgment in regard to plaintiff's entitlement to the past and ongoing benefits that Aetna has withheld on the ground that they are duplicative of plaintiff's personal injury settlement. Accordingly, the court reversed in part and remanded. View "Arnone v. Aetna Life Ins. Co." on Justia Law

This appeal arises out of a dispute between Century and Global over the extent to which Global is obligated to reinsure Century pursuant to certain reinsurance certificates. The district court held that the dollar amount stated in the “Reinsurance Accepted” section of the certificates unambiguously caps the amount that Global can be obligated to pay Century for both “losses” and “expenses” combined. Century contends that Global is obligated to pay expenses in addition to the amount stated in the “Reinsurance Accepted” provision and that, at a minimum, the district court erred in concluding that the certificates were unambiguous. The court certified to the New York Court of Appeals the following question: Does the decision of the New York Court of Appeals in Excess Insurance Co. v. Factory Mutual Insurance Co., impose either a rule of construction, or a strong presumption, that a per occurrence liability cap in a reinsurance contract limits the total reinsurance available under the contract to the amount of the cap regardless of whether the underlying policy is understood to cover expenses such as, for instance, defense costs? View "Global Reinsurance Corp. of America v. Century Indemnity Co." on Justia Law

Parties to a facultative reinsurance certificate differ as to which of two arbitration provisions govern the resolution of a dispute that has arisen between them. First Mutual, the ceding company, sought to compel its reinsurer, Infrassure, to submit to arbitration governed by an endorsement. Infrassure filed suit seeking a declaratory judgment that the arbitration provision contained in the body of the form is controlling. First Mutual counterclaimed. The district court held that the form’s procedures governed, granted declaratory relief in favor of Infrassure, dismissed First Mutual’s counterclaims, and denied the request to compel arbitration. The court concluded that the contract is unambiguous and the arbitration clause in the body of the certificate controls. The court explained that its reading of the facultative certificate is easily confirmed by consulting other provisions. Accordingly, the court affirmed the judgment. View "Infrassure, Ltd. v. First Mutual Transportation Assurance Co." on Justia Law

Fireman’s Fund, Great American, and MSI issued insurance policies that provided various coverages for a dry dock in Port Arthur, Texas owned by Signal. After the dry dock sank in 2009, Signal and Fireman’s Fund sought contributions from Great American and MSI for the loss of the dry dock and resulting environmental cleanup costs. The district court ruled that the Great American and MSI policies were void in light of Signal’s failure to disclose when it applied for those policies that the dry dock had significantly deteriorated and that repairs recommended by a number of consultants and engineers over several years had not been made. MSI and Signal settled and now Fireman's Fund contends that it may still pursue appeal of the issues relating to the policy issued to Signal by MSI based on the court's decision in Maryland Cas. Co. v. W.R. Grace & Co. The court held that the Great American policy was a marine insurance contract subject to the doctrine of uberrimae fidei and that Signal’s nondisclosure violated its duty under that doctrine, permitting Great American to void the policy. The court also held that MSI’s policy was governed by Mississippi law; that, under that law, Signal materially misrepresented the dry dock’s condition; and that MSI was entitled to void the policy on that basis.  Accordingly, the court affirmed the district court's finding that the policies were void. View "Fireman’s Fund Ins. Co. v. Great Am. Ins. Co." on Justia Law

After Ashley Reed sold counterfeit Fendi goods to Burlington and others, Fendi filed suit against Ashley Reed. USF&G, Ashley Reed's insurer, filed suit against Fendi and Ashley Reed, seeking a declaration that it owed no duty under the Policies to indemnify Ashley Reed with respect to the first underlying action. Fendi asserted a counterclaim seeking indemnification for the judgment entered against Ashley Reed in the First Action.  Burlington was given permission to intervene to seek indemnification under the Policies for the judgment entered against Ashley Reed in the second underlying action. The court agreed with the district court's holding that the basis of Ashley Reedʹs liability ʺwas the sale - not the advertising - of counterfeit Fendi products,ʺ and therefore there was no basis for indemnification under the Policies. Because the losses were not the result of an advertising injury, the court affirmed the judgment. View "United States Fidelity and Guaranty Co. v. Fendi Adele S.R.L." on Justia Law

Plaintiffs, two individual psychiatrists and three professional associations of psychiatrists, filed suit against defendants, four health‐insurance companies, alleging that the health insurers’ reimbursement practices discriminate against patients with mental health and substance use disorders in violation of the Mental Health Parity and Addition Equity Act of 2008 (MHPAEA), 29 U.S.C. 1185(a), and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. The court concluded that, because the psychiatrists are not among those expressly authorized to sue, they lack a cause of action under ERISA. The court also concluded that the association plaintiffs lack constitutional standing to pursue their respective ERISA and MHPAEA claims because their members lack standing. Accordingly, the court affirmed the judgment. View "Am. Psychiatric Ass’n v. Anthem Health Plans, Inc." on Justia Law