Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

US Framing International LLC entered into a subcontract with Continental Building Company for framing services on two student-housing projects. Disputes arose, leading US Framing to leave the Knoxville project. Continental then filed an insurance claim alleging US Framing's breach of the subcontract. US Framing sued Continental and its officers, claiming insurance fraud under Tennessee law. The district court dismissed the case, stating US Framing failed to plead any injury directly caused by the alleged fraudulent insurance claim.The United States District Court for the Eastern District of Tennessee initially reviewed the case. The court granted Continental's motion to dismiss, concluding that US Framing did not demonstrate any direct injury resulting from Continental's insurance claim. US Framing then appealed the decision.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court's dismissal, holding that US Framing did not plausibly allege any economic damages directly resulting from Continental's alleged insurance fraud. The court also determined that US Framing could not recover attorney's fees or statutory penalties, as it did not establish itself as a prevailing party entitled to such relief. The court's decision was based on the interpretation of Tennessee law, which requires a direct causal link between the alleged fraud and the claimed damages. View "US Framing International LLC v. Continental Building Co." on Justia Law

Karl Tobien, a door-to-door salesman, was attacked by a dog while working in Ohio. He filed two federal lawsuits: one against the homeowners in the Southern District of Ohio, which was dismissed by agreement, and another against Nationwide General Insurance Company in the Eastern District of Kentucky. Tobien claimed Nationwide violated Kentucky’s Unfair Claims Settlement Practices Act, acted in bad faith, and sought punitive damages after the company denied his insurance claim.The United States District Court for the Eastern District of Kentucky dismissed Tobien’s lawsuit for improper venue, concluding that most relevant events occurred in Ohio. Tobien appealed, arguing that the Eastern District of Kentucky was a proper venue and that the district court should have transferred the case to the Southern District of Ohio instead of dismissing it.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo and upheld the district court’s decision. The court determined that Tobien failed to show that a substantial part of the events giving rise to his claims occurred in the Eastern District of Kentucky. The court also found that transferring the case to the Southern District of Ohio would not be in the interest of justice, as Ohio law would apply and Tobien’s claims would fail under Ohio law. Consequently, the Sixth Circuit affirmed the district court’s dismissal of Tobien’s lawsuit. View "Tobien v. Nationwide Gen. Ins. Co." on Justia Law

Home Depot, Inc. and Home Depot U.S.A., Inc. (collectively, "Home Depot") experienced a data breach where hackers accessed their computer system and stole payment card information from customers. Home Depot settled claims with financial institutions for approximately $170 million, which included costs for reissuing payment cards and losses from reduced card usage. Home Depot's cyber insurers covered up to $100 million, and Home Depot sought additional coverage from Steadfast Insurance Company and Great American Assurance Company under their commercial general liability policies. The insurers denied coverage, arguing that the policies did not cover electronic data losses.The United States District Court for the Southern District of Ohio granted summary judgment in favor of the insurers, finding that the policies did not cover the claims related to the data breach. Home Depot appealed the decision.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo and affirmed the district court's decision. The court held that the electronic data exclusion in the insurance policies unambiguously barred coverage for both the reissuance and reduced usage claims. The court found that the payment card data qualified as "electronic data" under the policies, and the damages arose from the loss of use of this electronic data. Additionally, the court determined that the insurers had no duty to defend Home Depot in the lawsuits filed by the financial institutions, as the claims were not covered by the policies. The court concluded that the plain language of the policies excluded coverage for the damages arising from the data breach. View "Home Depot, Inc. v. Steadfast Insurance Co." on Justia Law

Employees of Mercedes-Benz Research and Development North America, Inc. accidentally set fire to a property leased from Airport Boulevard Associates, LLC (ABA) while transferring gasoline between vehicles. ABA's insurer, Pioneer State Mutual Insurance Company, paid ABA for the damages and sought reimbursement from Mercedes and its insurer, Allianz Global Risks US Insurance Company. Unable to resolve the matter, Pioneer filed a lawsuit in federal court.The United States District Court for the Eastern District of Michigan denied Pioneer's motion for summary judgment and granted summary judgment to Mercedes and Allianz. Pioneer appealed the decision.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court's decision regarding Allianz, holding that the No-Fault Act did not apply because the vehicle was exempt from registration and the Allianz policy did not provide property protection insurance. The court also rejected Pioneer's argument for apportionment of recovery between the insurers, as the policies insured different parties and risks.However, the court reversed the district court's decision regarding Mercedes. The court found that Mercedes potentially breached the lease by handling hazardous materials, specifically gasoline, on the property. This breach could allow Pioneer to recover damages despite the lease's waiver-of-subrogation clause. The case was remanded for further proceedings on the claims against Mercedes. View "Pioneer State Mut. Ins. v. HDI Global" on Justia Law

Annette McEachin, a human resources manager, was seriously injured in a car accident in 2017 and subsequently filed a disability claim with Reliance Standard Life Insurance Company. Reliance approved her for long-term disability benefits, which were later extended after another car accident worsened her condition. McEachin underwent multiple surgeries and treatments for her physical injuries and also received treatment for mental health issues, including depression and anxiety, exacerbated by her son's suicide in 2019. Reliance paid her benefits for nearly four years but stopped payments in April 2021, concluding that her physical health had improved sufficiently for her to return to work.The United States District Court for the Eastern District of Michigan found that McEachin no longer had a physical disability as of April 2021 but ruled that her mental health disabilities entitled her to two more years of benefits. Both parties appealed the decision. Reliance argued that the district court misinterpreted the insurance policy, while McEachin contended that her physical disabilities persisted beyond April 2021.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that McEachin's physical disabilities alone justified her disability benefits until April 2021, meaning the 24-month mental health limitation did not apply until then. The court affirmed the district court's finding that McEachin's physical disabilities no longer rendered her totally disabled as of April 2021. However, the court vacated the district court's decision regarding the mental health benefits and remanded the case to consider whether McEachin's post-April 2021 medical evidence could toll the 24-month mental health limitation period, potentially extending her eligibility for benefits beyond April 2023. View "McEachin v. Reliance Standard Life Ins. Co." on Justia Law

Nicholas and Stacy Boerson, owners of New Heights Farm I and II in Michigan, faced a disappointing corn and soybean harvest in 2019. They submitted crop insurance claims to Great American Insurance Company, which were delayed due to an ongoing federal fraud investigation. The Boersons sued Great American, the Federal Crop Insurance Corporation, and the U.S. Department of Agriculture for breach of contract, bad faith adjustment, and violations of insurance laws.The United States District Court for the Western District of Michigan dismissed the Boersons' claims. It ruled that claims related to Great American's nonpayment were unripe due to the ongoing investigation, while claims alleging false measurements and statements by Great American were ripe but subject to arbitration. The court also dismissed claims against the federal defendants on sovereign immunity grounds.The United States Court of Appeals for the Sixth Circuit affirmed the district court's dismissal. It held that the claims related to nonpayment were unripe because the insurance policy barred payment until the investigation concluded. The court also found that the arbitration agreement in the insurance policy covered the ripe claims against Great American, requiring those disputes to be resolved through arbitration. Additionally, the court ruled that sovereign immunity barred the claims against the federal defendants, as there was no clear waiver of immunity for constructive denial claims under the Federal Crop Insurance Act. View "New Heights Farm I, LLC v. Great American Insurance Co." on Justia Law

Following an accident, Jeremy Marchek sued his auto insurer, United Services Automobile Association (USAA), claiming that the company breached the terms of the policy it issued to him. Marchek argued that USAA wrongfully failed to compensate him for sales taxes and mandatory fees necessary to purchase a replacement vehicle after USAA declared his vehicle to be beyond repair. USAA paid Marchek the pre-accident value of his vehicle minus a deductible but did not include taxes and fees in the payment.The United States District Court for the Western District of Michigan dismissed Marchek’s complaint, ruling that USAA was not contractually obligated to compensate him for taxes and fees. The district court found that the insurance policy did not require USAA to cover these additional costs when calculating the actual cash value (ACV) of the vehicle.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that the plain language of the insurance policy plausibly requires USAA to compensate Marchek for the sales taxes and mandatory fees necessary to purchase a replacement vehicle. The court found that the policy’s definition of ACV, which is “the amount that it would cost, at the time of loss, to buy a comparable vehicle,” does not unambiguously exclude taxes and fees. Therefore, the case was remanded for further proceedings to determine whether USAA breached the contract by not including these costs in its payment to Marchek. View "Marchek v. United Services Automobile Association" on Justia Law

Donna Vanek, an employee of a construction company, was driving her personal Kia Optima to pick up supplies when a semitruck struck her car, killing her and her young nephew. The company’s Ford F-250, which Vanek would have used for the task, was in the repair shop at the time. The estates of Vanek and her nephew sued Ohio Casualty Insurance Company, arguing that the Kia qualified as a "temporary substitute" for the F-250 under the company’s insurance policy.The United States District Court for the Eastern District of Kentucky granted summary judgment to Ohio Casualty, ruling that the Kia did not qualify as a "temporary substitute" under the policy. The court accepted Ohio Casualty’s interpretation that a non-covered vehicle could not be a "temporary substitute" unless all covered vehicles were out of service.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that a reasonable jury could find that the Kia qualified as a "temporary substitute" for the F-250. The court noted that witnesses testified Vanek would have used the F-250 if it had been available and that the Kia was used temporarily while the F-250 was in the shop. The court rejected Ohio Casualty’s interpretation that all covered vehicles must be out of service for a vehicle to qualify as a "temporary substitute," finding no basis for this in the policy’s text. The case was remanded for further proceedings consistent with this opinion. View "Olenik v. Ohio Casualty Insurance Co." on Justia Law

Joel M. Guy, Jr. murdered his parents in 2016 with the intent to collect the proceeds from his mother’s insurance plans. His mother had life insurance and accidental death and dismemberment insurance through her employer, naming Guy and his father as beneficiaries. Guy was convicted of first-degree premeditated murder, felony murder, and abuse of a corpse by a Tennessee jury.The United States District Court for the Eastern District of Tennessee determined that Guy would be entitled to the insurance proceeds if not disqualified. However, the court ruled that Guy was disqualified under Tennessee’s slayer statute or federal common law, which prevents a murderer from benefiting from their crime. The court granted summary judgment in favor of Guy’s family members, who argued that Guy was not entitled to the benefits. Guy appealed, arguing that ERISA preempts Tennessee’s slayer statute and that no federal common-law slayer rule applies.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that ERISA does not explicitly address the issue of a beneficiary who murders the insured, and thus, either Tennessee law or federal common law must apply. The court found that both Tennessee’s slayer statute and federal common law would disqualify Guy from receiving the insurance proceeds. The court affirmed the district court’s decision, concluding that Guy’s actions disqualified him from benefiting from his mother’s insurance plans under both state and federal law. View "Standard Insurance Co. v. Guy" on Justia Law

David Howard, a former coal miner, worked from 1978 to 1997, with his last employer being Apogee Coal Company, which was self-insured by Arch Resources at the time. Howard filed a claim for benefits under the Black Lung Benefits Act (BLBA) in 2014. Initially, the District Director identified Patriot Coal Company as the liable insurer, but after Patriot's bankruptcy, the Department of Labor (DOL) issued a bulletin directing that Arch Resources be notified as the liable insurer. Arch contested this designation but failed to submit evidence within the required timeframe.The District Director issued a Proposed Decision and Order (PDO) naming Arch as the liable insurer. Arch's subsequent motions for discovery and to hold the case in abeyance were denied by the Administrative Law Judge (ALJ). Arch then appealed to the Benefits Review Board, which affirmed the ALJ's decision. Arch petitioned the United States Court of Appeals for the Sixth Circuit for review, arguing that the DOL's bulletin was a new rule requiring notice and comment, and that the evidentiary procedures violated the Administrative Procedure Act (APA).The Sixth Circuit denied Arch's petition for review and its motion to supplement the administrative record. The court held that the BLBA regulations, which require evidence to be submitted to the District Director within 90 days, were consistent with the APA and did not violate due process. The court also found that the DOL's bulletin did not constitute a new rule requiring notice and comment, as it merely provided guidance and did not alter any rights or obligations. The court concluded that Arch had received adequate notice and an opportunity to defend against its designation as the liable insurer. View "Apogee Coal Co. v. Office of Workers' Compensation Programs" on Justia Law