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

In 1985, Messing, an attorney, obtained a long-term disability (LTD) insurance policy through Provident. Beginning in 1994, Messing struggled with depression. In 1997, Messing was hospitalized for his depression for more than three weeks. Provident began paying LTD benefits but later initiated a dispute. Messing's subsequent lawsuit settled in 2000 with Provident resuming payments. In 2018, Provident sought proof, beyond Messing’s own certifications, that he was unable to work as an attorney. Messing’s treating psychiatrist, Dr. Franseen, submitted a report diagnosing Messing with “Major Depressive Disorder, recurrent, minimal to mild,” and noting that Messing had stopped using medications to treat his depression in 2012 “and ha[d] been stable for the most part since then.” Franseen refused to render an opinion as to whether Messing could return to work. Provident had Dr. Lemmen interview Messing. Lemmen concluded, “[t]here is no objective evidence that [Messing] would not be able to practice as an attorney, should he desire to do so.” Messing appealed the termination of his benefits, providing affidavits from attorneys and a report from a third psychiatrist, Callaghan.The Sixth Circuit affirmed the denial of Provident’s claim for reimbursement of benefits it had paid but reversed with respect to the termination of benefits. Messing has proven that he remains unable to return to work as an attorney. Improvements in Messing’s health do not necessarily mean he can return to working as a full-time personal injury attorney. Dr. Callaghan noted Messing’s progress is likely attributable to his abstention from practicing law. View "Messing v. Provident Life & Accident Insurance Co." on Justia Law

Wild Eggs owns and operates restaurants in Indiana, Ohio, and Kentucky. When the COVID-19 pandemic began, those states imposed Stay-at-Home orders for all “non-essential” businesses. Wild Eggs was forced to suspend in-person dining and to restrict restaurant use to curbside pickup and delivery. State Auto has insured Wild Eggs since 2016. Wild Eggs notified State Auto of its claim for business losses under the Restaurant Extension Endorsement, which provides for 30 days of lost business income for the suspension of restaurant operations due to the order of a civil authority that resulted from an actual or alleged exposure of a restaurant to a disease. It also claimed coverage for all lost business income resulting from “direct physical loss of or damage to property” under the “Business Income Coverage” provision. State Auto denied coverage. Wild Eggs filed a breach-of-contract suit.The Sixth Circuit affirmed the dismissal of the suit. The Endorsement did not apply because the closures of Wild Eggs’s restaurants did not result from exposure to COVID-19 at the restaurants themselves. The Business Income Coverage provision did not apply because Wild Eggs did not suffer tangible damage to its property. View "Wild Eggs Holdings, Inc. v. State Auto. Property & Casualty Insurance Co." on Justia Law

While working at Dura-Bond’s Duquesne, Pennsylvania plant, Marshall stepped out of his truck, while others were loading metal pipes onto it. A worker accidentally ran a forklift into the pipes, causing one to roll off the truck and crash into Marshall. Doctors had to amputate both of Marshall’s legs, leaving him totally disabled.Russell Trucking had contracted with Express to use its license. Express would ensure that drivers met federal requirements, but Russell could otherwise retain the drivers they wanted. Marshall had completed an Express application, passed a background check, and completed training with Russell. Marshall leased a truck from Russell and drove it under Express’s license. Although he signed a contract stating that he was an independent contractor, Marshall believed that he was an employee of both Express and Russell.Marshall filed a workers’ compensation claim. Russell, Express, and Dura-Bond all disclaimed an employment relationship with Marshall. Marshall conceded that he had agreed to obtain his own workers’ compensation insurance and had failed to do so. An ALJ found that Russell was Marshall’s “immediate employer” and that Express and Dura-Bond were Marshall’s “statutory employers” under Pennsylvania’s workers’ compensation statute. Neither Express nor Russell had insurance for Marshall. The judge ordered Dura-Bond (which had insurance) to pay Marshall’s benefits and allowed it to seek indemnity. Express reimbursed Dura-Bond for the benefits.Marshall subsequently brought tort claims against Express and Russell. RLI, which had issued Express a commercial general liability policy, refused to reimburse for a $2.4 million settlement, citing policy exclusions for “[a]ny obligation” “under a workers’ compensation” “law” and for injuries to an “employee.” The Sixth Circuit affirmed a jury finding that Marshall was a “temporary worker,” leaving the tort-suit settlement covered by the policy. View "P.I. & I. Motor Express, Inc. v. RLI Insurance Co." on Justia Law

Lawyers brought claims against schools under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400. After the claims failed, the schools sought their attorney’s fees from the lawyers under the IDEA’s fee-shifting provision. The School Districts alleged that, during the administrative process, the attorneys presented sloppy pleadings, asserted factually inaccurate or legally irrelevant allegations, and needlessly prolonged the proceedings. The lawyers asked their insurer, Wesco, to pay the fees. Wesco refused on the ground that the requested attorney’s fees fell within the insurance policy’s exclusion for “sanctions.”The Sixth Circuit affirmed summary judgment in favor of Wesco. The IDEA makes attorney misconduct a prerequisite to a fee award against a party’s lawyer, so the policy exclusion applied. The court noted that the legal community routinely describes an attorney’s fees award as a “sanction” when a court grants it because of abusive litigation tactics. View "Wesco Insurance Co. v. Roderick Linton Belfance, LLP" on Justia Law

Brown’s company, TME, owned the House of Blues recording studio in Memphis and leased a studio to Falls. Hanover issued separate insurance policies to TME and Falls. Intruders vandalized and burgled the studio, and committed arson. Hanover made advance payments to TME and Falls, then discovered that Brown had submitted false receipts and had been the target of several similar arson incidents. Hanover sued Brown, TME, and Falls, seeking recovery of the prepaid funds and a declaratory judgment. A jury returned a verdict against Brown but found that Falls was entitled to recover the full insurance coverage. Hanover unsuccessfully moved to overturn that verdict because TME was named as an additional insured on Falls’s policy and his policy voided coverage if “you or any other insured” misrepresented a material fact. Meanwhile, Falls sought monetary damages and declaratory relief against Brown and TME in Tennessee state court.Hanover filed an interpleader complaint against Brown, TME, and Falls in federal court, requesting that the court find the insurance award void under Tennessee public policy or, alternatively, determine to whom Hanover should pay the award. The district court enjoined Falls’s state court action, citing the Anti-Injunction Act, 28 U.S.C. 2283, The Sixth Circuit reversed. The Act allows an injunction only for necessity, not simply for efficiency. Because the district court proceedings were not in rem, an injunction was not “necessary” to aid the district court’s jurisdiction. View "Hanover American Insurance Co. v. Tattooed Millionaire Entertainment, LLC" on Justia Law

BDC lent $800,000 to a company owned by the Suggs, who personally guaranteed the loan and secured it with a $200,000 mortgage on their Shaker Heights home. Bank of America and MidFirst Bank held more senior mortgages on the home. The Suggs’ home suffered serious water damage from a burst pipe in 2014. State Farm insured the home for up to $352,130. State Farm denied their claim on the ground that the Suggs had failed to heat their home at a temperature required by their policy.The Suggs sued State Farm in an Ohio state court and sued all three lenders with mortgages on their home, explaining that these lenders “have an interest in the policy proceeds” because the policy entitled them to payment even if State Farm had a valid defense against the Suggs. BDC did not appear. After the case settled, the state court found that BDC had no right to the proceeds. BDC did not seek relief in the state court but filed a federal suit alleging that State Farm, its lawyers, and the Suggs’ lawyers colluded to defraud it. The district court dismissed the suit under Ohio’s claim-preclusion law. The SIxth Circuit affirmed. BDC cannot meet the demanding test required to attack the state court’s judgment in this collateral fashion. View "Business Development Corporation of South Carolina v. Rutter & Russin, LLC" on Justia Law

Tymoc died in a single-car accident. At the time of the accident, Tymoc was traveling between 80-100 miles per hour; the speed limit was 60 miles per hour speed. As Tymoc attempted to pass multiple cars, the gap between a car in the right lane and a box truck in the left lane closed. Tymoc veered to the right, causing his vehicle to drive off the road, roll down an embankment, striking multiple trees, and flip over several times.Through his employer, Tymoc was covered by Unum life insurance; the policy provided both basic life insurance coverage and an additional accidental death benefit. Unum approved a $100,000 payment of group life insurance benefits but withheld $100,000 in accidental death benefits, explaining that Tymoc’s conduct—speeding and reckless driving—caused his death, thereby triggering the policy’s crime exclusion. In a suit under the Employee Retirement Income Security Act, 29 U.S.C. 1001– 1191d, the district court entered in Fulkerson’s favor as to the accidental death benefits. The Sixth Circuit reversed. Reckless driving falls within the unambiguous plain meaning of crime. View "Fulkerson v. Unum Life Insurance Co. of America" on Justia Law

The Indian Health Service (IHS), operates direct healthcare facilities and funds Contract Health Services (CHS) programs for persons of American Indian descent, 25 U.S.C. 1603(5), (12). Under 25 U.S.C. 5301, tribes may manage and staff their own IHS facilities, contract with private insurers for tribal coverage, and operate their own CHS programs. IHS health programs are “the payer of last resort.” Medicare, Medicaid, or private insurance must pay before IHS reimbursement is available. The 2003 Medicare Prescription Drug Improvement Act authorized HHS to demand Medicare pricing from hospitals providing services to tribes through CHS programs, 42 U.S.C. 1395cc. The Tribe, which administers a CHS program, contracted with BCBSM for healthcare coverage. The Sixth Circuit previously reversed the dismissal of the Tribe’s lawsuit based on BCBSM’s alleged failure to insist on “Medicare-like rates” for care authorized by the Tribe’s CHS program and provided by Medicare-participating hospitals. On remand, the district court granted BCBSM summary judgment, concluding that the Tribe’s payments for CHS care through BCBSM's plans were not eligible for Medicare-like rates. The district court interpreted federal regulations as limiting the requirement of Medicare-like rates to payments for care that was authorized by CHS, provided by Medicare-participating hospitals, and directly paid for with CHS funds. The Sixth Circuit reversed. On remand, the district court must first address whether the Tribe’s CHS program authorized the care for which they assert they were entitled to Medicare-like rates. If the CHS program authorized this care, the court should then consider BCBSM’s alternative arguments. View "Saginaw Chippewa Indian Tribe of Michigan v. Blue Cross Blue Shield of Michigan" on Justia Law

Cardinal, a distributor of wholesale pharmaceutical products, purchased commercial umbrella insurance policies from National Union. Various plaintiffs have filed more than 3,000 lawsuits against Cardinal and other manufacturers, distributors, and dispensers of prescription opioids. The majority of federal cases are consolidated in coordinated, multi-district proceedings in the Northern District of Ohio. Plaintiffs “assert a wide variety of federal and state causes of action, many seeking to recover for increased payments, services, treatment, and/or care allegedly necessitated by the opiate-related addictions, overdoses, and deaths of those they serve.”National Union has reserved its right to deny coverage for opioid litigation claims. Cardinal sought a declaratory judgment in the Franklin County, Ohio Court of Common Pleas. National Union removed the suit to the Southern District of Ohio. The district court granted Cardinal’s motion and remanded the case to state court. The Sixth Circuit affirmed. The district court found no evidence of procedural fencing and properly declined to weigh that factor in favor of federal jurisdiction. The court noted a preference to allow state courts to answer questions of insurance contract interpretation and the actively developing nature of insurance coverage claims related to opioid litigation in Ohio state courts. The district court adhered to the principles of federalism and comity and engaged in a reasoned analysis of each factor in declining jurisdiction. View "Cardinal Health, Inc. v. National Union Fire Insurance Co. of Pittsburgh" on Justia Law

Under the “individual mandate” within the Patient Protection and Affordable Care Act of 2010, non-exempt individuals must either maintain a minimum level of health insurance or pay a “penalty,” 26 U.S.C. 5000A, the “shared responsibility payment” (SRP). The McPhersons did not maintain health insurance for part of 2017, and Juntoff did not maintain health insurance in any month in 2018. They did not pay their SRP obligations. In each of their Chapter 13 bankruptcy cases, the IRS filed proofs of claim and sought priority treatment as an “excise/income tax”: for Juntoff, $1,042.39, and for the McPhersons, $1,564.The bankruptcy court confirmed their plans, declining to give the IRS claims priority as a tax measured by income. The Bankruptcy Appellate Panel reversed. DIstinguishing the Sebelius decision in which the Supreme Court determined that the SRP constituted a “penalty” for purposes of an Anti-Injunction Act analysis and a “tax” under a constitutionality analysis, the Panel concluded that the SRP is not a penalty but a tax measured by income. It is “calculated as a percentage of household income, subject to a floor based on a specified dollar amount and a ceiling based on the average annual premium the individual would have to pay for qualifying private health insurance.” View "In re: Juntoff" on Justia Law