Insurance Law

Dist. Ct. erred in granting plaintiff’s motion to remand to state court breach of annuity contract class action that had been removed by defendant-insurance company to federal court under Class Action Fairness Act (CAFA). While Dist. Ct. believed “internal affairs” exception to removal under section 453(d) of CAFA applied because it deemed any dispute concerning policies issued by mutual insurer related to insurer’s internal affairs, Ct. of Appeals found that section 453(d) did not apply since instant dispute was contract and insurance law matter that did not pertain to defendant’s internal affairs. Ct. further found that Dist. Ct. erred in striking down choice-of-law provisions in instant contracts where Wisc. courts routinely enforced them. It also directed Dist. Ct. on remand to determine whether nationwide class action on issue of damages is appropriate given fact that 45% of instant 36,000 policies had choice-of-law clauses requiring application of law in class members’ home states.

Dist. Ct. did not err in granting plaintiffs-insurance companys' motion for summary judgment in action seeking declaration that plaintiffs’ insurance policies covering 1991 to 1995 and November 2006 to November 2009 time periods did not provide coverage in underlying lawsuit alleging that insured's police officials and prosecutors were guilty of false arrest, wrongful conviction and malicious prosecution in criminal sexual assault action that was eventually nolle prossed. Plaintiffs had no duty to defend underlying action under either policy where conviction occurred in 1986, which was operative date for any false arrest action. Moreover, neither policy applied to any malicious prosecution/wrongful conviction claim since operative date was date of exoneration, which occurred either in March of 2006, when Appellate Court overturned conviction, or in May of 2012 when nolle prosequi order was entered.