Insurance Law

Dist. Ct. erred in certifying class action for injunctive relief under Rule 23(b)(2) in action alleging that defendant-insurance company breached contractual obligation by consistently underpaying plaintiffs-policyholders who submitted claims for hail damage done to their roofs. While Dist. Ct. concluded that class claim for injunctive relief could proceed to determine whether defendant should be required to re-inspect plaintiffs' roofs pursuant to uniform and objective standard, instant case was not appropriate for class certification under Rule 23(b)(2) where plaintiffs' remedy in instant case was only for monetary damages, and where there was no contract or tort-based duty requiring defendant to use particular standard for assessing hail damage. Moreover, requested injunction as envisioned by plaintiffs was not final remedy for purposes of Rule 23(b)(2) since class-wide roof re-inspection would only lay evidentiary foundation for subsequent individual determinations of liability.

Dist. Ct. did not err in granting defendant-employer's motion for summary judgment in instant interpleader action filed by insurance company to determine ownership of life insurance proceeds on $1 million policy taken out by employer in name of key employee, after finding that employer was entitled to said proceeds as named beneficiary of said policy. While employer had intended to allow policy to lapse, record showed that liquidator of employer had unsuccessfully attempted to submit forms to insurance company to transfer ownership of policy to key employee, who in turn attempted to name his girlfriend as beneficiary of policy shortly before key employee committed suicide. Ct. rejected defendant-girlfriend's argument that she was entitled to reformation of policy to reflect actual name of employer so as to effectuate liquidator's failed attempt to transfer ownership of policy to key employee where it was unclear whether, upon any reformation, insurance company would have actually made said transfer. Moreover, Ct. rejected girlfriend's alternative argument that she was third-party beneficiary of insurance contract between employer and insurance company.

Dist. Ct. erred in granting defendant-insurance company's motion for summary judgment in action by plaintiff-insured alleging that defendant breached its implied contractual duty of good faith when defendant, while representing plaintiff in underlying personal injury action pursuant to terms of insurance policy, failed to timely alert plaintiff about possibility that damages in underlying lawsuit might exceed $1 million policy limits, which in turn precluded plaintiff from giving timely notice of underlying lawsuit to its excess insurance carrier under circumstances where underlying lawsuit eventually resulted in $2 million judgment. Defendant was presented with conflict of interest once it became aware of reason to believe that plaintiff's liability might result in judgment in excess of policy limit, and duty of good faith required that defendant inform plaintiff of said conflict so that plaintiff could exercise option to either hire new attorney at defendant's expense to take over defense in underlying action or to timely inform excess insurer for purpose of triggering protection of excess policy.