Justia Consumer Law Opinion Summaries

This appeal involved a challenge to how Geico General Insurance Company (“GEICO”) processed insurance claims under 21 Del. C. 2118. Section 2118 provided that certain motor vehicle owners had to obtain personal injury protection (“PIP”) insurance. Plaintiffs, all of whose claims for medical expense reimbursement under a PIP policy were denied in whole or in part, were either GEICO PIP policyholders who were injured in automobile accidents or their treatment providers. Plaintiffs alleged GEICO used two automated processing rules that arbitrarily denied or reduced payments without consideration of the reasonableness or necessity of submitted claims and without any human involvement. Plaintiffs argued GEICO’s use of the automated rules to deny or reduce payments: (1) breached the applicable insurance contract; (2) amounted to bad faith breach of contract; and (3) violated Section 2118. Having reviewed the parties’ briefs and the record on appeal, and after oral argument, the Delaware Supreme Court affirmed the Superior Court’s ruling that the judiciary had the authority to issue a declaratory judgment that GEICO’s use of the automated rules violated Section 2118. The Supreme Court also affirmed the Superior Court’s judgment as to the breach of contract and bad faith breach of contract claims. The Court concluded, however, that the issuance of the declaratory judgment was improper. View "GEICO General Insurance Company v. Green" on Justia Law

Appellee The Bank of New York Mellon, f/k/a The Bank of New York brought a foreclosure proceeding against Appellants J.M. and and Kathy Shrewsbury. The Bank was not the original mortgagee; it received the Shrewsbury mortgage by an assignment from the original mortgagee. The Shrewsburys answered the complaint asserting that the note representing the debt secured by the mortgage had not been assigned to The Bank. They further asserted that since the note had not been assigned to The Bank, it did not have the right to enforce the underlying debt and, therefore, did not have the right to foreclose on the mortgage. The Superior Court rejected the Shrewsburys' argument and granted summary judgment to The Bank. The narrow question presented on appeal was whether a party holding a mortgage must have the right to enforce the obligation secured by the mortgage in order to conduct a foreclosure proceeding. After review, the Supreme Court held that a mortgage assignee must be entitled to enforce the underlying obligation which the mortgage secures in order to foreclose on the mortgage. Accordingly, the Court reversed the trial court and remanded for further proceedings. View "Shrewsbury v. The Bank of New York Mellon" on Justia Law

This case arose from a dispute over certain property subject to a foreclosure. At issue was whether the parol evidence rule required that a person who claimed to hold a "purchase money mortgage" must prove his purchase money mortgage holder status solely by reference to the mortgage instrument itself. The court concluded that, in this case, the recorded deed and purchase money mortgage established that the sellers' mortgage satisfied, at least prima facie, all three requirements of 25 Del. C. 2108. Moreover, the mortgage contained no subordination language that would relinquish priority to the third party lenders. Therefore, the presumption that the sellers' mortgage was a purchase money mortgage entitled to statutory priority standards stood unrebutted. By applying the parol evidence rule to reach a contrary conclusion, the Superior Court erred as a matter of law. View "Galantino v. Baffone" on Justia Law

ConAgra Foods, Inc. ("ConAgra") sued Lexington Insurance, Co. ("Lexington") alleging breach of contract and breach of the implied duty of good faith and fair dealing. ConAgra's claims arose from the alleged 2007 contamination of certain Peter Pan and Great Value peanut butter products that ConAgra manufactured. ConAgra subsequently sought coverage under its insurance policy with Lexington for personal injury claims arising from its contaminated products and Lexington denied coverage. At issue was whether the provision in the insurance policy provided coverage in light of the "lot or batch" provision in the policy. The court held that the "lot or batch" provision was ambiguous where, under one of the two reasonable interpretations, Lexington's duties to defend and indemnify were triggered. The court also held that, because the policy arguably provided coverage to ConAgra, Lexington's duty to defend was thereby triggered when ConAgra satisfied the applicable "retained limit" for a single "occurrence." Accordingly, the court reversed and remanded to ascertain the intent underlying the ambiguous policy language for purposes of determining whether there was ultimate policy coverage.