Life Insurance Coverage Corner Class Actions Drawing a Line on Title Insurers’ Duty to Defend Michel L. Schlup Revocable Trust v. Attorneys Title Guaranty Fund Inc., No. 2023CA1886 (Co. Ct. App. Mar. 19, 2026). Addressing what it noted was a matter of first impression, the Colorado Court of Appeals held that the “complete defense rule,” which requires an insurer to provide a defense of all claims if any claim is arguably covered by the policy, does not apply to title insurance. Claims covered by a title insurance policy can be more readily bifurcated than other types of claims. And by the policy’s clear language, stating that the insurer is not liable for expenses in the defense of actions that allege matters not insured against the policy, “the parties bargained for an unambiguous and limited range of liability.” Therefore the title insurer owed no defense of claims for trespassing and unjust enrichment that arose out of the paving of an easement. n Nevada Supreme Court Affirms Excess Insurer’s Right to Equitable Subrogation North River Insurance Co. v. James River Insurance Co., No. 89228 (Nev. Jan. 29, 2026). The Nevada Supreme Court answered “yes” to this certified question from the Ninth Circuit: Under Nevada law, can an excess insurer state a claim for equitable subrogation against a primary insurer if the underlying lawsuit settled within the combined policy limits of the insurers? The case arose when a primary insurer refused multiple offers to settle an underlying action within its policy limits, before eventually settling for an amount that exceeded its policy limit and caused an excess insurer to contribute to the settlement. Equitable subrogation allows an insurer to stand in the shoes of the insured to pursue a claim the insured could have asserted—including when harm results from a failure to accept a reasonable settlement offer within policy limits. Although the insured’s full settlement was ultimately covered by the combined policy limits, the court reasoned that if the excess insurer had not contributed toward the settlement, the insured could have sued the primary insurer for amounts exceeding the primary policy. It was immaterial to the court that the insured suffered no actual damages. The court also found that public policy considerations bolstered this application of the equitable doctrine of subrogation. A primary insurer should be on the hook for any excess settlement amount resulting from its bad faith, and that result prompts fair and prompt settlements. n Be Careful About Counting CAFA Damages Before They Hatch Brown v. Allstate Corp., No. 1:22-cv-05096 (E.D.N.Y. Feb. 26, 2026). In this putative class action alleging underpayment or denial of benefits under auto insurance policies, the plaintiff alleged that the matter in controversy exceeds $5 million. That was sufficient to create a rebuttable presumption at the pleading stage that the plaintiff had met the amount in controversy requirement for the court to exercise federal jurisdiction under the Class Action Fairness Act (CAFA). However, at the class certification stage, the plaintiff submitted an expert report estimating total class damages at approximately $3.3 million. The court then calculated that the amount in controversy was with a “legal certainty” less than $5 million as of the time the plaintiff filed the complaint. The court granted the defendant insurers’ motion to dismiss for lack of subjectmatter jurisdiction, because whether federal subjectmatter jurisdiction under CAFA existed as of the date of filing may be tested by post-filing evidence. n 50 Shades of State Law Boaden v. Continental Casualty Co., No. 1:18-cv-03314 (N.D. Ill. Feb. 6, 2026). The plaintiffs challenged state-by-state rate raises on long-term care insurance, alleging that the state-bystate approach breached a promise to only raise rates uniformly for the entire “premium class,” which the plaintiffs contended meant all nationwide policyholders. The court found that the question of how to interpret the phrase “premium class” raised “the problematic specter of the Court applying dozens of different state laws to interpret the term.” It rejected the plaintiffs’ proposed solution of a 50-state survey to group states into six categories for how they interpret contracts (e.g., whether and when they consider extrinsic evidence to inform the language’s meaning) for three reasons. First, to the extent extrinsic evidence could be considered, it would differ for different putative class members and within different states’ laws, impeding common answers to the contract interpretation question. Second, the grouping assumed a two-stage plan (determining whether an ambiguity exists and then resolving any ambiguity), but contract interpretation does not organize neatly into those two stages across all jurisdictions. Third, there were misclassifications and inaccuracies in the plaintiffs’ 50-state survey. In the end, the court denied class certification, finding a lack of commonality. n 7 6
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