Christina Barrera, the office manager at PowerMed, was involved in a scheme to help unqualified individuals, mainly employees of AB InBev, fraudulently obtain disability benefits from the Social Security Administration (SSA) and private insurers. Patients paid PowerMed $21,600 for a "disability package" that included unnecessary medical tests and assistance in fraudulently applying for disability benefits. Barrera explained the scheme to patients, helped them complete paperwork, and coached them on how to appear disabled. An undercover officer's investigation led to Barrera's indictment and subsequent trial, where a jury found her guilty of conspiracy to defraud the SSA but acquitted her of health care fraud and theft of government funds.The United States District Court for the Eastern District of Missouri sentenced Barrera, ordering her to pay restitution to the SSA and private insurers. The presentence investigation report (PSR) recommended $339,407.80 in restitution to the SSA, but the Government argued for additional restitution to private insurers, totaling $203,907.62. The district court adopted the Government's figures, ordering Barrera to pay a total of $543,315.42 in restitution. After Barrera's sentencing, her co-conspirator Clarissa Pogue was sentenced but was not required to pay restitution to private insurers, leading Barrera to appeal.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that Barrera's criminal conduct included defrauding private insurers as part of the scheme to defraud the SSA, affirming the district court's decision to order restitution to private insurers. However, the court found errors in the calculation of restitution amounts for Prudential and MetLife, vacating those portions and remanding for further proceedings. The court rejected Barrera's argument regarding sentencing disparities with Pogue, emphasizing that the statutory direction to avoid unwarranted sentence disparities refers to national disparities, not differences among co-conspirators. The judgment was affirmed in part, vacated in part, and remanded. View "United States v. Barrera" on Justia Law

Cynthia Roberge, a State of Rhode Island employee, was involved in a car accident with an underinsured motorist while driving her personal vehicle during the course of her employment. She sought uninsured/underinsured motorist (UM/UIM) coverage under the State's insurance policy issued by Travelers Property Casualty Company of America. Travelers denied her claim, stating that she was not entitled to UM/UIM coverage because she was not driving a "covered auto" as defined by the policy.Roberge filed a lawsuit in Providence County Superior Court, asserting claims for breach of contract, declaratory judgment, and bad faith. Travelers removed the case to the United States District Court for the District of Rhode Island. The district court granted summary judgment in favor of Travelers, concluding that Roberge was not entitled to UM/UIM coverage under the policy's terms and that neither the Rhode Island Supreme Court's decision in Martinelli v. Travelers Insurance Companies nor the Rhode Island Uninsured Motorist Statute required such coverage.On appeal, the United States Court of Appeals for the First Circuit reviewed the case. The court noted that the policy's language clearly excluded Roberge from UM/UIM coverage because she was not driving a "covered auto." However, the court found that the case raised unresolved questions of Rhode Island insurance law, particularly regarding the applicability of the Martinelli exception and the requirements of the Rhode Island Uninsured Motorist Statute. The First Circuit decided to certify two questions to the Rhode Island Supreme Court: whether an employee must be considered a named insured under an employer's auto insurance policy when operating a personal vehicle in the scope of employment, and whether it violates Rhode Island law and public policy for an employer's policy to provide liability but not UM/UIM coverage to employees in such circumstances. The case was stayed pending the Rhode Island Supreme Court's response. View "Roberge v. Travelers Property Casualty Co. of America" on Justia Law

B.R.S. Real Estate, Inc. owned a commercial property in West Warwick, Rhode Island, which suffered extensive water damage in 2018 due to frozen and burst pipes. B.R.S. filed an insurance claim under a policy issued by Certain Underwriters at Lloyd's, London. Disagreements arose over the amount of the loss, leading to an appraisal process involving party-appointed appraisers and a neutral umpire. The appraisal panel issued an award, which B.R.S. contested, arguing that the appraiser appointed by the insurers was biased and that the district court erred in granting summary judgment on its claim for withheld depreciation.The United States District Court for the District of Rhode Island initially denied the defendants' motion to confirm the appraisal award, citing the need for discovery. After discovery, the court granted summary judgment for the defendants, concluding that no reasonable jury could find the appraiser biased or the umpire incompetent. The court also found that B.R.S. had not met the policy conditions for receiving the withheld depreciation, as the property had not been repaired or replaced for the same use.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the district court correctly applied the summary judgment standard and that B.R.S. could not challenge the appraiser's impartiality post-decision based on information known before the appraisal. The court also found that the umpire was competent and that B.R.S. failed to provide evidence that the property was repaired or replaced for the same use, as required by the policy. Consequently, the court upheld the denial of the withheld depreciation and confirmed the appraisal award. View "B.R.S. Real Estate, Inc. v. Certain Underwriters at Lloyd's, London" on Justia Law

Nevada Health CO-OP, a health insurance provider, received two loans from the Centers for Medicare & Medicaid Services (CMS) under the Affordable Care Act’s CO-OP program. These loans included a start-up loan and a solvency loan. In 2015, Nevada Health faced financial difficulties and was placed into receivership by the Nevada Commissioner of Insurance. CMS subsequently terminated the loan agreement and began offsetting payments owed to Nevada Health against the start-up loan debt.The United States Court of Federal Claims reviewed the case and granted summary judgment in favor of the Nevada Commissioner of Insurance, acting as the receiver for Nevada Health. The court found that the government improperly withheld statutory payments owed to Nevada Health under the ACA. The court also held that the government could not invoke 31 U.S.C. § 3728 to withhold these payments in the future.The United States Court of Appeals for the Federal Circuit reviewed the case. The court affirmed the lower court’s judgment that the government improperly withheld payments owed to Nevada Health. The court held that the loan agreement subordinated the government’s claim to those of policyholders and basic operating expenses, thus precluding the government from asserting offset rights to jump ahead of these senior creditors. However, the appellate court vacated the portion of the lower court’s order that addressed the government’s ability to invoke 31 U.S.C. § 3728, ruling that the lower court exceeded its jurisdiction by addressing this issue, which was not raised by the parties. View "Richardson v. United States" on Justia Law

John’s Grill, Inc., a restaurant in San Francisco, suffered significant financial losses during the COVID-19 pandemic and sought compensation from its property insurer, Sentinel Insurance Company, Ltd. Sentinel denied the claim, stating that the losses did not fall under the policy’s “Limited Fungi, Bacteria or Virus Coverage” endorsement, which only covers virus-related losses if the virus results from specific causes like windstorms or water damage. John’s Grill argued that this limitation made the virus-related coverage illusory and unenforceable.The San Francisco City and County Superior Court sustained Sentinel’s demurrer, finding the policy language clear and enforceable. The court reasoned that the specified causes of loss could potentially cause virus damage, thus the coverage was not illusory. The Court of Appeal reversed, agreeing with John’s Grill that the specified cause of loss limitation rendered the virus coverage illusory, as the listed causes were not realistically related to virus transmission. The appellate court held that the policy’s promise of virus-related coverage was illusory and allowed John’s Grill’s claims to proceed.The Supreme Court of California reversed the Court of Appeal’s decision. The court held that the policy’s specified cause of loss limitation was clear and unambiguous, and thus enforceable. It concluded that John’s Grill did not have a reasonable expectation of coverage for pandemic-related losses under the policy. The court also determined that the illusory coverage doctrine, as articulated by John’s Grill, did not apply because the policy did offer a realistic prospect for virus-related coverage under certain conditions. The case was remanded for further proceedings consistent with this opinion. View "John's Grill, Inc. v. The Hartford Financial Services Group, Inc." on Justia Law

In 2021, Shannon Carson was injured in an automobile accident in Louisiana while driving an 18-wheeler truck owned by his employer. The accident was caused by another driver, Jamarcea Washington, who was insured by GEICO and died in the collision. Carson's employer's truck was insured by American Millenium Insurance Company, which provided $75,000 in underinsured motorist (UIM) coverage. Carson also had a personal automobile insurance policy with USAA, which provided $50,000 in UIM coverage. Carson settled with GEICO and American Millenium for their policy limits and then sought additional UIM benefits from his USAA policy.The case was initially filed in Louisiana state court and then removed to the United States District Court for the Western District of Louisiana based on diversity jurisdiction. The district court granted summary judgment in favor of USAA, concluding that Carson, as a Class II insured under South Carolina law, was prohibited from stacking his personal UIM insurance on top of the American Millenium UIM coverage. Carson filed a Rule 59(e) motion, arguing that he was entitled to "port" his personal UIM coverage under South Carolina law. The district court denied the motion, maintaining that the case involved stacking, not portability, and that Carson had already received the statutory limit for UIM coverage.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court concluded that South Carolina law does not prevent Carson from recovering UIM benefits under his personal automobile insurance policy with USAA. The court distinguished between stacking and portability, noting that while stacking is prohibited for Class II insureds, portability allows an insured to recover under their personal UIM policy when their vehicle is not involved in the accident. The court vacated the district court's summary judgment and remanded the case for further proceedings consistent with its opinion. View "Carson v. USAA Casualty Insurance" on Justia Law

AXIS Insurance Company sought indemnification from American Specialty Insurance & Risk Services for claims AXIS settled, based on a contract between the two parties. The contract did not require AXIS to offer American Specialty the choice to approve the settlement or assume the defense. However, American Specialty argued that Indiana law imposed such an obligation. The district court agreed with American Specialty and granted summary judgment in its favor.The United States District Court for the Northern District of Indiana found that AXIS's settlement payment was voluntary because AXIS did not give American Specialty the opportunity to approve the settlement or assume the defense. The court concluded that AXIS had to show actual liability on the underlying claim to seek indemnification, which AXIS could not do. Therefore, the district court ruled that American Specialty had no duty to indemnify AXIS for the settlement payment.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that the contract did not require AXIS to tender the defense to American Specialty before settling claims. The court also found that Indiana law does not imply such a requirement in indemnification agreements. The Seventh Circuit concluded that AXIS was not obliged to offer American Specialty the opportunity to approve the settlement or assume the defense as a condition precedent to indemnification. The case was remanded for further proceedings consistent with this opinion. View "Axis Insurance Company v. American Specialty Insurance & Risk Services" on Justia Law

A property-insurance dispute arose between a condominium association and its insurer after storms damaged the property. The association demanded an appraisal of the loss, and both parties selected appraisers who then chose an umpire. The association's appraiser disclosed, on the day of final negotiations, that he believed he had a financial stake in the award due to a contingency-fee retainer. The insurer did not object at that time, and the appraisal panel issued an award over a month later. Subsequently, the insurer moved to vacate the award, claiming the appraiser's partiality.The United States District Court for the Southern District of Florida denied the insurer's motion to vacate the award, ruling that the insurer had waived its objection by not raising it sooner. The court also confirmed the appraisal award.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the insurer waived its objection to the appraiser's partiality by failing to object at the time of the disclosure. The court emphasized that a party must timely object to an arbitrator's or appraiser's partiality when it becomes aware of a potential conflict of interest. By waiting over two months and until after the award was issued, the insurer forfeited its right to challenge the appraiser's impartiality. The court did not address other arguments related to the choice of law or the appraiser's partiality, as the waiver issue was dispositive. View "Biscayne Beach Club Condominium Association, Inc. v. Westchester Surplus Lines Insurance Company" on Justia Law

David Howard, a former coal miner, worked from 1978 to 1997, with his last employer being Apogee Coal Company, which was self-insured by Arch Resources at the time. Howard filed a claim for benefits under the Black Lung Benefits Act (BLBA) in 2014. Initially, the District Director identified Patriot Coal Company as the liable insurer, but after Patriot's bankruptcy, the Department of Labor (DOL) issued a bulletin directing that Arch Resources be notified as the liable insurer. Arch contested this designation but failed to submit evidence within the required timeframe.The District Director issued a Proposed Decision and Order (PDO) naming Arch as the liable insurer. Arch's subsequent motions for discovery and to hold the case in abeyance were denied by the Administrative Law Judge (ALJ). Arch then appealed to the Benefits Review Board, which affirmed the ALJ's decision. Arch petitioned the United States Court of Appeals for the Sixth Circuit for review, arguing that the DOL's bulletin was a new rule requiring notice and comment, and that the evidentiary procedures violated the Administrative Procedure Act (APA).The Sixth Circuit denied Arch's petition for review and its motion to supplement the administrative record. The court held that the BLBA regulations, which require evidence to be submitted to the District Director within 90 days, were consistent with the APA and did not violate due process. The court also found that the DOL's bulletin did not constitute a new rule requiring notice and comment, as it merely provided guidance and did not alter any rights or obligations. The court concluded that Arch had received adequate notice and an opportunity to defend against its designation as the liable insurer. View "Apogee Coal Co. v. Office of Workers' Compensation Programs" on Justia Law

Angela Midthun-Hensen and Tony Hensen sought insurance coverage for therapies for their daughter K.H.'s autism from Group Health Cooperative between 2017 and 2019. The insurer denied coverage, citing a lack of evidence supporting the effectiveness of speech therapy for a child K.H.'s age and sensory-integration therapy for autism at any age. The family's employer-sponsored plan only covered "evidence-based" treatments. After several medical reviews and appeals upheld the insurer's decision, the parents sued, alleging violations of the Employee Retirement Income Security Act (ERISA) and state law regarding autism coverage.The United States District Court for the Western District of Wisconsin ruled in favor of the insurer, finding no violations of state law or ERISA. The plaintiffs then focused on their claim that the insurer's actions violated the Mental Health Parity and Addiction Equity Act (MHPAEA), which mandates equal treatment limitations for mental and physical health benefits. They argued that the insurer applied the "evidence-based" requirement more stringently to autism therapies than to chiropractic care, which they claimed lacked scientific support.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court found that the insurer's reliance on medical literature, which varied in its recommendations based on patient age, was permissible under the Parity Act. The court also noted that the plaintiffs failed to demonstrate that the insurer's treatment limitations for mental health benefits were more restrictive than those applied to "substantially all" medical and surgical benefits, as required by the statute. The court concluded that the plaintiffs' focus on a single medical benefit was insufficient to prove a violation of the Parity Act. View "Midthun-Hensen v. Group Health Cooperative of South Central, Inc.," on Justia Law