Articles Posted in Alaska Supreme Court

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An insured sued her auto insurer and one of its adjusters, alleging that the insurer breached the insurance contract and committed tortious bad faith by withholding underinsured motorist benefits and that the adjuster negligently handled her claim for those benefits. The insurer then paid all available underinsured motorist benefits to the insured, including interest. The insured continued her tort claims, alleging additional financial and emotional harm from the delayed benefits payment. The insured proposed a jury instruction addressing the effect of the insurer’s belated payment, but the superior court rejected that instruction. After trial the jury determined that: (1) the insurer had acted in bad faith, but its conduct was not a substantial factor in causing the insured’s asserted harm; and (2) the adjuster had not been negligent. The superior court subsequently ordered the jury to award the insured nominal damages. The jury then awarded the insured $2 in nominal damages and later awarded $450,000 in punitive damages. The superior court awarded the insured prevailing party costs and attorney’s fees against the insurer. The court also awarded the adjuster prevailing party attorney’s fees against the insured. The court rejected the insured’s request that judgment against the insurer be entered nunc pro tunc to the date of the jury verdict so that post-judgment interest on the punitive damages award would start earlier. The insurer appealed the nominal and punitive damages awards and the prevailing party determination. The insured cross-appealed the adjuster’s attorney’s fees award, the jury’s failure to award compensatory damages, the court’s rejection of the insured’s proposed jury instruction, and the court’s refusal to enter judgment effective from the jury verdict date. The Alaska Supreme Court affirmed in all respects save the adjuster’s attorney’s fees award: that was remanded for further proceedings. View "Government Employees Insurance Co. v. Gonzalez" on Justia Law

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An employee continued to work for over ten years after a job-related knee injury but had multiple surgeries on her injured knee. Over time, her employer made several permanent partial impairment payments, and she was eventually determined to be permanently and totally disabled because of the work injury. She began to receive Social Security disability at about the same time she was classified as permanently and totally disabled for workers’ compensation. Her employer asked the Alaska Workers’ Compensation Board to allow two offsets to its payment of permanent total disability (PTD) compensation: one related to Social Security disability benefits and one related to the earlier permanent partial impairment (PPI) payments. The Board established a Social Security offset and permitted the employer to deduct the amount of previously paid PPI. The employee appealed to the Alaska Workers’ Compensation Appeals Commission, arguing that the Board had improperly applied one of its regulations in allowing the PPI offset and had incorrectly calculated the amount of the Social Security offset. She also brought a civil suit against the State challenging the validity of the regulation. The State intervened in the Commission appeal; the lawsuit was dismissed. The Commission reversed the Board’s calculation of the Social Security offset and affirmed the Board’s order permitting the PPI offset. The employer appealed the Commission’s Social Security offset decision to the Alaska Supreme Court, and the employee cross- appealed the PPI offset. The Court affirmed that part of the Commission’s decision reversing the Board’s calculation of the Social Security disability offset and reversed that part of the Commission’s decision permitting an offset for permanent partial impairment benefits. The case was remanded back to the Commission for further proceedings. View "Alaska Airlines, Inc. v. Darrow" on Justia Law

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A driver lost control of his truck and crashed into a cabin, causing property damage and personal injuries to the cabin owner. The cabin owner brought suit against both the driver and the driver’s insurance company, alleging in part that the insurance company subsequently took charge of and negligently handled the fuel spill cleanup on the cabin owner’s property. The superior court granted the insurer summary judgment, concluding as a matter of law that the insurer could not owe the cabin owner an actionable duty. The cabin owner appealed, arguing that Alaska case law did not preclude a duty in this context. The Supreme Court agreed with the cabin owner and therefore reversed the superior court’s grant of summary judgment. View "Burnett v. Government Employee Ins. Co." on Justia Law

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Floyd Cornelison injured his back at work in 1996 while shoveling dirt. He had back surgery later that year, but it did little to improve his condition. The Board found he was permanently and totally disabled (PTD) in 2001 under the "odd-lot doctrine." TIG Insurance, the workers’ compensation insurer for Floyd’s employer, did not contest that he was PTD; it reclassified his workers’ compensation benefits as PTD in 2000. Floyd also received Social Security disability payments, and the employer received an offset for those payments. The employer and TIG challenged Cornelison's continuing eligibility for workers’ compensation, relying on surreptitious video surveillance and a doctor’s report issued after the doctor viewed an edited surveillance video. Cornelison and his wife sued TIG and a number of others involved in the attempt to terminate benefits; they alleged several causes of action, contending that the video had been purposely edited to provide a false picture of the employee’s physical abilities and that the defendants had participated to varying degrees in a scheme to defraud the Alaska Workers’ Compensation Board. The trial court granted summary judgment or dismissal as to all of the defendants on all counts. After review of the matter, the Supreme Court affirmed in part, and reversed in part. The Court concluded the Cornelisons provided enough evidence to show that a material factual dispute existed about the accuracy of the edited videos and the manner in which the videos were created. They also presented more than generalized claims of emotional distress. Because the superior court failed to address the issues in dispute in the IIED claim against certain persons involved with the making of the videos, we reverse the grant of summary judgment on this claim and remand to the superior court. The case was remanded for further proceedings. View "Cornelison v. TIG Insurance" on Justia Law

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The Ninth Circuit federal Court of Appeals certified two questions of Alaska law to the State Supreme Court. Ingaldson Fitzgerald was an Alaska law firm. Attorneys Liability Protection Society, Inc. (ALPS) was a Montana insurance company and risk-retention group. From April 29, 2007, to April 29, 2008, ALPS insured Ingaldson Fitzgerald. Ingaldson Fitzgerald’s insurance policy with ALPS insured the firm against claims arising from “an act, error or omission in professional services that were or should have been rendered by [Ingaldson Fitzgerald].” The policy expressly excluded from coverage any claims arising from conversion or disputes over fees. The policy also contained a provision providing that Ingaldson Fitzgerald would reimburse ALPS for fees and costs ALPS incurred in defending non-covered claims. In 2008 the bankruptcy trustee for the bankrupt estate of a former client of Ingaldson Fitzgerald, in conjunction with a separate former client of the firm, brought a claim against the firm arising out of Ingaldson Fitzgerald’s actions in disbursing from and withdrawing fees and costs against a retainer. The former client and the trustee sought recovery of that retainer, and asserted claims against Ingaldson Fitzgerald for, among other things, restitution, disgorgement, and conversion. The Ninth Circuit asked: (1) whether Alaska law prohibited enforcement of a policy provision entitling an insurer to reimbursement of fees and costs incurred by the insurer defending claims under a reservation of rights, where (a) the insurer explicitly reserved the right to seek such reimbursement in its offer to tender a defense provided by independent counsel, (b) the insured accepted the defense subject to the reservation of rights, and (c) the claims were later determined to be excluded from coverage under the policy; and (2) if yes, then did Alaska law prohibit enforcement of a policy provision entitling an insurer to reimbursement of fees and costs incurred by the insurer defending claims under a reservation of rights, where (a) the insurer explicitly reserved the right to seek such reimbursement in its offer to tender a defense provided by independent counsel, (b) the insured accepted the defense subject to the reservation of rights, and (c) it is later determined that the duty to defend never arose under the policy because there was no possibility of coverage? The Alaska Supreme Court answered both certified questions “yes.” View "Attorneys Liability Protection Society, Inc. v. Ingaldson Fitzgerald, P.C." on Justia Law

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Lee Stenseth was injured at work many years ago. He and his employer, the Municipality of Anchorage, entered into a compromise and release agreement (C&R) in August 1996 in which Stenseth waived all future benefits except medical benefits in exchange for $37,000. Stenseth retired from the Municipality in 1996, but he continued to receive medical benefits for his work-related injury, including narcotic pain medication. Ten years later, Stenseth was charged with multiple felonies related to selling or delivering narcotics that he had acquired, some from forged prescriptions modeled on the prescriptions for his work-related injury. Stenseth pleaded guilty to a number of felonies and served time in jail. He was released in June 2010. The Municipality sought to terminate future workers’ compensation benefits and be reimbursed for the benefits it paid out, alleging that Stenseth obtained those benefits by making a false statement or misrepresentation. The Alaska Workers’ Compensation Board dismissed the Municipality’s fraud petition after deciding that the parties had reached an enforceable settlement. The Municipality appealed the dismissal, arguing that any settlement of its fraud petition was void because the settlement did not meet the requirements set out in the Alaska Workers’ Compensation Act and the Board’s regulations. The Alaska Workers’ Compensation Appeals Commission affirmed the Board’s decision. The Municipality appealed to the Alaska Supreme Court, arguing that the Commission’s interpretation of the statute was incorrect and that the Commission incorrectly interpreted our decisions about estoppel. Finding no reversible error, the Supreme Court affirmed the Commission’s decision. View "Municipality of Anchorage v. Stenseth" on Justia Law

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Jennifer Lockwood was injured in a car accident caused by an uninsured drunk driver. Lockwood had car insurance through Geico General Insurance Company. After exhausting her policy's medical payments coverage, Lockwood sought payment under her uninsured motorist coverage. Geico offered $750 to settle the uninsured motorist claim, and Lockwood declined. Geico questioned Lockwood's "high" medical bills and refused to make additional medical payments outside of a total settlement of Lockwood's uninsured motorist claim. The parties eventually settled Lockwood's uninsured motorist claim for $25,000. Lockwood brought a tort claim against Geico for alleged breach of the duty of good faith and fair dealing implied in her insurance contract, arguing that Geico unreasonably delayed payment of Lockwood's uninsured motorist claim. The superior court granted summary judgment in favor of Geico on the bad-faith tort claim and awarded attorney's fees. Upon review of the matter, the Supreme Court reversed the superior court: because there was a genuine issue of material fact regarding whether Geico lacked a reasonable basis for delaying payment on Lockwood's uninsured motorist claim. The case was remanded for further proceedings. View "Lockwood v. Geico General Insurance Company" on Justia Law

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A worker was left a paraplegic after a 1976 work-related motor vehicle accident. He suffered a number of medical complications related to his injuries. In 2007, his employer controverted some aspects of his medical care, and he filed a written workers’ compensation claim. Shortly before the hearing on the claim, the employer withdrew most of its controversions. The Alaska Workers’ Compensation Board decided that some of the controversions were frivolous, unfair, or in bad faith. It imposed a statutory penalty and reported its findings about frivolous or unfair controversions to the Alaska Division of Insurance. The employer appealed, and the Alaska Workers’ Compensation Appeals Commission reversed the Board in part, deciding as a matter of law that the Board could not impose a penalty for some of the controversions. The Commission decided that other appeal points were moot. The worker appeals the Commission’s decision reversing the penalties and some attorney’s fees; the employer cross-appeals the Commission’s decisions about preservation of the controversion issues and mootness. Upon review, the Supreme Court affirmed the Commission's decision that the controversion issue was properly before the Board, but reversed regarding the penalties issue. View "Harris v. M-K Rivers" on Justia Law

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When Appellant Todd Christianson was sued by a former employee for severe personal injuries suffered while working for appellant's landscaping business, appellant tendered his defense to his general liability insurer. It did not accept his tender - instead, it sent him a letter that told him he should defend himself, noting an exclusion for claims of employees. Appellant then began to incur defense expenses. No insurer on the policies obtained by appellant's insurance broker, Conrad-Houston Insurance (CHI), ever defended him in the lawsuit. Nearly four years after receiving the insurer’s letter, appellant sued CHI for malpractice. After conducting an evidentiary hearing, the superior court applied the discovery rule and dismissed the malpractice lawsuit because it was filed after the applicable three-year statute of limitations had run. The superior court ruled that because the insurer’s letter put appellant on notice he might have a claim against CHI, the statute of limitations had begun to run more than three years before appellant sued CHI. Finding no reversible error, the Supreme Court affirmed the superior court. View "Christianson v. Conrad-Houston Insurance" on Justia Law

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Garold Charles was in an accident while riding as a passenger in a vehicle belonging to Tara and Anthony Stout. He brought negligence claims against the Stouts and Credit Union 1, the lienholder of the Stouts’ vehicle. Credit Union 1 moved for summary judgment. Charles opposed the motion, relying on testimony from Tara’s deposition and contending in part that he was a third-party beneficiary of an alleged contract between Credit Union 1 and the Stouts by which the credit union agreed to provide liability insurance. The superior court struck Tara’s testimony and granted summary judgment to Credit Union 1. Charles appealed. Finding no error in the trial court's decision, the Supreme Court affirmed. View "Charles v. Stout" on Justia Law