Justia Insurance Law Opinion Summaries

Pharmacist Joseph McNamara, Jr. appealed the grant of summary judgment in favor of Benchmark Insurance Company ("Benchmark") in Benchmark's indemnity action against McNamara. Benchmark commenced the indemnity action in an effort to recover funds expended to settle a medical-malpractice action brought against Southern Medical, Inc., Benchmark's insured and McNamara's employer. The medical-malpractice action was brought against Southern Medical by Ricky Avant and Kim Avant and was based, at least in part, on the alleged tortious acts and omissions of McNamara. Because the act complained of occurred in January 2010 and Benchmark sued McNamara in February 2014, the Alabama Supreme Court concluded Benchmark's indemnity action was time-barred under section 6-5-482, Ala. Code 1975. Thus, the trial court erred in entering a summary judgment in favor of Benchmark and in denying McNamara's motion for a summary judgment. View "McNamara v. Benchmark Insurance Co." on Justia Law

Defendant Horizon Healthcare Services, Inc., New Jersey’s largest health insurer, maintained a two-tiered provider-hospital system. Plaintiff Saint Peter’s University Hospital, Inc., and plaintiff Capital Health System, Inc. and others, commenced separate lawsuits claiming Horizon treated them unfairly and in a manner that contravened their agreements when they were placed in the less advantageous Tier 2. Plaintiffs assert Horizon’s tiering procedures were pre-fitted or wrongfully adjusted to guarantee selection of certain larger hospitals for the preferential Tier 1. The New Jersey Supreme Court was asked, by way of interlocutory appeal, to settle multiple discovery disputes that arose in the course of the litigation. The Supreme Court concluded the Appellate Division exceeded the limits imposed by the standard of appellate review both by assessing the disputed information’s relevance against the panel’s own disapproving view of the merits and by giving no apparent weight or consideration to the protections afforded by confidentiality orders. Having closely examined the record, the Supreme Court rejected the Appellate Division’s determination that the chancery judges encharged with these matters abused their discretion. It was not an abuse of discretion for the chancery judges to find the information sought was relevant to plaintiffs’ claims that Horizon violated either the network hospital agreements’ contractual terms, or the overarching implied covenant of good faith and fair dealing, when they were relegated to the less desirable Tier 2. View "Capital Health System, Inc. v. Horizon Healthcare Services, Inc." on Justia Law

Dow Corning Alabama, Inc., Dow Corning Corporation, Rajesh Mahadasyam, Fred McNett, Zurich American Insurance Company ("Zurich"), and National Union Insurance Company of Pittsburgh, PA ("National Union"), all petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to transfer the underlying declaratory-judgment action to the Montgomery Circuit Court pursuant to Alabama's forum non conveniens statute. Dow Corning Alabama hired Alabama Electric Company, Inc., an independent contractor, to perform the electrical installation of a vacuum system at Dow Corning Alabama's facility in Montgomery. The contract contained a forum-selection clause. An employee of Alabama Electric was injured while working at Dow Corning Alabama's Montgomery facility. The employee sued the Dow defendants, which in turn tendered their request for defense and indemnity to Alabama Electric and National Trust, both of whom denied coverage. Zurich and National Union settled the Montgomery lawsuit through mediation, and the case was ultimately dismissed. Later, Alabama Electric and National Trust filed an action with the Houston Circuit Court seeking certain declarations concerning their duties and obligations under the master contract and/or the National Trust policy regarding the settlement. The Dow defendants moved to transfer the declaratory judgment action from Houston to Montgomery County pursuant to the forum noon conveniens statute. The Alabama Supreme Court denied the writ application, finding the Dow parties did not satisfy their burden at the trial-court level of demonstrating that a change in venue from Houston County to Montgomery County was warranted under the interest-of-justice prong. View "Ex parte Dow Corning Alabama, Inc." on Justia Law

Defendant Alfa Mutual Insurance Company sought mandamus relief when the Pickens Circuit Court denied its motion to transfer the underlying lawsuit to the Tuscaloosa Circuit Court. In 2016, Richard Holley, a resident of Pickens County, was involved in a motor-vehicle accident in Tuscaloosa County. The other vehicle was driven by David Evans, who was uninsured. Emergency-medical-services personnel treated Holley at the scene and then transported him to DCH Regional Medical Center in Tuscaloosa. Law-enforcement personnel who were based in Tuscaloosa County also responded to the accident. After the accident, Holley received follow-up treatment from three medical providers in Tuscaloosa and one medical provider in Mississippi. The Alabama Supreme Court concluded the trial court exceeded its discretion in denying Alfa's motion for a change of venue based on the interest-of-justice prong of the forum non conveniens statute. Accordingly, the Court granted Alfa's petition for the writ of mandamus and direct the trial court, in the interest of justice, to vacate its order denying the motion to transfer the action to the Tuscaloosa Circuit Court and to enter an order transferring the case from the Pickens Circuit Court to the Tuscaloosa Circuit Court. View "Ex parte Alfa Mutual Insurance Company." on Justia Law

The Mississippi Workers’ Compensation Group Self-Insurer Guaranty Association (“Guaranty Association”) was ordered by the Mississippi Workers’ Compensation Commission (“Commission”) to assess former members of the Mississippi Comp Choice Workers’ Compensation Self-Insurers Fund (“Comp Choice”). In 2010, the Commission found that “a careful evaluation of the remaining assets and outstanding claims unfortunately shows an insufficient amount of Comp Choice assets to cover the projected claim payout.” The Commission ordered an assessment of the former members of Comp Choice for the last four years showing losses. The former members did not pay their assessments, and the Guaranty Association sued. The former members of Comp Choice filed a motion to dismiss, arguing that the Guaranty Association ignored their right of appeal and that the action was not ripe for consideration, was improper, and/or was premature and should be dismissed. The Circuit Court denied Comp Choice’s motion to dismiss, and ultimately ruled against the former members. Finding no reversible error in the judgment, the Mississippi Supreme Court affirmed. View "Scott Penn, Inc. v. Mississippi Workers' Compensation Group Self-Insurer Guaranty Association" on Justia Law

Parents Theresa Allocca and Timothy Allen Davison, filed this action in their individual capacities, and Davison also filed as personal representative of the Estate of Timothy "Asti" Davison. Asti was fatally shot while operating a vehicle that an assailant, operating another vehicle, had forced onto a median on an interstate highway. The Parents sought uninsured motorist (UM) benefits based on several automobile insurance policies issued by defendants York Insurance Company of Maine, Allstate Insurance Company, and Horace Mann Teachers Insurance Company. The Superior Court granted summary judgment in favor of the insurers, concluding that neither any of the policies nor Maine’s UM statute provided coverage for the loss associated with Asti’s death. The Maine Supreme Court affirmed: "[a]lthough the conduct of the person who killed Asti was indisputably deliberate and not accidental, there is no evidence in the record that it was foreseeable to Asti himself, and so, based on that approach, his death would be viewed as 'accidental.' ... describing an intentional act, such as an intentional killing, as an 'accident' stretches the plain meaning of that word too far." Without addressing the superior court’s conclusion that the UM coverage in the policies was not applicable because the loss did not arise from the "use" of a motor vehicle, the Supreme Court concluded as a matter of law that Asti’s death was not caused by an "accident." View "Allocca. v. York Insurance Company of Maine" on Justia Law

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

As Greg Peters and Mike Williams were attempting to position Peters’ fishing boat on its trailer, the winch handle recoiled, struck, and seriously injured Williams. Peters, who owned the truck, the trailer, and the boat, had two liability insurance policies covering bodily injury: his truck and trailer were insured by Allstate Property and Casualty Insurance Company (Allstate) and his boat was insured by Continental Casualty Company (Continental). Ultimately, the insurers settled with Williams for $460,000, each paying $230,000 toward the total settlement. Prior to settlement, however, the insurers had not agreed on apportionment. Continental sought a declaratory judgment that it was indemnified by Allstate based on its apportionment theory and also reimbursement for the defense costs it had incurred investigating the claim. Allstate moved to dismiss, seeking indemnity from Allstate based on its own apportionment theory and also sanctions against Continental for having made its defense costs and expenses claim. The circuit court treated the motion to dismiss as a motion for partial summary judgment and granted summary judgment in Allstate’s favor, but declined to award sanctions. Allstate then moved for summary judgment on Continental’s remaining indemnity claim, which the circuit court granted. Continental appealed the grant of summary judgment on its indemnity claim. Allstate cross-appealed the denial of sanctions. As to Continental’s indemnity claim, the Mississippi Supreme Court reversed summary judgment to Allstate and rendered judgment in favor of Continental. As to Continental’s claim of entitlement to defense costs, the Court affirmed summary judgment for Allstate. The Court affirmed the denial of sanctions. View "Continental Casualty Co. v. Allstate Property & Casualty Ins. Co." on Justia Law

Prime Hospitals provide inpatient services under the Medicare program, submitting payment claims to private contractors, who make initial reimbursement determinations. Prime alleged that many short-stay claims were subject to post-payment review and denied. Prime appealed through the Medicare appeal process. Prime alleged short-stay claims audits were part of a larger initiative that substantially increased claim denials and that the Center for Medicare & Medicaid Services (CMS) was overwhelmed by the number of appeals. CMS began offering partial payment (68 percent) in exchange for dismissal of appeals. Prime alleged that it executed CMS's administrative settlement agreement so that CMS was contractually required to pay their 5,079 Medicare appeals ($23,205,245). CMS ultimately refused to allow the Prime to participate because it was aware of ongoing False Claims Act cases or investigations involving the facilities. Prime alleged that the settlement agreement did not authorize that exclusion. The district court denied a motion to dismiss Prime’s suit but transferred it to the Court of Federal Claims. The Federal Circuit affirmed in part. The breach of contract claim is fundamentally a suit to enforce a contract and does not arise under the Medicare Act, so the Claims Court has exclusive jurisdiction under the Tucker Act, 28 U.S.C. 1491. That court does not have jurisdiction, however, over Prime’s alternative claims seeking declaratory, injunctive, and mandamus relief from an alleged secret and illegal policy to prevent and delay Prime from exhausting administrative remedies. View "Alvarado Hospital, LLC v. Cochran" on Justia Law

Kelly was in a collision a drunk driver, who had been drinking at Princeton Tavern. Princeton's dram shop liability policy was issued by State National. Kelly sued Princeton in state court, obtained a default judgment, and settled for $5 million. When that lawsuit was filed, Princeton requested that its broker, Carman, notify State of its obligation to defend and indemnify. Carman did not do so. Lacking notice, State refused to cover Princeton’s liability. Princeton assigned its rights to sue Carman; Kelly sued Carman in state court for negligence and breach of contract and filed a separate state-court action, seeking a declaratory judgment that Carmen's insurer, Maxum, was obligated to defend and indemnify. Maxum removed the Declaratory Action to federal district court, asserting diversity jurisdiction. Kelly and Carman are Pennsylvania citizens. Maxum (a Georgia company) argued that the two are together interested in securing Maxum’s coverage so that diversity of citizenship would exist once Carman was realigned to join Kelly as a plaintiff. The district court remanded to state court, reasoning that the state tort action constituted a parallel proceeding. The Third Circuit reversed. Contemporaneous state and federal proceedings are parallel under the Declaratory Judgment Action when they are substantially similar; the proceedings here were not. The nonexistence of a parallel state proceeding weighed significantly in favor of the district court entertaining the Declaratory Action but did not require it. Considerations of practicality and wise judicial administration counseled against abstention. View "Kelly v. Maxum Specialty Insurance Group" on Justia Law