Justia Insurance Law Opinion Summaries

Defendant Daniel Clapp plead no contest to concealing the true extent of his physical activities and abilities from his employer, the Department of the California Highway Patrol (CHP), and the State Compensation Insurance Fund (SCIF). Consistent with a resolution negotiated by the parties, the trial court granted defendant three years’ probation, and as a condition of probation, ordered him to pay restitution. Following a hearing, defendant was ordered to pay $30,095.68 to SCIF for temporary disability benefits and $81,768.01 to CHP for benefits wrongfully obtained. He was also ordered to pay $1,350 and $70,159 to SCIF and CHP respectively for investigative costs. Defendant appealed the restitution award as to investigation costs contending that, as public investigative agencies, neither SCIF nor CHP was entitled to reimbursement for the costs of investigating his claim. After review, the Court of Appeal concluded that as direct victims of defendant’s fraud, both CHP and SCIF were indeed entitled to restitution for investigative costs incurred in an effort to justify discontinuance of payments and recoup money defendant fraudulently obtained. View "California v. Clapp" on Justia Law

Defendant Gemini Insurance Company appealed a district court's holding La. C.C. arts. 2315.1, 2315.2 and 199 were “unconstitutional as applied to children given in adoption” and overruling the defendants’ peremptory exceptions of no right of action. At issue was whether plaintiffs Daniel Goins and David Watts, two adult children who were given in adoption as minors, had a right to bring wrongful death and survival actions stemming from the deaths of their biological father and his two minor children, who were not given in adoption, and were plaintiffs’ biological half-siblings. After a de novo review, based on the clear and unambiguous wording of La. C.C. arts. 2315.1 and 2315.2, the Louisiana Supreme Court concluded Goins and Watts were “children of the deceased” and “brothers of the deceased” who were permitted to bring wrongful death and survival actions arising from the death of their biological father and half-siblings. In view of the Court's holding that plaintiffs had a right to assert survival and wrongful death actions, the Court declined to address their argument that La. C.C. arts. 2315.1, 2315.2 and 199 were unconstitutional as applied to children given in adoption. View "Rismiller v. Gemini Insurance Co." on Justia Law

The Patient Protection and Affordable Care Act of 2010 (ACA) requires covered employers to provide women with “preventive care and screenings” without cost-sharing requirements and relies on Preventive Care Guidelines “supported by the Health Resources and Services Administration” (HRSA) to define “preventive care and screenings,” 42 U.S.C. 300gg–13(a)(4). Those Guidelines mandate that health plans cover all FDA-approved contraceptive methods. When the Federal Departments incorporated the Guidelines, they gave HRSA the discretion to exempt religious employers from providing contraceptive coverage. Later, the Departments promulgated a rule accommodating qualifying religious organizations, allowing them to opt out of coverage by self-certifying that they met certain criteria to their health insurance issuer, which would then exclude contraceptive coverage from the employer’s plan and provide participants with separate payments for contraceptive services without any cost-sharing requirements.In its 2014 “Hobby Lobby” decision, the Supreme Court held that the contraceptive mandate substantially burdened the free exercise of closely-held corporations with sincerely held religious objections. In a later decision, the Court remanded challenges to the self-certification accommodation so that the parties could develop an approach that would accommodate employers’ concerns while providing women full and equal coverage.The Departments then promulgated interim final rules. One significantly expanded the church exemption to include an employer that objects, based on its sincerely held religious beliefs, to coverage or payments for contraceptive services. Another created an exemption for employers with sincerely held moral objections to providing contraceptive coverage. The Third Circuit affirmed a preliminary nationwide injunction against the implementation of the rules.The Supreme Court reversed. The Departments had the authority under the ACA to promulgate the exemptions. Section 300gg–13(a)(4) states that group health plans must provide preventive care and screenings “as provided for” in comprehensive guidelines, granting HRSA sweeping authority to define that preventive care and to create exemptions from its Guidelines. Concerns that the exemptions thwart Congress’ intent by making it significantly harder for women to obtain seamless access to contraception without cost-sharing cannot justify supplanting that plain meaning. “It is clear ... that the contraceptive mandate is capable of violating the Religious Freedom Restoration Act.” The rules promulgating the exemptions are free from procedural defects. View "Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania" on Justia Law

GEICO Insurance Company appealed a trial court judgment entered in favor of plaintiffs Johnson Evans, Jimmy Smith, and Bernard Smith on plaintiffs' claims for damages resulting from an automobile accident caused by GEICO's insured, Bernard Grey. GEICO argued that the April 17, 2019, judgment entered against it was void because it did not receive notice of plaintiffs' claims against it or notice of the hearing on plaintiffs' claims. For their part, plaintiffs did not dispute that GEICO never received actual notice of any action pending against it in the present case. Instead, they argued GEICO had "constructive notice of potential litigation" because it had actual notice of Grey's accident involving plaintiffs -- which occurred in 2010 -- and that GEICO was aware that plaintiffs claimed to be injured by Grey's actions. The Alabama Supreme Court agreed with GEIDO that "constructive notice of potential litigation" clearly fell short of "even the most basic requirements of due process." Because it was undisputed GEICO never received notice of any claim pending against it, the April 17 judgment violated due process, and was therefore void. Because a void judgment would not support an appeal, the trial court was instructed to vacate its judgment, and GEICO's appeal was thus dismissed. View "GEICO Insurance Co. v. Evans" on Justia Law

In 2013, a bus driven by Defendant Asia Partman struck Respondent Andrew Neumayer while he was a pedestrian in Cayce, South Carolina. EMS transported Neumayer to Lexington Medical Center where he was diagnosed with a ruptured spleen, broken left ribs, left humerus fracture, left pneumothorax, and a punctured lung. After eight days in the hospital and medical costs of approximately $122,000, Neumayer was released. Partman worked for Defendant Primary Colors Child Care Center, and in November of 2013, Neumayer filed a lawsuit against both defendants, alleging negligence against Partman and Primary Colors. The defendants did not answer or respond in any fashion, and after a default judgment was entered, the court held a damages hearing, where it awarded Neumayer $622,500. Over eighteen months after the entry of default, Philadelphia Indemnity Insurance Co. (Philadelphia), Primary Colors' insurance carrier, received notice that its insured was involved in a lawsuit that culminated in a default judgment. While the record was unclear as to why it took eighteen months to notify Philadelphia, it ultimately received notice when Neumayer's counsel faxed documents seeking to collect $622,500. Philadelphia declined to pay that amount, instead asserting its indemnification obligation was limited to $25,000 because South Carolina jurisprudence required an insurer to pay only the minimum limits when it was substantially prejudiced by its insured's failure to provide notice of a lawsuit. Further, Philadelphia contended the failure to receive notice of the underlying lawsuit prevented an opportunity to investigate and defend. Neumayer filed this declaratory judgment action asking the court to require Philadelphia to pay the judgment in full. At issue before the South Carolina Supreme Court was whether notice clauses in automobile insurance policies were rendered meaningless by Section 38-77-142(C) of the South Carolina Code (2015) . The trial court found the clause in this policy void and accordingly required the insurance company to pay the full default judgment entered against its insured. The insurer appealed. The Supreme Court determined the circuit court erred in ruling that section 38-77-142(C) invalidated the standard notice clause contained in this insurance policy. “An insurer may continue to invoke notice clauses to deny coverage above the statutory limits, providing the insurer can prove that it was substantially prejudiced by its insured's failure to comply with the provision.” View "Neumayer v. Philadelphia Indemnity" on Justia Law

Javonne Hunt appealed a district court order requiring him to pay $27,501.86 in restitution to Blue Cross Blue Shield (“BCBS”). In 2017, Hunt was playing basketball at the YMCA in Bismarck, North Dakota when he was involved in an altercation with an opposing player. Hunt intentionally struck the opposing player in the jaw causing a bone fracture. Hunt was charged and subsequently found guilty by a jury of aggravated assault. Following his conviction, Hunt agreed to pay as restitution the out-of-pocket medical expenses incurred by the injured individual in the amount of $3,233.07. BCBS provided evidence that it had paid an additional $27,501.86 for the medical treatment of the injured individual under the injured individual’s policy of insurance. The district court applied N.D.C.C. 12.1-32-08(1) in granting restitution to BCBS and ordered Hunt to pay a total of $30,734.93; $3,233.07 for the conceded out-of-pocket costs plus the $27,501.86 claimed by BCBS. Hunt argued BCBS is precluded from recovery of its expenditures in the criminal proceedings because the definition of “victim” under N.D. Const. art. I, section 25 was incompatible with a recovery by a corporation under the criminal restitution statute, N.D.C.C. 12.1-32-08(1). The North Dakota Supreme Court found no reversible error in the district court’s judgment and affirmed the order. View "North Dakota v. Hunt" on Justia Law

Dami Hospitality, LLC (“Dami”) was the owner-operator of a Denver motel that employed between four and ten people at any given time. As an employer of three or more persons, Dami was required by statute to maintain workers’ compensation insurance. Dami allowed its workers’ compensation coverage to lapse on in 2005. Upon receiving notification of the lapse from the Division of Workers’ Compensation (“DWC”), Dami conceded the violation and paid a corresponding settlement in June 2006. Dami again allowed its workers’ compensation coverage to lapse in 2006. From June 2007 to September 2010, Dami carried the proper insurance, but the company’s workers’ compensation coverage again lapsed on September 12, 2010 and went without insurance until July 9, 2014. On February 19, 2014, the DWC discovered that Dami had allowed its workers’ compensation insurance to lapse for these periods of time and issued a notice to Dami regarding this. Dami faxed a copy of workers' compensation insurance for the July 10, 2014 - July 10, 2015 period; Dami offered no such evidence for any other period, nor any explanation for the lapses. Fines accrued for noncompliance, totaling $841,200. The DWC ultimately issued an order upholding the fines. Dami appealed to the Industrial Claim Appeals Office (“ICAO”). The ICAO rejected all but Dami’s excessive fines argument. The ICAO remanded the matter to the DWC, directing it to review the constitutionality of the aggregated per diem fines assessed in accordance with the test established by the court of appeals in Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005). The ICAO would ultimately affirm the resulting fines, and Dami appealed to the Court of Appeals. The appellate court set aside the fines, assuming, without deciding, the Excessive Fines Clause could be applied to challenge regulatory fees imposed on a corporation. The Colorado Supreme Court concluded the proper test to assess the constitutionality of government fines under the Eighth Amendment required an assessment of whether the fine was grossly disproportional to the offense for which it was imposed. The Supreme Court thus reversed the court of appeals’ ruling and remanded to that court for return to the Division of Workers’ Compensation with instructions to, as appropriate and necessary, develop an evidentiary record sufficient to determine whether the $250–$500 fine that a business was required to pay for each day that it was out of compliance with Colorado’s workers’ compensation law is proportional to the harm or risk of harm caused by each day of noncompliance. View "Colo. Dept. of Labor & Emp. Div. of Workers' Comp. v. Dami Hosp." on Justia Law

After DNA evidence exonerated Phillip Bivens, Bobby Ray Dixon, and Larry Ruffin, who spent a collective 83 years in prison for the rape and murder of a woman in Forrest County, their estates filed a civil rights law suit against the County. At issue in this appeal was whether two of the County's law enforcement liability policies require the insurers to defend the civil rights suit.The Fifth Circuit affirmed the district court's holding that there is a duty to defend, because the policies are triggered when injuries occur during the policy period, even though the wrongful acts that caused the injuries occurred before the policy period. In this case, the provisions of the Travelers and Scottsdale policies cover bodily injuries occurring during the policy period, and the estates' complaint alleges those injuries during the relevant time periods. Therefore, both insurers have a duty to defend the County and its officers. View "Travelers Indemnity Co. v. Mitchell" on Justia Law

The Eleventh Circuit dismissed this insurance dispute case, holding that Gerber, as assignee of the insured, did not have standing to bring a declaratory judgment class action against GEICO. In this case, the action did not assert any claims for money damages and there was no substantial likelihood that the insured would suffer a future injury. Accordingly, the court reversed and remanded with instructions to dismiss the complaint for lack of standing. View "A&M Gerber Chiropractic LLC v. Geico General Insurance Co." on Justia Law

Defendant issued a life insurance policy to the Decedent. Plaintiff, Decedent’s former wife, is the primary beneficiary; the contingent beneficiaries are Decedent’s “surviving children equally.” Plaintiff and Decedent divorced. Their Dissolution Agreement required that Plaintiff pay the premium of the Defendant’s policy and required “Husband at his expense [to] maintain" insurance on his life with the parties’ children as irrevocable primary beneficiaries. The couple had minor children at the time of Decedent’s death. When Plaintiff requested payment, Defendant requested that Plaintiff obtain waivers from "other potential parties” and court-appointed guardians for the children or that Plaintiff waive her rights so that Defendant could disburse the proceeds to the minor children. The court dismissed Defendant’s subsequent interpleader complaint and ordered Defendant to disburse to Plaintiff. A jury found that Defendant breached its contract, resulting in actual damages of $350,000; Defendant’s refusal to pay was in bad faith, resulting in additional damages of $87,500; and Defendant’s refusal to pay was either intentional, reckless, malicious, or fraudulent. The jury awarded punitive damages of $3,000,000. A Tennessee statute capped punitive damages at two times the compensatory damages awarded or $500,000, whichever is greater. Plaintiff challenged the cap under the Tennessee Constitution. The Tennessee Supreme Court declined to provide an opinion on certified questions. The district court then rejected Plaintiff’s challenge, reducing Defendant’s punitive damages liability to $700,000. The Sixth Circuit vacated in part, finding that the statutory cap on punitive damages, T.C.A. 29-39-104, violates the individual right to a trial by jury. View "Lindenberg v. Jackson National Life Insurance Co." on Justia Law