Justia Insurance Law Opinion Summaries

In a dispute between Timothy Towne and the Unified School District No. 259, the Supreme Court of the State of Kansas reversed the lower courts' rulings, finding that self-insured school districts are not exempt from regulation under the Kansas Insurance Code. Towne, an employee of the school district, was injured in a car accident and received benefits from the school district's self-funded medical benefit plan. After Towne recovered funds from a third party, the school district required him to reimburse the plan. Towne claimed that the plan's subrogation clause, which allowed for this reimbursement, was unenforceable under Kansas regulations. The district court and Court of Appeals held that the school district's plan was exempt from the Kansas Insurance Code, thereby making the subrogation clause enforceable. However, the Supreme Court reversed, holding that the medical benefit plan offered by the school district is a "health benefit plan" and the school district is a "health insurer" under Kansas law, making the school district subject to the anti-subrogation regulation. The case was remanded for further proceedings. View "Towne v. U.S.D. 259" on Justia Law

Lawyers brought claims against schools under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400. After the claims failed, the schools sought their attorney’s fees from the lawyers under the IDEA’s fee-shifting provision. The School Districts alleged that, during the administrative process, the attorneys presented sloppy pleadings, asserted factually inaccurate or legally irrelevant allegations, and needlessly prolonged the proceedings. The lawyers asked their insurer, Wesco, to pay the fees. Wesco refused on the ground that the requested attorney’s fees fell within the insurance policy’s exclusion for “sanctions.”The Sixth Circuit affirmed summary judgment in favor of Wesco. The IDEA makes attorney misconduct a prerequisite to a fee award against a party’s lawyer, so the policy exclusion applied. The court noted that the legal community routinely describes an attorney’s fees award as a “sanction” when a court grants it because of abusive litigation tactics. View "Wesco Insurance Co. v. Roderick Linton Belfance, LLP" on Justia Law

Two female students brought claims under Title IX, 20 U.S.C. 1681–88, alleging that the School District failed to prevent and inappropriately responded to sexual misconduct by a male student. The incidents occurred while the District did not have insurance coverage for sexual misconduct and molestation. After the District settled the suit for $1.5 million, its insurers sought a declaration of their rights and obligations under the District’s errors-and-omissions coverage. The district court held that the errors and omissions coverage applies although the policy contains a sexual misconduct exclusion. The judge stated that the exclusion was ambiguous and could be read to exclude only sexual misconduct by a school employee and might not bar coverage for “reactions to” a student’s sexual misconduct.The Seventh Circuit reversed. The sexual-misconduct exclusion is not ambiguous in precluding coverage for “[a]ny” sexual misconduct or molestation of “any person” and related allegations. Even if the sexual-misconduct exclusion barred only coverage for employees’ actions, the exclusion still applies. The District is not directly liable for misconduct by students. A school district can be liable for discrimination in cases of student-on-student sexual misconduct under Title IX only if the district has notice and is deliberately indifferent. By excluding coverage for “allegations relating” to sexual misconduct, the exclusion necessarily bars coverage for “reactions to” sexual misconduct. View "Netherlands Insurance Co. v. Macomb Community Unit School District" on Justia Law

Anthony Burke was a child diagnosed with an autism-spectrum disorder. Throughout the first six months of 2010, Anthony and his family were covered by a group health insurance policy (the “Policy”) with Appellant, Independence Blue Cross (“Insurer”), maintained through Anthony’s father, John Burke’s employer. Initially, Anthony received “applied behavioral analysis” (ABA) treatment at home. In August 2009, before an Autism Coverage Law became effective relative to the Burkes’ coverage, the family requested benefits, under the Policy, for ABA services to be provided at the parochial elementary school attended by Anthony. Insurer denied coverage on account of an express place-of-services exclusion in the Policy delineating that services would not be covered if the care was provided in certain locations, including schools. In a motion for judgment on the pleadings, Mr. Burke argued that the place-of-services exclusion in the Policy was nullified, as it pertained to in-school services, by the Autism Coverage Law. The Pennsylvania Supreme Court found that the Pennsylvania Legislature intended to permit only general exclusions that would not substantially undermine the mandatory coverage requirement: “we simply do not believe that the Legislature intended to permit insurers to exclude coverage in the sensory-laden educational environment where children spend large portions of their days, or to require families to litigate the issue of medical necessity discretely in individual cases to secure such location-specific coverage for the treatment.” The Supreme Court affirmed judgment in favor of the Burkes, and that the Policy’s place-of-services exclusion was ineffective under the Autism Recovery Law. View "Burke v. Independence Blue Cross" on Justia Law

The Supreme Court affirmed the circuit court’s order rejecting the Board of Trustees of the Kentucky Schools Boards Insurance Trust’s (KSBIT) claim of governmental immunity and thus denying its motion for summary judgment. In this complaint filed by the Deputy Rehabilitator of the Kentucky School Boards Trust Workers’ Compensation Self-Insurance Fund and of the Kentucky School Boards Insurance Trust Property and Liability Self Insurance Fund against the KSBIT Board for, inter alia, negligence, the KSBIT Board asserted a defense of governmental immunity and moved for summary judgment. The circuit court determined that the KSBIT Board was not entitled to governmental immunity because its “parent” entity was not an agency of state government that enjoyed governmental immunity and because it did not perform a function that was integral to state government. The Supreme Court affirmed, holding (1) because the KSBIT Board is not the offspring of local public school boards, it does not have the governmental immunity accorded to those governmental bodies; and (2) the KSBIT Board does not serve a function integral to state government. View "Board of Trustees of Kentucky School Boards Insurance Trust v. Pope" on Justia Law

Tenth-grader Jesus Rodriguez was injured while traveling to a soccer match in the bed of a pickup truck driven by a fellow student and teammate. Mutual of Omaha Insurance Company had issued a policy to the Kansas State High School Activities Association, which administered various extracurricular activities in the state. Rodriguez’s mother (Plaintiff) filed a claim with Mutual of Omaha. Mutual of Omaha denied the claim, reasoning that the travel during which Rodriguez was injured did not qualify as covered under the policy. Plaintiff sued the school district, Mutual of Omaha, and other defendants. The district judge held that Mutual of Omaha should be dismissed as a defendant in the case because Rodriguez’s travel was neither authorized by the school district nor subject to reimbursement, the two requirements for “covered travel” under the definition in the Mutual of Omaha policy. The court of appeals affirmed, holding that the travel involved in this case did not qualify as subject to reimbursement, and thus there was no coverage under the policy. The Supreme Court reversed, holding that the travel during which Rodriguez was injured was “authorized” and “subject to reimbursement,” and therefore, there was coverage under the policy language. View "Rodriguez v. United Sch. Dist. No. 500" on Justia Law

Central States, an employee benefit plan governed by the Employee Retirement Income Security Act, provides health insurance for Teamsters and their families. Guarantee Trust provides sports injury insurance for student athletes. Each of 13 high school and college athletes, all children of Teamsters, holds general health insurance from Central and sports injury insurance from Guarantee. Each suffered an injury while playing sports (most often football) between 2006 and 2009, and sought coverage from both companies. Each time Guarantee refused to pay the athlete’s medical expenses, and each time Central paid the bill under protest. The district court entered a declaratory judgment under ERISA, 29 U.S.C. 1132(a)(3)(B), that, when coverage of student athletes overlap, Guarantee must pay, and ordered Guarantee to reimburse Central for the payouts to the 13 students. The Sixth Circuit, affirmed in part characterizing the case as a “you first” paradox, or ‘gastonette.” An ERISA plan may coordinate benefits with another policy, but may not redefine the coverage of another policy. Absent the Central plan, the Guarantee policy would cover the sports injuries at issue without question. An ERISA plan must keep doing what it would do in another plan’s absence. That amounts to coordinating benefits, not redefining coverage. View "Cent St, SE & SW Areas Health & Welfare Fund v. First Agency, Inc." on Justia Law

Plaintiff, a student cheerleader paralyzed while practicing a tumbling maneuver in gymnastics class, sought coverage under the insurance policy that Mutual issued to Prairie View as a member of the NCAA. Mutual argued that the policy covered student cheerleaders who were injured during cheerleading practice sessions. The court concluded that the gymnastics class could be considered a "practice session" under the policy; the coach authorized, supervised, and organized the cheerleading activities during the gymnastics class; the activities performed during the class were performed in preparation for a Qualifying Intercollegiate Sport team competition where plaintiff's primary purpose in taking the class was to improve his skills as a cheerleader; and the activities during the class were directly associated with the activities of a Qualifying Intercollegiate Sport team. Accordingly, the court affirmed the district court's grant of summary judgment in favor of plaintiff. View "Patterson v. Mutual of Omaha Ins. Co." on Justia Law

This case stemmed from allegations of improprieties at the Brownsville Independent School District (BISD), including allegations that appellants were manipulating the bidding process for the BISD's Stop Loss Insurance Coverage. Appellants, all members of the BISD Board of Trustees (Board), argued that the district court should have granted their motion for summary judgment because they were entitled to qualified immunity. The court found no error in the district court's holding that genuine issues of material fact existed with respect to whether appellants violated appellee's First Amendment rights. The court also held that the district court did not err when it denied summary judgment on appellants' qualified immunity defense.

While away for a competition in a school-supported event, students caused damage to a motel where they were lodging. The motel's property insurer paid to repair the damage then exercised its right of subrogation pursuant to its insurance contract with the motel to seek to recover compensation for those responsible for the loss. The insurer filed a complaint against the school district, alleging it was liable for breach of contract based on its failure to protect and safeguard the property from damage during the period of occupancy and to refrain from activities that would damage the property. The superior court granted the school district's motion for summary judgment. The Supreme Court affirmed, holding that because the school district did not undertake to be responsible to pay damages in a subrogation action, the insurer's action against the school board was barred.