Justia Insurance Law Opinion SummariesArticles Posted in Hawaii Supreme Court
Nautilus Ins. Co. v. Lexington Ins. Co.
VP & PK purchased an insurance policy from Lexington Insurance Company for work on a construction site. Kila Kila, one of VP & PK’s subcontractors, purchased an insurance policy from Nautilus Insurance Company. Both policies contained an “other insurance” provision and included duties to defend and indemnify. When VP & PK and Kila Kila were sued for damages resulting from the construction, Nautilus funded the defense of both Kila Kila and VP & PK. Lexington satisfied the judgment against VP & PK but did not contribute to the defense costs. Nautilus filed a complaint seeking (1) a declaration that Lexington owed VP & PK a duty to defend, which it breached; and (2) equitable contribution from Lexington for defense costs. The U.S. district court granted summary judgment for Lexington, holding that Lexington’s policy was in excess to Nautilus’s policy, and therefore, Lexington’s duty to defend was not triggered. The Hawaii Supreme Court accepted certified questions from the court of appeals and held, inter alia, that (1) an “other insurance” clause purporting to release an otherwise primary insurer of the duty to defend if the insurer becomes excess as to liability is enforceable, but only as between two or more insurers seeking to allocate or recover defense costs; and (2) an otherwise primary insurer who becomes an excess insurer by operation of an “other insurance” clause has a duty to defend as soon as a claim is tendered to it and there is the mere possibility that coverage of that claim exists under its policy. View "Nautilus Ins. Co. v. Lexington Ins. Co." on Justia Law
Willis v. Swain
Petitioner was a passenger in an uninsured vehicle that was in an accident. At the time, Petitioner had a certificate policy issued by the Department of Human Services through its Joint Underwriting Program (JUP). The JUP Bureau determined Petitioner was entitled to receive benefits under the JUP and assigned Petitioner's claim to Respondent. Respondent, however, denied Petitioner's request for coverage because Petitioner's certificate policy did not include uninsured motorist coverage. Petitioner sued Respondent, alleging claims of, inter alia, bad faith. The circuit court entered summary judgment for Respondent. The intermediate court of appeals (ICA) affirmed, concluding that an underlying insurance contract was required to assert a claim of bad faith against an insurer. The Supreme Court vacated the judgments of the lower courts, holding (1) under the JUP, the insurer assigned to a claim owes the same rights to the person whose claim is assigned to it as the insurer would owe to an insured to whom the insurer had issued a mandatory motor vehicle insurance policy; (2) the insurer's good faith covenant implied in such motor vehicle policies applies to claimants under the assigned claim procedure despite the absence of an insurance policy; and (3) accordingly, Respondent owed Petitioner a duty of good faith. View "Willis v. Swain " on Justia Law
Jou v. Schmidt
Appellant, a medical doctor, challenged the partial denial of personal injury protection benefits after treating a patient insured by Appellee. While Appellant's request for an administrative hearing was pending in the Insurance Division of the State Department of Commerce and Consumer Affairs, the patient's available benefits under her policy were exhausted on account of payments to Appellant and other medical providers. Because of the exhaustion, the Insurance Division dismissed Appellant's claim. The circuit court and intermediate court of appeals (ICA) affirmed. The circuit court also denied Appellant's request for attorney's fees and costs under Haw. Rev. Stat. 431:10C-211(a), which allows fees and costs to be awarded even when a party does not prevail on its claim for benefits, finding Appellant's pursuit of the benefits to be unreasonable. The ICA affirmed. Appellant appealed the denial of attorney's fees. The Supreme Court vacated the ICA's judgment and the circuit court's final judgment, holding that the circuit court and ICA erred in concluding that Appellant's claim was unreasonable due to exhaustion of benefits where Plaintiff had made his claim prior to that exhaustion. Remanded. View "Jou v. Schmidt" on Justia Law
Hart v. TICOR Title Ins. Co.
Charles and Lisa Hart filed a complaint against TICOR Title Insurance Company for breach of contract after TICOR refused to defend the Harts under their title insurance policy against an escheat claim asserted by the State. The district court entered judgment in favor of TICOR and awarded TICOR attorneys' fees and costs. The Intermediate Court of Appeals (ICA) affirmed. The Supreme Court vacated the ICA's judgment and reversed the judgment of the district court in favor of TICOR and vacated the district court's award of attorneys' fees and costs to TICOR, holding that TICOR owed a duty to defend the Harts under the policy against the State's claim and prayer for affirmative relief. Remanded to the district court with instructions (1) to enter judgment in favor of the Harts, and (2) to determine an award of attorneys fees and costs to the Harts.
First Ins. Co. of Haw., Ltd. v. A&B Props., Inc.
Employee was allegedly involved in a work-related accident on property owned by Corporation. Insurer was Employer's insurance carrier. While paying Employee's workers' compensation benefits, Insurer filed suit against Corporation, asserting its right of subrogation. After the statute of limitations period had elapsed, Employee sought to intervene in Insurer's suit, and the circuit court granted Employee's request. Corporation subsequently moved for summary judgment on the ground that Haw. Rev. Stat. 386-8, which governs the right of an employee to intervene in an employer's third party liability lawsuit under workers' compensation law, did not allow an employee to intervene after the statute of limitations had expired. The circuit court granted Corporation's motion and entered judgment against Employee. The Supreme Court vacated the circuit court's judgment and remanded, holding that Employee could intervene in Insurer's action against Corporation because section 386-8 did not limit Employee's right to intervene in Insurer's timely filed lawsuit.
Alohacare v. Ito
Alohacare, a health maintenance organization (HMO), submitted a proposal to the Department of Human Services to bid for a Quest Expanded Access contract to provide healthcare services for participants in the state's Medicaid program. The Department of Human Services awarded Quest contracts to United HealthCare Insurance (United) and WellCare Health Insurance (Ohana) but not to Alohacare. Alohacare petitioned the Insurance Commissioner of the Department of Commerce and Consumer Affairs for declaratory relief that the Quest contracts required the accident and health insurers to carry an HMO license. The Commissioner concluded that the license was not required to offer the Quest managed care product because the services required under the contracts were not services that could be provided only by an HMO. The circuit court affirmed. The Supreme Court affirmed, holding (1) AlohaCare had standing to appeal the Commissioner's decision; (2) both accident and health insurers and HMOs were authorized to offer the model of care required by the Quest contracts; and (3) this holding did not nullify the Health Maintenance Organization Act.
Miller v. Hartford Life Ins. Co.
This lawsuit arose from an insurance contract between Plaintiff, who had cancer, and Defendants, two insurance companies. In May 2007, Plaintiff applied for long-term care benefits under her policy. Defendants found her eligible for benefits and paid her caregiver for services beginning in October 2007. Defendants provided coverage for Plaintiff for almost a year, then terminated her benefits on August 25, 2008. Nearly five months later, on January 23, 2009, Defendants reinstated her benefits retroactively. After Defendants terminated Plaintiff's benefits, she attempted suicide. On July 9, 2009, Plaintiff sued Defendants, alleging, inter alia, insurer bad faith and negligent and intentional infliction of emotional distress. The Supreme Court subsequently accepted a question certified to it by the district court and answered it by holding that if a first-party insurer commits bad faith, an insured need not prove the insured suffered economic or physical loss caused by the bad faith in order to recover emotional distress damages caused by the bad faith.
Ahn v. Liberty Mut. Fire Ins. Co.
In two consolidated cases, Liberty Mutual Fire Insurance Company denied personal injury protection (PIP) benefits to Chung Ahn and Kee Kim (collectively, Insureds) for treatments after motor vehicle accidents. Insureds each sought administrative reviews with the Insurance Division of the Department of Commerce and Consumer Affairs (DCCA). The DCCA granted summary judgment to Liberty Mutual based on the holding in Wilson v. AIG Hawaii Insurance Company, which stated that unless an insurer's non-payment of PIP benefits jeopardizes an insured's ability to reach the minimum amount of medical expenses required to file a tort lawsuit, insureds are not real parties in interest allowed to pursue lawsuits seeking payment of PIP benefits to providers. The circuit court reversed, concluding that Act 198 of 2006 had legislatively overruled Wilson. The intermediate court of appeals (ICA) upheld the circuit court. On appeal, the Supreme Court (1) overruled Wilson, holding that insureds are real parties in interest in actions against insurers regarding PIP benefits; and (2) vacated the ICA and circuit court judgments because at the time of judgment, Act 198 of 2006 was not retrospective, and the real party in interest holding of Wilson was still in effect. Remanded.