Justia Insurance Law Opinion Summaries

The Fifth Circuit Court of Appeals certified a question of Louisiana law to the Louisiana Supreme Court. The questions stemmed from the claims handling by State Farm Fire & Casualty Company following an automobile accident. In 2005, Danny Kelly was injured when the insured, Henry Thomas, and he were traveling in opposite directions. Both Kelly and a witness told police that Thomas had failed to yield to oncoming traffic, but Thomas maintained he was not at fault. Kelly was taken to a hospital by ambulance and treated for a fractured femur. He remained hospitalized for approximately six days. The cost of his medical care totaled $26,803.17. Both questions related to claims that an insurer was liable for subjecting its insured to a court judgment in excess of insurance policy limits. The Louisiana Court responded to the questions: (1) A firm settlement offer was unnecessary for an insured to sustain a cause of action against an insurer for a bad-faith failure-to-settle claim, because the insurer's duties to the insured can be triggered by information other than the mere fact that a third party has made a settlement offer; and (2) an insurer could be found liable under La. R.S. 22:1973(B)(1) for misrepresenting or failing to disclose facts that are not related to the insurance policy’s coverage because the statute prohibits the misrepresentation of “pertinent facts,” without restriction to facts “relating to any coverages.” View "Kelly v. State Farm Fire & Casualty Co." on Justia Law

Across the state, plaintiffs were filing complaints against health care providers from whom they sought treatment following automobile accidents and with whom their health care insurers had contracted reimbursement rates for the services rendered. At issue was the legality of these providers' policy of collecting or attempting to collect the undiscounted rate from the insured if a liability insurer may be liable, implemented through the filing of medical liens against plaintiffs' lawsuits and settlements pursuant to the health care provider lien statute. The Supreme Court granted certiorari to resolve a conflict among the appellate courts of this state on the issue of whether a class action is the superior method for adjudicating actions brought pursuant to the Health Care Consumer Billing and Disclosure Protection Act ("Balance Billing Act"). After review, the Court found plaintiffs in the Third Circuit Court of Appeal proceeded as a class, while plaintiffs in the Second Circuit Court of Appeal were denied class certification. After reviewing the record and the applicable law, the Supreme Court found the class action was superior to any other available method for a fair and efficient adjudication of the common controversy over the disputed billing and lien practices. Accordingly, the Court reversed the judgment of the Second Circuit. Finding all other requirements for class certification properly met, the Court reinstated the judgment of the trial court. View "Baker v. PHC-Minden, L.P." on Justia Law

In 2010, Debra Hackett was seriously injured in an accident in Sacramento County in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine McDonold jackknifed and collided with the vehicle being driven by Hackett. In 2012, the Hacketts filed a personal injury action in Sacramento County against Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages. Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC), who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking had an excess liability insurance policy with Lexington Insurance Company (LIC), who retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as counsel. In 2014, Silva Trucking and McDonold brought suit in Sacramento County against LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged legal malpractice. The gravamen of the complaint was that the insurers unreasonably refused to accept the policy limit demand when the insured’s liability was clear and damages were known to be in excess of the policy limit. The attorneys failed to advise their insurer clients to accept the demand and the consequences of failing to do so, and failed to advise Silva Trucking and McDonold of their need for personal counsel. LIC and CCIC responded with demurrers. Lewis Brisbois answered with a general denial and asserted 22 affirmative defenses. Under Code of Civil Procedure section 396b, subdivision (a), where an action has been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider opposition to the motion to transfer and may retain the action in the county where filed to promote the convenience of witnesses or the ends of justice. The question this case presented for the Court of Appeal's review was whether, in a multi-defendant case, an answer must be filed by all defendants before the court may consider opposition to the motion to transfer venue. The Court concluded the answer was yes. In this case, the trial court considered opposition to the motion before all defendants had answered the complaint. Accordingly, the Court issued a preemptory writ of mandate directing the trial court to vacate its order denying the motion to transfer and to issue a new order granting the motion. View "Cholakian & Assoc. v. Super. Ct." on Justia Law

In 1998, a driver hit pedestrian-plaintiff Roberta Folks with the side mirror of his vehicle and injured her. State Farm, the driver’s insurer, informed Folks she could receive basic personal injury protection (“PIP”) benefits under the driver’s policy. She received $104,000 in medical expenses and essential services. In 2002, State Farm told her she had exhausted the benefits available to her under the policy. Folks subsequently joined a lawsuit seeking additional PIP benefits in 2004. Over the course of the litigation, Folks unsuccessfully sought to certify a class on three attempts. In response to her last attempt in 2011, the district court determined she failed to satisfy the requirements of Rule 23(a) and Rule 23(b)(2) and denied class certification. A jury heard Folks’s individual claims and found in her favor in 2012. The district court amended the judgment in 2013 to correct errors in the calculation of damages. On appeal, Folks alleged the district court erred in denying class certification. She also argued the district court miscalculated the treble damages and statutory prejudgment interest to which she is entitled. Finding no error, the Tenth Circuit affirmed. View "Folks v. State Farm Mutual" on Justia Law

In 2009, George Lawrence, while employed by Schneider National Inc., suffered a work-related injury when he slipped and fell in a parking lot leased by Domtar Paper Company, and allegedly owned and maintained by Commercial Net Lease Realty Services, Inc., Commercial Net Lease Realty Trust, Commercial Net Lease Realty, Inc., National Retail Properties, Inc., and National Retail Properties Trust. As a result of this injury, Schneider's workers' compensation carrier, Liberty Mutual Insurance Company, paid Lawrence $33,929.23 in workers' compensation benefits. The issue this case presented for the Supreme Court's review centered on whether section 319 of the Pennsylvania Workers' Compensation Act (WCA) conferred on employers or their workers' compensation insurers a right to pursue a subrogation claim directly against a third-party tortfeasor when the injured employee took no action against the tortfeasor. Based on established precedent, the Superior Court held that Section 319 did not permit employers/insurers to commence an action directly against the third-party tortfeasor, and affirmed the trial court's grant of preliminary objections in favor of the tortfeasors. Agreeing with that reasoning, the Supreme Court affirmed. View "Liberty Mutual Ins. Co. v. Domtar Paper Co." on Justia Law

In 2004 the law firm was engaged to bring a medical malpractice action on behalf of a 14-year-old girl who had become paralyzed after surgery. The firm filed two complaints in Virginia state court. Each was dismissed: the first without prejudice for failure to correctly caption a pleading; the second with prejudice for filing outside the statute of limitations. Shortly thereafter, the firm applied for and obtained a new professional liability insurance policy. Asked whether there were “any circumstances which may result in a claim being made,” the firm responded “no.” The firm informed the insurer of the incident in 2009, but represented that it had occurred in 2008. In 2011, the insurance company noticed that the firm had made the caption error in 2006, before the policy period. In 2012, it notified the firm that it reserved its rights to deny coverage under the known risk exclusion. The girl filed a legal malpractice action in 2012, and was awarded $1,750,000 in 2013. The court found, as a matter of law and without expert testimony, that the firm was on notice of the potential malpractice claim and rejected arguments that the insurer had forfeited or waived its right to deny coverage. The D.C. Circuit affirmed. View "Chicago Ins. Co. v. Paulson & Nace, PLLC" on Justia Law

Plaintiffs, husband and wife, were struck by a motor vehicle being driven by Adam Pond while they were on a walk. At the time of the accident, the Connors owned a vehicle insured by Government Employees Insurance Co. (GEICO). The terms of the policy included underinsured motorist (UIM) coverage of $300,000 per person/$300,000 per accident. Pond maintained automobile liability insurance with Allstate Insurance Co. limited to $100,000 per person/$300,000 per accident. Plaintiffs settled with Allstate. Pursuant to the settlement, Allstate paid $100,000 to each plaintiff. Plaintiffs then submitted claims for underinsured motorist coverage to GEICO under the terms of the policy, seeking $300,000 total from GEICO. GEICO paid Plaintiffs $100,000. Plaintiffs then filed a complaint for declaratory judgment against GEICO as to the $200,000 in dispute. The trial court granted summary judgment in favor of GEICO. The Court of Appeals affirmed, holding that under the unambiguous terms of the policy, the total damages due to Plaintiffs as a couple were capped at $300,000, and because Allstate already paid each Plaintiff $100,000, which amounts were deducted from the amount that GEICO would be required otherwise to pay Plaintiffs, GEICO was responsible for the remaining $100,000. View "Connors v. Gov't Employees Ins. Co." on Justia Law

Patricia Doss filed a claim for workers' compensation with the Department of Labor and Industries after suffering chemical exposure during the course of employment with The Boeing Company. The exposure permanently aggravated her preexisting asthma, and she needed ongoing medical treatment as a result of these combined injuries. The Department determined that the combined effects of Doss's preexisting asthma and the aggravation of this condition during her Boeing employment rendered her permanently totally disabled. A right knee injury also contributed to Doss's preexisting disability. Due to her permanent total disability, the Department awarded Doss a pension. Boeing agreed to pay for the portion of the pension attributable to Doss' workplace injury but challenged the Department's order requiring it to pay for her postpension medical treatment. Boeing argued that the cost of this treatment should also be covered by the second injury fund. Boeing appealed to the Board. The issue this case presented for the Supreme Court's review centered on whether Boeing, as a self-insured employer, was entitled to second injury fund relief for a Doss' postpension medical costs. The Washington Supreme Court held that the plain language of the governing statutes did not allow a charge to the second injury fund for postpension medical treatment. Accordingly, the Court reversed the Court of Appeals. View "Boeing Co. v. Dep't of Labor & Indus." on Justia Law

In 2009, claimant sought workers' compensation benefits for a work-related injury. Claimant had preexisting multilevel degenerative disc disease and a history of intermittent low back pain with some bilateral radiation to his legs. SAIF, the employer's workers' compensation insurer, accepted a claim for a lumbar strain. Claimant subsequently sought acceptance of a combined condition, which SAIF ultimately denied on the ground that the accepted injury was no longer the major contributing cause of the combined condition. The Workers' Compensation Board upheld SAIF's denial, and claimant sought judicial review in the Court of Appeals. On appeal to that court, claimant contended that, in determining the compensability of his claim, the board erroneously had framed the inquiry in terms of whether the accepted condition continued to be the major contributing cause of his disability or need for treatment. In claimant's view, the proper inquiry was whether his accidental injury continued to be the major contributing cause of his combined condition. Claimant contended that there was no evidence that that injury was no longer the major contributing cause of his disability or need for treatment. While judicial review was pending before the Court of Appeals, claimant died of causes unrelated to his workplace injury, without a surviving spouse or other beneficiary entitled to a death benefit. The Court of Appeals held that claimant's estate, through his personal representative, was not authorized to pursue the claim to final determination under ORS 656.218(3) on the grounds that: (1) the estate was not one of the "persons" described in 656.218(5); and (2) the phrase "unpaid balance of the award" in the second sentence of subsection (5) restricted an estate's entitlement to permanent partial disability benefits that were awarded before a worker's death. The Supreme Court reversed the appellate court: in the absence of persons who would have been entitled to receive death benefits if the injury causing a deceased worker's disability had been fatal, an award of permanent partial disability benefits that is finally determined after the worker's death pursuant to ORS 656.218(3) is payable to the worker's estate under ORS 656.218(5). The case was remanded for further proceedings. View "Sather v. SAIF" on Justia Law

This dispute arose from the 2010 explosion and sinking of the Deepwater Horizon oil-drilling rig, which killed eleven people and resulted in extensive subsurface discharge of oil into the Gulf of Mexico for nearly three months. The issue in this case concerned the extent of insurance coverage afforded to the oil-field developer, BP, as an additional insured under primary- and excess-insurance policies procured by Deepwater’s owner, Transocean. The U.S. Court of Appeals for the Fifth Circuit certified to the Supreme Court two questions regarding the interplay between the insurance policies and provisions in a drilling contract giving rise to Transocean’s obligation to name BP as an additional insured. The Court held (1) BP is not entitled to coverage under the Transocean insurance policies for damages arising from the subsurface pollution because BP, not Transocean, assumed liability for such claims; and (2) based on the Court’s analysis of the first issue, it did not reach the second question. View "In re Deepwater Horizon" on Justia Law