Justia Insurance Law Opinion Summaries

Claimant-appellant Kevin Hope injured his right shoulder in 2003 while he was working for Empro Professional Services. He argued to the Industrial Commission that the Idaho Industrial Special Indemnity Fund (ISIF) was liable for part of his income benefits because he was totally and permanently disabled due to pre-existing back and shoulder injuries that combined with his 2003 shoulder injury. If Hope's total and permanent disability resulted from the combined effects of his 2003 shoulder injury and impairments that pre-existed that injury, then ISIF was liable for the portion of income benefits caused by the pre-existing injuries. Hope appealed the Commission's order that ISIF was not liable for any of Hope's benefits. The Commission found that Hope was totally and permanently disabled, but had failed to prove that his disability was a result of pre-existing back and shoulder impairments combined with his last shoulder injury. Hope argued that the Commission's decision was based on errors of law and fact. Finding no reversible error, the Supreme Court affirmed the Commission's order.View "Hope v. Industrial Special Indemnity Fund" on Justia Law

In 2007, Dave Peterson, while riding a motorcycle that he co-owned with Benjamin Gibson, was involved in an accident with a sport utility vehicle driven by Michael Johnson. Peterson died from the injuries he received in the accident. At the time of his death, Peterson lived with his girlfriend, Ashanti Green, and their two minor children. Green filed a wrongful death action in 2008, as tutrix for the minor children, and naming as defendants: Michael Johnson and his insurer, State Farm Mutual Automobile Insurance; Allstate Insurance Company, as the UM insurer of the plaintiff, who contended that coverage extended to Peterson under her policy provisions; and American Southern Home Insurance Company as the alleged insurer of the motorcycle. By a supplemental petition, Allstate was also named as a defendant in its capacity as Gibson's automobile insurer on grounds that UM coverage was provided to Peterson under that policy. The question this case presented for the Supreme Court's review centered on whether a motorcycle accident victim, ostensibly insured under the provisions of the motorcycle co-owner’s uninsured/underinsured motorist (UM) automobile insurance policy, was entitled to UM coverage under the policy even though there was no coverage for the accident under the policy’s liability provisions. Finding the insurer failed to demonstrate a lack of UM coverage, the Supreme Court concluded the district court erred in granting summary judgment dismissing the UM insurer, and the appellate court erred in affirming the ruling. Therefore, the Court reversed and remanded this case for further proceedings.View "Green v. Johnson" on Justia Law

Susan and Rodney Drown filed a medical malpractice action against Associated Women’s Health Specialists, P.C. (Health Specialists) asserting vicarious liability claims arising from the acts or omissions of its physicians. During the relevant period, Health Specialists was insured through a professional liability policy issued by Medical Inter-Insurance Exchange (Exchange). Health Specialists settled for the full amount of the policy and assigned to the Drowns its rights to recover against Exchange. Health Specialists was subsequently declared insolvent, and the Connecticut Insurance Guaranty Association (Association) assumed liability for the Exchange’s obligations. The Association then commenced this declaratory judgment action seeking a declaration that it had no obligations for the Drowns’ claims. Defendants, the Drowns and Health Specialists, counterclaimed. The trial court granted summary judgment in favor of Defendants. The Appellate Court reversed. The Supreme Court affirmed, holding (1) the Exchange’s preinsolvency breach of its duty to defend Health Specialists did not estop the Association from challenging its liability under the policy; and (2) the policy unambiguously did not cover Health Specialists for its vicarious liability in this case.View "Conn. Ins. Guar. Ass’n v. Drown" on Justia Law

Miles Cobrun was killed after he was struck by a vehicle driven by Robert Shill. Peggy Spaeth, Cobrun’s wife, filed a wrongful-death action against Robert and his insurer. Robert sought additional coverage under the liability policy of his parents issued by Cincinnati Insurance Company (CIC). CIC denied coverage. Robert then filed this declaratory-judgment action seeking a declaration that CIC owed him a duty of indemnification in the wrongful-death case. The trial court consolidated the declaratory-judgment and underlying wrongful-death actions. The trial court granted summary judgment for CIC. The appellate court reversed. At issue before the Supreme Court was the meaning of the term “domicile,” the crucial policy term at issue in regard to coverage for Robert under his parents’ CIC umbrella policy. The Supreme Court reversed, holding (1) in accordance with this Court’s previous jurisprudence, the definition of domicile is where a person resides, where he intends to remain, and where he intends to return when away temporarily; and (2) under this definition, Robert was not an insured “resident relative” under the umbrella policy at issue.View "Schill v. Cincinnati Ins. Co." on Justia Law

Mid-Continent Casualty Company brought a declaratory judgment action to settle an issue with its commercial commercial general liability (CGL) policy issued to Pennant Service Company. In 2001, True Oil Company, an owner and operator of oil and gas wells, entered into a master service contract (MSC) with Pennant for work on a well in Wyoming. The MSC included a provision whereby Pennant agreed to indemnify True Oil resulting from either Pennant or True Oil's negligence. In July 2001, Christopher Van Norman, a Pennant employee, was injured in an accident at True Oil's well. Van Norman sued True Oil in Wyoming state court for negligence. In accordance with the MSC's indemnity provision, counsel for True Oil wrote to Pennant requesting indemnification for its defense costs, attorney fees, and any award that Van Norman might recover against it. Mid-Continent refused to defend or indemnify True Oil based on Wyoming's Anti-Indemnity Statute, which invalidates agreements related to oil or gas wells that "indemnify the indemnitee against loss or liability for damages for . . . bodily injury to persons." In May 2002, True Oil brought a federal action against Mid-Continent for declaratory relief, breach of contract (CGL policy), and other related claims. In February 2005, the district court granted Mid-Continent summary judgment, determining that the MSC's indemnity provision, when invoked with respect to claims of the indemnitee's own negligence was unenforceable as a matter of public policy. The court held that Mid-Continent was not required to defend or indemnify True Oil in the underlying suit as it then existed because "where an indemnification provision in a MSC is void and unenforceable, the insurer never actually assumed any of the indemnitee's liabilities under the policy." The district court granted summary judgment to True Oil, determining Mid-Continent breached its duty to defend and indemnify True Oil. As damages, the court awarded True Oil the amount it paid to settle the underlying suit and the attorney fees and costs incurred in defending itself. Mid-Continent appealed the district court's judgment. Finding no reversible error, the Tenth Circuit affirmed.View "Mid-Continent v. True Oil Company" on Justia Law

Rose’s Bidwell, Ohio home was insured by State Farm. Rose also had a Personal Articles Policy that covered two Rolex watches. In 2009, a fire destroyed the house. Later that day, Rose made a claim of $696,373.30 for the dwelling, $512,765.57 for damage to personal property, $30,000 for living expenses, and $29,850 for one Rolex watch. State Farm’s investigator took a recorded statement from Rose and his wife and spoke with Rose’s ex-wife; gathered information by searching public records; and retained a fire investigator, who issued a report, finding that the fire originated in the kitchen, that electrical items did not appear to be the source of the fire, and that neither smoking nor cooking was suspected as a cause. The report indicated that non-reported human action could not be eliminated as a cause, but did not specify that the fire was deliberately ignited. State Farm denied Rose’s claims, alleging that Rose violated “Intentional Acts” and “Concealment or Fraud” conditions of his policies. Rose sued, alleging breach of contract and bad faith. The district court declined to grant summary judgment on the “Intentional Acts” clause, but found that some answers Rose gave, failing to identify multiple tax liens and judgments, in statements to State Farm were misleading and material, and granted summary judgment on the other claim. The Sixth Circuit reversed, finding material questions of fact concerning whether Rose misled investigators.View "Rose v. State Farm Fire & Cas. Co." on Justia Law

The Medicare as a Secondary Payer Act, 42 U.S.C. 1395y(b)(2) precludes Medicare from providing benefits when a “primary plan” could be expected to pay. When the primary plan does not promptly pay medical expenses, Medicare makes conditional payments and is entitled to reimbursement. Under the New Jersey Collateral Source Statute (NJCSS), N.J. Stat. 2A:15–97, a tort plaintiff cannot recover damages from a defendant when she has already received funding from a different source. Taransky was injured when she fell at a shopping center. Medicare conditionally paid for her care. She sued the owner, seeking damages for bodily injury, disability, pain and suffering, emotional distress, economic loss, and medical expenses. She settled for $90,000, granting a full release, stating that liens or subrogation claims would be satisfied from settlement proceeds, and stating that Taransky would indemnify the owner with respect to such claims. Based on the NJCSS, Taransky then claimed that her Medicare expenses were not included in the settlement and obtained an order that the settlement was solely recovery for bodily injury, disability, pain and suffering, emotional distress, and non-economic, otherwise-uncompensated loss. A Medicare contractor demanded reimbursement of $10,121.15. Taransky refused to pay, arguing that a tortfeasor was not a “primary plan” and that reimbursement would be inequitable because she had not recovered medical expenses. An ALJ ruled against Taransky. The Medicare Appeals Council affirmed. The district court dismissed, holding that it lacked jurisdiction over proportionality and due process claims because she had not raised them before the agency; that the NJCSS did not apply to conditional Medicare benefits; and that the MSP Act authorized reimbursement from the settlement. The Third Circuit affirmed. View "Taransky v. Sec'y U.S. Dep't of Heath & Human Servs." on Justia Law

Warner, insured by State Farm, was involved in an automobile accident. Following the accident, Michigan Spine provided Warner with about $26,000 of neurological treatment. State Farm denied coverage, stating that Warner’s condition was the result of a preexisting condition. Michigan Spine submitted the claim to Medicare, which approved a conditional payment of $5,000 under the Medicare Secondary Payer Act, 42 U.S.C. 1395y. Michigan Spine sued State Farm under Michigan’s No-Fault Act and the Medicare Secondary Payer Act, which permits private causes of action against primary plans that fail to pay medical expenses for which they are responsible. The district court dismissed, holding that a private party can recover under the Secondary Payer Act only if a “primary plan” has failed to provide appropriate reimbursement only because the planholder is entitled to Medicare benefits, and State Farm did not deny coverage on that basis. The Sixth Circuit reversed and remanded. Although the text of the Secondary Payer Act is unclear as to whether a private cause of action is available against a non-group health plan that denies coverage on a basis other than Medicare eligibility, accompanying regulations and congressional intent indicate that the requirement applies only to group health plans and not to non-group health plans. Michigan Spine may pursue its claim under the Secondary Payer Act. View "MI Spine & Brain Surgeons, PLLC v. State Farm Mut. Auto Ins Co" 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

Katie Graf was injured on the premises of Fat Cat Bar & Grill. Graf was awarded $500,000 in damages and $111,124 in prejudgment interest against Torcia & Sons, Inc, the owner of Fat Cat. Torcia was insured by Hospitality Mutual Insurance Company under a liquor liability insurance policy. Hospitality disclaimed liability for the prejudgment interest portion of the award. Consequently, Graf was granted a writ of attachment on Torcia’s liquor license to secure the excess payment. Graf and Torcia sought payment from Hospitality for the cost of a bond to release the attachment. When Hospitality refused, the parties entered into a settlement agreement under which Graf discharged the attachment of the liquor license and Torcia assigned its rights against Hospitality to Graf. Graf sued Hospitality. A federal judge granted Hospitality’s motion to dismiss, concluding (1) the $500,000 damages award represented the full extent of recoverable proceeds under the policy, and (2) to require Hospitality to pay for the cost of the bond would have expanded Hospitality’s liability in contravention of the terms of the policy. The First Circuit affirmed, holding that the policy unambiguously obligated Hospitality to pay the cost of bonds only for bond amounts that, together with any other liabilities, fell within the liability cap of $500,000. View "Graf v. Hospitality Mut. Ins. Co." on Justia Law