Justia Insurance Law Opinion Summaries

An overhead garage door struck Respondent Larry Crossgrove in the head while he made a delivery to a Wal-Mart store in Trinidad. Respondent required medical treatment for injuries suffered in the accident. His healthcare providers billed almost $250,000 for their services. Respondent's insurer however, paid the providers $40,000 in full satisfaction of the bills. Respondent subsequently filed suit against Wal-Mart. The issue before the Supreme Court was whether the appellate court erred when it held that the trial court incorrectly admitted evidence of the amount paid by the insurer for Respondent's medical expenses as a result of Wal-Mart's negligence. Upon review, the Court held that the court of appeal correctly held that the trial court correctly held that the trial court should have excluded evidence of the amounts paid because of the common law evidentiary component of the collateral source doctrine required the exclusion.

The Supreme Court reviewed an unpublished appeallate court decision to determine whether: the court of appeals erred under Colorado's collateral source doctrine when it admitted evidence of the amounts paid by Respondent State Farm Mutual Automobile Insurance Company for medical expenses that Petitioner Jack Sunahara incurred as a result of a car accident; and whether the court of appeals erred in affirming the trial court's ruling that portions of State Farm's claim file and information used by the company to generate reserves and settlement authority were not discoverable. The Court held that the appellate court erred in affirming the admission of evidence of the amounts paid for Petitioner's medical expenses because the pre-verdict evidentiary component of Colorado's collateral source rule prohibits the admission. The Court affirmed the appellate court in excluding portions of State Farm's claim file from admission.

This case arose from the negligence action Plaintiff Donald Smith filed against Defendant Michael Jeppsen after the parties were involved in a car accident. Plaintiff sought to recover, among other things, the cost of past and future medical expenses resulting from the crash. Defendant admitted liability, and the parties agreed that the proper measure of Plaintiff's medical expense damages should be the necessary and reasonable value of the medical services rendered. However the parties disagreed as to whether the trial court, in determining reasonable value, could consider evidence of the amounts billed to and paid by Plaintiff's insurance company (a collateral source). Upon review, the Supreme Court concluded the trial court was correct in applying 10-1-135 C.R.S. (2011) in this case because the statute pertained to cases pending recovery as of August 11, 2010. Furthermore, the Court held that the trial court correctly excluded from evidence the amount of the insurance company's payments because section 10-1-135(10)(a) codifies the common law pre-verdict evidentiary component of the collateral source rule and unambiguously required the exclusion.

Lynne Swartzbaugh purchased motor vehicle insurance with Encompass Insurance Company. The policy named Lynne, her husband, and their daughter Kelly (Petitioners) as drivers. Lynne executed a waiver of higher uninsured motorist (UM) coverage on the standard Maryland Insurance Administration form. Immediately beneath the signature line below the waiver appeared the legend: "Signature of First Named Insured." By its terms, consistent with Maryland law, the waiver remained in effect until withdrawn, and the waiver was never withdrawn. Later, Kelly was injured in an accident involving an under-insured driver. Kelly was unable to collect further damages from Encompass under that policy's UM coverage. Petitioners sought a declaration that the waiver was ineffective because Lynne was not in fact the "first named insured" on the policy. The circuit court ruled that the waiver signed by Lynne was valid and enforceable. The court of special appeals affirmed. The Court of Appeals affirmed, holding that, in the context of a motor vehicle insurance policy, the phrase "first named insured" refers to a person insured under the policy and specifically named in the policy who acts on behalf of the other insured parties and is designated as "first named insured" in the policy documents.

Plaintiffs Marc and Laurie Brown appealed a superior court order that granted summary judgment to Defendant Concord Group Insurance Company in their insurance coverage action. In 2005, Plaintiffs purchased a house from then-owner Michael Rogers. Two years later, they discovered water leaking into the house near a sliding glass door. They contacted Eugene Spencer, the person who built the house, to repair the problem. In 2009, Plaintiffs again observed water leaking into the house near the same sliding glass door. This time they contacted Daniel Lewis to repair the problem. Lewis later testified that damage was caused by leaks Spencer did not discover during his repair, but probably would have discovered had he removed all of the siding on the wall. The damage required extensive repair work. Concord Group insured Spencer. His policy did not cover "property damage" to his work "arising out of [his work] or any part of [his work]." Plaintiffs argued that the policy provided coverage because Spencer negligently repaired their house in 2007, and the damage in 2009 would not have occurred but for his negligence. Upon review of the policy in question, the Supreme Court concluded it was error for the trial court to grant Concord Group summary judgment because what caused the damage (either the 2003 or the 2007 work) was a genuine issue of material fact as to whether the policy provided coverage in this case. The case was reversed and remanded for further proceedings.

On May 21, 2008, Lisa Laws and Carmen Tinker (Plaintiffs) each filed a complaint against Calvin McIlroy, Jr. (McIlroy) and Calvin McIlroy, Sr. for damages arising out of a motor vehicle accident that occurred on June 8, 2007. GEICO and State Farm, the potential uninsured/underinsured motorist carriers were served with a copy of Laws' complaint, and State Farm was served with a copy of Tinker's complaint. Plaintiffs then filed orders of nonsuit. Plaintiffs filed second, identical lawsuits in the circuit court on January 19, 2010 before the nonsuit orders were entered by the court on February 4, 2010. McIlroy filed motions to dismiss the complaints, arguing that both cases were barred by the applicable two-year statute of limitations. Additionally, GEICO filed a plea in bar and State Farm filed a motion to dismiss, raising the same arguments made by McIlroy in his motions. The circuit court dismissed the actions with prejudice, concluding that Plaintiffs' complaints were not timely filed. The Supreme Court reversed, holding that the circuit court erred when it granted the motions to dismiss and the plea in bar, as the court erroneously interpreted the two-year statute of limitations for personal injuries.

Mary Arnold, who was injured in an automobile collision, brought a negligence action against the other driver, Jonathan Wallace, who was uninsured. Travelers Insurance Company, Arnold's carrier, defended the suit pursuant to its uninsured motorist coverage. The jury awarded a verdict for Arnold in the amount of $9,134. Arnold appealed. The Supreme Court affirmed, holding that the circuit court (1) did not err in admitting medical records under the business records exception, as there was established a sufficient foundation for the admission of the evidence; and (2) did not abuse its discretion in finding an expert physician qualified to testify when her partner previously had been retained by the opposing counsel.

James Cornelius initiated a declaratory judgment action against National Casualty Company to determine whether a policy of insurance issued by National Casualty to Cornelius's employer, Live Line Maintenance, provided uninsured motorist coverage to Cornelius for injuries he sustained while occupying a vehicle owned by Live Line. The circuit court granted National Casualty's motion for summary judgment, finding that Cornelius could not recover uninsured motorist benefits. The Supreme Court reversed, holding that the circuit court erred in granting summary judgment for National Casualty because Cornelius presented evidence to support his claim that there was a casual connection between Live Line and Live Line's proprietor's alleged negligent maintenance of the work vehicle and the accident that caused Cornelius's injuries.

After an insolvent employer's insurance company also became insolvent, the Mississippi Workers' Compensation Self-Insurers Guaranty Association (SIGA) made workers' compensation payments to an injured worker. SIGA sued the Mississippi Insurance Guaranty Association (MIGA) for reimbursement of those payments, and the trial court ordered reimbursement. The issue came before the Supreme Court who, after consideration, concluded that SIGA's claim against MIGA did not fall within the statutory definition of a "covered claim," and reversed the trial court’s reimbursement decision.

In 2002, Dung Thi Hoang Nguyen stopped behind Karen Thompson at a red light. In reaching for her purse, her foot slipped off the brake and her car bumped into Thompson's. Neither car was damaged. The two exchanged insurance information without calling the police. But after Thompson arrived at her parents' home, her father told her to get a police report for her insurance provider, so Thompson called Nguyen, who agreed to meet her at the police station that night. A few days later, Thompson visited her physician complaining of neck pain. An MRI of Thompson’s spine revealed a preexisting degenerative-disc disease associated with disc bulges. And despite ongoing therapy, Thompson continued to complain of headaches, insomnia, depression, and neck pain until, in 2004, she was referred to a neurosurgeon, who performed surgery in 2005, Thompson to treat her abnormal discs. Thompson filed suit against Nguyen, seeking $234,316.49 in compensation. Nguyen admitted liability but contested that the accident had caused Thompson that much damage. A jury awarded Thompson $9,131– the exact amount of her physical therapy bills, but she filed a motion for additur or a new trial on damages alone, which the circuit court denied. Thompson appealed, and the Court of Appeals reversed and remanded for a trial on damages. The jury awarded Thompson less than the amount requested. Thompson appealed the jury’s second award. Because causation was central to Thompson's argument for the new damages award, the Supreme Court found it a question of fact for the jury, and affirmed its award.