Justia Insurance Law Opinion Summaries

At issue before the Supreme Court was whether an opinion rendered by a medical expert was sufficient to rebut the presumption of disease causation under the Pennsylvania Workers' Compensation Act. Joseph Kriebel worked for the City of Philadelphia as a firefighter from 1974 to 2003. He died in 2004 from liver disease caused by hepatitis C. His widow Appellant Patricia Kriebel, filed a claim petition under the Act in 2005, alleging that her husband contracted hepatitis C in the course of his employment. Appellant sought to raise the presumption of occupational exposure. In support of her claim, Appellant presented the testimony of her husband's treating physician. The City rebutted the presumption of disease causation with testimony of its own medical expert. Upon review, the Supreme Court held that an expert's opinion does not constitute substantial competent evidence where it is based on a series of assumptions that lack the necessary factual predicate. Since the medical opinions in this case were based on unfounded suppositions, they were legally insufficient to overcome the presumption of disease causation. The Supreme Court reversed the Commonwealth Court that held that the City overcame the presumption with its' medical expert's testimony, and reinstated the order of the superior court which held in favor of Appellant.

At issue before the Supreme Court was whether it was a violation of public policy to exclude from underinsured motorist coverage (UIM) a claim by an individual eligible for workers' compensation benefits. Appellant Frank Heller was severely injured from an automobile accident that happened during the course of his employment as a police officer for Sugarcreek Borough. Workers' Compensation covered his medical expenses and two-thirds of his salary. The Borough paid the remainder of Appellant's salary. Appellant's losses and damages far exceeded the policy limit from the tortfeasor's insurance carrier. Accordingly, Appellant notified his insurer of a potential UIM claim and sought UIM benefits from the Borough pursuant to a policy issued by the Pennsylvania League of Cities and Municipalities. Ultimately, Appellant's claim was denied. Upon review, the Supreme Court concluded that an exclusion in Appellant's workers' compensation policy violated public policy and was therefore unenforceable. The Court reversed the Commonwealth Court which held that the policy considerations favored the insurer: "Invalidating the workers' compensation exclusion would not force [the UIM insurer] to underwrite an unknown risk for which it did not receive compensation. The Borough voluntarily elected to purchase optional UIM coverage. .. [W]e find [Appellant's] assertion that the Borough purchased illusory coverage persuasive… the vast majority of all UIM claims likely will be made by Borough employees who are eligible for workers' compensation. The subject exclusion operates to deny UIM benefits to anyone who is eligible for workers' compensation."

In this workers' compensation case, Employee was operating a torque gun, which jerked and twisted her right hand while at work. Employee contended that her injury extended into her arm. Employer agreed the injury was compensable but argued that the injury was limited to Employee's index finger. The trial court found that Employee's injury was properly apportioned to her right arm, rather than to her hand or finger, and awarded seventy percent permanent partial disability (PPD) to the right arm. Employer appealed, arguing that the trial court erred by apportioning the injury to the arm and that the award of PPD benefits was excessive. The Supreme Court Special Workers' Compensation Appeals Panel affirmed, holding (1) the evidence did not preponderate against the trial court's decision to apportion Employee's injury to the arm; and (2) the evidence supported the trial court's award of disability benefits.

Plaintiff Chase Wisness appealed the district court's grant of summary judgment in favor of Nodak Mutual Insurance Company (Nodak), finding its Farm and Ranch Excess Liability Policy did not provide coverage for his claim. Plaintiff argued on appeal that the district court erred by finding the insurance policy did not provide underinsured motorist coverage. In 2007, Plaintiff was a passenger in a vehicle driven by an unrelated third party. An accident occurred, and Plaintiff was injured and is now a paraplegic. At the time of the accident, Milo Wisness, Plaintiff's father, owned a Nodak Mutual automobile insurance policy with underinsured motorist limits of $500,000. Milo Wisness also owned a Farm and Ranch Excess Liability Policy issued by Nodak. Plaintiff settled with Nodak for underinsured limits on the automobile policy and reserved the right to pursue a claim under the excess liability policy. Plaintiff then sued alleging that Nodak wrongfully denied his claim under his excess liability policy because the policy provided underinsured motorist coverage, that Nodak used bad faith when denying the claim and that his father's insurance agent negligently counseled Milo Wisness about what insurance policy to buy. Nodak and the agent denied the allegations. Plaintiff moved for partial summary judgment, asking the court to declare coverage existed for his claim. Judgment was entered awarding Nodak its costs and dismissing Wisness's claim with prejudice. Upon review, the Supreme Court agreed with the district court's conclusion that the excess liability policy did not cover Plaintiff's claim, and affirmed the court's decision.

The superintendent of insurance, in her capacity as the liquidator of an insolvent insurer, filed an action in the county court of common pleas against an independent accounting firm that provided auditing services to the insurer, alleging negligence and that the firm had received preferential or fraudulent payments. The accounting firm moved to dismiss the complaint or to stay the proceedings and compel arbitration based on an arbitration clause that was contained in an engagement letter signed by the insurer and accounting firm. The trial court denied the motion. The court of appeals affirmed, holding that because the liquidator had not signed the arbitration agreement, there was a presumption against arbitration. The Supreme Court affirmed but in part for different reasons, holding that the liquidator was not bound by the insurer's agreement when the liquidator's claims did not arise from the contract that contained the arbitration provision.

Plaintiff Steven Lucas filed suit against Liberty Life Assurance Company of Boston (Liberty Life), asserting that the company violated the Employee Retirement Income Security Act of 1974 (ERISA) when it denied his claim for long term disability benefits. Finding that the denial of benefits was not arbitrary and capricious, the district court entered judgment in favor of Liberty Life. Plaintiff appealed the district court's decision. Plaintiff was an employee of the Coca-Cola Company. Liberty Life both administered and insured Coca-Cola's long-term disability benefits plan. Under the plan, it has discretionary authority to determine eligibility for benefits. Plaintiff suffered a work-related injury requiring spinal surgery and, after a short period back on the job, stopped working. He filed a claim for long-term disability benefits in August 2005. In September 2007, Liberty Life terminated Plaintiff's benefits after determining that he was not eligible for continued benefits under the "any occupation" provision: while he might not be capable of performing his own occupation, he was capable of performing some occupation comparable to his former position. Plaintiff filed an administrative appeal with Liberty Life, but the company upheld the denial of benefits. Upon review, the Tenth Circuit concluded that Liberty Life's decision was supported by substantial evidence, and that Plaintiff failed to show that it was arbitrary and capricious. Accordingly, the Court affirmed the district court's decision.

This case arose from an automobile collision in which a police officer employed by the City of Newman was driving a City police car when it was struck by a motor vehicle owned and operated by the insured, who had $25,000 of motor vehicle liability coverage. The City had a Member Coverage Agreement (Agreement) with the Georgia Interlocal Risk Management Agency (GIRMA), established under OCGA 36-85-1 et seq. The officer subsequently sued the insured in tort and served a copy of the complaint on GIRMA to notify GIRMA that it might be held responsible as an uninsured motorist carrier pursuant to OCGA 33-7-11. The court subsequently granted a writ of certiorari to the court of appeals to consider whether that court properly determined that a municipality's motor vehicle liability coverage secured through an interlocal risk management agency was not statutorily obligated to satisfy the requirements for uninsured and underinsured motorist coverage that were applied to commercial insurance policies and private self-insurance plans. The court held that the district court reached the correct conclusion when it determined that there was no authority for the conclusion that an interlocal risk management program such as that offered by GIRMA must include uninsured motorist coverage pursuant to OCGA 33-7-11. Therefore, the Agreement was limited to its express terms and did not include the underinsured motorist protection that the police officer sought. Accordingly, the judgment was affirmed.

After a minor collision between two vehicles in the drive-through line of a Taco Bell, Jack Morrell, the driver of one vehicle, stabbed and killed Eric Kalenka, the driver of the other vehicle. Morrell was uninsured and Kalenka’s policy provided coverage for liabilities arising out of the “ownership, maintenance, or use” of an uninsured motor vehicle. Kalenka’s automobile insurer filed an action in superior court, seeking a declaration that Kalenka’s policy did not provide coverage for Kalenka’s death. The superior court concluded that there was no general liability coverage under the policy. Appellant Uwe Kalenka, the personal representative of Eric Kalenka’s estate, appealed the denial of liability coverage. Upon review, the Supreme Court affirmed the superior court’s determination that Kalenka’s policy did not provide liability coverage.

Plaintiff, the executor of a decedent's estate, settled medical malpractice claims against several medical care providers for the decedent's wrongful death. Plaintiff then initiated this action against Defendant, the Indiana Patient's Compensation Fund, for damages that exceeded the $250,000 future value of her settlement with the medical providers pursuant to the Indiana Medical Malpractice Act. The trial court awarded Plaintiff the full amount. Defendant appealed, challenging the trial court's ruling that damages under the Adult Wrongful Death Statute (AWDS) included expenses of administration, contingent attorney fees, and loss of services. The court of appeals affirmed the trial court. The Supreme Court affirmed, holding that such damages may be sought under the AWDS.

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.