Justia Insurance Law Opinion Summaries

Plaintiff appealed the district court's dismissal of her ERISA, 29 U.S.C. 1001 et seq., action against defendant as not timely filed. Plaintiff was employed by defendant as a stockbroker in 1979 and starting in 1982, plaintiff had been disabled periodically from her employment. Plaintiff applied for long-term disability benefits around January 15, 1987. The court held that plaintiff's claim did not accrue in 1990 with regard to the ERISA statute of limitations, as the district court found, but rather accrued when her claim was finally denied on January 14, 2004. Therefore, plaintiff's action, filed on February 16, 2006, commenced within the four-year statutory limitations period for ERISA claims. The court also held that the limitations provision in the policy here did not apply to disability cases in which the claimant contested the amount of benefits or claims that the benefits have been miscalculated. Accordingly, the court vacated the judgment of the district court and remanded for further proceedings.

Appellant/Respondent Harleysville Mutual Insurance Company ("Harleysville") issued a series of standard CGL policies to the Respondent developers or their predecessors (collectively "Crossmann") for a series of condominium projects in the Myrtle Beach area of South Carolina. The exterior components of the condominium projects were negligently constructed, which resulted in water penetration and progressive damage to otherwise nondefective components of the projects. The homeowners settled their lawsuits against Respondents. Crossmann then filed this declaratory judgment action to determine coverage under Harleysville's policies. Upon review of the lower courtâs order, the Supreme Court reversed a finding of joint and several liability against the developers and its insurer, and found the scope of Harleysville's liability was limited to damages accrued during its "time on the risk." In so ruling, the Court adhered to its holding in âJoe Harden Builders, Inc. v. Aetna Casualty & Surety Co.â: â[u]sing our âtime on riskâ framework, the allocation of the damage award against Crossmann must conform to the actual distribution of property damage across the progressive damage period. Where proof of the actual property damage distribution is not available, the allocation formula adopted herein will serve as an appropriate default method for dividing the loss among Crossmann's insurers.â The Court remanded the case to the trial court for further consideration of the "time on risk" allocation.

This case stemmed from injuries Anthony Verdon Lujan sustained when his arm got caught on a luggage conveyor when he was inspecting the conveyor as an employee of Lloyd W. Aubry Co. (Aubrey), an independent contractor hired by US Airways to maintain and repair the conveyor. Aubry's workers' compensation insurer paid Verdon benefits based on the injury and subsequently sued US Airways seeking what it paid in benefits. Verdon intervened as plaintiff in the action, alleging causes of action for negligence and premises liability. At issue was whether the Privette v. Superior Court rule applied when the party that hired the contractor (the hirer) failed to comply with workplace requirements concerning the precise subject matter of the contract and the injury was alleged to have occurred as a consequence of that failure. The court held that the Privette rule did apply in that circumstance. The court concluded that, by hiring an independent contractor, the hirer implicitly delegated to the contractor any tort law duty it owed to the contractor's employees to ensure the safety of the specific workplace that was the subject of the contract. That implicit delegation included any tort law duty the hirer owed to the contractor's employees to comply with applicable statutory or regulatory safety requirements. Accordingly, plaintiffs here could not recover in tort from US Airways on a theory that Verdon's workplace injury resulted from defendant's breach of what plaintiffs described as a nondelegable duty under California Occupational Safety and Health Act of 1973 (OSHA), Cal. Code Regs., tit. 8, sections 3999, 4002, regulations to provide safety guards on the conveyor. Therefore, the court erred in reversing the trial court's grant of summary judgment for defendant.

Appellant Zebuleon Whitney collided with a bicyclist in his pick-up truck, seriously injuring the bicyclist. The bicyclist sought a settlement agreement in excess of the maximum coverage of the driverâs insurance policy. Appellee State Farm Mutual Automobile Insurance Company (State Farm) responded with an offer to tender policy limits, which the bicyclist refused. After a series of court proceedings in both state and federal court, Appellant sued his insurance company, complaining in part that his insurance company had breached its duty to settle. State Farm moved for partial summary judgment on a portion of the duty to settle claims. The superior court granted the motion. The parties then entered a stipulation by which Appellant dismissed all remaining claims, preserving his right to appeal, and final judgment was entered in the insurance companyâs favor. Because State Farmâs rejection of the bicyclistâs settlement demand and its responsive tender of a policy limits offer was not a breach of the duty to settle, the Supreme Court affirmed the superior courtâs grant of summary judgment to that extent. But because the superior courtâs order exceeded the scope of the insurance companyâs motion for partial summary judgment, The Court reversed the superior courtâs order to the extent it exceeded the narrow issue upon which summary judgment was appropriate. The Court remanded the case for further proceedings concerning the surviving duty to settle claims.

This case arose when plaintiff was seriously injured in an automobile accident negligently caused by a driver for defendant. At issue was whether an injured person could recover from the tortfeasor, as economic damages for past medical expenses, the undiscounted sum stated in the medical care provider's bill but never paid by or on behalf of the injured person. The court held that the collateral source rule, which precluded deduction of compensation the plaintiff had received from sources independent of the tortfeasor from damages the plaintiff "would otherwise collect from the tortfeasor" ensured that plaintiff here could recover in damages the amounts her insurer paid for her medical care. The rule, however, had no bearing on amounts that were included in a provider's bill but for which the plaintiff never incurred liability because the provider, by prior agreement, accepted a lesser amount as full payment. Such sums were not damages the plaintiff would otherwise have collected from the defendant and were neither paid to the providers on the plaintiff's behalf nor paid to the plaintiff in indemnity of his or her expenses. Therefore, because they did not represent an economic loss for the plaintiff, they were not recoverable in the first instance. The collateral source rule precluded certain deductions against otherwise recoverable damages, but did not expand the scope of economic damages to include expenses the plaintiff never incurred.

Tabitha Pourier was seriously injured in an automobile accident and suffered damages in excess of $250,000. After receiving $25,000 from the tortfeasor's liaility carrier and $100,000 in underinsured motorist coverage from her primary insurer, Pourier sought an additional $100,000 in underinsured coverage from her excess carrier, De Smet Insurance Company. De Smet denied coverage, asserting that an exclusion in the policy precluded coverage. On cross motions for summary judgment, the circuit court granted summary judgment in favor of De Smet, ruling that the policy exclusion was valid and enforceable. At issue on appeal was whether De Smet's owned-but-not-insured exclusion was void as against public policy because it prohibited Pourier, who was riding in a vehicle owned by her but insured by another company, from recovering for uncompensated damages by De Smet as the secondary insurer. The Supreme Court affirmed, holding that the policy exclusion was not against public policy.

Liberty Mutual sued Pella in the district court for declaratory judgment where the suit was sought to determine the scope of Liberty Mutual's obligation, under general commercial liability (GCL) policies issued to Pella, to reimburse Pella's defense costs in two underlying lawsuits. Both parties appealed the judgment of the district court. The court held that the district court did not err in concluding that Liberty Mutual's duty to reimburse Pella's defense costs should be determined by looking at the allegations in the complaint to determine if they stated a covered claim where Liberty Mutual would still have no duty to defend even if it had to reimburse defense costs in a suit where an "occurrence" was alleged but not yet an established fact. The court also held that because the underlying suits did not allege an "occurrence," Liberty Mutual did not owe Pella a duty to reimburse its costs in defending either action. Therefore, the court need not address Liberty Mutual's alternative argument. The court further held that the district court did not commit reversible error in granting summary judgment to Liberty Mutual. The court finally held that, in light of its conclusion that Liberty Mutual had no duty to reimburse Pella's defense costs in the underlying suits, the court need not address the issue of defense costs. Accordingly, the court affirmed the district court's grant of summary judgment to Liberty Mutual on Pella's bad-faith counterclaim. The court reversed the district court's order granting summary judgment to Pella on Liberty Mutual's claim for declaratory judgment and remanded with instructions to enter declaratory judgment in favor of Liberty Mutual.

Appellants Samantha Young and Rebekah Alley were injured while riding in a vehicle driven by Joshua Weeks. Appellants appealed from a judgment entered in the superior court in which the court held Weeks liable but permitted North East Insurance Company to rescind its automobile insurance policy on the vehicle Weeks was driving. Specifically, Young and Alley challenged the court's entry of summary judgment in favor of North East on its complaint seeking a declaratory judgment that it had no duty to defend or indemnify the driver because Weeks' mother had made material, fraudulent misrepresentations in applying for the automobile insurance. The Court of Appeals vacated the judgment, holding that genuine issues of material fact existed regarding whether Weeks' mother made a material, fraudulent misrepresentation to North East in obtaining the insurance policy. Remanded.

After suffering a work-related injury, Employee underwent surgery at a hospital owned by HealthEast Care System. The injury required surgical implantation of a spinal cord stimulator. Employer's worker's compensation insurance provider, State Auto Insurance, paid part but not all of the surgical expenses, asserting (1) the withheld portion of the expenses was attributable to a price markup added by HealthEast to the price paid by HealthEast for the implant hardware used in Employee's surgery, and (2) the manufacturer of the implant hardware should be required to charge directly for the implant hardware. The compensation judge found that Employer and State Auto were liable for the unpaid balance. The Workers' Compensation Court of Appeals affirmed. The Supreme Court affirmed, holding (1) HealthEast could charge for the implant hardware because when more than one health care provider is responsible for the creation of a service, article, or supply, the provider that provides the service, article, or supply in its final form is entitled to charge for it; and (2) a compensation judge does not have the authority to determine a reasonable value of a treatment, service, or supply that is lower than eighty-five percent of the provider's usual or customary charge.

Plaintiffs Russell and Jennifer Johnson blamed Liberty Mutual for failing to hold onto a pair of tail lights that they said would have helped them win a personal injury lawsuit they wanted to bring. Plaintiffs never asked Liberty Mutual to keep the tail lights, never mentioned their intent to sue, and allowed years to pass without a word. In their case against Liberty Mutual, they faulted the company for failing "to divine their hidden (and perhaps not yet formed) intentions." Upon review of the record by the Tenth Circuit, the Court concluded that because Plaintiffs could not identify a statutory or contractual basis for their claim, "they ask[ed the Tenth Circuit] to create one for them in the common law of tort." But the Court held the common law doesnât require such "uncommon foresight," and affirmed the lower court's decision to dismiss their case.