Justia Insurance Law Opinion Summaries

Defendant Alex Herrgott, was driving a four-seat Polaris all-terrain vehicle at night down a gravel road when he “overcorrected” trying to avoid a pothole. The ATV overturned, and Joseph MacNabb, a passenger, was severely injured. Since MacNabb was a state employee in the course and scope of his employment, he received workers’ compensation benefits from the Mississippi State Agencies Self-Insured Workers’ Compensation Trust. The Trust later initiated this litigation in an attempt to recover more than $300,000 in benefits paid for MacNabb’s injury. The circuit court ultimately granted summary judgment to Herrgott because the Trust’s Mississippi Rule of Civil Procedure 30(b)(6) representative could not articulate a legal theory entitling it to recover. The Mississippi Supreme Court found there was sufficient evidence of Herrgott’s negligence for the case to go to trial, and the deposition testimony of a lay witness should not have bound the Trust as to which legal theories it could pursue. The Supreme Court therefore reversed the summary judgment and remanded the case for trial. View "Mississippi State Agencies Self-Insured Workers' Compensation Trust v. Herrgott" on Justia Law

Scanlon went on leave from his job as a Systems Administrator at McKesson. He requested accommodations to return to work; McKesson temporarily granted some, but not all, of them. Scanlon did not return to work but sought long-term disability insurance benefits under a McKesson group policy underwritten, insured, and administered by LINA. To meet the definition of “disabled” under the policy, an employee must be unable to perform the “material duties” of the employee’s regular occupation and earn 80% or more of the employee’s indexed earnings from working in the employee’s regular occupation. LINA denied Scanlon’s request and denied two administrative appeals after Scanlon supplied VA examination reports and letters and two residual functional capacity evaluations. LINA's medical examiners concluded that Scanlon was not entitled to benefitsIn a suit under ERISA, 29 U.S.C. 1132, the district court found that Scanlon, a veteran, suffered from myriad chronic orthopedic and sleep disorders that cause him pain and impact his daily life but found Scanlon ineligible for benefits, concluding Scanlon did not show that he cannot perform the material duties of his job. The Seventh Circuit vacated. The district court clearly erred when it failed to consider Scanlon’s inability to sit at his desk for eight hours a day as required by his occupation and his inability to perform the cognitive requirements of his job during regular work hours and in its treatment of certain medical records Scanlon provided. View "Scanlon v. Life Insurance Co. of North America" on Justia Law

Husband Steven McAnulty was married twice: once to Plaintiff Elizabeth McAnulty, and once to Defendant Melanie McAnulty. Husband's first marriage ended in divorce; the second ended with his death. Husband’s only life-insurance policy (the Policy) named Defendant as the beneficiary. But the Missouri divorce decree between Plaintiff and Husband required Husband to procure and maintain a $100,000 life-insurance policy with Plaintiff listed as sole beneficiary until his maintenance obligation to her was lawfully terminated (which never happened). Plaintiff sued Defendant and the issuer of the Policy, Standard Insurance Company (Standard), claiming unjust enrichment and seeking the imposition on her behalf of a constructive trust on $100,000 of the insurance proceeds. The district court dismissed the complaint for failure to state a claim. Plaintiff appealed. By stipulation of the parties, Standard was dismissed with respect to this appeal. The only question to be resolved was whether Plaintiff stated a claim. Resolving that issue required the Tenth Circuit Court of Appeals to predict whether the Colorado Supreme Court would endorse Illustration 26 in Comment g to § 48 of the Restatement (Third) of Restitution and Unjust Enrichment (Am. L. Inst. 2011) (the Restatement (Third)), which would recognize a cause of action in essentially the same circumstances. Because the Tenth Circuit predicted the Colorado Supreme Court would endorse Illustration 26, the Court held Plaintiff has stated a claim of unjust enrichment, and accordingly reversed the previous dismissal of her case. View "McAnulty v. McAnulty, et al." on Justia Law

Princeton Excess and Surplus Lines Insurance Company (PESLIC) filed this declaratory judgment action. PESLIC issued two commercial liability insurance policies to the Clubs covering the time period relevant to the Models’ claims: Number 1RA3GL0000179–01, with a policy period of November 9, 2015, to November 9, 2016 (the 01 Policy); and Number 1RA3GL0000179–02, with a policy period of November 9, 2016, to November 9, 2017 (the 02 Policy). The policies have identical coverage provisions but contain slightly different exclusions. The parties dispute whether this exclusion renders illusory the Personal and Advertising Injury coverage provided in the 02 Policy. If it does not, then the Clubs have no coverage applicable to the Models’ claims; if it does, then they have coverage, as the district court held.   The Fifth Circuit reversed the district court’s summary judgment ruling. The court held PESLIC does not have a duty to defend or indemnify the Clubs in the underlying lawsuit because neither the 01 Policy nor the 02 Policy provides coverage for the claims alleged by the Models. The court explained that the text of the 02 Policy is not ambiguous, and Texas law “presumes that the party knows and accepts the contract terms.” Those terms disclose that the policy’s Personal and Advertising Injury coverage comprises a single category of coverage and further that the Exhibition and Related Marketing Exclusion removes much but by no means all, of that coverage. The 02 Policy is, therefore, not illusory, and the exclusion must be enforced, constraining the court to conclude there is no coverage for the Models’ underlying claims under the 02 Policy. View "Princeton Excess v. AHD Houston" on Justia Law

Plaintiff sued Travelers Indemnity Company of America, seeking a declaration that an insurance policy between Travelers and the City of Hermantown authorizes up to $2,000,000 in coverage for his tort claim against the city. The district court granted summary judgment for Plaintiff, and Travelers appeals.   The court concluded that the insurance policy limits the amount of Plaintiff’s recovery to $500,000 and therefore reversed the judgment. The court explained that under Minnesota law, a municipality is liable for its torts and those of its employees acting within the scope of their employment. But a municipality may obtain insurance coverage for damages “in excess of the limit of liability imposed by section 466.04,” and procurement of such insurance waives the statutory limit of liability. The court concluded that the insurance policy authorizes coverage up to only $500,000 for Plaintiff’s claim. The policy provides different limits for different types of liabilities. The policy provides a coverage limit of $2,000,000 for claims not subject to the statutory limit set forth in Minn. Stat. Section 466.04. But for claims subject to the statutory limit in Section 466.04, the endorsement expressly limits coverage to $500,000. The substance of this contractual arrangement is no different than if the parties agreed on two separate policies for the two different types of liability. Plaintiff’s claim for injuries arising from an automobile accident in Hermantown is subject to Minnesota’s $500,000 cap on municipal tort liability. View "James Prisk v. Travelers Indemnity Co. of America" on Justia Law

M.P.N. manufactures radiators in Philadelphia. Mercer worked at M.P.N. from 2015-2017. In 2019, Mercer sued., alleging that M.P.N. concealed blood test results showing that he had dangerously high levels of zinc and lead after he was exposed to lead and cadmium on the job. A physician advised M.P.N. to remove Mercer from work but M.P.N. ignored the advice. As a result, Mercer continued working at M.P.N. and suffered permanent, avoidable brain damage. The Pennsylvania Workers’ Compensation Act is the “exclusive” source of employer liability for suits relating to workplace injuries suffered by employees. Mercer argued that he could recover from M.P.N. under a “fraudulent misrepresentation” exception recognized by the Pennsylvania Supreme Court.Zenith Insurance sought a declaration that it was not contractually obligated to defend M.P.N., against a workplace liability lawsuit. In a partial summary judgment, the district court declared that Zenith has a duty to defend M.P.N. The Third Circuit dismissed an appeal. Because the district court did not rule on all of the claims before it, that order is not final and cannot be appealed under the usual source of jurisdiction, 28 U.S.C. 1291. Zenith argued the court could consider its challenge under 28 U.S.C. 1292(a)(1), which permits appeals from non-final orders that relate to injunctive relief but the Third Circuit rule is that purely declaratory orders are not injunctive and cannot be enforced by contempt. View "Zenith Insurance Co. v. Newell" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the opinion of the Workers' Compensation Board affirming the administrative law judge's (ALJ) conclusion that medical providers did not have to submit their medical billing statements until after a determination of liability, holding that the statute is unambiguous.At issue was whether P&P Construction, Inc. and, by extension, the company's insurer, Kentucky Employers Mutual Insurance (KEMI), was responsible for payment of medical billings statements submitted outside of the forty-five-day period set forth in Ky. Rev. Stat. 342.020(4). The ALJ and Board determined that medical providers do not have to submit their billings until after a determination of liability. The court of appeals reversed, holding that medical providers are required to submit their billings within forty-five days of service, regardless of whether a determination of liability has been made, and therefore, employers and their insurance carriers are not responsible for payment of billings submitted after the forty-five day period. The Supreme Court, holding that under the unambiguous language of the statute, medical service providers must submit their billings within forty-five days of treatment, and such requirement applies both pre- and post-award. View "Farley v. P&P Construction, Inc." on Justia Law

United Behavioral Health (“UBH”) appeals from the district court’s judgment finding it liable to classes of Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et seq. (“ERISA”) Plaintiffs under 29 U.S.C. Sections 1132(a)(1)(B) and (a)(3), as well as several pre- and posttrial orders, including class certification, summary judgment, and a remedies order. UBH contends on appeal that Plaintiffs lack Article III standing and that the district court erred at class certification and trial in several respect.   The Ninth Circuit reversed in part. The panel held that Plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each Plaintiff. And Plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct. The panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the panel reversed the district court’s certification of the denial of benefits classes. The panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. View "DAVID WIT, ET AL V. UNITED BEHAVIORAL HEALTH" on Justia Law

K.C. Hopps, Ltd., sued its insurer, The Cincinnati Insurance Company, seeking coverage for lost business income incurred during the COVID-19 pandemic. Cincinnati moved for summary judgment based on K.C. Hopps’s inability to show physical loss or damage, which the district court denied. After the jury returned a verdict for Cincinnati, K.C. Hopps renewed its motion for judgment as a matter of law and moved for a new trial. The district court denied both motions.   The Second Appellate District affirmed. The court explained that K.C. Hopps alleged that COVID-19 particles were present at its properties. The court wrote that has repeatedly rejected similar claims for COVID-19-related business interruptions because the insured did not sufficiently allege physical loss or damage. The court explained that even if K.C. Hopps could show actual contamination of its properties, any possible contamination was not the cause of its lost business income. K.C. Hopps did not limit its operations because COVID-19 particles were found at its properties—it did so because of the shutdown orders. K.C. Hopps remained open until government orders limited its operations. And even if its premises weren’t contaminated, K.C. Hopps “would have been subject to the exact same restrictions.” View "K.C. Hopps, Ltd. v. The Cincinnati Insurance Co." on Justia Law

Plaintiff and appellant Rhonda S. is the conservator, appointed pursuant to section 5350 of the Lanterman-Petris Short Act (LPS), of her adult son David S. Plaintiff sued Defendants and respondents Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals for a declaration of their obligations, under LPS and the terms of David’s health plan, to transport and accept for “assessment and evaluation” (each as defined in LPS) conservatees like David upon their conservators’ demand. The trial court sustained Kaiser’s demurrer.
The Second Appellate District affirmed. The court explained that it rejects Plaintiff’s implication that an LPS conservatee is per se suffering from an “Emergency Medical Condition” at all times following the judicial determination of grave disability. The purposes of LPS conservatorship include providing treatment to the conservatee. (Section 5350.1.) To assume a conservatee’s condition remains static following the conservatorship order is to assume treatment is always ineffectual. We are offered no basis for such an assumption. For a mental health condition to be an “Emergency Medical Condition” under the plan, “acute symptoms of sufficient severity” must result in an “immediate” specified danger or mental health disorder-induced disability. Second, even if conservatees were in a state of perpetual “Emergency Medical Condition” within the meaning of the plan, Plaintiff’s requested declaration would eliminate the coverage requirement that a “reasonable person would have believed that the medical condition was an Emergency Medical Condition which required ambulance services.” View "Rhonda S. v. Kaiser Foundation Health Plan" on Justia Law