Justia Insurance Law Opinion Summaries

Haylee Hinton was injured in a car accident caused by another motorist running a red light. She initially sought compensation from her employer’s workers’ compensation insurer and later settled with the motorist’s insurance carrier. Hinton then filed a claim for underinsured motorist benefits with Midwest Family Mutual Insurance, her underinsured motorist coverage provider, and submitted the claim to arbitration as permitted by Utah law.Midwest sought a declaratory judgment from the district court to limit the categories of damages Hinton could recover in arbitration, citing Utah Code section 31A-22-305.3(4)(c)(i), which excludes benefits paid or payable under the Workers’ Compensation Act from underinsured motorist coverage. The district court interpreted the statute to mean that past and future medical expenses and two-thirds of lost wages were payable under workers’ compensation and ruled that Hinton could not recover these categories of damages from Midwest.Hinton petitioned for interlocutory review, arguing that the district court lacked jurisdiction and misinterpreted the statute. The Utah Supreme Court found that the district court had jurisdiction but misinterpreted the statute. The court concluded that “payable” means benefits that can or may be paid to a specific claimant in a particular case, not just categories of damages generally available under workers’ compensation. The court vacated the district court’s order and remanded the matter for further proceedings to determine what benefits remain payable to Hinton under the Workers’ Compensation Act. View "Hinton v. Midwest Family Mutual Insurance" on Justia Law

Joe David Hudson was injured while working for Joplin Regional Stockyards, Inc. (JRS) in 2002. In 2005, Hudson, JRS, and JRS' insurer, Star Insurance Company, entered into a settlement agreement where Hudson received an $80,000 lump sum. The settlement left future medical expenses for Hudson's left ankle open. In 2011, Hudson had a below-the-knee amputation, which Star refused to cover. Hudson filed the settlement in circuit court in 2013, and the court rendered judgment in accordance with the settlement. Hudson later filed an equitable garnishment action, leading Star to pay $92,000 for his medical bills. In 2015, Star agreed to reimburse Hudson up to $610,311.75 for future medical expenses. In 2016, Hudson and JRS entered into a subordination agreement, acknowledging all payments due under the judgment had been received.In 2022, Hudson filed a motion to revive the judgment, which JRS opposed, arguing the judgment had been satisfied and the Division of Workers' Compensation had not determined the future medical care provision. JRS also filed a motion for relief from the judgment, claiming it was void due to lack of due process. The Circuit Court of Jasper County sustained Hudson's motion to revive the judgment and overruled JRS' motion for relief.The Supreme Court of Missouri reviewed the case and determined that JRS had standing to appeal. The court found that the circuit court erred in reviving the judgment because JRS had satisfied the judgment by paying the $80,000 lump sum. The court reversed the circuit court's order sustaining Hudson's motion to revive the judgment and overruled Hudson's motion to revive the judgment. Hudson's motion for damages for a frivolous appeal was also overruled. View "Hudson v. Joplin Regional Stockyards, Inc." on Justia Law

Glenn O. Hawbaker, Inc. (GOH) engaged in a scheme to underpay its employees by misappropriating fringe benefits owed under the Pennsylvania Prevailing Wage Act (PWA) and the Davis-Bacon Act (DBA). This led to two class-action lawsuits against GOH. GOH sought coverage under its insurance policy with Twin City Fire Insurance Company (Twin City), which denied coverage and sought a declaratory judgment that it had no duty to provide coverage. GOH and its Board of Directors counterclaimed, alleging breach of contract and seeking a declaration that certain claims in the class actions were covered under the policy.The United States District Court for the Middle District of Pennsylvania dismissed GOH's counterclaims, concluding that the claims were not covered under the policy due to a policy exclusion for claims related to "Wage and Hour Violations." The court also granted Twin City's motion for judgment on the pleadings, affirming that Twin City had no duty to defend or indemnify GOH for the class-action claims.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's judgment. The Third Circuit agreed that the claims in question were not covered under the policy because they were related to wage and hour violations, which were explicitly excluded from coverage. The court emphasized that the exclusion applied broadly to any claims "based upon, arising from, or in any way related to" wage and hour violations, and found that the factual allegations in the class actions were indeed related to such violations. Thus, Twin City had no duty to defend or indemnify GOH under the terms of the policy. View "Twin City Fire Insurance Co. v. Glenn O. Hawbake, Inc." on Justia Law

In this case, the plaintiff, MVT Services, LLC (MVT), purchased a workers’ compensation and employers’ liability policy (WC/EL Policy) from Great West Casualty Company (Great West) for coverage from January 1, 2013, to January 1, 2014. MVT also entered into a Staff Leasing Agreement with OEP Holdings, LLC (OEP) and purchased a non-subscriber insurance policy from Crum & Forster Specialty Insurance Company (C&F). On August 13, 2013, MVT terminated its Texas coverage under the WC/EL Policy, effective September 16, 2013. On September 15, 2013, a day before the termination, MVT’s semi-tractor trailer crashed, killing driver Lawrence Parada. Parada’s widow filed a lawsuit against MVT. Great West denied coverage, leading MVT to seek defense under the C&F Policy.The United States District Court for the District of New Mexico found that Great West breached its duty to defend MVT, causing MVT to incur damages. The court awarded MVT damages and attorney fees. Great West appealed, arguing that the district court erred in finding that the Parada lawsuit would have resolved within the policy limit and that the breach did not proximately cause the damages.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court held that the district court did not clearly err in its factual findings that MVT would have invoked the Exclusive Remedy defense and that the gross negligence claim would have resolved within the policy limit. The court also found that the district court did not err in awarding damages for the $250,000 retention under the C&F Policy, the $250,000 MVT contributed to the settlement, and $41,476.84 in attorney fees. The court affirmed the district court’s award of attorney fees, concluding that Great West failed to show the district court committed legal error or clearly erred in its fact findings. The Tenth Circuit affirmed the district court’s judgment. View "MVT Services v. Great West Casualty Company" on Justia Law

Kevin Klabon, a technician for CMI Legacy, LLC, was injured in a car accident while driving a company van. The accident was caused by Rodrigo Canchola-Rodriguez, an underinsured driver. Klabon received workers' compensation benefits from CMI's carrier, Pinnacol Assurance, and settled with Canchola-Rodriguez's insurer for $25,000. He then sought additional underinsured motorist (UIM) benefits from CMI's commercial auto insurer, Travelers Property Casualty Company of America, which valued his claim at $78,766 but paid only $45,766.68.Klabon sued Travelers in state court for unreasonable denial and delay of UIM benefits, alleging bad faith and breach of contract. Travelers removed the case to federal court and moved for summary judgment, arguing that Klabon's receipt of workers' compensation benefits barred his UIM claim under Colorado's Workers' Compensation Act (WCA). The United States Magistrate Judge certified the question to the Colorado Supreme Court, given conflicting precedents and significant public policy implications.The Colorado Supreme Court concluded that an employee injured by a third-party tortfeasor and who receives workers' compensation benefits is not barred from suing their employer's UIM insurer. The court held that the WCA's exclusivity provisions immunize only employers and their workers' compensation carriers, not separate UIM insurers. The court also determined that a suit to recover UIM benefits does not constitute a suit against the employer or co-employee and thus is not barred by the WCA. The court answered the certified question in the negative, allowing Klabon to pursue his claim against Travelers. View "Klabon v. Travelers Property Casualty Company of America" on Justia Law

Plaintiffs M.S. and L.S. sought insurance coverage for mental health treatments for their child, C.S., under a health benefits plan provided by M.S.'s employer, Microsoft Corporation. The plan, administered by Premera Blue Cross, is subject to ERISA and the Parity Act. Premera denied the claim, stating the treatment was not medically necessary. Plaintiffs pursued internal and external appeals, which upheld the denial. Plaintiffs then sued in federal district court, alleging improper denial of benefits under ERISA, failure to produce documents in violation of ERISA’s disclosure requirements, and a Parity Act violation for applying disparate treatment limitations to mental health claims.The United States District Court for the District of Utah granted summary judgment to Defendants on the denial-of-benefits claim but ruled in favor of Plaintiffs on the Parity Act and ERISA disclosure claims. The court found that Defendants violated the Parity Act by using additional criteria for mental health claims and failed to disclose certain documents required under ERISA. The court awarded statutory penalties and attorneys’ fees to Plaintiffs.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court vacated the district court’s grant of summary judgment on the Parity Act claim, finding that Plaintiffs lacked standing to bring the claim. The court reversed the district court’s ruling that Defendants violated ERISA by not disclosing the Skilled Nursing InterQual Criteria but affirmed the ruling regarding the failure to disclose the Administrative Services Agreement (ASA). The court upheld the statutory penalty for the ASA disclosure violation and affirmed the award of attorneys’ fees and costs to Plaintiffs. View "M.S. v. Premera Blue Cross" on Justia Law

Plaintiffs Marla Knudsen and William Dutra, representing a class of similarly situated individuals, filed a class action lawsuit under the Employee Retirement Income Security Act (ERISA) against MetLife Group, Inc. They alleged that MetLife, as the administrator and fiduciary of the MetLife Options & Choices Plan, misappropriated $65 million in drug rebates from 2016 to 2021. Plaintiffs claimed this misappropriation led to higher out-of-pocket costs for Plan participants, including increased insurance premiums.The United States District Court for the District of New Jersey dismissed the case for lack of standing. The court concluded that the plaintiffs did not demonstrate a concrete and individualized injury. It reasoned that the plaintiffs had no legal right to the general pool of Plan assets and had not shown that they did not receive their promised benefits. The court found the plaintiffs' claims that they paid excessive out-of-pocket costs to be speculative and lacking factual support.The United States Court of Appeals for the Third Circuit affirmed the District Court's dismissal. The Third Circuit held that the plaintiffs failed to establish an injury-in-fact, as their allegations of increased out-of-pocket costs were speculative and not supported by concrete facts. The court noted that the plaintiffs did not provide specific allegations showing how the misappropriated drug rebates directly caused their increased costs. The court emphasized that financial harm must be actual or imminent, not conjectural or hypothetical, to satisfy Article III standing requirements. Consequently, the plaintiffs lacked standing to pursue their ERISA claims. View "Knudsen v. MetLife Group Inc" on Justia Law

In October 2020, Elliot Fama, employed by Sanford Contracting, was working on a project in Scarborough, Maine. After work, he and his co-worker, Robert Clarke, consumed alcohol at a hotel and a tavern. Later, in the hotel parking lot, Clarke struck Mr. Fama, causing him to fall and sustain fatal injuries. Laureen Fama, Mr. Fama’s widow, settled a workers’ compensation claim in Massachusetts for $400,000.Laureen Fama then filed a lawsuit in Cumberland County Superior Court against Bob’s LLC, which operated the tavern, and Clarke. She alleged liquor liability, wrongful death, loss of consortium, and battery. The defendants moved for summary judgment, arguing that the workers’ compensation settlement precluded the lawsuit. The Superior Court denied these motions, leading to the current appeal.The Maine Supreme Judicial Court reviewed the case. It held that under Maine’s Workers’ Compensation Act (MWCA), Ms. Fama’s settlement barred her from suing Clarke, as the Act’s immunity provisions extend to co-employees. Consequently, Clarke was exempt from the lawsuit. The court further held that because Clarke could not be retained as a defendant, the claims against Bob’s LLC failed under the “named and retained” provisions of Maine’s Liquor Liability Act (MLLA).The court vacated the Superior Court’s order denying summary judgment and remanded the case for entry of judgment in favor of Bob’s LLC and Clarke. View "Fama v. Bob's LLC" on Justia Law

Ramon Vasquez, Jr., sustained injuries while working in a restaurant and subsequently filed a workers' compensation claim, which was accepted by AmTrust North America, Inc. AmTrust paid $177,335.59 in benefits. Vasquez then initiated third-party litigation against several defendants, resulting in a $400,000 settlement. AmTrust, having intervened as subrogee, sought to recover its lien from the settlement proceeds. Vasquez argued that AmTrust was not entitled to any of the settlement proceeds based on prior case law.The Eighth Judicial District Court of Clark County held that AmTrust did not meaningfully participate in the third-party litigation and thus had to bear a portion of the litigation costs and fees under the Breen formula. The court also ruled that AmTrust could not recover from the portion of the settlement allocated to noneconomic damages, as per Poremba. Consequently, the district court adjudicated AmTrust’s lien at $0 and dismissed its complaint.The Supreme Court of Nevada reviewed the case and found that the Breen formula, which required insurers to bear a portion of litigation costs, conflicted with NRS 616C.215(5). The court held that there is no requirement for an insurer to intervene or participate in the third-party claim to recover on its lien. The court also overruled the Breen formula and Poremba to the extent they conflicted with the statute, stating that an insurer's lien applies to the total proceeds of any recovery, including noneconomic damages. The Supreme Court of Nevada reversed the district court’s order and remanded the case for further proceedings consistent with this opinion. View "Amtrust North America, Inc. v. Vasquez" on Justia Law

American Building Innovation LP (ABI) was hired by Balfour Beatty Construction, LLC (Balfour Beatty) as a subcontractor for a school construction project. ABI had a workers’ compensation insurance policy when it began work, but the policy was canceled due to ABI’s refusal to pay outstanding premiums from a previous policy. This cancellation led to the automatic suspension of ABI’s contractor’s license. Despite knowing it was unlicensed and uninsured, ABI continued working on the project.The Superior Court of Orange County found that ABI was not duly licensed at all times during the performance of its work, as required by California law. ABI’s license was suspended because it failed to maintain workers’ compensation insurance. ABI later settled its premium dispute and had the policy retroactively reinstated, but the court found this retroactive reinstatement meaningless because it occurred long after the statute of limitations for any workers’ compensation claims had expired. The court ruled that ABI could not maintain its action to recover compensation for its work due to its lack of proper licensure.The California Court of Appeal, Fourth Appellate District, Division Three, affirmed the lower court’s judgment. The court held that ABI was not entitled to retroactive reinstatement of its license because the failure to maintain workers’ compensation insurance was not due to circumstances beyond ABI’s control. ABI’s decision not to pay the premiums and its false representations to the Contractors’ State License Board were within its control. Consequently, ABI was barred from bringing or maintaining the action under section 7031 of the Business and Professions Code. The court also affirmed the award of attorney fees to Balfour Beatty under the subcontract’s prevailing party attorney fee provision. View "American Building Innovations v. Balfour Beatty Construction" on Justia Law