Justia Insurance Law Opinion Summaries

Defendant ReadyLink Healthcare, Inc. (ReadyLink) was a nurse staffing company that placed nurses in hospitals, typically on a short-term basis. Plaintiff State Compensation Insurance Fund (SCIF) was a public enterprise fund created by statute as a workers' compensation insurer. Premiums that SCIF charged were based in part on the employer's payroll for a particular insurance year. SCIF and ReadyLink disputed the final amount of premium ReadyLink owed to SCIF for the 2005 policy year (September 1, 2005 to September 1, 2006). ReadyLink considered certain payments made to its nurses as per diem payments; SCIF felt those should have been considered as payroll under the relevant workers' compensation regulations. The Insurance Commissioner concurred with SCIF's characterization of the payments. A trial court rejected ReadyLink's petition for a writ of administrative mandamus to prohibit the Insurance Commissioner from enforcing its decision, and an appellate court affirmed the trial court's judgment. SCIF subsequently filed the action underlying this appeal, later moving for a judgment on the pleadings, claiming the issue of the premium ReadyLink owed for the 2005 policy year had been previously determined in the administrative proceedings, which was then affirmed after judicial review. The trial court granted SCIF's motion for judgment on the pleadings. On appeal, ReadyLink conceded it previously litigated and lost its challenge to SCIF's decision to include per diem amounts as payroll for the 2005 insurance year, but argued it never had the opportunity to challenge whether SCIF otherwise properly calculated the premium amount that it claims was due pursuant to the terms of the contract between the parties, or whether SCIF's past conduct, which ReadyLink alleged included SCIF's acceptance of ReadyLink's exclusions of its per diem payments from payroll in prior policy years and SCIF's exclusion of per diem amounts in paying out on workers' compensation claims filed by ReadyLink employees, might bar SCIF from being entitled to collect that premium amount under the contract. To this, the Court of Appeal concurred the trial court erred in granting SCIF's motion for judgment on the pleadings. Judgment was reversed, and the matter remanded for further proceedings. View "State Comp. Ins. Fund v. ReadyLink Healthcare, Inc." on Justia Law

New Jersey Transit Corporation (New Jersey Transit) sought to recover workers’ compensation benefits paid to an employee, David Mercogliano, who sustained injuries in a work-related motor vehicle accident. It sued the individuals allegedly at fault in the accident, defendants Sandra Sanchez and Chad Smith, pursuant to N.J.S.A. 34:15-40, a provision of the Workers’ Compensation Act that authorized employers and workers’ compensation carriers that have paid workers’ compensation benefits to injured employees to assert subrogation claims. The issue this case presented for the New Jersey Supreme Court's review was whether that subrogation action was barred by the Auto Insurance Cost Recovery Act (AICRA). The trial court granted defendants’ motion, ruling that New Jersey Transit could not assert a claim based on economic loss. It noted that N.J.S.A. 39:6A-2(k) defined economic loss for purposes of AICRA to mean “uncompensated loss of income or property, or other uncompensated expenses, including, but not limited to, medical expenses.” In the trial court’s view, because New Jersey Transit’s workers’ compensation carrier paid benefits for all of Mercogliano’s medical expenses and lost income, he had no “uncompensated loss of income or property,” and thus sustained no economic loss for purposes of AICRA. The trial court relied on Continental Insurance Co. v. McClelland, 288 N.J. Super. 185 (App. Div. 1996), and policy considerations in reaching its decision. The Appellate Division reversed that judgment, agreeing with New Jersey Transit that its subrogation action arose entirely from “economic loss comprised of medical expenses and wage loss, not noneconomic loss.” However, it rejected the trial court’s view that an employer’s or workers’ compensation carrier’s subrogation claim based on benefits paid for economic loss contravened AICRA’s legislative intent. Finding no error in the appellate court's judgment, the New Jersey Supreme Court affirmed. View "New Jersey Transit Corporation v. Sanchez" on Justia Law

Beginning in 1965, Honeywell and the labor union negotiated a series of collective bargaining agreements (CBAs). Honeywell agreed to pay “the full [healthcare benefit] premium or subscription charge applicable to the coverages of [its] pensioner[s]” and their surviving spouses. Each CBA contained a general durational clause stating that the agreement would expire on a specified date, after which the parties would negotiate a new CBA. In 2003, the parties negotiated a CBA obligating Honeywell to pay “not . . . less than” a specified amount beginning in 2008. The retirees filed suit, arguing that the pre-2003 CBAs vested lifetime, full-premium benefits for all pre-2003 retirees and that the CBAs of 2003, 2007, and 2011 vested, at a minimum, lifetime, floor-level benefits for the remaining retirees.The Sixth Circuit agreed with the district court that none of the CBAs vested lifetime benefits. Without an unambiguous vesting clause, the general durational clause controls. Reversing in part, the court held that the “not . . . less than” language unambiguously limited Honeywell’s obligation to pay only the floor-level contributions during the life of the 2011 CBA. The court rejected a claim that Honeywell acquired a "windfall" at the retirees' expense. View "International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Honeywell International, Inc." on Justia Law

The Supreme Court allowed hundreds of former employees of W.R. Grace & Company's Zonolite Division in Libby (Grace) to continue their asbestos-related personal injury claims against Maryland Casualty Company (MCC), Grace's former workers' compensation insurance provider, holding that MCC owed Grace workers a direct common law duty under Restatement (Second) of Torts 324A(b)-(c) to use reasonable care under the circumstances to warn them of the known risk of exposure to airborne asbestos in certain Grace workplaces.The Supreme Court assumed supervisory control over proceedings pending before the Montana Asbestos Claims Court. Here the Court addressed on extraordinary review MCC's assertion that the district court erred in concluding that MCC owed a duty of care to warn third-party employees of Grace of a known risk of airborne asbestos exposure in or about Grace facilities in and about Libby, Montana between 1963 and 1970. The Supreme Court held that, based on MCC's affirmative assumption of employee-specific medical monitoring and Grace's reliance on MCC to perform that function, MCC owed Grace workers a legal duty to use reasonable care to warn them of the risk of airborne asbestos. View "Maryland Casualty Co. v. Asbestos Claims Court" on Justia Law

A construction contractor’s employees were injured on the job and received workers’ compensation benefits from their employer. The workers later brought a negligence suit against three other corporations: the one that had entered into the construction contract with their employer, that corporation’s parent corporation, and an affiliated corporation that operated the facility under construction. The three corporations moved for summary judgment, arguing that all three were “project owners” potentially liable for the payment of workers’ compensation benefits and therefore were protected from liability under the exclusive liability provision of the Alaska Workers’ Compensation Act. The superior court granted the motion, rejecting the workers’ argument that status as a “project owner” was limited to a corporation that had a contractual relationship with their employer. After review, the Alaska Supreme Court concluded a project owner, for purposes of the Act, "must be someone who actually contracts with a person to perform specific work and enjoys the beneficial use of that work." Furthermore, the Court found the workers raised issues of material fact about which of the three corporate defendants satisfied this definition. Judgment was therefore reversed and the matter remanded for further proceedings. View "Lovely, et al. v Baker Hughes, Inc., et al." on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of Plaintiff's employer's insurance broker and insurer and dismissing Plaintiff's action claiming that the broker had a duty to advise the employer to obtain workers' compensation insurance and that the insurer had a duty to defend the employer in the underlying action, holding that the district court did not err.Plaintiff was injured in an accident during the course and scope of his employement. Plaintiff reached a settlement with his employer and received an assignment of rights against his employer's insurance broker and insurer. Plaintiff then brought this action. The district court concluded that both the broker and the insurer were entitled to judgment as a matter of law. The Supreme Court affirmed, holding that the district court did not err in (1) applying case law applicable to insurance agents rather than insurance brokers; (2) finding that the broker fulfilled its duties as an insurance broker to the employer; and (3) finding that the insurer did not owe a duty to defend the insurer. View "Merrick v. Fischer, Rounds & Associates, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court in favor of Sun Life Assurance Company of Canada finding that Sun Life properly permitted an offset of Appellant's benefits under tis employer-sponsored long-term disability insurance policy (the Plan) by the amount of Appellant's service-connection disability compensation (Veterans' Benefits), holding that the district court did not err.Specifically, the First Circuit held (1) Appellant's Veterans' Benefits fell squarely within the definition of "Compulsory Benefit Act or Law"; (2) that the district court did not err by concluding as a matter of law that Veterans' Benefits unambiguously qualify as a form of "Other Income Benefit" covered by the Plan's offset provision; and (3) the district court did not err by rejecting as a matter of law Appellant's assertion that Sun Life's offset determination was motivated, at least in part, by Appellant's military service in violation of the Uniformed Services Employment and Reemployment Rights Act. View "Martinez v. Sun Life Assurance Co. of Canada" on Justia Law

In separate incidents, claimants Miguel Velazquez and Servando Velazquez suffered injuries within the scope of their employment, and each required Spanish language interpreting services in connection with their medical care. Meadowbrook Insurance Company was the workers’ compensation carrier for the claimants’ employers and accepted both claims and administered benefits. DFS Interpreting (“DFS”), which provided interpreter services to each claimant, timely submitted invoices to Meadowbrook for the services provided. Meadowbrook refused to pay the invoices DFS submitted. DFS objected to the insurance company’s explanations of review, but did not request a second review pursuant to Labor Code section 4603.2 (e) or California Code of Regulations, title 8, section 9792.5.5. Meadowbrook petitioned for writ of review of the Workers’ Compensation Appeal Board’s (WCAB) decision on reconsideration that liens held by DFS Interpreting (DFS) against Meadowbrook regarding unpaid invoices for interpreter services DFS provided to Meadowbrook’s insureds were not foreclosed by DFS’s failure to follow procedural rules. The Court of Appeal issued the writ, and held that DFS’s failure to comply with required procedures resulted in DFS’s bills being deemed satisfied. This result meant Meadowbrook was not liable for further payment. The Court annulled the WCAB’s decision to the contrary and remanded for further proceedings. View "Meadowbrook Ins. Co. v. Workers' Comp. Appeals Bd." on Justia Law

Neither the Worker's Compensation exclusion or the Employee Indemnification and Employer's Liability exclusion in a standard commercial automobile insurance policy barred coverage for the liability of a third-party permissive user of an insured vehicle who caused personal injuries to an employee of a named insured. While employees of Milton Hardware were performing construction work at the home of Rodney Perry, Milton Hardware's owner authorized Perry to move one of Milton Hardware's trucks. In doing so, Perry accidentally struck a Milton Hardware employee, Greg Ball, and caused him serious injuries. Ball requested indemnification from Milton Hardware's insurer, United Financial, but United Financial denied coverage. The district court granted a declaratory judgment in favor of United Financial, holding that the policy it issued to Milton Hardware did not cover Perry's liability for Ball's injuries.The Fourth Circuit vacated and held that, because Ball's negligence claim against Perry was a claim against a third party, rather than a claim against his employer for workers' compensation, the Worker's Compensation exclusion did not apply. The court also held that the policy's broader exclusion for Employee Indemnification and Employer's Liability, which on its face would apply to exclude coverage for Perry's liability to Ball, was inoperable because its limitation of coverage contravened West Virginia Code 33-6-31. Therefore, the court remanded for further proceedings. View "United Financial Casualty Co. v. Ball" on Justia Law

The Court of Appeal annulled the decision of the appeals board and remanded with directions to find that the special employer had a valid endorsement in its workers' compensation insurance policy excluding coverage for special employees. The court held that while the appeals board was correct that the limiting endorsement had not been signed by the special employer, the written affirmation required by the regulation then in effect is not limited to a signature. Taking into account the circumstances of the entire transaction and its history, the court held that there was substantial compliance with the requirement of a written affirmation. Therefore, the court held that CIGNA was liable for the claim as a covered claim within the meaning of Insurance Code section 1063.1. View "Travelers Property Casualty Co. v. Workers' Compensation Appeals Board" on Justia Law