Justia Insurance Law Opinion Summaries

Employee was allegedly involved in a work-related accident on property owned by Corporation. Insurer was Employer's insurance carrier. While paying Employee's workers' compensation benefits, Insurer filed suit against Corporation, asserting its right of subrogation. After the statute of limitations period had elapsed, Employee sought to intervene in Insurer's suit, and the circuit court granted Employee's request. Corporation subsequently moved for summary judgment on the ground that Haw. Rev. Stat. 386-8, which governs the right of an employee to intervene in an employer's third party liability lawsuit under workers' compensation law, did not allow an employee to intervene after the statute of limitations had expired. The circuit court granted Corporation's motion and entered judgment against Employee. The Supreme Court vacated the circuit court's judgment and remanded, holding that Employee could intervene in Insurer's action against Corporation because section 386-8 did not limit Employee's right to intervene in Insurer's timely filed lawsuit.

Employee filed a workers' compensation claim against Employer. Employer's Insurer accepted liability for Employee's claim. Insurer contracted with third-party Adjuster to provide services for Employee's claim. Employee and Insurer disagreed over elements of the claim, and Attorney advised Insurer on various legal matters. The claim was eventually resolved. Employee then filed the present action for unfair claims settlement practices, naming Insurer and an employee of Adjuster as defendants. Employee served Employer with a subpoena requesting, inter alia, a letter Attorney wrote to Adjuster's employee concerning the underlying case. Employer and Insurer objected to the subpoena, citing attorney-client privilege and the work-product doctrine. The court denied the motions. Insurer then petitioned the Supreme Court for a writ of supervisory control. The Court dismissed the petition, holding that the district court correctly applied the law of attorney-client privilege but incorrectly analyzed the work product doctrine. However, because the court reached the proper conclusion, supervisory control was unnecessary.

Claimant Gary Brown filed a complaint with the Industrial Commission seeking disability benefits after he injured his back while working for The Home Depot. Arguing that the injuries caused by the accident in combination with his preexisting conditions, left him permanently and totally disabled, Claimant sought workers' compensation benefits from both Home Depot and the Idaho Industrial Special Indemnity Fund (ISIF). The Commission determined that Claimant was not permanently and totally disabled. Claimant contended on appeal that the Commission erred by evaluating his ability to find work based upon his access to the local labor market at the time his medical condition stabilized in 2005. He argued that his labor market access should have been evaluated as of the date of the Commission hearing in 2009. He also argued that the Commission based its finding that he was 95 percent disabled on an incorrect understanding of the expert testimony presented at the hearing. Upon review, the Supreme Court held that Claimant's labor market at the time of the disability hearing was the proper labor market to be used in evaluating his disability. But because the Commission applied an incorrect legal standard, the Court vacated the Commission's decision and remanded the case for further proceedings.

Appellant Lincoln McNulty worked as a ski patroller for Sinclair Services Company as a member of the Sun Valley Resort from 2005 to 2010. Once the ski season ended in 2009, Appellant filed for unemployment benefits effective April 2009, through November 2009. During those off-season months, he began working part-time at the Sawtooth Club for extra income. However, Appellant failed to report such employment or any earnings from the Sawtooth Club to the Idaho Department of Labor when he filed for unemployment benefits each week. The Idaho Department of Labor discovered the discrepancy and a claims investigator spoke with Appellant and ultimately issued an Eligibility Determination that Appellant was ineligible for benefits because he willfully made false statements or failed to report material facts in order to obtain benefits. Appellant appealed to the Supreme Court, arguing that his failure to report was not willful, the facts were not material, and that he should be eligible for a waiver of the requirement to repay the unemployment benefits. Upon review, the Court affirmed the Industrial Commission's conclusion that Appellant willfully failed to disclose material facts in order to obtain unemployment benefits and that he must repay the overpayment of both state and federal benefits as well as any applicable interest and penalties.

During the course of his employment as a police officer for the Town of Abingdon, Kevin Christy suffered injuries from an automobile accident. Christy was insured under an automobile liability insurance policy issued by Mercury Casualty Company (Mercury). Christy submitted a claim to Mercury for payment of the portion of his medical expenses not paid by the Town's workers' compensation carrier. Mercury denied the claim, asserting that an exclusion in the policy barred Christy from receiving any payment for medical expenses because a portion of those expenses had been paid by workers' compensation benefits. Christy filed a warrant in debt against Mercury seeking contract damages. The district court entered judgment in favor of Christy. The circuit court reversed, concluding that, based on the unambiguous language of the exclusion, payment of workers' compensation triggered the exclusion and precluded payment by Mercury. The Supreme Court affirmed, holding that the language of the exclusion was clear and that the exclusion permitted Mercury to deny coverage for any expenses that would have been subject to workers' compensation coverage without regard to whether all of those expenses were actually paid by the workers' compensation carrier.

On June 28, 2010, Appellant Maria Gomez filed a Worker’s Compensation Complaint with the Industrial Commission (Commission) claiming benefits for an accident that occurred in 2009, when she injured her lower back lifting sixty-pound boxes. The injury occurred at Blackfoot Brass (Dura Mark). Appellant had previously suffered two work-related accidents while working with Dura Mark, one in 2002, the other in 2006, but had returned to work without restrictions after participating in physical therapy for both injuries. The issue before the Supreme Court centered on a Commission order denying reconsideration of Appellant's motion to reopen the record to allow for additional evidence on the issue of causation. The Industrial Commission previously ordered that Appellant had failed to prove the medical treatment she received for a back injury was related to an industrial accident and injury. At the emergency hearing pursuant to the Judicial Rules of Practice and Procedure adopted by the Commission, Appellant introduced evidence regarding her entitlement to reasonable and necessary medical care pursuant to I.C. 72-432, but the referee denied Appellant's claim on the grounds of causation. Upon review, the Supreme Court affirmed the Commission's judgment. In doing so, the Court wanted to provide a "clear message that without a specific stipulation that causation will be a contested issue at the hearing pursuant to I.C. 72-713, and especially if there is a difference of opinion as to causation by opposing parties and their experts, claimant’s attorneys should no longer be lulled by anything other than a stipulation to all legal prerequisites and elements for recovery and be prepared to present evidence of a causal connection between the industrial injury or sickness and the required treatment."

In 2005, pursuant to the Black Lung Benefits Act's administrative provisions, an Administrative Law Judge (ALJ) awarded lifetime benefits to Merrill Lambright and survivor benefits to his widow, Delores Ashmore. Lambright's claims arose out of his employment with Petitioner Bridger Coal Company. In 2006, a three-member panel of the U.S. Department of Labor Benefits Review Board vacated the ALJ's decision and remanded to the ALJ for reconsideration. In 2008, the ALJ denied benefits on both the lifetime and survivor claims. In 2009, a three-member panel of the Board reversed this decision and reinstated the 2005 award of benefits. The issue on appeal was the characterization of Ms. Ashmore's 2002 request for a modification in her survivor benefits: "it appears the director interpreted Ashmore's motion as a motion for modification based on change in conditions, but only to the extent Ashmore alleged she was entitled to additional (survivor) benefits due to Lambright's death. To the extent the order granting modification was based on a change in conditions, the ruling only implicated the claim for survivor benefits, not Lambright's original claim for lifetime benefits." On reconsideration en banc, the full five-member Board was unable to reach a disposition in which at least three permanent members concurred. As a result, the 2009 panel decision stood. Petitioner appealed, challenging the scope of the 2009 panel's authority to review the 2008 ALJ decision, the standard used in determining whether to award benefits, and the onset-date determination. Upon review, the Tenth Circuit affirmed the 2009 panel decision.

Franklin Insurance commenced this action against its insured, School Board, for a declaratory judgment that Franklin Insurance owed no duty to defend the School Board in an action commenced by the School Board employees for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. 216(b), nor any duty to indemnify the School Board for any judgment that might be entered in the action. The court concluded that the failure to comply with FLSA was a wrongful act and that, while a judgment awarding unpaid wages would not be a covered loss under the policy because payment of those wages was a preexisting duty, any obligation to pay liquidated damages and attorneys' fees would cause the School Board a loss from a wrongful act, covered by the policy. Accordingly, the court reversed the district court's grant of summary judgment in favor of Franklin Insurance.

Lawrence Trudell was injured when he fell while trying to descend a ladder from the roof of a structure on which he was working. At the time he was employed by Phillips Construction Co. (Phillips), a construction contracting company principally owned by Clayton Phillips and Trish Dorman. Phillips did not have workers' compensation insurance, even though it was licensed by the State. The structure Trudell was working on was owned by John Brent and Debra Hibbert. Trydell filed suit for workers' compensation benefits against Phillips and the Hibberts, alleging that the owners were "project owners" as defined in the Alaska Workers’ Compensation Act and thus liable for securing workers' compensation. Phillips then filed for bankruptcy. The Hibberts denied liability on the basis that they were not "project owners." After a bench trial solely about whether the building owners were "project owners" or Trudell's employers, the superior court decided that they were neither and that they were not liable to pay worker's compensation, and awarded attorney’s fees against the Trudell. Upon review, the Supreme Court concluded it was error to interpret "project owners" as excluding the building owners, and reversed the superior court's decision.

Firefighters, who suffered career-ending injuries during required training exercises, obtained line-of-duty disability pensions and sought continuing health coverage under the Public Safety Employee Benefits Act, 820 ILCS 320/10, which requires employers of full-time firefighters to pay health insurance premiums for the firefighter and family if the firefighter suffers a catastrophic injury as a result of a response to what is reasonably believed to be an emergency. The trial court dismissed a declaratory judgment action by one firefighter and affirmed denial of the insurance benefit for one firefighter. The appellate court affirmed. The supreme court held that an "emergency" means an unforeseen circumstance calling for urgent and immediate action and can arise in a training exercise. The other firefighter had obtained a declaratory judgment, which was affirmed by the appellate court. The supreme court distinguished the situation because, although he was instructed to "respond as if it were an actual emergency," he was not injured while making an urgent response to unforeseen circumstances involving an imminent danger to person or property.