Justia Insurance Law Opinion Summaries

Appellant American Federation of State, County and Municipal Employees, Council 3 (“Appellant”) filed suit against the State of Maryland alleging that the State breached a statutorily formed contract with current state employees to provide them with certain prescription drug benefits upon retirement. The district court agreed that Maryland law created a contract, it held that the contract was unilateral in nature and that the promised benefits do not vest until an employee retires with sufficient years of service. The district court determined that the current employees represented by Appellant had no vested contractual right to the retirement prescription drug benefits and dismissed the complaint.   The Fourth Circuit affirmed. However, the court did so because it found that the statutory language does not create a contract with state employees. The court explained that in reviewing the language of the statutes at issue, it concluded that they do not create a contract binding upon the State. While Section 2-508 does “entitle” retirees to a subsidy, it does not include any unmistakable contract language. Rather, it only “entitles” a retiree to the “same State subsidy allowed a State employee.” The court explained that nothing in Sections 2-508 or 2-509.1 leaves the court with an unmistakably “clear indication that the legislature intended to bind itself contractually.” Therefore, “all doubts must be resolved in favor of the continuance of the power” of the state legislature to modify or repeal enactments of a previous legislature. View "AFSCME Maryland Council 3 v. State of Maryland" on Justia Law

Appellants– the former secretary-treasurer and president, respectively, of a District Lodge of the International Association of Machinists – appealed the district court’s denial of their motion for a preliminary injunction. They sued the international union, its president, and its general secretary-treasurer. The controversy concerns the suspensions of Appellants’ and the international union’s imposition of a trusteeship on their District Lodge. Appellants’ first amended complaint alleged one count under Title I and five counts under Title III of the Labor-Management Reporting and Disclosure Act (the “LMRDA”). They sought equitable relief along with compensatory and punitive damages. A month after they filed their first amended complaint, they filed a motion for a preliminary injunction. The district court denied the motion. It held that Appellants had not shown a likelihood of success on the merits. It also held that the other factors did not favor them.   The DC Circuit affirmed. The court held that Appellants’ request under Title III to end the trusteeship is moot. A case becomes moot when a party obtains the relief they sought. Here, the disputed trusteeship has been lifted. Further, the court explained that Appellants seek to invalidate an officer election. It is impossible to reinstate Appellant as secretary-treasurer or allow the District Lodge to elect new members to other positions unless the court invalidates the officer election that just occurred. Thus, the court rejected the Title I claim. View "Ian Scott-Anderman, et al. v. Robert Martinez, et al." on Justia Law

Respondent Stephany Connelly was a passenger in a vehicle driven by co-worker Freya Trezona during the course and scope of their employment when Trezona negligently caused the accident, injuring Connelly. Because workers’ compensation benefits did not fully redress Connelly’s injuries, she made a claim for bodily injury and uninsured motorist (UM) benefits with her own insurance carrier and with Trezona’s carrier. Both companies denied the claim, contending Connelly’s sole remedy lay with the South Carolina Workers’ Compensation Act. Connelly filed suit seeking a declaration that both policies provided coverage. The parties agreed the dispute turned on the interpretation of the phrase “legally entitled to recover” found in the UM statute. The trial court ruled in favor of Connelly, and the court of appeals concurred the phrase was legally ambiguous. The South Carolina Supreme Court found the phrase unambiguous: the amount a plaintiff is “legally entitled to recover” under a UM provision of an insurance policy is the amount for which the plaintiff has secured a judgment against the at-fault defendant. Because the Act prevents Connelly from ever becoming “legally entitled to recover” from Trezona under the facts of this case, the Court reversed the trial court. View "Connelly v. Main Street America Group" on Justia Law

Reliance Standard Life Insurance Company denied Plaintiff’s claim for long-term disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Plaintiff brought an under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. Section 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Plaintiff. Reliance appealed, arguing that courts in the Fourth Circuit are required to resolve ERISA denial-of-benefits cases via summary judgment and that the district court erred in dispensing with this case through a bench trial. Reliance also argued that this Court must review the district court’s legal conclusions.   The Fourth Circuit affirmed. The court first held that because the plan at issue here did not require objective proof of disability, the court rejected Reliance’s contention that Plaintiff’s claim fails for the lack of such evidence. Further, the court wrote that the record supports the district court’s determination that Plaintiff’s disability was not limited to a “specific locale.” Accordingly, the court agreed that Plaintiff was “totally disabled” under the terms of the plan. View "Anita Tekmen v. Reliance Standard Life Ins." on Justia Law

This action was brought by plaintiff Nancy Holm, administratrix of the estate of her husband, Christopher Friedauer, who died in 2015 after falling at his workplace, Holmdel Nurseries, LLC. As a longtime employee of the family-owned business, Christopher had been covered by workers’ compensation insurance, but he was no longer covered after he became a member of the LLC in 2012. Plaintiff claimed that defendant Daniel Purdy, who served as the insurance broker for Holmdel Nurseries from 2002 to 2015, failed to provide to the LLC the notice mandated by N.J.S.A. 34:15-36, and that Christopher was unaware that he no longer had workers’ compensation coverage in his new role as an LLC member. She alleged that as a result of defendant’s negligence and breach of fiduciary duty, Friedauer’s dependents were deprived of a workers’ compensation death benefit to which they would have been entitled under N.J.S.A. 34:15-13 had he been covered by workers’ compensation insurance at the time of his death. Defendant asserted that Friedauer’s father, Robert Friedauer, the LLC’s managing member for insurance issues, instructed defendant in 2002 that Holmdel Nurseries did not want to purchase workers’ compensation coverage for its LLC members because of the cost of that coverage. At the close of a jury trial, the trial court granted defendant’s motion for an involuntary dismissal pursuant to Rule 4:37-2(b) and his motion for judgment at trial pursuant to Rule 4:40-1. Informed by the New Jersey Legislature’s expression of public policy in N.J.S.A. 34:15-36, the New Jersey Supreme Court concurred with the Appellate Division that defendant had a duty to advise the LLC members, at the time of the workers’ compensation policy’s purchase or renewal, that an LLC member actively performing services on the LLC’s behalf was eligible for workers’ compensation coverage, but that the LLC must elect to purchase such coverage in order to obtain it. Consistent with N.J.S.A. 34:15-36, however, the Supreme Court held that defendant could not be held liable for breach of that duty unless the damages alleged were caused by defendant’s willful, wanton or grossly negligent act of commission or omission. The Supreme Court disagreed with the trial court’s assessment of the evidence presented by plaintiff on the question of proximate cause. Accordingly, the Court concurred that the trial court erred when it granted defendant’s motion to dismiss and his motion for judgment at trial, and affirmed as modified the Appellate Division’s judgment. The case was thus remanded to the trial court for further proceedings. View "Holm v. Purdy" on Justia Law

Supreme Court affirmed in part and reversed in part three orders issued by two separate judges presiding over two separate but related cases in the circuit court, holding that remand was required.Specifically, the Supreme Court held that the circuit court (1) did not err in denying Praetorian Insurance Company's motion to intervene in Plaintiff's wrongful death action against its insured, Air Cargo Carriers, LLC for lack of standing to assert Air Cargo's right to workers' compensation immunity; (2) erred in denying Praetorian's motion for summary judgment as to count one of its declaratory judgment complaint; and (3) correctly dismissed count two of Praetorian's declaratory judgment complaint on the grounds that Praetorian lacked standing. View "Praetorian Insurance Co. v. Chau" on Justia Law

The Travelers Indemnity Company appeals the judgment entered after the superior court denied Travelers’ petition for a writ of administrative mandate challenging the Insurance Commissioner’s decision that certain agreements relating to workers’ compensation insurance policies issued to Adir International, LLC were unenforceable. Travelers contended that Adir’s lawsuit in the trial court, which included a request for a declaratory judgment the agreements were void, barred the Commissioner, under the doctrine of exclusive concurrent jurisdiction, from exercising jurisdiction while that lawsuit was pending. Travelers also appealed the post-judgment order granting Adir’s motion for attorney fees, contending attorney fees were not authorized.   The Second Appellate Division affirmed the order and judgment denying Travelers’s petition. The court explained that the exclusive concurrent jurisdiction doctrine does not apply in this context to proceedings pending before the trial court and an administrative agency; and, in any event, it was reasonable and consistent with the primary jurisdiction doctrine for the trial court to defer to the Commissioner’s determination of the validity of the agreement at issue. In addition, because Adir’s administrative claim fell within the agreement’s attorney fee provision, the court affirmed the post-judgment order awarding Adir attorney fees. View "The Travelers Indemnity Co. v. Lara" on Justia Law

The Multiemployer Pension Plan Amendments Act of 1980 imposes liability on employers who withdraw—partially or completely—from multiemployer pension funds. After a complete withdrawal, GCIU-Employer Retirement Fund’s (GCIU) actuary calculated MNG Enterprise’s (MNG) withdrawal liability using an interest rate published by the Pension Benefit Guaranty Corporation. On MNG’s challenge, an arbitrator found (1) that MNG could not be assessed partial withdrawal liability following a complete withdrawal, (2) that it had shown the interest rate used was not the best estimate of the plan’s experience, and (3) that GCIU properly included the newspapers’ contribution histories. The district court affirmed the arbitrator’s award, vacating and correcting only a typographical error on the interest rate.   The Ninth Circuit affirmed in part and vacated in part the district court’s order affirming, except for a typographical error, an arbitrator’s award regarding the withdrawal liability. The panel held that the MPPAA directs the plan actuary to determine withdrawal liability based on “actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” The panel held that the GCIU actuary’s use of the PBGC rate, without considering the “experience of the plan and reasonable expectations,” did not satisfy the “best estimate” standard. View "GCIU-EMPLOYER RETIREMENT FUND, ET AL V. MNG ENTERPRISES, INC." on Justia Law

Petitioners Javier Vasquez and his employer, Matosantos International Corporation (MIC), appealed a New Hampshire Compensation Appeals Board (CAB) determination that it could not order respondent, The Hartford Insurance Company, to pay workers’ compensation benefits to Vasquez. The CAB concluded that the Department of Labor (DOL), and therefore the CAB, lacked jurisdiction under the New Hampshire Workers’ Compensation Law to interpret the workers’ compensation insurance policy that MIC had purchased from The Hartford. Because the New Hampshire Supreme Court concluded the CAB did have jurisdiction to consider and resolve the coverage dispute between MIC and The Hartford, it vacated the CAB’s decision and remanded for its consideration, in the first instance, of whether the policy purchased by MIC covered Vasquez when he was injured while working in New Hampshire. View "Appeal of Vasquez" on Justia Law

Principal Life Insurance Company (Principal) offers a product called the Principal Fixed Income Option (PFIO), a stable value contract, to employer-sponsored 401(k) plans. Plaintiff on behalf of himself and a class of plan participants who deposited money into the PFIO, sued Principal under the Employee Retirement Income Security Act of 1974 (ERISA), claiming that it (1) breached its fiduciary duty of loyalty by setting a low-interest rate for participants and (2) engaged in a prohibited transaction by using the PFIO contract to make money for itself. The district court granted summary judgment to Principal after concluding that it was not a fiduciary. The Eighth Circuit reversed, holding that Principal was a fiduciary. On remand, the district court entered judgment in favor of Principal on both claims after a bench trial. Plaintiff challenges the court’s judgment.   The Eighth Circuit affirmed. The court agreed with the district court that Principal and the participants share an interest because a guaranteed CCR that is too high threatens the long-term sustainability of the guarantees of the PFIO, which is detrimental to the interest of the participants. The question then becomes whether the court clearly erred by finding that Principal set the CCR in the participants’ interests. The court held that the district court did not clearly err by finding that the deducts were reasonable and set by Principal in the participants’ interest of paying a reasonable amount for the PFIO’s administration.  Finally, the court affirmed the district court’s judgment in favor of Principal on the prohibited transaction claim because it is exempted from liability for receiving reasonable compensation. View "Frederick Rozo v. Principal Life Insurance Co." on Justia Law