Justia Insurance Law Opinion Summaries

Appellant Brenda Jones was involved in an automobile accident with another driver that caused damage to her vehicle. Appellant's insurance policy with Nationwide Property and Casualty Company (Nationwide) included collision coverage for the vehicle involved, subject to a $500 deductible. The policy also provided Nationwide with the right of subrogation. Nationwide paid Appellant for all damage to the vehicle, reduced by the $500 deductible. Nationwide then filed a subrogation claim against the other driver and recovered under the other driver's liability coverage. The recovery, while in excess of Appellant's deductible, was only ninety percent of the amount Nationwide paid Appellant under the collision coverage policy. Nationwide paid Jones a pro rata share of the subrogation award by reimbursing her for ninety percent of her deductible, which amounted to $450. Appellant filed a class action against Nationwide claiming that Nationwide's uniform practice of pro rating reimbursements of deductibles violated the "made whole" doctrine. All claims were based upon Appellant's conclusion that Nationwide should have reimbursed her for her entire $500 deductible, despite the provision in the policy granting Nationwide subrogation rights. Appellant also sought injunctive relief to stop Nationwide's practice of pro rata deductible reimbursement. The Supreme Court concluded that the "made whole" doctrine did not apply to the collision coverage at issue in this case, the Court affirmed the dismissal of Appellant's class action.

In this discretionary appeal, the Supreme Court was asked to address whether the "regular use" exclusion in a personal automobile insurance police was valid to preclude payment of underinsured motorist benefits (UIM) to a police officer injured in the course of employment while operating his police vehicle for which the officer did not have an ability to obtain UIM coverage. Appellant Robert Williams was a Pennsylvania State Trooper seriously injured in an accident involving his police vehicle. At the time of the accident, Appellant maintained a personal automobile insurance policy with Government Employees Insurance Company (GEICO). He sought to recover UIM benefits from GEICO from the accident, but GEICO denied coverage citing the "regular use" exclusion contained in the policy. The trial court granted GEICO's motion to dismiss, and the Superior Court affirmed in an unpublished memorandum. Appellant argued on appeal that because of the special factual circumstances and challenges he faces as a state trooper, his insurer should have provided him with UIM coverage "despite the unambiguous policy exclusion because Pennsylvania has a strong public policy of protecting police officers and other first responders such that they are entitled to special treatment." Upon review, the Supreme Court concluded "Appellant's argument simply fails." The Court held that the trial and superior courts were correct in denying Appellant coverage under his UIM policy, and affirmed their decisions.

At issue before the Supreme Court was whether an opinion rendered by a medical expert was sufficient to rebut the presumption of disease causation under the Pennsylvania Workers' Compensation Act. Joseph Kriebel worked for the City of Philadelphia as a firefighter from 1974 to 2003. He died in 2004 from liver disease caused by hepatitis C. His widow Appellant Patricia Kriebel, filed a claim petition under the Act in 2005, alleging that her husband contracted hepatitis C in the course of his employment. Appellant sought to raise the presumption of occupational exposure. In support of her claim, Appellant presented the testimony of her husband's treating physician. The City rebutted the presumption of disease causation with testimony of its own medical expert. Upon review, the Supreme Court held that an expert's opinion does not constitute substantial competent evidence where it is based on a series of assumptions that lack the necessary factual predicate. Since the medical opinions in this case were based on unfounded suppositions, they were legally insufficient to overcome the presumption of disease causation. The Supreme Court reversed the Commonwealth Court that held that the City overcame the presumption with its' medical expert's testimony, and reinstated the order of the superior court which held in favor of Appellant.

At issue before the Supreme Court was whether it was a violation of public policy to exclude from underinsured motorist coverage (UIM) a claim by an individual eligible for workers' compensation benefits. Appellant Frank Heller was severely injured from an automobile accident that happened during the course of his employment as a police officer for Sugarcreek Borough. Workers' Compensation covered his medical expenses and two-thirds of his salary. The Borough paid the remainder of Appellant's salary. Appellant's losses and damages far exceeded the policy limit from the tortfeasor's insurance carrier. Accordingly, Appellant notified his insurer of a potential UIM claim and sought UIM benefits from the Borough pursuant to a policy issued by the Pennsylvania League of Cities and Municipalities. Ultimately, Appellant's claim was denied. Upon review, the Supreme Court concluded that an exclusion in Appellant's workers' compensation policy violated public policy and was therefore unenforceable. The Court reversed the Commonwealth Court which held that the policy considerations favored the insurer: "Invalidating the workers' compensation exclusion would not force [the UIM insurer] to underwrite an unknown risk for which it did not receive compensation. The Borough voluntarily elected to purchase optional UIM coverage. .. [W]e find [Appellant's] assertion that the Borough purchased illusory coverage persuasive… the vast majority of all UIM claims likely will be made by Borough employees who are eligible for workers' compensation. The subject exclusion operates to deny UIM benefits to anyone who is eligible for workers' compensation."

Appellant Robert Petty is sole owner of Co-Appellant R.G. Petty Masonry. Appellants contracted with Respondent Blue Cross of Northeastern Pennsylvania (Blue Cross), a nonprofit hospital corporation that provides health insurance coverage for its employees. Appellants are covered under the group policy as subscribers. Appellants filed a four-count class action suit against Blue Cross, alleging that it violated the state Nonprofit Law by accumulating excessive profits and surplus well beyond the "incidental profit" permitted by statute. The second count alleged Blue Cross breached its contract with Appellants by violating the Nonprofit Law. The third count alleged Blue Cross owed appellants a fiduciary duty by virtue of their status as subscribers, and that duty was breached when it accrued the excess surplus. The fourth count requested an inspection of Blue Cross' business records. The trial court found Appellants lacked standing to challenge Blue Cross' alleged violations of the Nonprofit Law and dismissed the suit. The Commonwealth Court affirmed the trial court. Upon careful consideration of the briefs submitted by the parties in addition to the applicable legal authorities, the Supreme Court found that Appellants indeed lacked standing under the Nonprofit Law to challenge Blue Cross by their four-count complaint. Accordingly, the Court affirmed the lower courts' decisions and dismissed Appellants' case.

The Commonwealth Court declined to issue a writ of mandamus to Appellant Crozer Chester Medical Center (Crozer) in its attempt to force the Department of Labor and Industry (Department) to reimburse it for medical fees. Claimant William Radel suffered a work-related injury while lifting a bundle of rebar for his employer. The claimant underwent surgery at Crozer, and Crozer sent claimant's records and the bill to claimant's insurance company, Zurich North American Insurance (Zurich). Zurich did not pay, nor did it deny the claim. Crozer then turned to the State for reimbursement. The Department rejected the application as "premature," because Zurich's non-payment made an "outstanding issue of liability/compensability for the alleged injury." Crozer then petitioned the Commonwealth Court to force the Department to pay. The Supreme Court agreed that Crozer's application for reimbursement was premature. The Court found that Crozer did not try to resolve Zurich's nonpayment before petitioning the State or the Commonwealth Court. The Court affirmed the decision of the Department and the lower court, and dismissed Crozer's petition for a writ of mandamus.

Appellant Walnut Street Associates (WSA) provides insurance brokerage services and helps employers obtain health insurance for their employees. Appellee Brokerage Concepts, Inc. (BCI) is a third party administrator of employee benefit plans. Procacci retained BCI as administrator of its insurance plans, and BCI paid commissions to WSA based on premiums paid by Procacci. In 2005, Procacci requested BCI reduce its costs, but BCI would not meet Procacciâs proposal. Procacci then notified BCI that it would take its business elsewhere. BCI asked Procacci to reconsider, and in the process, disclosed to Procacci how much it paid to WSA as its broker. The amount was higher than Procacci believed WSA had been earning, but there was no dispute that BCIâs statements about WSAâs compensation were true. As a result of BCIâs letter, Procacci terminated its contract with WSA. WSA sued BCI alleging that BCI tortiously interfered with the WSA/Procacci contract by disclosing the amount of WSAâs compensation. BCI argued that it could not be liable for tortious interference because what it said was true, or otherwise justified and privileged. At trial, the jury found that BCI did interfere in the WSA/Procacci contract. BCI appealed, and the appellate court reversed the trial courtâs judgment. The appellate court adopted a section of the Restatement of Torts, which said that truth is a defense to a claim of tortious interference. WSA maintained that the Restatement was not applicable according to Pennsylvania law. The Supreme Court reviewed the case and adopted the Restatement defense that truth is a defense to claims of tortious interference with contractual relations. The Court affirmed the decision of the appellate court.

In 1998, Appellee Stephen Heim filed a professional liability action against two doctors and their medical practices alleging that their negligent care from 1992 to 1996 caused the death of his wife. In August 2000, Mr. Heim received a jury verdict for over $1 million. The jury attributed a substantial percentage of fault to Mrs. Heim, and apportioned the remaining liability among the defendant doctors, which they bore jointly and severally. At the time of the alleged negligent acts, the doctors each maintained primary professional liability insurance coverage for $200,000 per occurrence under a policy issued by a private insurer. That insurer went bankrupt, and the policy was assumed by the Pennsylvania Property and Casualty Association (PPCIGA). Excess liability protection was provided to health care providers through a government-run contingency fund known as the Medical Professional Liability Catastrophe Loss Fund (CAT Fund). It was determined that the primary insurance policy left a $100,000 shortfall in order to satisfy Mr. Heimâs judgment. The CAT Fund determined it had no responsibility to redress the shortfall from the primary insurerâs bankruptcy. With no insurance money to protect them, Mr. Heim sued against the doctorsâ assets seeking to recover the unpaid portion of the judgment that neither the insurance company nor the CAT Fund would pay. The Commonwealth Court ruled in Mr. Heimâs favor, but in accordance with joint and several liability, applied the order to both PPCIGA and the CAT Fund. The Fund appealed to the Supreme Court. The Supreme Court found that under the statutory scheme that governs the CAT Fund, the facts of this case clearly implicated the Fundâs responsibility to the doctors to pay for the $100,000 shortfall left by their primary insurance policy. Accordingly, the Court affirmed the decision of the Commonwealth Court.