Justia Insurance Law Opinion Summaries

Douglas Ghee, as the personal representative of the estate of Billy Fleming, appealed a circuit court order dismissing a wrongful-death claim brought against USAble Mutual Insurance Company d/b/a Blue Advantage Administrators of Arkansas ("Blue Advantage"). Fleming presented to the emergency department complaining of constipation and abdominal pain. He would ultimately need a colectomy, but the hospital informed him Blue Advantage had decided that a lower quality of care (continued non-surgical management) was more appropriate than the higher quality of care (surgery) that Fleming's surgeon felt was appropriate. Fleming and his family had multiple conversations with agents of Blue Advantage in an unsuccessful attempt to convince the company that the higher surgery was the more appropriate course of care. Ultimately, an agent of Blue Advantage suggested to Fleming that he return to the hospital in an attempt to convince hospital personnel and physicians to perform the surgery on an emergency basis. For five days, Fleming would present to the emergency room, each time he was treated by non-surgical means, then returned home. On the evening of July 15, 2013, Fleming's condition had deteriorated such that he had to be intubated. He died after midnight of septic shock due to a perforated sigmoid colon with abundant fecal material in the peritoneal cavity. A lawsuit was filed against Blue Advantage, asserting that the combined negligence of the hospitals and clinics involved and Blue Advantage, proximately caused Fleming's death. Because the trial court determined that Ghee's allegations against Blue Advantage as stated in the original complaint were defensively preempted by ERISA, the Alabama Supreme Court found Ghee should have had the right to amend his complaint to clarify his state-law claims. Because the Court concluded that Ghee should have been afforded the right to amend his complaint, it reversed the judgment of the trial court and remanded for further proceedings. View "Ghee v. USAble Mutual Insurance Company d/b/a Blue Advantage Administrators of Arkansas" on Justia Law

In this insurance coverage dispute, the Supreme Court reversed the judgment of the circuit court ruling in favor of Doswell Truck Stop, LLC (DTS) on DTS's declaratory judgment action against James River Insurance Company and entered final judgment declaring that an auto exclusion precluded coverage of James Smith's injuries under the policy at issue, holding that the trial court erred in ruling in favor of DTS.Smith filed a personal injury lawsuit against DTS for injuries he allegedly suffered as a result of a tire explosion that occurred when DTS was repairing a tire on Smith's tractor-trailer. DTS filed an insurance claim with James River, which had issued a commercial general liability policy to DTS. James River denied coverage on the basis that DTS's claim was precluded by the auto exclusion. DTS then filed this action seeking a determination of whether the policy covered Smith's injury. The circuit court ruled in favor of DTS. The Supreme Court reversed, holding (1) the circuit court erred determining that the auto exclusion was ambiguous with respect to the meaning of "maintenance" of an auto; and (2) the circuit court erred in ruling that an independent basis existed for coverage under the policy. View "James River Insurance Co. v. Doswell Truck Stop, LLC" on Justia Law

Petitioner Theodore Morrison had surgery on his right knee in 2004 after injuring it at work. He returned to work after the surgery and did not consult a doctor about that knee for almost ten years, until he again injured it in 2014 while working for a different employer. Following the 2014 injury he sought to have arthroscopic surgery as his doctor recommended. His 2014 employer disputed its liability for continued medical care, and the worker filed a written claim against the 2014 employer. The Alaska Workers’ Compensation Board joined the earlier employer to the claim and decided, after a hearing, that the 2014 work injury was the substantial cause of the worker’s current need for medical care, requiring the 2014 employer to pay the cost of treatment for the right knee. The 2014 employer appealed to the Alaska Workers’ Compensation Appeals Commission, which decided the Board misapplied the new compensability standard and remanded the case to the Board for further proceedings. Morrison petitioned the Alaska Supreme Court for review of the Commission’s decision, and the Supreme Court reversed the Commission’s decision and reinstated the Board’s award. Based on the medical testimony, the Court found the Board identified two possible causes of Morrison’s need for medical treatment at the time of the hearing. It then considered the extent to which the two causes contributed to that need and decided the 2014 injury was the more important cause of the need for treatment then. "The legislature gave the Board discretion to assign a cause based on the evidence before it. The Board did here what the statute directs." View "Morrison v. Alaska Interstate Construction Inc." on Justia Law

The Alaska Workers’ Compensation Board denied a Bryce Warnke-Green's request that his employer pay for a van modified to accommodate his work-related disability. On appeal, the Alaska Workers’ Compensation Appeals Commission decided that a modifiable van was a compensable medical benefit. Warnke-Green moved for attorney’s fees. The Commission reduced the attorney’s hourly rate, deducted a few time entries, and awarded him less than half of what was requested. Warnke-Green asked the Commission to reconsider its award, but the Commission declined to do so because of its view that the Alaska Workers’ Compensation Act (the Act) allowed it to reconsider only the final decision on the merits of an appeal. The Alaska Supreme Court granted Warnke-Green's petition for review, and held that the Commission had the necessarily incidental authority to reconsider its non-final decisions. The Court also reversed the Commission’s award of attorney’s fees and remanded for an award that was fully compensable and reasonable. View "Warnke-Green v. Pro-West Contractors, LLC" on Justia Law

In a consolidated appeal, the New Jersey Supreme Court considered one central issue: whether the New Jersey Legislature intended to deviate from its highly regulated no-fault system of first-party self-insurance to cover medical expenses arising from automobile accidents when it amended the statutory scheme to allow an insured to elect smaller amounts of personal injury protection (PIP) under a standard policy. Each plaintiff in this appeal was injured in a car accident. Each was insured under a standard policy with insurance that provided for $15,000 in PIP coverage instead of the default amount of $250,000. Neither was able to sustain a claim for bodily injury (noneconomic loss) due to each policy’s limitation-on-lawsuit option. Each sued for outstanding medical bills in excess of their elected PIP coverage ($28,000 and $10,000, respectively). The trial courts ruled against plaintiffs in each matter and prohibited plaintiffs from admitting evidence of their medical expenses that exceeded their $15,000 PIP limits. The Appellate Division consolidated the cases on appeal, and, in a published opinion, reversed both trial court orders. After its review, the Supreme Court could not concluded there was evidence of a clear intention on the part of the Legislature to deviate from the carefully constructed no-fault first-party PIP system of regulated coverage of contained medical expenses and return to fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected lesser amount of available PIP coverage. "Unless the Legislature makes such an intent clearly known, the Court will not assume that such a change was intended by the Legislature through its amendments to the no-fault system in the Automobile Insurance Cost Reduction Act." View "Haines v. Taft" on Justia Law

SC, an outpatient surgical center, permits outside physicians to perform day surgery at its facility. Its insurance limited APA’s liability to $1 million per claim. In 2002, Dr. Hasson, an outside physician, performed outpatient laparoscopic surgery on Tate at SC. Hasson did not see Tate or sign her discharge instructions before SC released her; SC’s anesthesiologist discharged Tate, giving Tate's boyfriend discharge instructions. Days later, Tate checked into the hospital with a perforated bowel that rendered the previously-healthy 34‐year‐old a quadriplegic. Tate sued Hasson and SC. APA hired attorneys to defend SC. APA set the “Reserve” (money the Michigan Department of Insurance required APA to put aside to cover an adverse verdict) at $560,000. APA believed the damages could exceed the policy limit but that SC was not likely to be found liable. In 2007, APA rejected Tate's offer to settle for policy limits. Hasson’s insurer settled for his policy limit ($1 million). After the Illinois Appellate Court remanded the issue of whether SC’s nursing staff breached the standard of care, APA raised the Reserve to $1 million, stating that it still believed the case was defensible. Before the second trial, APA rejected Tate's second settlement demand for the policy limit. The jury returned a $5.17 million verdict. SC then sued APA for bad faith. The Seventh Circuit affirmed judgment as a matter of law in favor of APA. SC did not establish that anyone involved in litigating the case believed there was more than a mere possibility SC would be found liable; the mere possibility of liability is insufficient under the Illinois Supreme Court’s reasonable probability standard. View "Surgery Center at 900 North Michigan Avenue, LLC v. American Physicians Assurance Corp., Inc." on Justia Law

The Supreme Court affirmed the judgment of the circuit court finding in favor of Plaintiff in this declaratory judgment action seeking underinsured motorist benefits under two insurance policies with Defendant, holding that the policy language was ambiguous and that underinsured motorist coverage applied.Plaintiff, special administrator of the Estate of Nehemiah Larimer, brought this action following Nehemiah's death in an accident. Defendant denied coverage pursuant to an "owned but not insured" exclusion in the underinsured motorist benefits endorsement. The circuit court, finding the language of the policy ambiguous, granted Plaintiff's motion for summary judgment. The Supreme Court affirmed, holding that the language of the underinsured motorist endorsement was ambiguous, and therefore, the interpretation most favorable to the insured must be adopted. View "Larimer v. American Family Mutual Insurance Co." on Justia Law

The Supreme Court accepted certification of a question of law in a proceeding pending before the United States District Court for the District of Connecticut and answered that Virginia law recognizes that the collateral source rule can apply to breach of contract cases.Specifically at issue was whether Virginia law applies the collateral source rule to a breach of contract action where the plaintiff has been reimbursed by an insurer for the full amount it seeks in damages from the defendant. The Supreme Court answered that the same rationales supporting the recognition of the collateral source rule in tort cases also supports the rule's application in certain breach of contract actions. The Court further explained that whether the rule applies to a given case requires a case by case analysis as to whether the parties' expectations, in light of those rationales, support the rule's application. View "Dominion Resources, Inc. v. Alstom Power, Inc." on Justia Law

The Supreme Court accepted a question certified to it by the United States District Court for the District of Montana to address an Estate's third-party claim to stacked liability limits in an aircraft insurance policy that covered multiple aircraft, concluding that the answer to the question, which the Court reformulated, was no.The Supreme Court reformulated the question as follows: "Is the Estate of Darrell L. Ward entitled to stack the limits of liability coverage for three separate aircraft under the terms of an insurance policy issued to the pilot of an aircraft in which Ward was a passenger at the time it crashed?" The Supreme Court answered no to the reformulated certified question because (1) the plain, unambiguous language of the contract limits the coverage to the aircraft that is involved in the accident; (2) there is no public policy or statute that mandates payment of the cumulative coverage for separate aircraft in an aviation liability insurance policy that does not provide for such payment; and (3) the insurance policy at issue was not subject to stacking of its passenger liability coverages. View "U.S. Specialty v. Estate of Ward" on Justia Law

The Georgia Supreme Court granted certiorari in this case to review whether the Court of Appeals erred in reversing the grant of summary judgment to the insurer on the insured’s failure-to-settle claim. The Court also asked the parties to address whether an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits or whether, even absent such an offer, a duty arises when the insurer knows or reasonably should know that settlement within the insured’s policy limits is possible. As to this threshold issue, the Court concluded an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits. Applying the applicable rules of contract construction to correspondence from two injured parties in the instant case, the Court concluded the injured parties presented to the insurer a valid offer to settle within the insured’s policy limits but that the offer did not include any deadline for accepting the offer. Based on the undisputed evidence, as a matter of law, the insurer did not act unreasonably in failing to accept the offer before it was withdrawn by the injured parties. As the insurer was entitled to summary judgment, the Court reversed the decision of the Court of Appeals. View "First Acceptance Insurance Company of Georgia, Inc. v. Hughes" on Justia Law