Justia Insurance Law Opinion Summaries

Manuel Lainez had been independently driving commercial vehicles for eight and a half years. He owned his own truck and his own business, Lainez Trucking. He purchased a trucker’s liability policy from Scottsdale Indemnity Company with a $1 million liability limit. Lainez entered into a motor carrier agreement with Western Transportation Services. Western did not own tractors or trailers, but contracted with owner/operators or drivers. The agreement provided that Lainez was an independent contractor and was responsible for all costs and expenses incidental to the performance of transportation services. He agreed to maintain liability insurance and to name Western Transport as an additional insured. Western Transport, through the California Automobile Assigned Risk Plan (CAARP), purchased a commercial assigned risk policy from National Continental Insurance Company (NCI), which stated "'Named Insured’s Business: 1 Trucker for Hire-Excess'" and named Lainez as a driver. It did not list, describe, or rate any vehicle. It was rated on an excess cost of hire basis at a premium that was 4 to 10 percent of the cost of a policy rated on a primary cost of hire basis. The issue this case presented for the Court of Appeal's review was whether the two insurance companies were coprimary insurers or whether NCI was an excess insurer for an underlying fatality involving Lainez. The trial court granted NCI’s motion for a summary judgment, concluding that Scottsdale was the primary insurer pursuant to California Insurance Code section 11580.9, subdivisions (d) and (h). The Court of Appeal agreed that Scottsdale was the primary insurer and NCI was the excess insurer and affirmed the judgment. View "Scottsdale Indemnity v. National Continental Insurance Co." on Justia Law

State farm Fire & Casualty Company issued a rental dwelling policy to Jerry Dantzler. The tenants of Dantzler’s rental property sued Dantzler for personal injuries allegedly sustained by a Dantzler’s tenant as a result of exposure to lead-based paint. Dantzler tendered the claim to State Farm. State Farm subsequently filed an action for declaratory judgment against Dantzler and the tenants asking for a determination of whether its policy precluded coverage for the tenants’ personal injury claim. The district court granted summary judgment for State Farm, concluding as a matter of law that the pollution exclusion barred coverage under State Farm’s policy. The court of appeals reversed, concluding that a genuine issue of material fact existed as to whether the tenant’s injuries were the result of a “discharge, dispersal, spill, release or escape of pollutants” as described in the pollution exclusion. The Supreme Court reversed, holding that all manners of exposure to lead-based paint involve discharge, dispersal, spill, release, or escape, and therefore, the manner of exposure was not a material fact that prevented summary judgment. Remanded.View "State Farm Fire & Cas. Co. v. Dantzler" on Justia Law

Kaiser Permanente covered three patients who received care at an emergency room operated by Dameron Hospital Association. The patients were injured due to the negligence of third party tortfeasors who had automobile liability insurance with California Automobile Association Inter-insurance Bureau (AAA) and Allstate Insurance Company. Unlike Kaiser, neither AAA nor Allstate had contracts with Dameron. In the absence of an agreement for negotiated billing rates, Dameron sought to collect from AAA and Allstate its customary billing rates by asserting liens filed under the Hospital Lien Act (HLA). AAA and Allstate ignored Dameron’s HLA liens when paying settlements to the three Kaiser patients. Upon learning of the settlements, Dameron sued AAA and Allstate to recover on its liens. The trial court granted the automobile liability insurers’ motions for summary judgment on grounds the patients’ debts had already been fully satisfied by their health care service plans. Reasoning the HLA liens were extinguished for lack of any underlying debt, the trial court dismissed the case. The trial court further found dismissal was warranted because Dameron failed to timely file some of its HLA liens against AAA. The issue this case presented for the Court of Appeal was whether a heath care service plan’s payment of a previously negotiated rate for emergency room services insulate the tortfeasor’s automobile liability insurer from having to pay the customary rate for medical care rendered? AAA and Allstate contended they were not responsible for any amount after Kaiser paid in full the bill for the emergency room services provided by Dameron. Dameron contended that it contracted with Kaiser to preserve its rights to recover the customary billing rates from tortfeasors and their automobile liability insurers. Dameron argued the tortfeasors and their liability insurers were responsible for the entire bill for medical services at the customary rate, not just the difference between the reimbursement received from Kaiser and the customary billing rate. Although Dameron claimed it should benefit from the California Supreme Court’s holding that it may avoid extinguishment of its HLA liens upon receiving payments from health insurers, the contract in this case preceded that case by 10 years. The Court of Appeal concluded that the Dameron/Kaiser contract did not preserve the right to recover the customary billing rate for emergency room services from third party tortfeasors: "[I]f Dameron wishes to preserve its right to recover its customary billing rates through an HLA lien, it is free to contract for this right. But Dameron must actually contract for this right. A history of voluntary cooperation with Kaiser does not suffice to avail Dameron of the [Supreme Court's] guidance on reservation of contractual rights under the HLA." Consequently, the trial court properly granted summary judgment in favor of AAA and Allstate. As to Dameron’s argument that it filed a timely claim relating to patient Rita H.’s HLA lien, the Court of Appeal affirmed the trial court’s dismissal based on the statute of limitations. Dameron has not made a sufficient showing of diligence to toll the claim under the discovery rule. View "Dameron Hospital Assn. v. AAA etc. Ins. Exchange" on Justia Law

Cases consolidated cases for appellate review stemmed from alleged injuries suffered by plaintiff Faye Ainsworth while she was at defendant Charles Chandler’s business, Chandler Electric. Plaintiff sued claiming she was injured when she tripped on a coil of wires that had been placed in the stairway. Defendant sued his insurer, Concord Insurance Group, arguing that insurer had wrongfully and in bad faith failed to provide adequate coverage for the claim. The insurer filed a counterclaim seeking a declaration of noncoverage. The trial court granted summary judgment to defendant, concluding that plaintiff was a social guest of defendant at the time of her visit, that the duty of care defendant owed her was the lesser duty applicable to licensees under Vermont law (as opposed to that which is owed to business invitees), and that defendant did not breach this duty. The trial court also granted summary judgment to the insurer, on the basis that the underlying personal injury action had been dismissed and therefore no coverage was owed. Plaintiff and defendant both appealed, contesting the court’s order granting summary judgment in favor of defendant. Defendant contested the order granting summary judgment in favor of insurer. Upon review of the cases, the Supreme Court affirmed with respect to defendant’s motion to disqualify the trial judge, but reversed with respect to plaintiff’s suit and reversed and remanded for further proceedings with respect to defendant’s claim against the insurer and the insurer’s counterclaim for declaration of noncoverage. View "Ainsworth v. Chandler" on Justia Law

Plaintiff Helena Murphy appealed a superior court judgment in favor of defendant, Patriot Insurance Company, her homeowner’s insurer. The dispute between the parties stemmed from storm damage done to plaintiff's house in 2007, and the subsequent claims she made on her insurance policy. On appeal of the superior court's ruling in Patriot's favor, plaintiff argued: (1) Patriot was estopped from denying coverage for the removal and replacement of a chimney on her home; and (2) the trial court erred in dismissing claims for negligence and bad faith. Finding no reversible error, the Supreme Court affirmed. View "Murphy v. Patriot Insurance Company" on Justia Law

Plaintiff Progressive Casualty Insurance Company insured the vehicle involved in the accident at issue in this case. Given the number of victims, the policy’s liability coverage did not fully compensate at least one of the injured passengers. The parties disputed whether the injured passenger was therefore entitled to UIM benefits under Progressive’s policy. Progressive argued that coverage was barred by certain exclusions in its policy. The trial court found Progressive’s exclusions unenforceable as inconsistent with the definition of an "underinsured vehicle" set forth in 23 V.S.A. 941(f). Progressive appealed, arguing that its exclusions should be enforced, and that it should not have to provide both liability and UIM benefits to the injured passenger. The Supreme Court agreed with Progressive after its review of the case, and therefore, reversed the trial court’s decision.View "Progressive Casuality Insurance Co. v. MMG Insurnace Co." on Justia Law

Barbara Potter suffered a repetitive trauma injury as a result of her employment as a dental hygienist over a period of more than 30 years. In late 2007 or early 2008, while working in a dental clinic for Dr. Patrick McCulla, Potter began experiencing pain in her neck. Potter received medical treatment for her pain 12 times between October 17, 2008, and January 20, 2009. By this time, McCulla had sold the dental practice to Dr. Tracy Garcia. Potter’s duties and hours remained the same during and after the ownership change. Potter filed a petition in the Nebraska Workers’ Compensation Court seeking benefits. That court found Potter had preexisting conditions in her neck which were aggravated by her duties as a dental hygienist and awarded benefits based on a 40-percent loss of earning capacity. It determined that the date of the injury was February 11, 2009, as that was the date she first missed work to be treated for her injury. Because Garcia was Potter’s employer on the date of the injury, the court held Garcia and FirstComp liable for all of Potter’s medical expenses and compensation benefits. Garcia appealed. The Supreme Court concluded Nebraska Workers’ Compensation Court properly determined that her injury manifested itself on February 11, 2009, during Potter’s employment with Garcia, and that Garcia and Garcia’s workers’ compensation carrier are liable for all of Potter’s medical expenses and compensation benefits. View "Potter v. McCulla" on Justia Law

In June 2011, fourteen-year-old Jean-ah Leon was seriously injured while operating a Bad Boy Buggy ( an off-road vehicle used for outdoor recreation). A year later, Jean-ah’s parents, Vincent and Mandi Leon, filed a products liability and personal injury lawsuit in Louisiana against the owner of the Bad Boy Buggy, a Louisiana resident. They also named the owner’s insurer, the Textron Parties, and several other entities and individuals. Within a few days, the Leons dismissed all parties except the vehicle owner and his insurer from the Louisiana case. The Leons filed suit in Adams County, Mississippi, against the Textron Parties and the others previously named in the Louisiana suit, seeking damages of “an amount not yet determined” but greater than $10,000,000. The Leons served that complaint and summonses on the Textron Parties through their registered agents in Mississippi. They amended their complaint, adding claims for gross negligence and punitive damages. The Leons did not issue new summonses to the Textron Parties with the amended complaint; instead, they sent copies to the Textron Parties’ headquarters by certified mail with accompanying letters addressed “To Whom it May Concern.” The Textron Parties’ attorney in the Louisiana case also requested and received a copy of the amended complaint by email. The Textron Parties’ answer was due thirty days after they were served with the original complaint. They did not file an answer to the original complaint or the amended complaint. The Leons then sought a default judgment against the Textron Parties based on the amended complaint. An entry of default and default judgment were entered the same day. The issue this case presented for the Mississippi Supreme Court's review arose from that default judgment: the Textron Parties claimed that the default judgment was void and should have been set aside because they did not receive proper service of the amended complaint, they were not given notice of the default judgment, and the plaintiffs failed to state a claim against them. Additionally, the Textron Parties asserted that a three-pronged balancing test for relief from default judgments required that it be set aside because they had a colorable defense and the plaintiffs would not be prejudiced. The Supreme Court held that the default judgment was not void, but it should have been set aside under the three-pronged test. View "BB Buggies, Inc. v. Leon" on Justia Law

In Spring 2008, Williams Company Construction, Inc. entered into a construction contract to remodel the Friendly Smiles Cosmetic Dentistry Office owned by Dr. Brenda Barfield. Dr. Barfield previously leased the building from Williams Company owner Glen Williams for approximately five years before she purchased the property from him in 2008. Dr. Barfield hired Williams to remodel the building because of its construction experience and familiarity and knowledge of the building. When Dr. Barfield hired Williams, she did not know whether the remodeling work would be done by Williams or subcontractors. Dr. Barfield did not deal directly with any subcontractors during the remodeling project nor did she direct Williams to hire any specific subcontractors. During the remodel, Williams served as the general contractor and hired subcontractors to do various construction tasks. In December 2008, a section of a copper water pipe froze and burst. The frozen water pipe caused minor water damage and was repaired by plumbing subcontractor Home Heating. During the repair process, a Home Heating employee cut a hole in the wall to locate the leak and discovered that the air in the plumbing wall was cold. The employee was concerned the pipe could freeze again and notified the Friendly Smiles Cosmetic Dentistry Office about the cold air. Dr. Barfield contacted Williams to express her concern about the pipes re-freezing from the cold air. According to testimony, Williams told Dr. Barfield not to worry about the pipes freezing again because of circulating warm air around the hole. Dr. Barfield also wanted the hole in the wall patched, but had difficulty in securing Williams or Home Heating to fix it. Dr. Barfield made repeated requests for Williams or Home Heating to resolve the cold air issue, but they did not fix the problem. Approximately one week after the pipe was fixed, the water pipe froze and broke again, this time causing extensive water damage to the dental office. Dr. Barfield and her insurance company, Travelers Insurance, brought suit against Williams, Home Heating (and other subcontractors) for negligence, and breach of contract. Before trial, the parties stipulated that the total amount of damages was $220,046.09. Williams requested the trial court to include a jury instruction concerning the independent contractor distinction (C-55.25), and a jury instruction pertaining to the failure of a party to produce witnesses (C-80.30). The court denied the two requests. At the pretrial hearing, the parties stipulated that the case would be tried before the jury based on comparative fault. The jury was given a special verdict form and found Williams seventy percent at fault, Home Heating twenty-five percent at fault, and Dr. Barfield five percent at fault. Judgment was entered against Williams. Williams subsequently filed a motion for a new trial arguing the court erred in denying its requested jury instructions and there was insufficient evidence for the jury to find Williams seventy percent at fault for the damages. Following a hearing, the district court denied the motion. Williams appealed the district court's judgment, but finding no reversible error, the Supreme Court affirmed. View "Travelers Cas. Ins. Co. of America v. Williams Co. Construction" on Justia Law

In 2007, appellant Brent McCormick suffered a back injury while pushing a net reel aboard the F/V CHIPPEWA, owned by Chippewa, Inc. The day after his injury McCormick was treated with ibuprofen. Later that night rough seas caused him to fall out of his bunk and hit his head. McCormick continued to suffer back pain and dizziness and later was treated by medical specialists. In 2010, McCormick filed a complaint against Chippewa, Inc. and Louis Olsen (the vessel’s captain), alleging “unseaworth[i]ness” of the F/V CHIPPEWA and negligence in failing to ensure workplace safety and provide proper medical care. Chippewa had a liability insurance policy with a $500,000 per occurrence limit, including a “cannibalizing” provision specifying that costs and expenses spent “investigating and/or defending any claim” would be deducted from the policy limit. The parties ultimately agreed to settle the case for the "policy limit," but were unable to agree on what "policy limit" meant. Each side sought to enforce the agreement based on their respective understandings of the term. During summary judgment proceedings, one party asked for time to conduct discovery regarding the parties’ intent. The superior court granted summary judgment to the other party and denied the discovery request as moot. Because it was an abuse of discretion not to allow discovery before ruling on the summary judgment motion, the Supreme Court vacated the summary judgment order and remanded the case so that appropriate discovery could be conducted. View "McCormick v. Chippewa, Inc." on Justia Law