Justia Insurance Law Opinion Summaries

Articles Posted in Supreme Court of Hawaii
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The Supreme Court affirmed in part and vacated in part the judgment of the intermediate court of appeals (ICA) in this dispute regarding payment of uninsured motorist (UM) and underinsured motorist (UIM) benefits to Plaintiff, holding that the circuit court properly excluded evidence related to an unleaded claim but erred in denying Plaintiff's motion to amend complaint solely on the basis of undue delay.Plaintiff, individually and as personal representative of the estate of her son, who died as a passenger in an automobile accident, brought this action seeking a declaratory judgment, arguing that Defendant improperly failed to recognize that UM and UIM coverages totaling $1.2 million were available to her. At issue before the Supreme Court was whether the circuit court erred in granting Defendant's motion to present evidence or in denying Plaintiff's motion to amend complaint. The ICA affirmed. The Supreme Court vacated in part, holding that the circuit court (1) did not abuse its discretion in granting Defendant's motion to preclude evidence; but (2) erred in concluding that Plaintiff could not amend her complaint due to undue delay. View "Carvalho v. AIG Hawaii Insurance Co." on Justia Law

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In this case, the Supreme Court clarified the proper timing of Alvarado calculations, which determines the reimbursement due the insurer from a third-party settlement, and the reimbursement process for an insurer when the amount of workers' compensation (WC) benefits the insurer has already dispensed to the employee is less than the amount it owes the employee for its share of attorney's costs and fees for the third-party action.Petitioner received WC benefits from Respondent. Petitioner brought suit against the owner of the building in which she was injured and reached a settlement. Respondent then sought reimbursement of the WC benefits it had paid to Petitioner under Haw. Rev. Stat. 386-8 and Alvarado v. Kiewit Pacific Co., 993 P.2d 549 (Haw. 2000). At issue was whether certain WC benefits that Respondent owed Petitioner were properly classified as "paid compensation" and whether the process of Respondent's reimbursement of WC benefits exceeded the amount it had previously contributed to Petitioner as "paid compensation." The Supreme Court held (1) Alvarado calculations shall be performed based on the date on which the employee receives the third-party recovery; and (2) an insurer's "share" of the attorney's fees and costs the employee incurs while pursuing third-party recovery is based on the insurer's total WC liability. View "Moranz v. Harbor Mall, LLC" on Justia Law

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The Supreme Court answered a certified question by concluding that, under Hawai'i law, a permissive user of an insured vehicle, whose connection to the vehicle is permission to use the vehicle to run errands and drive to work, was entitled to uninsured motorist (UM) benefits under the chain-of-events test because he was injured by an uninsured motorist.The Supreme Court determined that the proper inquiry under the chain of events test was whether a permissive user has retained a sufficient connection to the insured vehicle. The Court then held that, under the chain of events test, the driver at issue was entitled to UM benefits because he was a permissive user of the insured vehicle during the chain of events resulting in his injury caused by an uninsured motor vehicle. View "State Farm Mutual Automobile Insurance Co. v. Mizuno" on Justia Law

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The Supreme Court reversed the judgment of the intermediate court of appeals (ICA) affirming the judgment of the circuit court that there were not genuine issues of material fact regarding whether Defendant, Hawaii Medical Service Association (HMSA), acted in bad faith in denying Brent Adams' claim for coverage of an allogenic transplant, holding that there were genuine issues of material fact as to whether HMSA fulfilled its duty of good faith and fair dealing in its handling of Brent's claim.After Brent was diagnosed with stage III multiple myeloma, a life-threatening form of bone marrow cancer, doctors determined that Brent's best chance of survival was first an autologous transplant and then an allogenic transplant. HMSA provided coverage for the first phase of the transplant but denied the claim as to the allogenic transplant. Brent subsequently died. Brent and his wife, Patricia, filed this action alleging that HMSA acted in bad faith in administering Brent's claim for the allogenic transplant. The Supreme Court reversed the lower courts' summary judgment rulings for HMSA, holding that evidence of HMSA's conduct during its relationship with Brent raised genuine issues of material fact as to whether HMSA unreasonably handled Brent's claim for an allogenic transplant. View "Adams v. Hawaii Medical Service Ass'n" on Justia Law

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Health insurers do not have a broad, unrestricted right of subrogation against third-party tortfeasors who cause injury to their insureds but, rather, are limited to reimbursement rights established by statute.In this personal injury case, the circuit court ruled that Haw. Rev. Stat. 663-10 and/or Haw. Rev. Stat. 431:13-103(a)(1) abrogated Hawai’i Medical Service Association’s (HMSA) contractual and common law rights in subrogation against a third-party tortfeasors responsible for injury to its insured. The Supreme Court affirmed, holding (1) a health insurer does not have equitable subrogation rights against a third-party tortfeasor in the context of personal injures; (2) a health insurer’s subrogation and reimbursement rights are limited by section 663-10 and section 431-13:103(a)(1); (3) any contractual provision that conflicts with section 663-10 is invalid; and (4) section 663-10 takes precedence over HMSA’s subrogation rights. View "Yukumoto v. Tawarahara" on Justia Law