Justia Insurance Law Opinion Summaries

Plaintiff, insured under two-long term disability plans, sued the Plans when Unum decided to deduct his Social Security Disability Insurance (SSDI) benefit as deductible income under each plan, resulting in what he termed a "double offset." Because the court held that Unum's decision was not an abuse of discretion, that the plain language of the Plans permitted the deduction of the SSDI benefit from each plan, and that plaintiff was not entitled to equitable estoppel, the court affirmed the district court's grant of summary judgment in favor of the Plans. View "Renfro v. The Funky Door Long Term Disability Plan, et al." on Justia Law

Plaintiff brought suit against Deerbrook for breach of the implied covenant of good faith and fair dealing. Plaintiff was injured in an accident caused by Deerbrook's insured and after plaintiff received a judgment against the insured, the insured assigned his bad faith claim to plaintiff. Plaintiff argued that Deerbrook breached the implied covenant of good faith and fair dealing owed to its insured when Deerbrook did not attempt to reach a settlement of plaintiff's claims after the insured's liability in excess of the policy limit became reasonably clear. Plaintiff subsequently appealed the district court's rejection of his request to instruct the jury that it could consider Deerbrook's failure to effectuate a settlement in determining whether Deerbrook breached the implied covenant. The court concluded that plaintiff's proposed jury instruction was consistent with the law but that there was no evidentiary basis for the instruction. Accordingly, the court affirmed the judgment.

Plaintiffs, employees at a defense plant in Arizona, collectively bargained for the right to receive employer-provided healthcare coverage after they retired. At issue was whether those employees, now retirees, were contractually entitled to receive premium-free healthcare coverage until age 65, or whether the contracts on which the retirees relied as providing that entitlement allowed their prior employer to start charging them for their insurance. The court held that Raytheon expressly agreed to provide 100% company-paid healthcare coverage for eligible retirees; that Raytheon's obligation survived the expectation of the collective bargaining agreements (CBAs); and that Raytheon's agreed-upon obligation could not be unilaterally abrogated by Raytheon, regardless of the rights Raytheon reserved for itself in Plan documents, because the CBAs did not incorporate the Plans' reservation-of-rights provisions with respect to employer contribution issues, as opposed to issues relating to the provision of monetary or in kind benefits for particular medical services. The court further held that the district court did not err in rejecting plaintiffs' claim for punitive and extra-contractual damages.

This case arose when R&R sued the Insurance Company of Pennsylvania, a subsidiary of AIG, for breach of contract, unfair competition, and tortious bad faith denial of an insurance claim to recover damages from a wildfire. In Case No. 10-55115, R&R appealed from the district court's grant of judgment as a matter of law on its bad faith tort claim. In Case No. 10-55888, R&R appealed from the district court's grant of costs in favor of AIG. The court reversed the district court's grant of judgment in AIG's favor on R&R's bad faith tort claim after addressing the disclosure requirements of Rules 26(a) and 26(e), as well as exclusion of the invoices at issue under Rule 37(c)(1). Therefore, the court remanded for further proceedings. The court's reversal of the district court's judgment on R&R's claims necessitated reversal of the district court's award of costs as well.

In this case, an insurance agency had a contract with an insurance company that allowed the agency to commingle collected insurance premiums with its other funds in its general operating account. The government contended that the premiums collected by the agency were the property of the insurance company and held "in trust" by the agency; it alleged that when the funds were not remitted but used for other purposes, they were embezzled by the agency's treasurer, defendant. Defendant was charged with ten counts of embezzlement of insurance premiums in violation of 18 U.S.C. 1033(b)(1) and one count of conspiracy to commit embezzlement. The court held that under long-standing Arizona law, the contract between the agency and the company, which permitted agency commingling, required monthly agency payments whether premiums were collected or not, and created a right of interest on late payments, created a creditor-debtor relationship, not a trust. The agency had contractual and fiduciary duties to the company, but was not a trustee. Because the funds in question were not held "in trust" by the agency as a matter of law, an essential element of embezzlement was lacking. Therefore, the court reversed the denial of defendant's motion for judgment of acquittal.

Appellant filed a declaratory judgment action seeking a declaration that AHCCCS had no right to recover from her father's annuity at all or, alternatively, had no right to recover for any costs incurred for the care of her mother received after her father's death. Appellant subsequently appealed the district court's judgment granting summary judgment to AHCCCS. The court held that the 2006 amendment to 42 U.S.C. 1396p(c)(1)(F)(i) created a right in the State to recover as a remainder beneficiary against a community spouses' annuity for an institutionalized spouse's medical costs. The court further held that the State's recovery was not limited to the amount it paid for the institutionalized spouse's medical costs as of the date of the community spouse's death. Accordingly, the court affirmed the judgment, concluding that AHCCCS could be reimbursed as the primary remainder beneficiary from the father's annuity for the cost of the medical assistance it paid on the mother's behalf after the father's death.

Plaintiff, the personal representative of the Estate of Gaye S. Glaser, appealed the district court's affirmance of the Medicare Appeals Council's (MAC) ruling that Kaiser was not required to pay for Glaser's liver surgery. Plaintiff contended that by refusing to cover the procedure, Kaiser failed to comply with 42 C.F.R. 422.112(a)(3), which required Medicare Advantage plans to make their services available, accessible, and adequate, and 42 C.F.R. 422.112(a)(9) and 422.113(b)(iii), which required the plans to cover "urgently needed services." The court held that substantial evidence supported the MAC's decision and affirmed the judgment.

This appeal presented the question of whether a provision of the federal Health Insurance Portability and Accountability Act (HIPAA), Pub. L. No. 104-191, 110 Stat. 1936, preempted Montana's "little HIPAA" law, Mont. Code Ann. 33-22-526(2)(a), for purposes of both conferring federal subject matter jurisdiction and defeating state-law causes of action on the merits. The federal and state HIPAA provisions at issue prohibited certain insurers from charging different premiums to similarly situated participants on account of a participant's health and status-related factor. The court affirmed the district court and held that federal HIPAA preempted the Montana law, both jurisdictionally and on the merits, because Montana's HIPAA provision was identical to, and expressly relied upon, federal law. The court held, however, that federal law did not preempt a claim for relief under a separate Montana unfair insurance practices statute that barred insurers from engaging in unfair discrimination when charging policy premiums to similarly situated individuals, Mont. Code Ann. 33-18-206(2).

The State of Arizona appealed the district court's order granting a preliminary injunction to prevent a state law from taking effect that would have terminated eligibility for healthcare benefits of state employees' same-sex partners. The district court found that plaintiffs demonstrated a likelihood of success on the merits because they showed that the law adversely affected a classification of employees on the basis of sexual orientation and did not further any of the state's claimed justifiable interests. The district court also found that plaintiffs had established a likelihood of irreparable harm in the event coverage for partners ceased. The court held that the district court's findings and conclusions were supported by the record and affirmed the judgment.

This dispute emerged from state and federal litigation over liability for damages and defense costs in certain environmental tort suits. At issue was an action for damages that appellants brought in federal court and a declaratory judgment action that appellee brought in state court, which appellants later removed to federal court. The district court dismissed the former and remanded the latter in light of a related third action that had been pending for several years in state court. The court held that the district court did not abuse its discretion by deciding that the parties' claims should be resolved in a more comprehensive action (Vulcan Action). The court also held that the district court had discretion under Wilton v. Seven Falls Co. and Brillhart v. Excess Ins. Co. of Am. to remand the removed action. The court further held that the district court's concerns about piecemeal litigation and interfering with the progress made in the Vulcan Action supported dismissal under Colorado River Water Conservation Dist. v. United States. Therefore, the court affirmed the judgment of the district court.