Articles Posted in US Court of Appeals for the Sixth Circuit

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Reid founded Capitol, which owned commmunity banks, and served as its chairman and CEO. His daughter and her husband served as president and general counsel. Capitol accepted Federal Reserve oversight in 2009. In 2012, Capitol sought Chapter 11 bankruptcy reorganization and became a “debtor in possession.” In 2013, Capitol decided to liquidate and submitted proposals that released its executives from liability. The creditors’ committee objected and unsuccessfully sought derivative standing to sue the Reids for breach of their fiduciary duties. The Reids and the creditors continued negotiation. In 2014, they agreed to a liquidation plan that required Capitol to assign its legal claims to a Liquidating Trust; the Reids would have no liability for any conduct after the bankruptcy filing and their pre-petition liability was limited to insurance recovery. Capitol had a management liability insurance policy, purchased about a year before it filed the bankruptcy petition. The liquidation plan required the Reids to sue the insurer if it denied coverage. The policy excluded from coverage “any claim made against an Insured . . . by, on behalf of, or in the name or right of, the Company or any Insured,” except for derivative suits by independent shareholders and employment claims (insured-versus-insured exclusion). The Liquidation Trustee sued the Reids for $18.8 million and notified the insurer. The Sixth Circuit affirmed a declaratory judgment that the insurer had no obligation with respect to the lawsuit, which fell within the insured-versus-insured exclusion. View "Indian Harbor Insurance Co. v. Zucker" on Justia Law

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Raymond, injured in a slip-and-fall accident, received medical treatment at Mercy Health Anderson Hospital. Strunk, injured in a car accident, received medical treatment at Mercy Health Clermont Hospital. Both have health insurance. Each of their insurers has an agreement with Mercy for the provision of services. Raymond and Strunk provided all information necessary for the hospital to submit claims. Mercy did not submit claims to the insurers. Instead, Avectus, on behalf of Mercy, sent letters to Raymond’s and Strunk’s attorneys stating the balance due for medical services and requesting that, to prevent collection efforts against their respective clients, the attorneys sign a “letter of protection” against any settlement or judgment, agreeing “to withhold and pay directly to Mercy Health the balance of any unpaid charges ... should my firm obtain any settlement or judgment for this patient." Raymond and Strunk claimed that Mercy and Avectus sought compensation from them for their medical expenses, in violation of Ohio Revised Code 1751.60. The district court dismissed. The Sixth Circuit reversed. The defendants sought payment “from a health-insuring corporation’s insured” while in a healthcare services contract with their health-insurance providers. The court rejected a claim that the defendants effectively sought compensation from a third party. View "Raymond v. Avectus Healthcare Solutions, LLC" on Justia Law

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Corey worked as a machine operator in Eaton’s Ohio factory. Corey has long suffered from cluster headaches— extremely painful attacks that strike several times per day for weeks on end. In 2014, Corey applied for short-term disability benefits under Eaton’s disability plan after a bout of headaches forced him to miss work. After granting a period of disability, the third party administering Eaton’s disability plan discontinued benefits because Corey failed to provide objective findings of disability. Under the plan, “[o]bjective findings include . . . [m]edications and/or treatment plan.” Corey’s physicians treated his headaches by prescribing prednisone, injecting Imitrex (a headache medication), administering oxygen therapy, and performing an occipital nerve block. The district court upheld the denial. The Sixth Circuit reversed, citing the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). Corey’s medication and treatment plan satisfy the plan’s objective findings requirement. View "Corey v. Sedgwick Claims Management Services, Inc." on Justia Law