Justia Insurance Law Opinion Summaries

Norma Hoff owned a home she rented through a property management agency. The roof sustained hail damage, and she contracted with Alliance Construction & Restoration, Inc. (Alliance) to make the repairs. Alliance subcontracted the roof repairs to MDR Roofing, Inc. (MDR). MDR employed Hernan Hernandes as a roofer. While working on Hoff's roof, Hernandez fell from a ladder and suffered serious injuries. He filed a workers' compensation claim against MDR, but MDR's insurer, Pinnacol Assurance, denied the claim because MDR's insurance coverage had lapsed. The issue this case presented for the Supreme Court's review was whether Pinnacol had a legal obligation to notify MDR of a certificate of insurance when the policy evidenced by the certificate was cancelled. Based on the certificate at issue in this case and the applicable statute, the Colorado Supreme Court concluded that the insurer had no such obligation. Therefore, the Court reversed the appellate court's judgment to the contrary. View "Pinnacol Assurance v. Hoff" on Justia Law

Harrogate, a healthcare provider, participates in Blue Cross networks. Harrogate’s patients sign an “Assignment of Benefits,” allowing Harrogate to bill Blue Cross directly for services. The Provider Agreement allows Blue Cross to perform post-payment audits and recoup overpayments from Harrogate. Blue Cross paid Harrogate's claims for antigen leukocyte cellular antibody (ALCAT) tests, which purport to identify certain food allergies. Blue Cross claims that these tests have “little or no scientific rationale.” Investigational treatments are not “covered, compensable services” under Blue Cross’s Manual, which is incorporated by reference into the Provider Agreement. That Agreement also specifies that Harrogate may not “back-bill” patients for un-reimbursed, investigational treatments unless, before rendering such services, “the Provider has entered into a procedure-specific written agreement with the Member, which has advised the Member of his/her payment responsibilities.” Blue Cross began recouping ALCAT payments. Harrogate filed suit under the Employee Retirement Income Security Act. The district court dismissed, holding that Harrogate did not meet the statutory definition of “beneficiary” and had not received a valid assignment for the purpose of conferring derivative standing to bring suit under ERISA. The Seventh Circuit affirmed. While Harrogate had derivative standing through an assignment of benefits, its claim regarding recoupments falls outside the scope of that assignment. View "Brown v. BlueCross BlueShield of Tenn., Inc." on Justia Law

After plaintiffs' home was damaged by heavy rain, their insurer, State Farm, arranged for them to live in a rented residence while their house was being repaired. State Farm eventually made payments under the policy exceeding $248,000, but denied coverage for certain items. Plaintiffs asserted claims for breach of insurance contract, bad faith, and elder abuse against State Farm and requested an award of punitive damages. The trial court granted summary adjudication in State Farm's favor on each claim and on the request for punitive damages. The court concluded that there are triable issues of fact regarding the claim for breach of insurance contract, but none regarding the other claims and the request for punitive damages. In the published portion of the opinion, the court concluded that the bad faith claim fails under the genuine dispute doctrine, and that the evidence supporting the application of that doctrine precludes the existence of triable issues regarding the elder abuse claim. Accordingly, the court reversed as to the breach of insurance contract issue and affirmed as to the trial court's remaining rulings, remanding for further proceedings. View "Paslay v. State Farm Gen. Ins. Co." on Justia Law

Bonnie Jones was injured during the course of her employment. Her employer’s comp carrier, American Home Assurance Company, paid her various benefits but did not pay her supplemental income benefits (SIBs) for the fourteenth quarter of 2011. Jones sued, and the parties settled. Under the Texas workers’ compensation regime, where SIBs are concerned, settlements cannot bypass a statutory formula or facilitate benefits were none were due as a matter of law. In this case, the settlement was noncompliant. The trial court approved the proposed settlement, and the court of appeals affirmed. The Supreme Court reversed, holding that a court cannot condone a noncompliant settlement regarding an SIBs award. View "Tex. Dep’t of Ins., Div. of Workers’ Comp. v. Jones" on Justia Law

After Siasmorn Gopal was admitted to the emergency room at Kaiser Foundation Hospitals and died after she was transferred to another hospital, Gopal's husband and the trustee of her estate filed suit alleging that defendants violated California law. Plaintiffs alleged that Kaiser Hospitals, SCPMG, and Health Plan treated Gopal differently than they would have treated a member and that the different treatment caused her death. The court affirmed the trial court's rejection of plaintiffs' enterprise theory of liability. The court concluded that there is nothing inequitable in requiring plaintiffs to look to Kaiser Hospitals and SCPMG - the providers at issue - for compensation for their claims. Thus, plaintiffs are not without recourse or remedy. The court noted that the fact that health care providers, and not health plans, are subject to the Medical Injury Compensation Reform Act of 1975 (MICRA), Civ. Code, 3333.2, is not an inequitable result, but a public policy determination made by the Legislature. Accordingly, the court affirmed the judgment. View "Gopal v. Kaiser Found. Health Plan" on Justia Law

A pretrial detainee asserted claims under 42 U.S.C. 1983 against guards and nurses at a regional jail. The jail authority had purchased a general liability insurance policy (the VaCorp Policy) from the Virginia Association of Counties Group Self Insurance Risk Pool (Risk Pool Association) and also elected to participate in a government-sponsored insurance program (the VaRISK Plan) managed by the Division of Risk Management (DRM). While the federal suit was pending, the detainee filed a declaratory judgment action against DRM and the Risk Pool Association seeking a determination of their respective liabilities for insuring the jail defendants. The Risk Pool Association and the DRM filed opposing third-party claims for declaratory relief. The detainee later settled with the jail defendants. The circuit court concluded (1) the VaRISK Plan was the sole primary coverage and that the DRM had the exclusive duty to defend the jail defendants, and (2) the Risk Pool Association had no duty to contribute toward the defense costs incurred by the jail defendants in the federal suit. The Supreme Court affirmed in part and reversed in part, holding (1) the VaCorp Policy and VaRISK Plan provided co-primary liability coverage to the jail defendants; and (2) VaRISK Plan’s $2 million coverage extension applicable to medical malpractice claims did not apply to the section 1983 civil rights claim alleging violations of federal constitutional law. Remanded. View "Commonwealth, Div. of Risk Mgmt. v. Va. Ass'n of Counties Group Self Ins. Risk Pool" on Justia Law

O.C.G.A. 9-11-67.1 is a new Georgia statute governing settlement offers for personal injury and death claims arising from motor vehicle accidents. This case arises from an automobile accident involving the Dempseys and the Woodards, in which Thomas Dempsey was at fault. The court found it necessary to certify questions of Georgia law to the Georgia Supreme Court concerning the interpretation of section 9-11-67.1. The court certified the following questions: 1) Under Georgia law and the facts of this case, did the parties enter a binding settlement agreement when Insurer Grange accepted the Woodards' offer in writing? 2) Under Georgia law, does O.C.G.A. 9-11-67.1 permit unilateral contracts whereby offererors may demand acceptance in the form of performance before there is a binding, enforceable settlement contract? 3) Under Georgia law and the facts of the case, did O.C.G.A. 9-11-67.1 permit the Woodards to demand timely payment as a condition of accepting their offer? 4) Under Georgia law and the facts of this case, if there was a binding settlement agreement, did Insurer Grange breach that agreement as to payment, and what is the remedy under Georgia law? View "Grange Mut. Cas. Co. v. Woodard" on Justia Law

Respondent Jennifer Hansen was injured in a motor vehicle accident in late 2007. Four months later, she presented an underinsured motorist (“UIM”) claim to petitioner American Family Mutual Insurance Company (“American Family”), insurer of her vehicle. As proof of insurance, Hansen offered lienholder statements issued to her by American Family’s local agent that identified her as the named insured at the time of the accident. American Family’s own records, however, indicated that the named insureds on the policy at the time of the accident were Hansen’s stepfather and mother, William and Joyce Davis (the “Davises”). In reliance upon the policy as reflected in its own records, American Family determined that Hansen was not insured under the policy and denied coverage. Hansen filed an action against American Family asserting claims for breach of contract, common law bad faith, and statutory bad faith for unreasonable delay or denial of benefits under sections 10-3-1115 and -1116, C.R.S. (2015). Prior to trial, American Family reformed the contract to name Hansen as the insured, and the parties settled the breach of contract claim, leaving only the common law and statutory bad faith claims for trial. The trial court ruled that the deviation in the records issued by American Family’s agent and those produced by its own underwriting department created an ambiguity in the insurance policy as to the identity of the named insured, and instructed the jury that an ambiguous contract must be construed against the insurer. The jury found in favor of Hansen on the statutory bad faith claim, indicating on a special verdict form that American Family had delayed or denied payment without a reasonable basis for its action. The trial court awarded Hansen attorney fees, court costs, and a statutory penalty. American Family appealed the judgment and award of statutory damages, arguing, among other things, that the trial court erred in finding that the lienholder statements created an ambiguity in the insurance contract as to the identity of the insured and that, at the very least, the contract was arguably unambiguous such that the company had a reasonable basis to deny coverage and could not be liable for statutory bad faith. The court of appeals affirmed, finding that the lienholder statements created an ambiguity and that, even assuming American Family’s legal position was a reasonable one, American Family could still be held liable for statutory bad faith. After its reverse, the Supreme Court reversed. Because the insurance contract unambiguously named William and Joyce Davis as the insureds at the time of the accident, the trial court and court of appeals erred in relying on extrinsic evidence to find an ambiguity in the insurance contract, "[a]n ambiguity must appear in the four corners of the document before extrinsic evidence can be considered." Accordingly, American Family’s denial of Hansen’s claim in reliance on the unambiguous insurance contract was reasonable, and American Family could not be held liable under sections 10-3-1115 and -1116 for statutory bad faith. View "Am. Family Mut. Ins. Co. v. Hansen" on Justia Law

After Randall Seger died while working on a hydraulic-lift drilling rig when it suddenly collapsed, his parents obtained a judgment against the drilling company. The drilling company then assigned its rights against the insurers to the parents, and the parents brought a Stowers action against the insurers. See G.A. Stowers Furniture Co. v. Am. Indem. Co. The court held that, because the evidence is legally insufficient to support a jury verdict to the contrary, Randall was a leased-in worker as a matter of law. In this case, plaintiffs' claimed loss was excluded from coverage under the commercial general liability (CGL) policy and the Stowers action fails as a result. The court did not reach the damages issue addressed by the court of appeals. Accordingly, the court affirmed the judgment, which reversed the trial court's judgment and rendered judgment that plaintiffs take nothing, but on different grounds. View "Seger v. Yorkshire Ins." on Justia Law

Arrowood Indemnity Company, a member of the Mississippi Windstorm Underwriting Association (“the Windpool”), submitted its premium data as required for a post-Katrina data-correction process. Arrowood failed to claim the appropriate credits available to it by statute which, it alleged, resulted in a nearly five-million-dollar overpayment. Arrowood had based its data submission on incorrect information provided by the Windpool, so it requested an opportunity to submit the correct information. The Windpool denied its request because the deadline for corrections had passed. The Mississippi Insurance Commissioner and the Chancery Court affirmed the Windpool’s decision. After its review, the Mississippi Supreme Court found that the Windpool’s deadline was tolled under the facts of this case because its incorrect representation precipitated Arrowood’s incorrect data submission. The Court reversed the decisions of the Insurance Commissioner and the Hinds County Chancery Court and remanded this case for further proceedings. View "Arrowood Indemnity Company v. Mississippi Windstorm Underwriting Association" on Justia Law