Justia Government & Administrative Law Opinion SummariesArticles Posted in Insurance Law
Appeal of Vasquez
Petitioners Javier Vasquez and his employer, Matosantos International Corporation (MIC), appealed a New Hampshire Compensation Appeals Board (CAB) determination that it could not order respondent, The Hartford Insurance Company, to pay workers’ compensation benefits to Vasquez. The CAB concluded that the Department of Labor (DOL), and therefore the CAB, lacked jurisdiction under the New Hampshire Workers’ Compensation Law to interpret the workers’ compensation insurance policy that MIC had purchased from The Hartford. Because the New Hampshire Supreme Court concluded the CAB did have jurisdiction to consider and resolve the coverage dispute between MIC and The Hartford, it vacated the CAB’s decision and remanded for its consideration, in the first instance, of whether the policy purchased by MIC covered Vasquez when he was injured while working in New Hampshire. View "Appeal of Vasquez" on Justia Law
Seattle Tunnel Partners v. Great Lakes Reinsurance (UK) PLC
Petitioners Washington State Department of Transportation (WSDOT) and Seattle Tunnel Partners (STP), sought reversal of a Court of Appeals decision affirming the partial summary judgment rulings that an “all risk” insurance policy did not provide coverage for certain losses. At issue in WSDOT’s petition for review was whether the loss of use or functionality of the insured property constituted “physical loss” or “physical damage” that triggered coverage. STP’s petition asked whether the insurance policy excluded coverage for damage to the insured property caused by alleged design defects and whether the policy covers delay losses. This case arose out of a major construction project to replace the Alaskan Way Viaduct in Seattle. In 2011, STP contracted with WSDOT to construct a tunnel to replace the viaduct. The project started in July 2013. A tunnel boring machine (TBM) used in the project stopped working in December 2013, and did not resume until December 2015. The project was unable to continue during the two-year period while the TBM was disassembled, removed, and repaired. STP and WSDOT tendered insurance claims under the Policy. Great Lakes denied coverage, and STP and WSDOT sued the insurers, alleging wrongful denial of their claims. The Washington Supreme Court affirmed the Court of Appeals, finding that even if it interpreted “direct physical loss or damage” to include loss of use, no coverage under Section 1 is triggered because the alleged loss of use was not caused by a physical condition impacting the insured property. View "Seattle Tunnel Partners v. Great Lakes Reinsurance (UK) PLC" on Justia Law
Lanclos v. United States
Lanclos was born in 1982 at the Keesler Air Force Base Medical Center. During childbirth, she was seriously injured and as a result, suffers from Athetoid cerebral palsy. The settlement agreement for Lanclos’s medical malpractice suit required the government to make lump sum payments to Lanclos’s parents and their attorney; Lanclos would receive a single lump sum payment followed by specific monthly payments for the longer of 30 years or the remainder of her life. The government would purchase an annuity policy to provide the monthly payments. The government selected Executive Insurance to provide the monthly annuity payments. Executive encountered financial difficulties and, in 2014, reduced the amount of the monthly payments by 42%. Lanclos estimates that the reduction will result in a shortfall of $731,288.81 from the amount described in the settlement agreement.The Court of Federal Claims reasoned that the “guarantee” language in the Lanclos agreement applies to the scheduled monthly structure of the payments but not the actual payment of the listed amounts and that the government was not liable for the shortfall. The Federal Circuit reversed. Under the ordinary meaning of the term “guarantee” and consistent with the agreement as a whole, the government agreed to assure fulfillment of the listed monthly payments; there is no reasonable basis to conclude that the parties sought to define “guarantee” or to give the term an alternative meaning. View "Lanclos v. United States" on Justia Law
American Home Assurance v. Liberty Mutual Fire Insurance Co.
Pursuant to an arbitration award, American Home paid workers’ compensation benefits to an employee injured in 2008. American did not file a notice before the arbitration that, pursuant to Iowa Code 85.21, it was paying the claim subject to a potential coverage issue. By 2013, American paid all the benefits owed under the arbitration award. In 2016, the employee sought to reopen the case. American then filed a section 85.21 notice seeking reimbursement of benefits paid to the employee, claiming that on the date of injury Liberty Mutual was providing the employer with workers’ compensation coverage.The workers’ compensation commissioner concluded that in order to be entitled to reimbursement, American was required to file section 85.21 notice before the arbitration proceeding and could not, years later, seek to be reimbursed. The district court reversed, reasoning that section 85.21 gave the commissioner broad power to order reimbursement, not time-limited in the statute. The court of appeals, agreeing with the commissioner, reversed. The Iowa Supreme Court agreed. The commissioner may require that insurance carriers obtain a section 85.21 reimbursement order before an evidentiary hearing in order to seek indemnity or contribution from another carrier. The procedural question is not controlled by the substantive provisions of section 85.21. The commissioner has simply established a rule of procedure for handling section 85.21 claims. View "American Home Assurance v. Liberty Mutual Fire Insurance Co." on Justia Law
P. v. Accredited Surety and Casualty Co.
A Surety on a $50,000 bail bond appeals from an order denying its motion to set aside a summary judgment entered on the bond. Surety contends the summary judgment entered on the bail bond is voidable and must be vacated because it was not filed within 90 days after the appearance period expired as required by Penal 2 Code section 1306, subdivision (c). The trial court concluded the Surety was estopped from arguing the reinstatement order was void. As Surety’s challenge to the summary judgment was based on the invalidity of the reinstatement order, the court concluded that the challenge must fail. The Fifth Appellate District agreed with Surety’s contention that the trial court lacked the authority to reinstate the bond after the appearance period expired. However, the trial court correctly decided that Surety’s conduct estopped it from raising the invalidity of the reinstatement order as a basis for vacating the summary judgment. Here, Surety (1) had prior notice that a reinstatement order would be entered, (2) gave its written consent to the reinstatement, (3) paid a $50 reinstatement fee a few days after the reinstatement order, and (4) benefited when the forfeited $50,000 bail bond was reinstated. Furthermore, the trial court relied on Surety’s consent when it vacated the forfeiture and reinstated the bail bond. The court concluded such circumstances estop Surety from arguing the reinstatement order was invalid. Because the invalidity of the reinstatement order is a necessary condition to Surety’s argument that the summary judgment is voidable. View "P. v. Accredited Surety and Casualty Co." on Justia Law
Prate Roofing and Installations, LLC v. Liberty Mutual Insurance Corp.
Prate, a construction contractor, sought coverage through the Illinois Assigned Risk Plan, which provides workers’ compensation insurance coverage through a risk pool administered by the National Council on Compensation Insurance (NCCI). Liberty was assigned as Prate’s carrier. After determining that Prate’s subcontractor, ARW, did not have workers’ compensation insurance, Liberty assessed Prate an additional premium of $127,305. The Illinois Workers’ Compensation Appeals Board, which provides dispute resolution services for NCCI, declined to rule on the dispute, citing insufficient information. Prate appealed to the Department of Insurance (DOI) under Insurance Code section 462. One of Prate’s arguments was that ARW had no employees and that all work on Prate projects was performed by RTS, which had workers’ compensation insurance. The DOI’s hearing officer agreed with Liberty on all issues. The circuit court affirmed. While an appeal was pending, the appellate court issued its ruling in a dispute between Liberty and a trucking company, finding that DOI did not have the authority to resolve a dispute concerning employment status.The Illinois Supreme Court reinstated the trial court decision. The DOI had the authority to resolve the dispute under 215 ILCS 5/462. While section 462 does not apply to all insurance premium disputes but only to those involving the application of a rating system to a party’s insurance, the existence of a single factual dispute does not preclude review under section 462. View "Prate Roofing and Installations, LLC v. Liberty Mutual Insurance Corp." on Justia Law
Illinois Insurance Guaranty Fund v. Becerra
Illinois Insurance Guaranty Fund is a state-created insolvency insurer; when a member insurer becomes insolvent, the Fund pays covered claims. In cases involving insolvent health insurance, many claims are for patients who are eligible for both Medicare benefits and private health insurance. The Fund sought a determination that it is not subject to reporting requirements under section 111 of the 2007 Medicare, Medicaid, and SCHIP Extension Act, 42 U.S.C. 1395y(b)(7) & (b)(8), which is intended to cut Medicare spending by placing financial responsibility for medical costs with available primary plans first. Because time may be of the essence in medical treatment, the government may make conditionally cover medical expenses for Medicare beneficiaries insured by a primary plan, subject to later reimbursement from a primary plan. Section 111 imposes reporting requirements so that the government can identify the primary plan responsible for payment. The Fund believes that it is not an “applicable plan.”The district court dismissed for lack of subject-matter jurisdiction, reasoning the government had not made a final decision through its administrative processes. The Seventh Circuit affirmed. The Fund can obtain judicial review of its claim in a federal court only by channeling its appeal through the administrative process provided under 42 U.S.C. 405(g). The usually-waivable defense of failure to exhaust administrative remedies is a jurisdictional bar here. View "Illinois Insurance Guaranty Fund v. Becerra" on Justia Law
County of Santa Clara v. Superior Court
Hospitals provided emergency medical services to members of the county’s health plan, which is licensed and regulated by the state Department of Managed Health Care under the Knox-Keene Health Care Service Plan Act, Health & Saf. Code 1340. The county reimbursed the Hospitals for $28,500 of a claimed $144,000. The Hospitals sued, alleging breach of an implied-in-fact or implied-in-law contract. The trial court rejected the county’s argument that it is immune from the Hospitals’ suit under the Government Claims Act (Gov. Code 810).The court of appeal reversed. The county is immune from common law claims under the Government Claims Act and the Hospitals did not state a claim for breach of an implied-in-fact contract. The county does not contest its obligation to reimburse the Hospitals for the reasonable and customary value of the services; the issue is what remedies may be pursued against the county when the reasonableness of the reimbursement is disputed. The Knox-Keene Act provides alternative mechanisms to challenge the amount of emergency medical services reimbursements. A health care service plan has greater remedies against a private health care service plan than it does against a public entity health care service plan, a result driven by the Legislature broadly immunizing public entities from common law claims and electing not to abrogate that immunity in this context. View "County of Santa Clara v. Superior Court" on Justia Law
California ex rel. Ellinger v. Magill
Relator Gilbert Ellinger brought a qui tam suit on behalf of the People of the State of California against Zurich American Insurance Company (Zurich), ESIS, Inc. (ESIS), and Stephanie Ann Magill, under Insurance Code section 1871.7, a provision of the Insurance Frauds Prevention Act (IFPA). In January 2016, Ellinger injured his back while working, and he immediately informed his supervisor. The following month, Ellinger reported to his employer’s human resources manager that he had sustained a work-related injury and had told his supervisor about it. The human resources manager created a “time line memorandum” summarizing the conversations she had with Ellinger about the injury. She placed the memorandum in Ellinger’s personnel file. Ellinger filed a workers’ compensation claim. Magill worked as a senior claims examiner for ESIS and was the adjuster assigned to investigate Ellinger’s claim. ESIS denied Ellinger’s claim on an unspecified date. Magill later testified that she denied the claim because of a written statement from Ellinger’s supervisor in which the supervisor claimed that Ellinger had not reported the injury to him. When the human resources manager was deposed in November 2016, she produced the time line memorandum, which Ellinger’s counsel in the workers’ compensation action did not know about until then. Nearly eight months after that disclosure, in July 2017, ESIS reversed its denial of the claim and stipulated that Ellinger was injured while working, as he had alleged. Contrary to Magill’s testimony, her email messages showed that the human resources manager had emailed Magill the time line memorandum in March and April 2016, and Magill thanked the manager for sending it. Ellinger alleged that Magill’s concealment of or failure to disclose the time line memorandum violated Penal Code section 550 (b)(1) to (3). On the basis of those alleged violations, Ellinger alleged that defendants were liable under section 1871.7. Against each defendant, Ellington sought a civil penalty and an assessment of no greater than three times the amount of his workers’ compensation claim. The trial court sustained defendants’ demurrers without leave to amend, concluding defendants could not be held liable under section 1871.7 for any failures of Magill in the claims handling or review process. Finding no reversible error in sustaining the demurrers, the Court of Appeal affirmed. View "California ex rel. Ellinger v. Magill" on Justia Law
Cox, Cox, Filo, Camel & Wilson, LLC v. Louisiana Workers’ Compensation Corporation
The Louisiana Supreme Court granted certiorari in this case to decide whether the district court had jurisdiction over a claim for penalties against an insurer arising from its failure to provide a defense in workers’ compensation proceedings, and, if so, whether the insurer violated its duties of good faith and fair dealing, thereby making it liable for damages and penalties. After review of the trial court record, the Supreme Court concluded the district court had jurisdiction over the claim and correctly found that the insurer breached its duties to its insured. However, the Court found the district court’s damage award rose to the level of an abuse of discretion. The judgment of the court of appeal was amended to award damages in favor of Cox, Cox, Filo, Camel & Wilson, LLC and against Louisiana Workers’ Compensation Corporation in the total amount of $61,655.00, representing $20,550.00 in special damages and $41,100.00 in penalties. View "Cox, Cox, Filo, Camel & Wilson, LLC v. Louisiana Workers' Compensation Corporation" on Justia Law