Articles Posted in Insurance Law

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In this insurance coverage dispute, the district court erred in concluding that Plaintiff’s claim under the Unfair Trade Practices Act (UTPA) and the Declaratory Judgment Act should be dismissed. Plaintiff was involved in an accident while she was a passenger in a car driven by Kevin Gallivan. Peter Kirwan owned the vehicle, and Safeco Insurance Company insured Kirwan. Mid-Century Insurance Company insured Gallivan. Plaintiff sued Safeco and Mid-Century (collectively, Defendants), and the parties entered into a settlement agreement. Plaintiff subsequently brought this lawsuit against Defendants bringing claims seeking declaratory judgment and violations under the UTPA and alleging that Defendants used the collateral source statute to justify reduction in her damages notwithstanding that the collateral source statute was inapplicable. The district court granted Defendants’ motion to dismiss. The Supreme Court reversed, holding (1) even if Defendants had a reasonable basis to apply the collateral source statute, the court failed to consider the plain language of the statute and whether it was applicable in Plaintiff’s case; and (2) Plaintiff sufficiently pled an independent cause of action under the UTPA to overcome Defendants’ joint motion to dismiss. View "Marshall v. Safeco Insurance Co. of Illinois" on Justia Law

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Christita Moreau appealed a Workers’ Compensation Court (WCC) order denying her motion for summary judgment and granting summary judgment to Transportation Insurance Company. Moreau’s husband Edwin worked at the W.R. Grace mine near Libby. In 2009, he died from asbestos-related lung cancer. In 2010 Moreau, as personal representative of Edwin’s estate, filed a workers’ compensation claim for occupational disease benefits. Transportation Insurance Company (Transportation) was W.R. Grace’s workers’ compensation insurer, and it denied liability for the claim. Edwin’s employer, W.R. Grace, established and funded the Libby Medical Plan (LMP) to pay the medical expenses of its employees who were injured by exposure to asbestos. LMP paid approximately $95,000 of Edwin’s medical expenses. In 2012, as part of Grace’s bankruptcy, “certain rights and duties of the LMP” were transferred to the Libby Medical Plan Trust. Grace remained responsible for LMP’s “ongoing payment obligations” incurred before that time. In 2013, Transportation accepted liability for the workers’ compensation claim and entered a settlement with Moreau. Transportation agreed to reimburse Medicaid, other providers, and Moreau personally for medical expenses each had paid for Edwin’s care. The parties stipulated that Transportation paid all of Edwin’s medical bills or reimbursed the other persons or entities that had paid them. Transportation did not reimburse the LMP for the $95,846 of Edwin’s medical bills it had previously paid because the LMP refused to accept it. After the LMP refused to accept reimbursement from Transportation, Moreau demanded that Transportation pay the $95,000 either to Edwin’s Estate, to the LMP or its successor, or to a charity selected by the Estate. Transportation refused and Moreau filed a second petition with the WCC to resolve the issue. The WCC determined that all of Edwin’s medical care costs had been paid; that Edwin had no liability to any health care provider; and that he had no right to claim any further payment from Transportation. The WCC determined that if the Estate were to receive the $95,000 from Transportation it would represent a double recovery because Edwin had already received the medical benefits themselves. The Court concluded that Moreau therefore lacked standing to proceed Moreau’s petition. The WCC also found that Moreau’s attorneys also represented the LMP Trust “for purposes of recovering the disputed $95,846” for the LMP Trust. At the time of the WCC order, the LMP Trust was not a party to this action and had not advanced a claim in the WCC for reimbursement of the amount paid by its predecessor LMP. The WCC therefore granted summary judgment to Transportation. Finding no reversible error in that WCC decision, the Montana Supreme Court affirmed. View "Moreau v. Transportation Ins." on Justia Law

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The Supreme Court reversed the order of the district court granting Jennifer Teeter’s motion for summary judgment in this declaratory action filed by Teeter against Mid-Century Insurance Company, Teeter's insurer, seeking payment of medical expenses and lost wages after an accident. The district court concluded that Teeter made a prima facie showing that it was reasonably clear that her medical expenses and wage losses were causally related to the accident and that the opinions of certain doctors did not create a disputed issue of material fact as to medical causation and damages. The Supreme Court disagreed and remanded the case for further proceedings, holding that there was a clear dispute of material fact regarding causation because it was not reasonably clear if Teeter’s expenses were causally related to the accident. View "Teeter v. Mid-Century Insurance Co." on Justia Law

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An injured first party insured who is compelled to sue for underinsured motorist (UIM) benefits and recovers more at trial than the last insurance company offer, the insurer must pay the first party insured’s attorney fees in an amount determined by the district court to be reasonable. Plaintiff in this case filed suit against Farmers Insurance Exchange, demanding her UIM policy limits. After Farmers extended its final offer of $77,500 to settle the claim, the jury returned a verdict in the amount of $450,000 in favor of Plaintiff. Judgment was entered for the policy limit amount of $200,000. The district court denied Plaintiff’s motion for attorney fees. The Supreme Court reversed, holding that Farmers was required to pay Plaintiff’s attorney fees because Plaintiff was compelled to sue and the jury returned a verdict higher than the amount of the last offer made by Farmers to settle her UIM claim. View "Mlekush v. Farmers Insurance Exchange" on Justia Law

Posted in: Insurance Law

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An injured first-party insured who is compelled to sue for underinsured motorist (UIM) benefits and recovers more at trial than the last insurance company offer is entitled to recover his or her attorney fees in an amount subsequently determined by the district court to be reasonable. In this case, Plaintiff was compelled to sue Insurer. The jury returned a verdict higher than the amount of the last offer made by Insurer to settle her UIM claim. The Supreme Court held that Insurer was required to pay Plaintiff’s attorney fees. The court thus reversed the district court order denying fees and remanded the case for further proceedings. View "Mlekush v. Farmers Insurance Exchange" on Justia Law

Posted in: Insurance Law

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The Supreme Court affirmed the order of the district court granting summary judgment to State Farm Mutual Automobile Insurance Company on Kilby Butte Colony, Inc.’s complaint filed after State Farm declined the Colony’s underinsured motorist (UIM) claim submitted on behalf of Mary Ann and Ivan Stahl. The Stahls, members of the Kilby Butte Hutterite Colony, were injured in an automobile accident. Hutterite colony members own assets of the community collectively, and therefore, the Stahls could not own a vehicle in their individual capacities. All of the Colony’s auto insurance policies were purchased through State Farm, and no individual Colony members were listed as named insureds on any vehicle owned by the Colony. The district court determined the the Stahls did not qualify for UIM coverage because they did not satisfy the definition of an “insured” within the terms of the policy. The Supreme Court affirmed, holding that the district court did not err in finding that the Stahls did not satisfy the unambiguous definition of “insured” under UIM coverage in the policy and that they were therefore not entitled to those benefits. View "Kilby Butte Colony, Inc. v. State Farm Mutual Automobile Insurance Co." on Justia Law

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Jessica Huckins filed a complaint against Barry Van Sickle and his real estate agent alleging several causes of action related to Van Sickle’s failure to disclose previous basement flooding problems in the sale of his home. At all relevant times, Van Sickle held three insurance policies through United Services Automobile Association (USAA). USAA denied coverage for the claims stated in the underlying complaint. Van Sickle settled the underlying litigation with Huckins by way of a consent judgment and Van Sickle’s assignment of all claims under his insurance policies to Huckins in exchange for a covenant not to execute. Huckins then brought this case against USAA, alleging, inter alia, breach of duty to defend Van Sickle. The district court concluded that USAA had not breached its duty to defend under any of the policies because the claim did not constitute an “occurrence” as defined by the policies. The Supreme Court reversed, holding (1) USAA had a duty to defend Van Sickle, at least until a ruling was obtained declaring there was no coverage; and (2) by failing to defend Van Sickle, USAA breached its duty to defend. View "Huckins v. United Services Automobile Ass’n" on Justia Law

Posted in: Insurance Law

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While employed by a company now known as Asurion Services, LLC, Christy Harris filed industrial injury claims for two different incidents. Lumbermens Mutual Casualty Company adjusted Harris’s workers’ compensation claims until it was declared insolvent. Montana Insurance Guaranty Association (MIGA) subsequently assumed the handling of Harris’s claims. Thereafter, MIGA notified Asurion that it would seek reimbursement for the benefits it paid to Harris pursuant to Mont. Code Ann. 33-10-114(2). Asurion filed a declaratory judgment action against MIGA. The district court granted motion for Asurion based on the exclusivity provision of the Montana Workers’ Compensation Act (Act), concluding that because Asurion met its obligation to obtain workers’ compensation insurance, it had no payment obligations to Harris, and therefore, Mont. Code Ann. 33-10-114(2) did not afford MIGA relief. The Supreme Court affirmed, holding that because Asurion provided workers’ compensation coverage in accordance with the Act, Asurion was not required to reimburse MIGA for benefits paid to Harris. View "Asurion Services, LLC v. Montana Insurance Guaranty Ass’n" on Justia Law

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After Robert Fitte burned tree branches on his property, a fire rose from the ashes of the burn and erupted into a wildfire known as the Corral Fire. At the time of the fire, Fitte carried two insurance policies issued by Mountain West Farm Bureau Mutual Insurance Company, including the commercial automobile policy at issue in this appeal. Fitte stipulated to entry of a judgment in favor of Associated Dermatology and Skin Cancer Clinic of Helena, P.C. Profit Sharing Plan and Trust for the benefit of Stephen D. Behlmer, M.D. (Behlmer). Fitte and Behlmer subsequently entered into an agreement wherein Fitte assigned his rights in the Mountain West policies to Behlmer. Behlmer then filed this action seeking a declaration that the automobile policy provided coverage for the Corral Fire damages. The district court ruled in favor of Behlmer and directed that the insurance proceeds be deposited into the district court. The Supreme Court reversed, holding that the district court erred in holding that there was coverage for the Corral Fire damage under Mountain West’s commercial automobile policy. View "Associated Dermatology & Skin Cancer Clinic of Helena, P.C. Profit Sharing Plan & Trust for the Benefit of Stephen D. Behlmer v. Mountain West Farm Bureau Mutual Insurance Co." on Justia Law

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Charlotte Suzor injured her knees in a workplace accident in 1982 and settled her workers’ compensation claims in 1987 with her self-insured employer, reserving the right to seek future medical benefits for ongoing complications from her injury. In 2009, Suzor broke her hip after her knees gave out. Suzor’s physical filed a claim with Sedgwick Claims Management Services (Sedgwick), the third-party administrator for the workers’ compensation plan now funded by her employer’s successor in interest, International Paper Company (International). After Sedgwick denied the claim, Suzor sued International, Sedgwick, and two of Sedgwick’s employees (collectively, Defendants), alleging bad faith and breach of fiduciary duty. The district court entered judgment in favor of Defendants. The Supreme Court affirmed, holding (1) Defendants did not owe Suzor a fiduciary duty; (2) the district court did not abuse its discretion in denying Suzor’s jury instruction on causation; (3) the mistaken association of a wrong juror questionnaire with a juror was not a structural error necessitating a new trial; (4) the jury’s award of no damages was supported by sufficient evidence; and (5) the district court did not abuse its discretion in its award of attorney’s fees. View "Suzor v. International Paper Co." on Justia Law