Steven Plitt, Expert Witness
In Essex Insurance Co. v. William Kramer & Assoc., 331 Conn. 493, 205 A.3d 534 (2019), the Connecticut Supreme Court issued an important decision regarding the statute of limitations for claims brought by insurers against TPAs.
Under Connecticut law there is a three-year statute of limitations for negligence actions brought by insurance companies against independent TPAs. When does this statute begin to run? That was the question addressed by the Connecticut Supreme Court in this case.
Recently the Illinois Court of Appeals in Xtreme Protection Services, LLC v. Steadfast Insurance Co., 2019 Ill. App. (1st) 181501 N.E.3d (Ill. App. 3/3/19) found that the insurance company was required to relinquish its control of the insured's defense and to pay for independent counsel because the complaint against the insured sought significantly more in punitive damages than in compensatory damages and the policy excluded punitive damages. The Court found that when punitive damages that are sought are disproportionately greater than compensatory damages sought, the insurance company's interests may be advance by providing a "less-than-vigorous" defense, thereby creating a conflict of interest between the insurance company and its insured.
In Essex Insurance Co. v. William Kramer & Assoc., 331 Conn. 493, 205 A.3d 534 (2019), the Connecticut Supreme Court issued an important decision regarding the statute of limitations for claims brought by insurers against TPAs.
Under Connecticut law there is a three-year statute of limitations for negligence actions brought by insurance companies against independent TPAs. When does this statute begin to run? That was the question addressed by the Connecticut Supreme Court in this case.
The 5th Circuit Court of Appeals in Ekhlassi v. National Lloyds Ins. Co., 926 F.3d 130 (5th Cir. 2019) found that a lawsuit brought against a flood insurer was untimely when it was not filed in federal court within one year. In this case, the 5th Circuit Court of Appeals affirmed the District Court's ruling that a plaintiff/insured was required to file his, her suit in federal court within one year following the denial letter even though the suit had been brought in state court. Failure to file in federal court within one year barred the claim.
Recently, in Folweiler Chiropractic, PS v. American Family Ins. Co., 2018 WL 5729873 (Wash. App. 2018), the Washington Court of Appeals reinstated a class action lawsuit against American Family where the suit accused American Family of unfairly discounting medical payments based upon computerized databases which were used to determine the reasonable cost of medical services. It was alleged that American Family, based upon the computerized databases that were utilized, automatically disallowed medical bill charges that exceeded the 80th percentile amount for the relevant zip code. The suit alleged that this practice violated Washington's Consumer Protection Act (CPA), RCW 19.8.020. The medical provider, Folweiler Chiropractic, filed the putative class action lawsuit, contending that the automatic deductions were a violation of Washington's PIP statute, the Unfair Claims Settlement Practices Regulations, and the CPA. The case was initially dismissed, but the Court of Appeals reversed and reinstated the case.
Insurance policies are typically issued with a split limit. First, the policy will state its "per person" limit, which is the most the policy will pay for bodily injury damages to one person. Then, the policy will state a "per accident" limit, which is the aggregate of all claims arising from a single automobile accident. A question that often arises regarding split limits in automobile policies is whether loss of consortium damages are part of the "per person" limit assigned to the bodily injured claimant. In Jones v. IDS Property Casualty Insurance Co., 27 Cal.App. 5th, 625, 238 Cal.Rptr.3d 356 (3rd Dist. 2018), the California Court of Appeals held, consistent with the overwhelming majority of jurisdictions, that loss of consortium claims of one spouse are folded into the overall "per person" limit of liability policy limits under a standard automobile liability policy. The insureds argued that because the bodily injured spouse and the wife were two separate people, the aggregate limit applied and not the per person limit. However, this argument was rejected. Focusing on the language of the policy, the Court found that the express language of the policy, which stated that the per person limit applied to damages for bodily injury to one person, "regardless of the number of . . . claims, claimants . . ." meant that the "to one person" phrase in the policy modified "bodily injury." Based upon that interpretation, the per person limit applied to all damages, including loss of consortium, that arose from a bodily injury to one person. This was an expected result.
Recently, in a fire loss case, the Wisconsin Supreme Court revisited the question of the number of occurrences. In Secura Insurance v. Lyme St. Croix Forest Company, LLC, 918 N.W.2d 885 (Wis. 2018), the issue of multiple occurrences arose. Under the facts of the case, a fire started in a piece of logging equipment owned by the insured. The flames from the fire spread from dry grass to a pile of recently felled jack pine and then into the surrounding forest. Eventually, the fire had burned thousands of acres over the course of three days. There was both real and personal property loss to many individuals and businesses. Secura Insurance, the insured's liability insurance company, brought a declaratory judgment action to establish that the fire involved a single occurrence subject to the policy's $500,000 per occurrence limit, as opposed to the policy's $2 million aggregate limit. The trial court found against Secura. The trial court found that each property owner's claim qualified as a separate occurrence and, therefore, Secura's total liability under the policy was the aggregate limit. The intermediate appellate court agreed with the trial court. However, the Wisconsin Supreme Court reversed.
In Bacon Construction Co., Inc. v. Arbella Protection Insurance Company, Inc., 208 A.3d 595 (R.I. 2019), the Rhode Island Supreme Court enforced the terms of an endorsement which limited additional insured status to liability events that were caused partially by the acts or omissions of the named insured or those acting on behalf of the named insured. In this case, a subcontractor's liability policy contained an endorsement which listed the construction project's general contractor as an additional insured, but only with respect to liability for injury or damage caused partially by the acts or omissions of the named insured. The underlying case involved an employee's lawsuit against the general contractor only for negligence. Because the underlying complaint only alleged the general contractor's negligence, the Court enforced the limiting language of the additional insured endorsement when finding that the general contractor was not an additional insured because the named insured's liability was not involved at least partially in the underlying tort case.
In a recent case, the Indiana Court of Appeals held that while a spill of hazardous materials resulted from two distinct regulatory violations, the event was a single occurrence for purposes of insurance. In Auto-Owners Ins. Co. v. Long, 112 N.E.3d 1165 (Ind. Ct. App. 2018), transfer denied, 124 N.E.3d 61 (Ind. 2019., a shipping company which was shipping a hazardous substance failed to properly label and package a hazardous substance that was being shipped. The hazardous substance spilled and injured a postal worker. The Court found only one occurrence, notwithstanding the two regulatory violations (labeling and packaging). Using a cause analysis for determining the number of occurrences, the Court found that while the insured failed both to properly label and package the hazardous substance did not multiply the number of occurrences. Both regulatory violations resulted in only one accident that resulted from the regulatory violations. Although the insured did two things wrong, both in shipping and packaging the hazardous material, the wrongdoing resulted in only one spill, which was the single proximate, uninterrupted, and continuing cause that resulted in the injury to the postal worker.
In Bacon Construction Co., Inc. v. Arbella Protection Insurance Company, Inc., 208 A.3d 595 (R.I. 2019), the Rhode Island Supreme Court enforced the terms of an endorsement which limited additional insured status to liability events that were caused partially by the acts or omissions of the named insured or those acting on behalf of the named insured. In this case, a subcontractor's liability policy contained an endorsement which listed the construction project's general contractor as an additional insured, but only with respect to liability for injury or damage caused partially by the acts or omissions of the named insured. The underlying case involved an employee's lawsuit against the general contractor only for negligence. Because the underlying complaint only alleged the general contractor's negligence, the Court enforced the limiting language of the additional insured endorsement when finding that the general contractor was not an additional insured because the named insured's liability was not involved at least partially in the underlying tort case.
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