Strawn v. Farmers Insurance Co. of Oregon is a class action that challenged the insurer’s use of automated bill review systems to determine the reasonableness of medical claims submitted under the Personal Injury Protection (PIP) coverage of automobile policies. The plaintiff alleged that Farmers had promised to pay the “reasonable” cost of covered medical services, but had failed to do so. In May 2011, the Supreme Court of the State of Oregon ruled that a class could ... Keep Reading »
Amid Gun Frenzy, West Virginia Court Pries Coverage Issue From the Jury’s Hands
Since President Obama called for new gun-control legislation after the Sandy Hook tragedy, sales of weapons have spiked and government officials have proposed a variety of new measures to encourage —or even mandate —gun training and ownership. In a development that is arguably unrelated to this increase in the number of people handling firearms, accidental shootings have occurred at gun shows and ranges, in gun stores and even during gun certification training courses. ... Keep Reading »
Impleading an Insured Proves “Mighty” Costly
Nuances of procedure can make a big difference in coverage disputes. In Danaher Corp. v. Travelers Indemnity Corp., No. 10 Civ. 0121(JPO)(JCF) (S.D.N.Y. Jan. 31, 2013), Travelers was required to pay the attorneys’ fees its insured had incurred filing a summary judgment motion in a case against Travelers. The ruling was not based on any impropriety in the insurer’s opposition to the motion, but rather, on the fact that Travelers had chosen to bring the insured into the ... Keep Reading »
In the Last Frontier, Insurers Shouldn’t Leave Defendants Out in the Cold
An Alaska politician once said of the folks she grew up with, "We grow good people in our small towns, with honesty and sincerity and dignity." But those virtues don’t exactly leap out of the story behind Williams v. Geico Cas. Co., No. S–14089 (Alaska Jan. 25, 2013), which mostly has to do with alcohol, selfishness and stupidity. At the climax of this sordid tale, a party to the lawsuit argued that an insurer’s refusal to offer policy limits for a release of only one ... Keep Reading »
Federal Court Refuses to Let Insured Shoot First, Seek Coverage Later
at Sandy Hook Elementary School, the issue has been taken up passionately by both sides of the dispute over gun violence. Did the murderers in Newtown and Aurora kill in large numbers because they were able to fire many shots quickly, and without reloading, as Sen. Lautenberg believes? Or, as a Wall Street Journal editorial recently suggested, can the proliferation of mass killings be more reasonably attributed to the practice of designating “gun-free zones” in ... Keep Reading »
Reading Teleology Leaves: “Condominium” Exclusion Does Not Apply to Unsold Apartment
As every lawyer knows, Aristotle distinguished four types of explanation, or “cause,” for natural phenomena. The “final cause” is “that for the sake of which” a thing is what it is. In nature, the final cause can be the end of a series of developmental changes that typical members of a species undergo: the chicken is the final cause of the egg, the oak the final cause of the acorn. This blog recently discussed a case in which the Supreme Court of South Dakota invoked ... Keep Reading »
Watching the Detectives: Washington Court Opens Door to Second-Guessing Insurers’ Investigations of Claims
In a case of first impression, the Supreme Court of Washington has ruled that an insurer’s express and unqualified contractual right to request an examination under oath is subject to an implied requirement that the request be “reasonable or material.” The court further held that an insured’s refusal of even a reasonable request for an EUO will not excuse the insurer from paying a claim, absent a showing of actual prejudice. The court’s ruling means insurers cannot ... Keep Reading »
If a Tree Falls, and No Court Held an Insurer Must Defend It, Is There a Breach of Contract?
A liability carrier claims a policy does not require it to defend a particular lawsuit. A federal district court agrees, and the insurer stops providing a defense. Five years later, a Court of Appeals reverses. Did the insurer breach its insurance contract? In what appears to be a case of first impression, a federal court in California has said “no,” because holding otherwise would “tip the scales too far in favor of the insured.” ... Keep Reading »
Complaint Charges that Law Firm Ads Deceptively Omitted Coverage Defenses
Selling insurance can be hard, because it can involve making simple statements about complex products. Brokers and agents (as well as insurers) can sometimes be held responsible for their customers’ failure to understand those complexities. A few months ago, New York’s Court of Appeals held that even a corporation’s failure to read its own policy did not bar its claim against its insurance broker for an allegedly negligent failure to obtain certain liability coverage. ... Keep Reading »
Ripeness Is All: Illinois Court Effectively Forbids Interlocutory Review of Arbitrators’ Discovery Orders
An Illinois Appellate Court has taken the next step in limiting the role of courts in insurance arbitrations. In Klehr v. Illinois Farmers Insurance Co., No. 1-12-1843 (Ill. App. Ct., First Dist. Jan. 22, 2013), the plaintiff tried to obtain interlocutory review of an arbitrator’s discovery order by filing an action for a declaratory judgment. Addressing what it declared to be a question of first impression nationally, the Appellate Court dismissed the action, on the ... Keep Reading »