Insurance Claims And Issues

Link to Advice Source on Purchasing Automobile Insurance Coverage.

   Insurance Coverage in Automobile Liability Insurance Policies is at the heart of this useful newspaper report, with many sources mentioned in it for you to follow up, containing helpful advice on purchasing Automobile Liability Insurance Policies generally:  Julie Patel, "News to Use/Top 10:  Tips for Getting the Best Price, Coverage for Auto Insurance" (South Florida Sun-Sentinel (Ft. Lauderdale), Wednesday, October 21, 2009).

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"Reasonable Basis" for Denying Coverage, Thus No Bad Faith: Unpublished.

   In an unpublished decision under New Jersey law, a Federal Judge was confronted with a Bad Faith Claim against an Insurance Company which had issued a Policy that the Court called "a businessowner's policy".  Download Laverde v. Sirius Am. Ins. Co. (D.N.J. Opinion Signed August 26, 2009.Opinion Filed August 28, 2009.Stated NOT FOR PUBLICATION), attached Official Slipsheet Opinion at 1. The Policyholder presented a Claim for Coverage of lost "business personal property," and failed in establishing Coverage for the Claim.  Download Laverde v. Sirius Am. Ins. Co. (D.N.J. Opinion Signed August 26, 2009.Opinion Filed August 28, 2009.Stated NOT FOR PUBLICATION), at 2, 5.   This result was held "fatal to [the Policyholder's] bad-faith claim for damages."  Download Laverde v. Sirius Am. Ins. Co. (D.N.J. Opinion Signed August 26, 2009.Opinion Filed August 28, 2009.Stated NOT FOR PUBLICATION), at 6.

      The Federal Judge held in that case that for either one of two alternative reasons, there was no valid Bad Faith Claim in that case:  Not only did the Plaintiff Policyholder fail in establishing Coverage which under New Jersey law prevents any Bad Faith Claim for accruing, but the Federal Judge also held that the Insurance Company Defendant in that case had an "arguable reason" for Denying all Coverage which itself is a good defense to a Bad Faith Claim under New Jersey law.  Download Laverde v. Sirius Am. Ins. Co. (D.N.J. Opinion Signed August 26, 2009.Opinion Filed August 28, 2009.Stated NOT FOR PUBLICATION), at 6.

There is also a post concerning the decision in the LaVerde case on Insurance Bad Faith Law Blog.

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Expert Witness Protected From Discovery Intimidation in Insurance Case.

   "This case presents issues of first impression regarding the proper scope of discovery into an expert witness's purported bias."  Download American Family Mut. Ins. Co. v. Hon. Larry Grant (Ariz. Ct. App., Div. One, Opinion Filed October 8, 2009), attached official Slipsheet Opinion Paragraph 1.  In that case, a Policyholder-Insured sued her UM/UIM Carrier for breach of contract and alleged Bad Faith.  She caused a subpoena duces tecum to be issued on the Defendant Insurance Company's physician-Expert Witness.  She also claimed that the doctor was biased in favor of the Insurance Company and against her.  The subpoena served upon the Expert Witness in that case demanded that the doctor "produce extensive documentation."  Download American Family Mut. Ins. Co. v. Hon. Larry Grant (Ariz. Ct. App., Div. One, Opinion Filed October 8, 2009), Paragraph 6.

   The Plaintiff-Policyholder had not yet deposed the Expert in that case.  The Arizona Appellate Court also pointed out that in that case, the Plaintiff had not made an attempt to obtain "bias-related information" from the Expert other than by serving him with the Subpoena Duces Tecum at issue.  The Plaintiff's announced purpose of this discovery, the Appellate Court recalled, was in fact to obtain "bias-related information".  Download American Family Mut. Ins. Co. v. Hon. Larry Grant (Ariz. Ct. App., Div. One, Opinion Filed October 8, 2009), paragraph 19.  The Trial Court ordered the Expert to provide the "extensive documentation" demanded by the Plaintiff's Subpoena.  It included financial information and other documentation that went far beyond the discovery and reporting requirements imposed on Expert Witnesses under the Rules of Civil Procedure.

   In fact, the Trial Court's Order greatly expanded the timeframe for which the Plaintiff-Policyholder's Subpoena demanded that the Expert produce documents.  "For reasons not explained by the record, the court instead ordered Dr. Zoltan to produce documentation 'for the period of five years preceding the date of the accident to the present," or for the period of nine (9) years before the appellate decision.  Download American Family Mut. Ins. Co. v. Hon. Larry Grant (Ariz. Ct. App., Div. One, Opinion Filed October 8, 2009), paragraph 17.

   In addition, the Expert Witness in that case acknowledged that he was subject to being deposed, that he would be filing a Report, and that in short he had to meet the discovery and reporting burdens imposed on Experts under the  Rules of Civil Procedure.  Nothing in the record indicated that the Expert was reluctant to meet or resistant to these burdens.  Download American Family Mut. Ins. Co. v. Hon. Larry Grant (Ariz. Ct. App., Div. One, Opinion Filed October 8, 2009), Paragraph 27.

   The Arizona Court of Appeals vacated the Trial Court's Order compelling the subpoenaed production from this Witness, and remanded after stating this holding:

   We vacate the challenged portions of the superior court's discovery order and remand this matter for further proceedings consistent with this opinion, including an assessment of whether Allo [the Policyholder-insured] has explored less intrusive discovery and, if so, whether she can demonstrate good cause for more expanded inquiries.  The [trial] court shall also impose a more reasonable time frame for any disclosures ordered on remand.

Download American Family Mut. Ins. Co. v. Hon. Larry Grant (Ariz. Ct. App., Div. One, Opinion Filed October 8, 2009), Paragraph 30.

Expert Witnesses in Insurance Cases are examined in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" (Second Edition Shepard's/McGraw-Hill, 2009 Supplement West Publishing Company), particularly §§ 8:17, 9:6, and 12:18 among many others.  A related post concerning this new decision was published yesterday on Insurance Claims and Bad Faith Law Blog.

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Florida Homeowner's Insurance Premiums Continue to Increase ... When Available.

   In a continuous development that has only begun in Florida, Homeowner's Insurance Companies have satisfied State Insurance Regulators of their need to charge higher Premiums.  See Julie Patel, "Homeowner Rates:  Regulators OK Insurance Increases" (South Florida Sun-Sentinel, Friday, October 23, 2009).

   Florida Homeowner's Insurance Premiums are only the first to increase.  Expect increases in Homeowner's Premiums everywhere in the United States where the risks are increasing for Property Insurance Coverage of all kinds -- which means virtually the entire nation.

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House Judiciary Committee Votes to Regulate Health Insurance Companies ...

   ... Can Property, Casualty, Life and Other Insurance Companies be far behind?

   The Judiciary Committee of the U.S. House of Representatives voted overwhelmingly this week to regulate Health Insurance Companies.  A majority of the House Judiciary Committee voted to repeal the Antitrust Exemption for Health Insurance Companies.  The Antitrust Exemption for all Insurance Companies was legislated by Congress in 1945.  See, e.g., Janet Adamy and Greg Hitt, "Vote on Medicare Payment Cut Divides Democrats" p.A6, col. 1 (Wall Street Journal, Thursday, October 22, 2009); Shailagh Murray, "Senate Keeps Medicare Payment Formula" (Washington Post Online, Thursday, October 22, 2009).

   Clearly, this is just the opening bid.  The goal is power.  In this instance, the goal is replacing State Regulation of all Insurance Companies, starting with Federal Regulation of Health Insurance Companies.  This is not necessarily such a good idea.  It will mean replacing people who have demonstrated both personal and institutional expertise and experience in State Regulation of Insurance Companies.  They will be replaced with people who will apply for new jobs in Washington, D.C.  The new jobs will be dispensed with the recommendations of Members of Congress.  Neither the new jobseekers nor the Members of Congress may clearly know very much, if anything, about Insurance Regulation.

   It is more than a little like firing all the personnel who are experienced in Emergency Management, for example, and putting the new hires under the control of a horse trainer -- and expecting good things to happen too.

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Push For Premiums, Pushback From Politicians -- Health Insurance Heats Up.

   Health Insurance Companies reportedly are ready to launch a bare-knuckles fight to secure the greater Premiums they thought they had already negotiated in deals with the White House.  They have clearly taken the gloves off.  They are not bound by the Marquess of Queensberry Rules, if ever they were bound by such niceties at all.  In its corner, the Obama Administration is reportedly ready to turn from the attending crowd and face the Companies.  Whether they will actually meet in the ring and fight it out, or compromise again, remains to be seen.

   Speculation abounds that the Administration now has something in its hands which it is willing to fight for:  The Baucus Bill passed by the U.S. Senate Finance Committee last week.  See Political Notebook, "Obama Pushes Back at Insurers" (Boston Globe Online, Sunday, October 18, 2009).

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Duke Disputes Directors and Officers Insurance Coverage, and Bad Faith.

   Duke University sued its D&O Carrier, National Union Fire, for failing to pay costs connected with settlement, and defense expenses, plus for National Union's alleged Bad Faith in handling Duke's Coverage Claims.  The settlement costs and defense expenses were allegedly incurrred in connection with infamous charges against three Duke lacrosse players including sexual assault, which turned out not to be true.  Here is a copy of Duke's Complaint:  Download Complaint.Filed112408.DukevNationalUnion (MDNC).

   National Union Fire filed a 44 page Answer with 30 alleged Affirmative Defenses, a Counterclaim in 5 Counts, and a Third-Party Complaint against United Educators Insurance.  Here are copies of the first 22 pages:  DownloadFirst22Pages.AnswerADsCCofNationalUnion.Filed01.16.09 (MDNC) .

And here are the last 22 pages, without attached Exhibits:  Download Last22PagesAnswerADsCCandTPCofNationalUnionFire.Filed 01.16.09 (MDNC). 

   On Tuesday, October 20, 2009 the Magistrate Judge assigned to the case as of that date, recused himself.  Another Magistrate Judge has just been assigned.

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Chinese Drywall: Insurers Drop Policyholders For Failure to Repair? UPDATE

   This updates a post here from Tuesday, October 13, 2009.

   Newspapers report that now two (2) Homeowner's Insurance Companies in Florida may be dropping Policyholders for failure to repair their homes after Damage allegedly caused by Chinese Drywall.  The Homeowner's Insurers in question are reportedly offering as evidence the fact that the same Policyholders-Homeowners presented Insurance Claims for Chinese Drywall Damage, which these Insurers denied.  See M.P. McQueen, "Insurers Drop Drywall Victims" (Wall Street Journal, Wednesday, October 14, 2009).

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Open Covenants, Openly Arrived At: C-SPAN Cameras on the Way?

   This carries forward the discussion of an issue or two in the post here on Friday, October 16, 2009. 

   During the 2008 Presidential Campaign, the successful candidate received much applause and many votes when he announced that Health Reform talks would be "televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents and who are making arguments on behalf of the drug companies or the insurance companies."   Then-Senator, now President Barack Obama, quoted by Perry Bacon, Jr., "Small Group Now Leads Closed Negotiations on Health-Care Bill" (Washington Post Online, Sunday, October 18, 2009).  [Emphasis added.]

  With the President's point person, Rahm Emmanuel, leading the current talks on Healthcare Reform among a group of three (3) Senators and a handful of Cabinet Secretaries, the C-SPAN television cameras are on the way, right?

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Secret Meetings, Secret Handshakes ... Public Option?

   Mr. Rahm Emmanuel has been publicized a lot lately.  The Obama Administration has been pursuing a stealth Health Reform agenda, you might say, and Mr. Emmanuel has been its most active agent.  The results are coming in.

   First up:  After the Senate Finance Committee reported its version of a Bill out of that Committee, 27 Unions signed on to a full-page newspaper ad announcing their opposition to that Bill -- because it did not include a Public Health Insurance Option.

   Reportedly, before the 27 Unions went public with their members' insistence on a Public Option, and their opposition to the one Bill in Congress that would not enact a Public Health Insurance Option, Mr. Emmanuel tried to negotiate further with the Unions.  He had already secretly secured the Unions' agreement to remain silent while the Senate Finance Committee was deliberating.  The Unions honored their agreement while the Committee, you will recall, was slowly reviewing all the options and before it opted out of any Public Option.

   Apparently, Mr. Emmanuel tried to convince the Unions, again in secret meetings, that he thought the Unions had also agreed not to go public about the Public Option their members wanted, even after the Senate Finance Committee passed out the only Bill in Congress without a Public Option.  The Unions did not remember the secret agreement that way, at all.  "That was not the commitment we made," said Mr. Gerald McEntee, the AFSCME Union Head, as quoted by Holly Rosenkrantz in "Unions Spurn White House to Oppose Senate Health Bill (Update 1)" (Bloomberg.com, Wednesday, October 14, 2009).

   Next:  Health Insurance Companies balked at the Senate Finance Committee Bill, too.  Their opposition is based primarily on that Bill's provisions which will make it cheaper for persons to pay a penalty rather than pay for Health Insurance Policies from the Health Insurance Companies.  They thought they had a deal for everyone to definitely be required to pay Premiums to them, which they secretly made with Mr. Emmanuel and Senator Baucus too, in exchange for their not opposing "Health Care Reform".  Now that they think their secret deal was not kept, they are opposing the Baucus Bill vehemently.  See Ceci Connolly, 'Health Insurers Emerge as Obama's Top Foe in Reform Effort" (Washington Post Online, Wednesday, October 14, 2009).

   Next At This Time:  Mr. Emmanuel is still in charge of the Obama Administration's stealth plan, you might call it, for "Health Care Reform".  Reportedly, he is in closed meetings with members of the Administration and Congress to put the finishing touches on the Senate Finance Committee Bill before Congress votes on it.  A photograph taken before the first meeting began shows the seating priority at the table, so to speak.  Mr. Emmanuel is clearly ranked in priority -- so important in these meetings in the District, you know -- ahead of Cabinet Secretaries and Senators.  See  David M. Herszenhorn and Robert Pear, "White House Team Joins Talks on Health Care Bill" (New York Times Online, Thursday, October 15, 2009).

   After all this time, the product of secret meetings and secret deals seems to be coming apart, if there ever was one.  Perhaps success will result from fewer secret meetings, secret handshakes ... and a Public Option.  You never know if that will bring success.  We do know however that secrecy has resulted in a continuing string of failures.

See also the post here on Friday, October 9, 2009 entitled, "'Bogus' Bill; Option Healthy; 'MAYBE the Fix is NOT on!'"

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