ERISA-GROUP INSURANCE-SUPPLEMENTAL LONG-TERM DISABILITY POLICY-SPECIALITY RATED-DIAGNOSTIC RADIOLOGIST AS OPPOSED TO INTERVENTIONAL RADIOLOGIST AT TIME OF DISABILITY

October 31st, 2018 by Rieders Travis in Insurance

McCann v. Unum Provident, 2018 3d Cir. 2018 LEXIS 29638 (October 5, 2018) Scirica, J.-The Department of Labor has promulgated a safe harbor regulation exempting certain plans from the definition of an “employee welfare benefit plan.” But we conclude Dr. McCann’s then-employer sufficiently endorsed the plan under which his policy was purchased to render the safe harbor inapplicable. ERISA will supply the governing framework. As to the merits, we believe Provident incorrectly defined Dr. McCann’s occupation in administering his disability claim and that the claim must be evaluated in the context of his specialty – interventional radiology. We will remand for the District Court to consider whether Dr. McCann’s medical conditions prevent him from being able to perform his “substantial and material duties” as an interventional radiologist as required by the terms of the policy. 

INSURANCE-COMMERCIAL LIABILITY POLICY-EXCLUSIONS-DESIGNATED ONGOING OPERATIONS-VEHICLE DISMANTLING

October 18th, 2018 by Rieders Travis in Insurance

Tuscarora Wayne Ins. In the Superior Court Co. v. Hebron, Inc., 2018 Superior Ct. LEXIS 1077 (October 3, 2018), Stabile, J.  Fire occurred when truck driver was attempting to pump gas into a flatbed truck in the loading dock outside of the facility. The fire caused damage to the facility. The Superior Court said it was wrong for the lower court to grant summary judgment in favor of the insurance company against the insured. The court reversed. The cause of the fire was completely unrelated to the process of stripping the vehicle of its parts. The fire had nothing to do with designated ongoing operations which in this case was vehicle dismantling operations. The vehicles dismantling operations had ceased and were no more “ongoing operations.” The lower court was wrong. 

INSURANCE-BAD FAITH-ATTORNEY’S FEES

October 10th, 2018 by Rieders Travis in Insurance

Bernie Clemens, Nicole Clemens v. New York Central Mutual Fire Insurance Company, and/or NYCM Insurance Group and/or NYCM Holdings, Inc., 3d Cir. 2018 (Greenaway, Jr., J.  After a jury awarded him $100,000 in punitive damages under the Pennsylvania Bad Faith Statute, 42 Pa. Cons. Stat. § 8371, Appellant Bernie Clemens submitted a petition for over $900,000 in attorney’s fees from Appellee New York Central Mutual Fire Insurance Company (“NYCM”). The District Court denied this petition in its entirety, reasoning that it was not adequately supported and that the requested amount was grossly excessive given the nature of the case. Finding no abuse of discretion, we will affirm and, in doing so, take the opportunity to formally endorse a view already adopted by several other circuits – that is, where a fee-shifting statute provides a court discretion to award attorney’s fees, such discretion includes the ability to deny a fee request altogether when, under the circumstances, the amount requested is “outrageously excessive.” Brown v. Stackler, 612 F.2d 1057, 1059 (7th Cir. 1980); see also, e.g., Envtl. Def. Fund, Inc. v. Reilly, 1 F.3d 1254, 1258-60 (D.C. Cir. 1993); Fair Hous. Council…

INSURANCE-UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW-FRAUD OR DECEPTIVE CONDUCT

October 10th, 2018 by Rieders Travis in Insurance

Gregg v Armerprise Fin., Inc., 2018 Pa. Super. LEXIS 1009 (September 12, 2018) Kunselman, J.  This is a nonjury verdict finding that insurance company deceitfully profited from business transaction with Gary and Mary Gregg. The court found the insurance company violated that section of the Unfair Trade Practices & Consumer Protection Law, which prohibits anyone who advertises, sells or distributes goods and services from engaging in any fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding during a transaction. At issue is the sale of life insurance. The transaction was somewhat complex, but what was of concern was where money was placed that was sent to the carriers. The money was put in a growth account which increased commissions because of a 5.75 surcharge.  Insurance companies argued res judicata and collateral estoppel because a jury found that there was no misrepresentation. It acquitted the insurance companies on the UTPCPL count, argued the insurance companies. The companies believe that the trial court erred when it found them in violation of the UTPCPL after the jury verdict, which they felt was to the contrary. The judge, however, decided distinct…

INSURANCE-DEFENSE, DUTY TO PROVIDE-FOUR CORNERS RULE-EXCEPTIONS

September 28th, 2018 by Rieders Travis in Insurance

Lupu v. Loan City, LLC, Nos. 17-1944 & 17-2024 (3d Cir. September 10, 2018) Ambro, C.J.  What is the duty of a real estate title insurer in Pennsylvania to defend the insured party (here the successor to a lender) against claims of the borrower/mortgagor? Its courts, we predict, would not apply the “in for one, in for all” rule (known also as the complete defense rule)1—whereby a single covered claim triggers an obligation for the title insurer to defend the entire action—to a case about that insurer’s duty to defend. To identify a covered claim, we apply Pennsylvania’s rule that potentially covered claims are identified by “comparing the four corners of the insurance contract to the four corners of the complaint.” American & Foreign Ins. Co. v. Jerry’s Sport Center, Inc., 2 A.3d 526, 541 (Pa. 2010). The insured in its briefing used the latter term. As both the District Court and the title insurer refer to the rule by its more colloquial name, we do as well.  Although the Pennsylvania Supreme Court was invited to make an exception to the “four corners” rule, it flatly declined, finding “no reason…

INSURANCE FINANCIAL RESPONSIBILITY LAW-FIRST PARTY BENEFITS-MEDICAL BENEFITS-CONTRACT BREACH-BAD FAITH-UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW

September 24th, 2018 by Rieders Travis in Insurance

Shea v USAA, 2018, U.S. Dist. LEXIS 234750 (July 25, 2018), Surrick, J.  This case involves failure to pay first party medical benefits. Instead the insurance company demanded peer review. Viewing the allegations in the light most favorable to Plaintiff, the pleading raises a reasonable expectation that discovery will produce evidence that an insurance contract existed between Plaintiff and Defendant, Defendant breached the contract, and that breach caused Plaintiff to incur ascertainable losses. The breach of contract claim survives dismissal. We join the growing majority of federal and state courts that have followed the rationale of Schwartz. “Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both.” Schwartz, 1996 WL 189839, at *5 (citing 1 Pa. C.S.A. 1933). Where an insurer has not complied with Section 1797’s specific provisions, there is no reason to limit the damages recoverable from the insurer to those damages set out in Section 1797. Id. In those situations, as alleged here, Section 1797 and Section 8371 are not irreconcilable.…

INSURANCE-DEFENSE-COMMERCIAL-ROOFING COVERAGE

September 17th, 2018 by Rieders Travis in Insurance

Preferred Contrs. Ins. Co., RRG, LLC v Sherman, 2018 Super Ct. of PA, LEXIS 844 (July 24, 2018), Murray, J.  The insured was aware that roofing work would not be covered. There was an incident here and the insurance company denied coverage for an injured individual. Apparently it was decided under Montana law. There were material issues of fact for a jury to resolve as to whether the insured made misrepresentations or omissions in its insurance application that materially affected the decision of the insurance company to issue a policy. The trial court did not error in determining that delivery of the policy did not actually occur here. Montana is cited that insured not rely on the coverage exclusions in an insurance policy if the insurer fails to deliver the policy to the insured.

INSURANCE-FINANCIAL RESPONSIBILITY LAW-COVERAGE-NON-OWNED CAR-LAWFUL POSSESSION BY YOU OR ANY RESIDENT RELATIVE

July 9th, 2018 by Rieders Travis in Insurance

State Farm Mutual Automobile Insurance Company v. Erin C. Dooner, 2018 Pa. Super. 146 (June 5, 2018) Bender, P.J.E.  State Farm granted summary judgment.  Mr. and Mrs. Dooner were being driven home by third party appellant.  Husband and wife had a fight, and Ms. Dooner grabbed the steering wheel and jerked it.  This caused the car to swerve into oncoming traffic and collide head-on with a police cruiser.  Lawsuits were filed by the injured people against Dooner relative to the accident.  The court found that there was no coverage and granted summary judgment because this was not the situation of a “non-owned car” being lawfully operated.  Ms. Dooner was not in “lawful possession” of the car at the time of the accident when she grabbed the steering wheel.  She was neither in possession nor was her possession, if there was such, “lawful.”  Ms. Dooner’s action of grabbing the steering wheel did not constitute possession of the vehicle but rather interfered with its operation.  Even if Ms. Dooner was found in possession of the car at the time of the accident, the possession was not lawful.

INSURANCE-FINANCIAL RESPONSIBILITY LAW-SUBROGATION-PENNSYLVANIA STATE POLICE

July 5th, 2018 by Rieders Travis in Insurance

Pennsylvania State Police v. Workers’ Compensation Appeal Board (Bushta), 2018 Pa. LEXIS 2582 (May 29, 2018) Todd, J.  In this discretionary appeal, we consider whether Appellant, the Pennsylvania State Police (“PSP”), is entitled to subrogation of benefits that a trooper—who was injured in a motor vehicle accident—was eligible to receive under the Workers' Compensation Act (“WCA”)  against the trooper's recovery from a third-party tortfeasor pursuant to the Motor Vehicle Financial Responsibility Law (“MVFRL”). For the reasons that follow, we conclude that PSP does not have a right of subrogation. Accordingly, we affirm the order of the Commonwealth Court. The instant appeal involved the interplay between three Pennsylvania statutes—the WCA, the Heart and Lung Act, and the MVFRL. On January 21, 2014, Claimant and his spouse entered into a Settlement and Indemnity Agreement and Release of all Claims (“Settlement Agreement”) with the tractor-trailer driver, the driver's employer, and the other responsible parties (collectively, “third-party tortfeasors”) for $1,070.000.1 The Settlement Agreement provided, inter alia, that Claimant would “reimburse any lien holder, known or unknown, for any liens as a result of the ․ incident.” Claimant further acknowledged that he was “solely responsible for the payment…

BAD FAITH-COLLISION REPAIR

July 5th, 2018 by Rieders Travis in Insurance

Berg v. Nationwide Mutual Insurance Company, 2018 Pa. Super. LEXIS 604 (June 5, 2018) Stabile, J.  Appellant, Nationwide Mutual Insurance Company, Inc., appeals from the April 21, 2015 judgment against it on the bad faith claim of Appellee Daniel Berg, individually and as the executor of the estate of Sharon Berg a/k/a Sheryl Berg. We vacate the judgment and remand for entry of judgment in favor of Appellant. The court, in the bench trial, found against the insurer and the Superior Court threw out the verdict. The court will reverse the finding of bad faith where the trial court’s “critical factual findings are either unsupported by the record or do not rise to the level of bad faith.”  Brown v. Progressive Insurance, 860 A.2d 493, 502 (Pa. Super. 2004) emphasis added, appeal denied 872 A.2d 1197 (2005).  Insurers must cover insureds for the fair value of their loss.  Here, the insurance company covered the cost of repairs to the Jeep.  In terms of the initial appraisal, the court found bad faith but the appellate court did not believe that was justified.  The evidence does not support the trial court’s finding…