Articles Posted in Insurance Dispute

mercedes-1450415-1024x683Louisiana has laws in place requiring drivers to carry car insurance. However, insurance policies are not uniform and some policies may contain ambiguities or be silent altogether on specific issues. The following case illustrates such a scenario.

Jeremy Elliot was a service technician working for a Mercedes-Benz dealership in Baton Rouge, LA and was involved in an accident while driving a customer’s car during a routine servicing. Elliot sued the other driver and the driver’s insurance company, State Farm; State Farm settled. Evidently, the other driver’s insurance policy was insufficient to cover the damages.   

Thus, Elliot sought reimbursement elsewhere and sued the insurance company that covered the car he had been driving, Encompass Indemnity Company (“Encompass”), as well as his employer’s insurance company, Travelers Indemnity Company (“Travelers”). Travelers filed a motion for partial summary judgment, asking the District Court to find that Encompass was liable for up to $500,000 in coverage for an underinsured motorist.

car-fire-1346381-1024x662When you let a friend borrow your car you probably don’t give much thought to who’s insurance policy would cover any potential accidents. Insurance policies contain many loopholes that can exclude coverage when an accident occurs. The following case out of Lafayette, discusses the problems that can arise when a friendly gesture turns into a legal nightmare for the parties involved.

Judith Landry of Lafayette, Louisiana and Therese Lesinski were involved in an automobile collision. Landry filed a personal injury lawsuit against Lesinski claiming that Lesinski’s carelessness caused the accident. Importantly, at the time of the accident, Lesinski was driving a car belonging to Mr. Braus, whom she had been staying with in his home. Lesinski’s own personal vehicle was insured by State Farm, but Mr. Braus (the car involved in the accident) was insured by Allstate.

State Farm denied liability by claiming that it was not responsible for any of the damage done to Landry because the car belonged to Mr. Braus who was not a member of Lesinski’s household. State Farm asserted as much in a motion for summary judgment. A motion for summary judgment effectively asks a court to dismiss the entire lawsuit. See La. C.C.P. art. 966.

baseball-in-the-grass-1557579-1024x683Peanuts and cracker jacks are two cornerstones of the game of baseball.  However, surgery is not. Yet, when one little leaguer got struck by a baseball during practice, the league’s insurer tried to get out of picking up some of his medical bills. The Louisiana Third Circuit Court of Appeal, however, was not going to let the insurance company off so easily.  

On June 1, 2010, nine-year-old Michael Folley was hit in the mouth by an errant baseball during his baseball team’s practice. On May 20, 2011, Tonya Csaszar, on behalf of her son Michael, brought suit against Nationwide Insurance, alleging that Michael would require future medical treatments and surgeries as he got older. Nationwide, having paid some medical expenses, denied further coverage based on a provision of the policy limiting coverage to medical expenses incurred within three years of the accident.  Nationwide moved for summary judgment arguing coverage for Michael under the policy had terminated.  The Judicial District Court for the Parish of LaFayette denied the motion and Nationwide appealed.  

The parties disputed when the injuries were “incurred” and thus subject to coverage. Nationwide argued that there was no ambiguity in the meaning of “incurred” in the language of the policy and any medical treatment beyond the three-year cap was not subject to coverage. The Plaintiffs contested however that due to Michael’s young age, he would need additional medical treatment to accommodate physical changes as he grew.  Nationwide’s policy did not define the word “incur.”  

compensation-1444901-1-1024x798It’s always bad when you get injured. But it is even worse when you have no insurance coverage for that injury. Recently, a St. Tammany Parish man experienced both incidents when he was injured on the job and realized that his employers were not covered by workers’ compensation insurance.

After Edward Jones suffered an injury while on the job, he sued his employer Clesi Foundations, L.L.C. for workers’ compensation benefits. Workers’ compensation pays for an employee’s medical expenses and lost wages when an employee is injured on the job. At trial, the court awarded Mr. Jones benefits, penalties, and attorney fees because Clesi Foundations L.L.C. failed to defend against Mr. Jones’s claim. After receiving a judgment against Clesi Foundations L.L.C., Mr. Jones discovered that his employer’s workers’ compensation coverage was underwritten by American Interstate Insurance Company (“American Interstate”). When a workers’ compensation policy is underwritten, that means another company, in this case, American Interstate, guarantees the payment of the damages assessed in a workers’ compensation case. Mr. Jones then filed a case against American Interstate for the amount of damages the trial court assessed against Clesi Foundations L.L.C.

At trial, Mr. Jones filed a motion for summary judgment. Summary judgment is a legal proceeding where both parties in a lawsuit ask the court to decide the case prior to it going to trial. In his motion, Mr. Jones alleged that American Interstate provided workers’ compensation insurance coverage to Clesi Foundations during the time he was injured. American Interstate claimed that it canceled its coverage of Clesi Foundation L.L.C. and provided notice of cancellation fifteen days prior to Mr. Jones’s injury. The Workers’ Compensation Judge (“WCJ”) found in favor of American Interstate.

more-large-yard-ornaments-1560393-1024x683The government owes a duty to its citizens to serve their best interests. But what happens when the government breaches that duty? Can we, as citizens, sue our government for perceived wrongs it has committed? Can we recover damages? This is an especially critical issue when it comes to a government’s responsibility to its citizens in times of natural disasters, as illustrated by the following case.

On August 26, 2012, in anticipation of Hurricane Isaac’s arrival, both Governor Bobby Jindal and St. John the Baptist Parish (“Parish”) President, Natalie Robottom, declared a state of emergency. Hurricane Isaac hit three days later. On October 26, 2012, sixty Parish residents (“Residents”), who suffered flood damages as a result of Hurricane Isaac, filed a class action against the Parish. The Residents alleged that the Parish was negligent and at fault for its failure to warn of the probability of flooding, its failure to declare a mandatory evacuation, and its failure to take steps to lessen the damage to the Residents.

The Parish filed an exception of no cause of action on June 24, 2014. An exception of no cause of action raises the question of whether the law provides a remedy to anyone under the facts alleged in the petition. Specifically, the Parish claimed it was entitled to immunity from the Residents’ claims under the Louisiana Homeland Security and Emergency Assistance and Disaster Act (“Act”). The Fortieth Judicial District Court Parish of St. John the Baptist held that the Parish was immune to the Residents’ claims under the Act. Accordingly, the Trial Court granted the Parish’s exception of no cause of action and dismissed the Residents’ claims. The Residents attempted to amend their petition for damages to try and overcome the immunity defense but the Trial Court denied this request.  The Residents filed an appeal, arguing that the Trial Court erred in dismissing their claims based on the Parish’s immunity.

dentist-1422973-1024x768Does your homeowner’s insurance policy include coverage for libel or slander?  We all make inappropriate comments and write negative reviews online from time to time.  But what if you are sued for something you say or write? In a recent case out of Caddo Parish, Louisiana a dentist learned that while your policy may extend coverage for negligent acts, the insurance company may not be so willing to come to your defense for intentional acts.  

In this case, the Louisiana State Board of Dentistry (“Board”) revoked Dr. Ryan Haygood’s dental license.  On November 8, 2010, after an investigation and disciplinary proceedings, the Board found that Dr. Haygood violated the Dental Practice Act by over-diagnosing patients.   Dr. Haygood appealed all the way to the Louisiana Fourth Circuit Court of Appeal which vacated and remanded the case.  Dr. Haygood then filed a lawsuit for damages against the Board, Dr. Herman O. Blackwood, III and others. Dr. Haygood specifically alleged that Dr. Blackwood intentionally presented false claims that Dr. Blackwood knew to be untrue. Moreover, Dr. Haygood alleged that Dr. Blackwood conspired with other members of the Board to bring the disciplinary proceedings against Dr. Haygood without good cause for the purpose of causing him to lose his license.  Dr. Haygood contended that Dr. Blackwood used his position in the community to essentially force the other Board members to go along with his plan to destroy Dr. Haygood’s career.     

Upon notification of the lawsuit, Dr. Blackwood contacted his insurance company, Encompass Insurance Company of America (“Encompass”), seeking defense and indemnity through his homeowner’s insurance policy.  However, Encompass declined coverage based upon a provision in the insurance policy which specifically provided that intentional acts of libel or slander are not covered.  Encompass filed a motion for summary judgment on the issue of coverage.  The Judicial District Court for the Parish of Caddo agreed that the policy did not cover the claims against Dr. Blackwood, therefore, Encompass had no duty to defend the lawsuit.   Dr. Blackwood appealed to the Louisiana Second Circuit Court of Appeal.  

no-fine-print-1419142-1024x768One of the least know parts of a personal injury suit occurs after trial or settlement. It’s called subrogation. Subrogation is the reimbursement of third parties for payments made relating to an accident. Many times, a subrogation claim is made by the injured’s own vehicle insurance provider or by the injured’s own medical insurance provider. Embedded in many insurance contracts is a “subrogation waiver.” As the name suggests, a subrogation waiver in an insurance contract provides that one party agrees to waive its subrogation rights against another party in the event of a loss. Typically, this waiver takes the form of insurers agreeing to forego its ability to seek payment from third parties who may be responsible for losses the insurer had to pay to its insured. In a workers’ compensation context, such waivers would prevent an insurer from seeking compensation from a party who may have been responsible for an employee becoming injured. Absent such waiver, an insurer would have the ability to seek compensation for what it paid in benefits from the party responsible for the work injury.

Recently, a Louisiana Court of Appeal ruled on a case involving a dispute regarding the scope of a subrogation waiver in an insurance policy between Offshore Energy Services, Inc. (“OES”) and Liberty Mutual. In this case, a man named Anthony Beslin was injured while working as an employee for OES. OES had a contract with Liberty Mutual where Liberty Mutual agreed to pay workers’ compensation benefits to any injured OES employee. The contract also contained a subrogation waiver where Liberty Mutual agreed to waive its right of subrogation against “[a]ll persons or organizations that are parties to a contract that requires you to obtain this agreement . . . . ” Based on the insurance contract with OES, Liberty Mutual paid workers’ compensation benefits to Mr. Beslin.

At the time of the accident, OES provided services to Anadarko Petroleum Co. (“Anadarko”) on an oil rig. Based on the contract between OES and Anadarko, OES had to provide workers compensation insurance to its employees and also agree that its insurer (Liberty Mutual) waive its right of subrogation against Anadarko and its Indemnitees (someone who is secure from the legal responsibilities of his or her action). One such indemnitee, Grey Wolf Drilling Co, L.P. (“Grey Wolf”), owned the rig on which Mr. Beslin was injured. It was alleged that a Grey Wolf’s employee’s negligence caused Mr. Beslin’s injuries. In addition to seeking workers’ compensation, Mr. Beslin filed suit against Anadarko, Grey Wolf, and the allegedly negligent employee seeking compensation. Liberty Mutual then intervened, asserting a subrogation claim against Grey Wolf for the workers’ compensation benefits it paid Mr. Beslin.

porquet-guardiola-1239750-683x1024Inherent in most insurance contracts is an insurer’s duty to defend its insured against certain lawsuits. Part of this duty requires the insurer to pay for all legal costs and other fees related to a particular lawsuit. In a commercial general liability (“CGL”) context, business owners often rely on an insurer’s duty to defend in order to avoid paying significant legal fees for defending actions which would ultimately be covered by a CGL policy. As one might expect, whether this duty to defend exists depends on whether the loss alleged in a lawsuit is within the scope of the policy’s coverage. As a recent Louisiana Appellate Court illustrates, it is very important that insureds understand the language of their CGL policies so as to know when a duty to defend exists.

This case involved a dispute between engineering consultants Chalmers, Collins & Alwell, Inc. (“Chalmers”) and their insurer, Certain Underwriters at Lloyd’s (“Underwriters”), over whether Underwriters owed Chalmers a duty to defend against an underlying lawsuit. The underlying lawsuit involved a contract Chalmers had entered into with Haland Operating Services, LLC (“Haland”) to work on the drilling of a well. As outlined in the contract, the well at issue was being dug in tricky conditions which required the use of specialized equipment. While the well was being dug, problems arose. The drill rig that Chalmers recommended Haland use was not able to handle the difficult drilling conditions and resulted in damage to the equipment as well as Haland’s interests in the well. Haland then terminated the contract with Chalmers and hired another engineering firm to complete the well. In response, Chalmers pursued an action in arbitration against Haland. Haland then brought their own claims against Chalmers in arbitration. Chalmers then demanded that Underwriters defend it against Haland’s claims. However, Underwriters declined to defend, resulting in the instant dispute. The Lafayette Parish District Court found in favor of Underwriters, finding that Haland’s claims were not covered by Chalmers’ CGL policy, and so Underwriters had no duty to defend. Chalmers’ appealed.

Under Louisiana law, the obligation of an insurer to defend its insured is broader than its obligation to indemnify (obligation of the insurance company to pay for any injuries caused by its insured) its insured, which means that an insurer may have to defend its insured against lawsuits even though the policy would ultimately end up not covering the loss. Am. Home Assurance Co. v. Czarniecki, 230 So.2d 253, 259 (La. 1969). Determining whether an insured is owed a duty to defend requires looking at the allegations made by the third party. An insurer is obligated to defend a lawsuit against its insured unless the allegations are “unambiguously” excluded from coverage. However, even though some allegations by a third party may be clearly excluded from coverage under a policy, a duty to defend may still exist if “at least a single allegation” would not clearly be excluded. Duhon v. Nitrogen Pumping & Coiled Tubing Specialists, Inc., 611 So.2d 158, 161 (La. Ct. App. 1992). The factual allegations of a third party, rather than conclusory allegations, are what courts look at in making a determination whether an insurer must defend the insured.

willow-1385791-1024x766The National Flood Insurance Program, or NFIP, was Congress’ approach to providing flood coverage at affordable rates. Generally, through the program homeowners can buy a Standard Flood Insurance Policy, or SFIP, from the Federal Emergency Management Agency, or from private insurers. According to the Court of Appeals for the Fifth Circuit, the SFIP outlines the conditions and requirements under which federal funds may be distributed to eligible policyholders. See Marseilles Homeowners Condo. Ass’n, Icn. v. Fidelity Nat’l Ins. Co., 542 F.3d 1053, 1054 (5th Cir. 2008). It is these requirements, or rather not following them to the letter, that sometimes stop homeowners from receiving their coverage.

Ron and Patricia Ferraro own a house at 133 Somerset Road, in Laplace, Louisiana. They had an SFIP from Liberty Mutual. Unfortunately, Hurricane Isaac in 2012 caused extensive damage to their home; nonetheless, their insurance policy with Liberty Mutual was in effect.

The Ferraros filed a claim for benefits, and Liberty Mutual sent an independent adjuster. The adjuster recommended a payment of $103,826 and prepared a proof-of-loss form in this amount. The Ferraros signed and submitted this form along with a signed proof-of-loss form. Important to their case, they also included a handwritten note stating that they would send supplements later. Liberty Mutual paid the full amount of $103,826.

highway-14-junction-1628439-768x1024Underinsurance policies provide drivers an extra layer of protection. These policies compensate drivers for injuries suffered in accidents with uninsured or underinsured drivers, but the process of claiming under these policies can be problematic. Ted Luquette encountered this difficulty after he was injured in a car accident in Abbeville.

Luquette was driving home from church in Abbeville, Louisiana when he was hit by a car driven by Chad Mowbray, who through the owner of the vehicle, Billie Borga, was insured with Allstate. After the accident, Luquette settled for his injuries with Allstate for $100,000, which was the policy limit. Luquette then brought a lawsuit against his own insurance, Farmers Bureau. Luquette claimed he required surgeries resulting in damages in excess of $100,000 as a result of the accident, which entitled Luquette to a payout under his policy.

To demonstrate that Allstate was the only insurance that the Mowbray and Borga had, Luquette primarily relied on a discovery answer by Allstate, which stated that Allstate was not aware of Mowbray or Borga being covered by any other insurance policy. At trial, the jury was asked whether Luquette sufficiently proved that Mowbray and Borga were underinsured. Luquette did not object to this question, and the jury resolved that he had not shown that Mowbray and Borga were underinsured.