Articles Posted in Insurance Dispute

energy-1495365-1024x768After making a successful workers’ compensation claim, an insurer may make a subrogation claim, which is the right of an insurer to recover the amount paid out in a claim from a third party that caused the claim to occur. However, failure to properly reserve this right can affect an insurer’s right to recovery and possibly bar recovery altogether. A recent lawsuit in the Orleans Parish highlighted this fact.

In the aftermath of Hurricane Gustav, numerous workers were needed in order to restore Louisiana’s power grid. Mr. Scarberry was a former electrical lineman for Oklahoma Gas and Electric company (OGE). OGE is part of the Southeastern electrical Exchange (SEE), which is a nonprofit trade association composed of numerous utility companies that provide electricity throughout the U.S. Members in the SEE enter into Mutual Assistance Agreements, which govern relationships between requesting members and responding members. In this case, Entergy Gulf States Louisiana L.L.C. and Entergy Services, Inc. (collectively referred to as Entergy) requested the assistance of OGE in restoring power throughout Louisiana. As a result of this request, Mr. Scarberry began working for Entergy in Jennings, Louisiana under an agreement.  

During his efforts, Mr. Scarberry was severely electrocuted and became permanently disabled as a result of the accident with no chance for gainful employment in the future. Mr. Scarberry filed a lawsuit in July 2009 against Entergy. During this period, Mr. Scarberry received workers compensation from OGE in the amount of $150,162.49. OGE received reimbursement for these payments from Entergy, which was acknowledged with a “receipt” executed on August 1, 2011, pursuant to their agreement.  OGE also reserved their right to subrogation with the receipt.  

misc-rig-oil-ship-yard-equipme-1468457-1024x768In the insurance industry, one of the most important issues to consider when determining whether a claim is covered under a policy is the wording of the contract. Whether it is home, auto, life, or, as in this case a marine insurance policy, the exact words of the contract will control whether or not a specific claim will be paid out. Equally important are the laws which will control how those words are interpreted. And in a recent case out of Louisiana, one insured was out of luck over the interpretation of one small word.  

In a recent Louisiana case, Union Oil Company of California, which owned an offshore drilling platform near the coast of Louisiana, contracted with Shaw Global Energy Services Inc. (“Shaw”) from Delcambre, Louisiana, to perform sandblasting and painting for the platform. In 2003, Michael Cash, an employee of Shaw, was injured by an employee of Max Welders, Inc. while being transferred by crane from a platform to a supply vessel. Mr. Cash filed a lawsuit against Max Welders, its primary insurance company, and its marine excess insurer, Liberty Insurance Underwriters, Inc. (“Liberty”).  During the course of the lawsuit, Liberty notified Max Welders that they were declining to cover the incident with Mr. Cash because the act of ferrying Mr. Cash to and from the platform fell under an exclusion in the excess insurance policy. The exclusion Liberty pointed to was a platform exclusion where they would not cover anything “arising out of the ownership, use or operation of . . . platforms.”  Max Welders, the primary insurer, and Mr. Cash settled for the policy limit of one million dollars. But because of the severity of Mr. Cash’s injuries, Max Welders agreed to pay an additional four hundred thousand dollars.

Max Welders brought a cross-claim against Liberty alleging the platform exclusion did not apply and that coverage should be extended to cover the four hundred thousand dollars in excess payment.  The United States District Court for the Western District of Louisiana agreed with Max Welders that the platform exclusion did not apply because the word “use” in the insurance policy was ambiguous.  The District Court reasoned that because the transferring of Mr. Cash to the vessel was not within the intended purpose of an oil rig platform (extracting energy) that the exclusion did not apply and the insurance company had to pay Max Welders for the four hundred thousand dollars.  Liberty appealed to the United States Fifth Circuit Court of Appeal.    

the-pig-1189462-1024x807When employees are fired they can often be entitled to benefits upon termination; including money payments to act as a substitute salary while the terminated employee searches for another job. While there is no federal requirement in the United States for an employer to offer severance pay, many do as it can be an attractive benefit to potential employees. Many employers choose to adopt a plan that falls under the Employee Retirement Income Security Act (“ERISA”).  Employers can get tripped up however when they fail to support a denial of severance pay by substantial evidence.   

In this case, Mr. Napoli was denied severance pay because the company he worked for claimed that he was terminated for violating company policies. Mr. Napoli was hired by Scios, Inc. in 2001 which was subsequently acquired in 2003 by Johnson and Johnson. He enrolled in the severance pay plan through Johnson and Johnson. After he was terminated, Mr. Napoli filed for severance pay and was initially told he was eligible. However, Johnson and Johnson later denied his claim asserting that Mr. Napoli committed a “Group 1 Violation” and that he made around $3,000 in wrongful charges to a corporate credit card. Mr. Napoli, in a wise move, hired an attorney who subsequently applied for severance pay again and requested additional information about why the claim was denied. Johnson and Johnson again denied the claim and included the provision of the severance agreement Mr.Napoli allegedly violated. Mr. Napoli appealed through the corporation’s internal procedures in 2012 and the claim was denied again.  

Mr. Napoli filed a lawsuit in state court alleging that the company denied him benefits without just cause and that such an act violated ERISA. Johnson and Johnson responded by removing the case to federal court and counterclaiming for $3,000 in unauthorized credit card charges. The United States District Court for the Middle District of Louisiana agreed with Johnson and Johnson that the denial was based on a reasonable interpretation of the severance pay plan. Mr. Napoli appealed that decision to the United States Court of Appeals for the Fifth Circuit.  

When a natural disaster strikes the issue of insurance comes to the forefront. What can a homeowner do when their home is damaged but the insurance company delays and fails to pay? That was the case when a Kenner, Louisiana, couple had their wood floors ruined by Hurricane Isaac. After taking the company to court, the family was finally able to recover claims for the damages as well as sanction the insurance company for the delay.

japanese-porch-tsumago-1228438-1024x768Russell and Tracy Varmall owned a home in Kenner, Louisiana. Their home sustained damages during Hurricane Isaac in 2012. The home was insured by Bankers Specialty Insurance Company (“Bankers”) for wind damage and New Hampshire Insurance Company for flood damage.

The Varmalls initially made claims to Bankers after the hurricane, which included damages to their roof and attic, water damage to their living room ceiling, damages to their fence, and a claim for spoiled food. These claims were adjusted in a timely fashion and were not an issue in the case.

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.