Articles Posted in Insurance Dispute

a-guys-dream-1546422-1024x768When multiple auto insurance policies are involved after an auto accident it may be difficult to tell which one is controlling. When a mother’s car broke down she borrowed a car from a friend to take her children to daycare. While on the way to drop her kids off she accidentally rear-ended the car of another driver on Highway 139 in Ouachita Parish, Louisiana. When the time came to determine whose car insurance was controlling a lawsuit was filed to resolve this question.

When Shannon Boyd’s Ford Taurus wouldn’t start, she borrowed Vicki Ellis’ Chrysler 300 to take her children to daycare and go to work. While one the way to daycare Boyd rear-ended Hugh and Janie Green’s Dodge Ram. While Boyd and her Taurus were insured by Safeway, Ellis and her Chrysler were insured by State Farm. After the accident State Farm paid $4,041.77 in property damages to the Greens and subsequently filed suit against Safeway for reimbursement.

The issue at trial was which insurance policy is primary. Both Safeway and State Farm filed motions for summary judgment alleging that the other was the primary policy. The Trial Court found that Safeway’s policy defined a “temporary substitute automobile” in a way that conflicted with the policy goals of La. R.S. 22:1296 which mandates that automobile insurance policies must extend to temporary substitute and rental vehicles. With this statutory context in mind, the Trial Court determined that Ellis’ Chrysler met the conditions of a “temporary substitute vehicle.” The Trial Court thus concluded that Safeway was the primary policy. Safeway appealed.

industry-up-sign-1533438-768x1024Generally, a driver who is insured for a vehicle they own will remain insured if they use a vehicle they don’t normally use. To limit this, insurance policies commonly contain a regular use exclusion, which will exclude an insurance company from liability when the insured driver uses another vehicle they don’t own, but use regularly. In a recent case, the Louisiana Second Circuit Court of Appeal had to determine whether the exclusion in the defendant’s insurance policy applied to a truck the defendant drove as part of his work.

In this case, Star Youngblood was in a two-car crash with Natasha Jones, the plaintiff, in Mansfield, Louisiana. Youngblood worked for Mansfield Drug Company, Inc. (“MDCI”). At the time of the accident, Youngblood was driving a 2007 Chevrolet pickup owned by MDCI, in the course of his work. Jones filed a lawsuit against Youngblood, MDCI, MDCI’s auto liability insurer, Republic Fire and Mr. Youngblood’s personal auto insurer Farm Bureau.

Youngblood had his personal vehicle, a 2002 Ford pickup, insured with Farm Bureau for $25,000 per person. Youngblood’s policy with Farm Bureau contained a clause which stated that non-owned vehicles which are “furnished for regular use” to the insured are excluded from coverage. Prior to the trial on September 16, 2013, Jones settled with all defendants except Farm Bureau. The Trial Court found that because Youngblood needed specific permission each time he used MDCI’s pickup truck, the regular use exclusion in Youngblood’s policy with Farm Bureau did not operate. As such, Farm Bureau provided coverage for this accident and the court awarded Jones $25,000 which was the policy limit.

claim-check-1166752-1024x766When plaintiffs sue based upon statutes, legal decisions often hinge upon how the statute is interpreted. In many cases, this can depend on how the court interprets the meaning of a single word within the statute. In order to interpret legal statutes, courts employ a process known as statutory construction. In this case the court utilized statutory construction to determine that the meaning of “claim” used in the Louisiana Revised Statutes did not apply to a final “judgment” issued by a court.

Byard Edwards Jr. sought to recover underinsured motorist (UM) benefits via his insurance policy with Louisiana Farm Bureau Mutual Insurance Company after he sustained injuries in an automobile accident. After Edwards won at trial, he began a proceeding to recover statutory penalties and attorney fees from Farm Bureau because it failed to pay the judgment from the UM case within either 30 or 60 days of the final judgment. Edwards sought these penalties and fees under La. R.S. 22:1892 and La. R.S. 22:1973. These Sections require insurers to pay out “claims” to an insured party within specified time frames. The Trial Court granted summary judgment in favor of Farm Bureau and Edwards appealed the decision.  

The issue, in this case, was whether or not the final “judgment” issued by the court constituted a “claim”, as used pursuant to the aforementioned statutes. The Court of Appeal interpreted the meaning of the term “claim” by following the rules of statutory construction. The first step the Court took was to consider the language of the statute itself. However, the word “claim” is not defined in either Section.

storm-over-barcelonetta-1463885-1024x679Automobile accidents can be terrifying experiences.  Severe automobile accidents that involve injuries can be truly devastating and life altering.  In the event one is injured in an automobile accident, he/she has several options available to him/her in obtaining compensation for his/her losses.  More specifically, one may have a claim against the other driver(s) who caused the automobile accident or have the ability to bring a claim against the other driver’s insurance company.  Depending on the circumstances of the automobile accident, one may also have the ability to bring a claim against his/her own insurance company for compensation.

An insurance company is required to act in good faith with any individual making a claim, regardless of whether he/she is a policyholder with said insurance company.  Generally, an insurance company has acted in bad faith if it fails to fulfill the obligations stipulated in the insurance policy language or if it fails to abide by the laws of the state where the claim has been filed.  Some examples of bad faith include but are not limited to: refusing to pay a claim owed; failing to timely pay a claim owed; requiring unreasonable unnecessary paperwork to process the claim filed; failing to deny a claim within a reasonable amount of time; and failing to explain the reasons(s) for why a claim is denied.  Consequently, having a great attorney who is competent in identifying bad faith can assist you pursuing a legal claim against the insurance company for its actions, while also assisting you with the original claim presented to the insurance company for the property damage and bodily injury you suffered in the automobile accident.

The following case out of East Baton Rouge, Louisiana is an example of an insurance company acting in bad faith and being legally penalized for doing so.  On May 20, 2010, the plaintiffs, Dedra and Sheddrick Griffin filed a petition for damages against State Farm Mutual Automobile Insurance Company as a result of an automobile accident that occurred on January 13, 2010.  On January 13, 2010, Jacob P. Savoy driving a 2001 Mitsubishi Spyder struck Mr. and Mrs. Griffin driving a 2000 Infiniti I30 from behind while traveling eastbound on U.S. Highway 190 in West Baton Rouge, Louisiana.  The accident caused extensive property damage and personal injuries to Mr. and Mrs. Griffin.  More specifically, Mrs. Griffin, the driver of the Infiniti sustained injuries to her shoulder, neck, and chest wall, in addition to aggravating pre-existing injuries to her neck, back, and legs, while Mr. Griffin sustained injuries to his left knee, chest wall, and back.  Mr. and Mrs. Griffin were both treated by Dr. David Wyatt, an orthopedic surgeon.  At the time of the accident, Allstate Insurance Company insured Mr. Savoy with liability limits of $10,000.00/$20,000.00, while State Farm insured Mr. and Mrs. Griffin.

money-1537580-781x1024Concursus proceedings can be complicated. In a concursus proceeding, multiple parties assert competing claims to money or property. La. C.C.P. art. 4651. These types of proceedings are designed to free the court from the burden of dealing with multiple lawsuits. As a party to a concursus proceeding, you assert your claims to a particular piece of property against all other claimants. This necessitates a good lawyer, as demonstrated by a recent case of the Louisiana First Circuit Court of Appeal.

In 2010, Joseph Shows was injured in an automobile accident that left him with extensive bodily injuries and significant medical expenses. Fortunately for Mr. Shows, he had prepared for such events by obtaining uninsured/underinsured motorist (“UM”) insurance through Farmers Insurance Exchange in the policy amount of $100,000.  He was also covered under a health benefits plan provided by his employer Trimac Transportation, Inc., administered by Blue Cross and Blue Shield of Texas, Inc. (“BCBSTX”).

After the accident, Shows was able to recover $25,000 from the at-fault driver’s insurance company, Allstate, in addition to $63,933.34 of Shows’ $100,000 Farmers UM policy limit. However, one question remained: Who would receive the remaining balance of Mr. Shows’ UM policy limit, totaling $36,066.66?  Farmers filed a concursus petition against Mr. Shows and BCBSTX to recover the remaining balance.

alligator-close-up-3-1375396-1024x748A car accident can create a significant change in one’s life. If nothing else, it can generate a large monetary cost that will be difficult to repay. Automobile insurance, which each person must have to a certain extent, can help with this cost.  Other sources like governmental benefits may be of help to some, but it is essential to understand how public benefits and private insurance policies may interact.  Louisiana law requires that a person who is suing an insurance company, such as the insurer of another driver at fault for a car accident, must exhaust any other insurance policies that the plaintiff may be entitled to benefits.  La. R.S. 22:2062(A).  This statute further states that benefits paid by a plaintiff’s insurance policy will be credited against any amount that the defendant insurance company may be said to owe, up to the policy limits of the plaintiff’s insurance. If there is no policy limit, then the full amount will be considered a credit.

In a recent case, the Louisiana Fourth Circuit Court of Appeal attempted to determine just what the law means by “other insurance”.  This case involves Charles Brown, who was injured in a car accident in 2012 when another driver failed to stop at a stop sign.  Mr. Brown sued the other driver and that driver’s insurance company now called the Louisiana Insurance Guaranty Association (LIGA). In response, LIGA argued that it should not be made to pay Mr. Brown’s expenses since he had received Medicaid benefits that exceeded the policy limit of the insurance policy at issue. Mr. Brown moved for partial summary judgment, arguing that either LIGA was not entitled to a credit for the Medicaid payments, that it would still be liable despite its credit, or that the statute does not block liability behind the first $15,000 in per-person benefits. In response, LIGA argued both that the Medicaid benefits exceeded its liability coverage and that Mr. Brown’s lack of automobile insurance coverage prevented his recovery. The District Court heard the arguments and denied Mr. brown’s motion while granting that of LIGA. The District Court dismissed the claim, ruling that Mr. Brown’s Medicaid payments entitled the insured defendant to a credit.  Mr. Brown appealed to the Fourth Circuit Court of Appeal.

Mr. Brown argued that the District Court should not have considered Medicaid benefits to be “other insurance” for the purposes of the statute and that the benefits should not have been credited as they did not cover the extent of his injuries. He also argued that the Federal Social Security Act controlled such a case, or that the District Court misapplied the statute as a credit rather than a partial recovery prevention.

car-rear-mirror-1413786-1024x680In Louisiana, uninsured motorist coverage is mandatory. It seeks to protect drivers from motorists with no or insufficient liability coverage to pay for the damage they cause in accidents. In Louisiana, uninsured motorist coverage guarantees that anyone who purchases insurance on their car will automatically benefit from uninsured motorist coverage equal to the liability limits. This does not mean, however, that insurance companies can’t limit the scope of their uninsured motorist coverage. When coverage is denied, and lawsuits are filed, often times the issue is whether the accident falls within the insurer’s policy. A recent lawsuit in the Louisiana Fifth Circuit Court of Appeal is illustrative.  

Jorge Alicea was traveling eastbound on I-10 in Jefferson Parish, Louisiana on March 30, 2011. It was 5:00 a.m. and dark. The weather was clear and traffic was mild. Suddenly, Mr. Alicea’s Dodge Caliber rear-ended a Chevrolet 6000 driven by Jared Summers. Mr. Alicea filed a lawsuit against Mr. Summers alleging that Mr. Summers suddenly stopped because of an accident ahead of him caused by an unknown driver, causing a collision between Mr. Alicea and Mr. Summers. Mr. Alicea was insured by GEICO General Insurance Company, whom Mr. Alicea named as a defendant in the lawsuit.

GEICO responded to the lawsuit by filing a motion for summary judgment, seeking to have the case thrown out before trial.  In its motion for summary judgment, GEICO argued pleadings and initial discovery showed that GEICO owed Mr. Alicea no uninsured motorist coverage because Mr. Alicea was at fault in causing the accident when he rear-ended summers. GEICO’s uninsured motorist policy requires covers only incidents corroborated by independent and disinterested witnesses who establish the injury was caused by an unidentified or uninsured/underinsured driver. The Trial Court granted GEICO’s motion for summary judgment, which Mr. Alicea appealed.

crash-car-1309515-1024x768Kenneth White’s road trip from Monroe to Shreveport, Louisiana wasn’t exactly uneventful. The Monroe man was involved in a traffic accident that led to a legal battle between insurance companies. White’s insurance dispute led to a significant change in the law, as the Court of Appeal held that a major auto carrier’s contract provision violated public policy.

Experiencing mechanical problems with his 1999 Pontiac Grand Am, White borrowed his mother’s sports utility vehicle to make the one-hundred-mile trip on August 29, 2012. Kenneth did not live with his mother and was not included on her State Farm auto insurance policy. White had his own insurance policy with Safeway.

During the trip, White rear-ended a vehicle driven by Danny Litton. Litton suffered injuries in the accident and claimed property damage. Almost four months later, Litton filed a personal injury lawsuit that named White, Safeway, and State Farm as defendants. State Farm then filed a subrogation claim against Safeway. In the insurance context, a subrogation claim involves a carrier filing a claim against a party to collect for compensation paid out to a policyholder. State Farm claimed White’s use of his mother’s car constituted use of a temporary substitute vehicle, and they were entitled to compensation under La. R.S. 22:1296.

new-orleans-1446699-1024x768How familiar are you with your motorist insurance policy? Are you fully covered for uninsured/underinsured motorist coverage? In Louisiana, uninsured motorist coverage protects you if you’re in an accident with an at-fault driver who doesn’t carry liability insurance. Underinsured motorist coverage, on the other hand, steps in when you’re in an accident with an at-fault driver whose liability limits are too low to cover the damage or medical expenses. Every insurance policy in Louisiana is considered to include uninsured/underinsured motorist coverage unless it is validly rejected. In a recent case, the Louisiana Fourth Circuit Court of Appeal found that an electronic signature on an online form was valid to uphold an insurance policy.

In August 2011, Plaintiff Rapalo-Alfaor filed a lawsuit against George Lee Jr. and Liberty Mutual, Lee’s insurance company, in the District Court of Orleans Parish.  Plaintiff alleged that he was rear-ended while driving on I-610 by Lee.  Lee responded to the suite and both parties engaged in discovery for several years.  Discovery is an exchange of questions and requests for documents served on the other party in order to establish facts in a lawsuit.

Plaintiff later amended the lawsuit to include Underwriters of Lloyd, Plaintiff’s insurance company.  Plaintiff alleged that under his policy with Lloyd he was entitled to medical payments and uninsured/underinsured motorist coverage.  Lloyd denied both claims by the Plaintiff.  Lloyd subsequently filed two motions for summary judgment.  A motion for summary judgment is a request for the court to rule that the other party has no case because there are no facts at issue.  The first motion alleged that Plaintiff had canceled the policy prior to the accident but this was denied by the District Court.  The second motion alleged that Plaintiff did not contract for medical payment coverage and he denied uninsured/underinsured motorist coverage.  Lloyd included copies of the policy and the Plaintiff’s application for coverage.

toxic-1189855-1024x681A unique feature of our American federal system is the separate yet intertwined system of state and federal courts. Sometimes a dispute may begin in a state court and end up in federal court. And sometimes, there may end up being parallel proceedings in both the state and federal systems. There are limits, however. A federal court can decline to hear an action if there is a parallel proceeding in the state court system. Recently, the Fifth Circuit Court of appeal was called upon to determine whether a district court erred when it declined to hear a declaratory action and related counterclaims.

In May 2012, Jeffrey Dugas II purchased an Icee cup drink from the Regency Inn in Lafayette, Louisiana. Dugas sustained injuries from the Icee cup, which was found to contain toxic chemicals; specifically sodium hydroxide, a chemical found in the hotel’s laundry facility. Sohum LLC, the owners of the Regency Inn, filed a lawsuit against their insurance provider, Century Surety Company after the insurer declined to defend Sohum in a court case brought by Dugas. Century then filed a declaratory action in federal court asking for a declaratory judgment stating that the insurance policy Sohum had in force at the time of Dugas’ injuries excluded coverage for injuries caused by harmful materials. Since Dugas’ injuries were the result of laundry chemicals, Century claimed that Sohum’s insurance policy did not cover the injuries.

Sohum brought counterclaims against Century, alleging that the insurer breached their contract by refusing to defend them in court and provide coverage for the injuries Dugas sustained. Further, Sohum claimed Century refused coverage in bad faith; that the insurer was reliable through the doctrine of estoppel based on “unspecified prior representations”; vicarious liability based on misrepresentation by the insurance company’s agents; and, lastly, unfair business practices based on the insurer’s failure to reveal material facts to Sohum. Century filed a motion to dismiss based on Sohum’s counterclaims of bad faith and unfair commercial practices.