Insurance Dispute

August 4, 2017

Read the Fine Print, Louisiana Court Finds Company Falls With Subrogation Waiver

no-fine-print-1419142-1024x768 One 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.

August 3, 2017

Louisiana Court Finds Commercial Liability Insurer Owed No Duty to Defend

by Berniard Law Firm

porquet-guardiola-1239750-683x1024 Inherent 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.

August 1, 2017

Strict Adherence to Flood Insurance Policy Requirements is Crucial to Obtaining Recovery

by Berniard Law Firm

willow-1385791-1024x766 The 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.

July 2, 2017

Comprehensive proof of driver at fault’s underinsurance required to claim under underinsurance policy

by Berniard Law Firm

highway-14-junction-1628439-768x1024 Underinsurance 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.

July 1, 2017

Louisiana Court Does not Hold Insurer Responsible for Negligence of an Uncovered Driver

by Berniard Law Firm

highway-perspective-1508300-1024x768 Lawsuits that are rooted in car accidents are typically cut and dry; it is easy to determine the party at fault and to determine the party that should pay for the costs of damage. However, a case arising out of Monroe proves that this is not always the case. This perplexing lawsuit involves a situation in which the at-fault party was not covered under the vehicle’s insurance.

After a car accident occurred on September 29, 2010, at the intersection of Louisville Avenue and North 18th Street, Shanedra Reed and Jasine Hubbard brought claims against one of the car’s insurers, Safeway, alleging that they were passengers in the car driven by Naiman Carroll when they became injured by the accident. Safeway was Carroll’s insurer, so under these claims, this company would be liable for their injuries. However, Safeway affirmatively argued that Carroll and Reed were passengers in the car, while Hubbard, who is not covered by Safeway under Carroll’s insurance, was driving. Hubbard’s claim was eventually dismissed because she failed to answer discovery before trial.

At trial on January 30, 2014, the Trial Court determined that Hubbard had been negligent in failing to properly look for traffic while making a left turn at a stoplight. As a result, the trial court found that Safeway was liable to Reed for general damages of $10,000, as well as for special damages caused as a result of the accident.

June 25, 2017

Disability ERISA Insurance Claims Require Timely Production of Evidence

by Berniard Law Firm

accessibility-1538227-1-1024x768 Navigating an ERISA disability insurance claim through the courts can be a difficult task. The best ERISA disability isurance claim lawyers can help be your guide to ensure your rights are protected. The following case that arises out of the Federal Court system in New Orleans demonstrates the issues that can arise when you fail to timely provide the required documents to prove your case and your insurer denies your disability claim.

The case began when Angel Dix a two-year employee of Blue Cross Blue Shield Louisiana began experiencing back pain. Her doctors deemed her disabled for insurance purposes and she began receiving disability benefits under the company’s long-term disability program. Less than a month later, Dix was notified that she would no longer receive disability payments by her insurance company. The letter stated that the administrator found that the medical evidence “no longer supported a finding of disability.” The administrator considered medical opinions from treating and reviewing physicians, findings of an independent medical evaluation, and a vocational expert’s report. Dix appealed the decision.

During the initial review process, the administrator asked Dix whether she would like to submit additional documentation, and even gave Dix an extension on the deadline for submitting documentation. Dix failed to submit any additional information. The record was reviewed and the decision of the administrator was upheld. Then, approximately one year and three months after the administrator issued its final decision in her appeal, Dix submitted medical records, X-rays, MRIs, affidavits, and a favorable Social Security Administration decision. The affidavits were from two of her doctors stating that they do not recall speaking with the reviewing physician. The administrator declined to add the documents to the administrative record because Dix has exhausted her administrative remedies.

June 12, 2017

Louisiana Court of Appeal Finds Insurance Company’s Definition of Rental Vehicle Unlawful

by Berniard Law Firm

a-guys-dream-1546422-1024x768 When 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.

June 9, 2017

Regular Use Exclusion in Louisiana Insurance Policy Prevents Plaintiff’s Recovery

by Berniard Law Firm

industry-up-sign-1533438-768x1024 Generally, 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.

June 1, 2017

Louisiana Court Distinguishes between “Insurance Claim” and “Court Judgment”

by Berniard Law Firm

claim-check-1166752-1024x766 When 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.

May 27, 2017

When Can an Insurance Company’s Bad Faith Handling in Auto Accident Claim Lead to Penalties?

by Berniard Law Firm

Automobile 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.