Appellate Division holds that established standards for expert witnesses apply to PIP claim

In Kaplan v. Hanover Ins. Co. a chiropractor, Kaplan, sued Hanover Insurance Company to recover pursuant to PIP payments for treatment provided to Hanover's insured.

A chiropractor employed by Kaplan had treated the insured. Kaplan sought to offer expert testimony about the necessity of the treatment provided and its causal relationship to the accident. For some inexplicable reason the trial judge refused to allow his testimony on the grounds that he had not treated the insured himself.

The Massachusetts Appellate Division held that the judge's ruling was an abuse of discretion. It pointed out that there is no requirement that an expert have personal knowledge of a case and may rely on materials prepared by others.

Workers Comp Audit Worksheets

Ask your insurer to provide you with a copy of the audit worksheet prepared for your most recently expired workers' compensation policy. This document provides the details of how the insurance company determined your final premium. It lists employees, classifications and payrolls. Look for errors such as the inclusion of overtime and incorrect classification of employees.

Facebook in Litigation - 2

This is part two of Tara Pollitt's article on Facebook in Ontario litigation.

The Murphy case was followed in Leduc v. Roman,[1] an appeal of a Master’s decision. Justice Brown held that a party who maintains a private Facebook account stands in no different position than one who maintains a publicly accessible profile and to permit a party to hide behind privacy controls on a website designed to share social information is to deprive the other party of material relevant to ensuring a fair trial. In Leduc the defendant had obtained an initial order requiring the plaintiff to preserve the website prior to the balance of the motion being heard. This approach is useful to prevent information from being changed or deleted before the motion can be heard.

Facebook was used recently in a trial decision out of Newfoundland called Terry v. Mullowney.[2] The plaintiff was cross-examined at trial using printouts from his publicly accessible Facebook account. The Court explicitly noted that the material from Facebook showed the plaintiff had a full and active social life and without that evidence he would have been left with a very different view of the plaintiff’s social life. The information was a critical factor in reducing the claim from approximately $1.3 million to $40,000.

[1] [2009] O.J. No. 681 (S.C.J.).
[2] 2009 NLTD 56 (Canlii).

FIRST OFFICIAL REJECTION

 

"I’m afraid we got turn downs from the agents to whom I submitted your summary."

 

I received this email  just this afternoon while in Disney.

back to the drawing board.

Work Comp Book Online - The Blook

A reminder that my best selling workers compensation book is available free on line.



www.WorkCompBlook.com

MY BOOK WRITING ODYSSEY

The efforts continue to create a perfected manuscript of my first novel. 

I have actually had a bit of interest in California for my project and I hopeful that a literary agent with much vision, good connection and divine patience will take me under his or her wing and and shepherd my book into a marketable item, wit maybe a movie to follow (we can all dream). 

On a trip in the Ozarks, there was a new story that would have eroded some of plot. Trish, who is right over 99% of the time, said God was stirring me to complete the book faster. 

It helped. I wrote the final sentence and so when I got a call from LA on another issue, I mentioned it.  That fellow could not help me directly, but he knew a guy and so on.   

I will keep this going as a history of what I hope will be the first of many in the series, Lord willing. 

Dave

Fast Work Comp Claims

All your employees should know the importance of fast reporting of any claim.



The quicker you get your employee help the better the outcome.  There is no downside to fast reporting.



Employees should know how and to whom claims should be reported.  Have a very specific process that is well documented and reinforced.  Make sure your work comp insurer is in on what your doing too.



Ask you agent if your insurer has sample procedures you can use.

Selling Life Insurance

When times are tough people often look to the cash value in their life insurance policies as a source of cash. In addition to borrowing the cash value, one strategy that is sometimes recommended is to sell your life insurance policy to a third party. You would get more than the cash value but not as much as the death benefit. Although this might seem like a good way to raise cash, in general this is a strategy that financial planners don’t recommend.

Selling your life insurance to a third party is called a “life settlement.” There are several things to be aware of before jumping into such an arrangement. First of all, in general, the value of the settlement over the amount of your total premiums paid will be taxable as ordinary income. You would owe federal and state tax. That increase in taxable income may affect your eligibility for Medicaid or other government assistance. In addition, you lose a valuable asset that may be very important to your spouse or other beneficiaries at your death.

Investors who buy life settlements are really only interested in policies for individuals over age 65 and in poor health, and this group is particularly vulnerable to aggressive sales tactics. The industry is susceptible to fraud because the expenses of the sale can be high and not readily discernable.

As I said above, an alternative to selling your policy is to take a loan on the cash value. If you don't need the cash value but are having trouble keeping up with the premiums, ask your adult children, if they are the policy beneficiaries, to pay the premiums.

Insurance is too important for a last-minute decision

By Kathryn Canavan, Special for USA TODAY
Health care insurance and other benefits cost employees thousands of dollars a year — on average about 30% of their total compensation.

But many employees wait until the last minute to make selections, do precious little research and make big mistakes that cost them in multiple ways. Two examples: paying more upfront for benefits they may not need; and making poor decisions that show up when a health or other emergency arises.

The 2010 open enrollment season at workplaces nationwide is ramping up as fall arrives.

Given what's at stake, experts say workers should pledge this time around to make better selections. There's a lot of ground to make up: Only 6% of consumers feel completely prepared to deal with health care costs, according to the Deloitte Center for Health Solutions. And most employees spend 30 minutes or less choosing their health plans, according to Cigna.

"People don't put a lot of thought into enrolling in their plans," Cigna spokesman Joseph Mondy says. "Typically, people spend like half an hour deciding. Compare that to how many hours you agonize before you buy a TV."

Some tips to get the most out of your employee plan:

Don't wait until the last minute

Enroll, and do so on time. Don't assume that you'll be automatically enrolled in the plan you chose last year.

"We have this whole month to review things, and we wait until the night before we have to make the decision to open the booklet," says Lenny Sanicola, an employee benefit specialist with WorldatWork, an association of human resources professionals.

His recommendations: Sift through materials early; discuss plans with family members; make a list of questions; and attend your company's face-to-face meetings. If you don't get the answers you need, go to your human relations officer or supervisor. Understand what you're signing up for and what your out-of-pocket expenses are going to be.

"As you get into the 2010 decision-making, there are fewer simple decisions," says Cigna's chief learning officer Karen Kocher.

Include others in decisions. Family members may think that taking advantage of legal coverage, a pet insurance option or flexible-spending account make sense, even if you don't. Those opinions should matter.

Check eligibility requirements

Before you make a decision to jump to your spouse's plan in this rocky economy, make sure you'll be able to return to your employer's plan if you waive enrollment now and your spouse loses his or her job later.

Also, determine whether your adult children are still eligible or newly eligible for your family plan.

"Eligibility is where people can really get tripped up," says Michelle Connor, a senior benefit consultant at CBIZ Employee Services.

Employees should also realize that companies are auditing to ensure former spouses or unqualified adult children are not lingering on family plans. Don't be surprised if your human resources office suddenly requests your offspring's college schedule.

Think about health coverage costs

The single most important question when choosing any health insurance plan is, "What is my annual liability?" Connor says.

Add likely out-of-pocket costs to the premiums being deducted from your paycheck. When you determine likely out-of-pocket costs, put that amount in a pretax flexible-spending account.

Kocher says employees must understand their needs and the available options: "The absolute best fit will not only get you the best coverage, it will also assure your out-of-pocket costs are minimized."

Mondy says websites can often be go-to places for prescription-price comparisons and, increasingly, for cost-and-quality comparisons of medical professionals.

"Find out all the programs your company offers. You may be pleasantly surprised," he says.

One program many people don't take advantage of: flexible-spending accounts.

"One of the things that scares people about an FSA is the use-it-or-lose-it provision, but you can always run out and buy a whole season's supply of cold and flu medication or a new pair of eyeglasses" at the end of the year to use money in the account, says Ken McDonnell, program director for the Employee Benefit Research Institute.

Consider life, disability insurance

If your age or health make it expensive to get private life insurance, your employer can be a good place for that because it's usually less expensive and requires little or no medical underwriting, says Barry Petruzzi, vice president of group benefits for Guardian Life Insurance Company of America. He says employees can use an online calculator to determine whether they should buy more insurance than an employer already provides for free.

Connor also recommends buying short-term disability insurance "every day and twice on Sunday" because it ensures your paycheck.

She says six out of 10 employees will be on disability at some time during their careers, and most will be on short-term disability.

Pregnancy, for example, falls under short-term disability. She says even the group she calls "the young infallibles" are exposed to plenty of risk of short-term injury from sports and auto accidents.

Educate yourself about investments

Jane White, president of Retirement Solutions of Madison, N.J., says employees need 10 times their final year's salary for a retirement nest egg, so save accordingly.

To do that in the best way, says WorldatWork's Sanicola, employees should take advantage of financial seminars and online tools offered by companies, and keep an eye on investing fees.

If you can afford to contribute enough to your 401(k) or other such plan that's eligible for a company match, do it.

"Your net pay won't go down 6% if you contribute 6%, because you're using pretax money," Sanicola says.

Also, if your company provides its match in company stock, divest out of it as quickly as possible, White says. A diversified portfolio is insurance against losses if your company stumbles and the stock price plummets.

Get and stay healthy

Some employers and insurance companies offer financial incentives to employees who use gyms or attend smoking-cessation programs.

Ask if your employer provides any reimbursements. If they do, make lifestyle changes to take advantage.

Free Life Insurance? Not Really

By Jeff Brown

It seems like a deal that’s too good to be true: Pay premiums on your term-life insurance policy, then get them all back if you don’t die during the 10, 20 or 30 years you are covered. It’s like getting insurance for free.

But like most too-good-to-be-true deals, this one isn’t quite as good as it appears. Most people can do better with a standard term policy.
So-called return-of-premium options were devised a number of years ago to boost sales of term policies, the simplest and least expensive type of life insurance. With term, the policy holder pays an annual or semiannual premium in exchange for a death benefit for survivors.

But the benefit is paid only if the policy holder dies within the period, or term, covered by the policy. Die later and the survivors get nothing, and the premiums seem to have been wasted.

That encouraged lots of potential customers to opt for variable, universal or whole-life policies that cover the policy holder for life and build up a cash value.

The return-of-premium option on term policies is meant to attract customers who want something to show for years of premium payments if they outlive their policies and their survivors don’t collect a death benefit. The premium is not returned if you die with the policy in effect and a death benefit is paid.

But you have to pay a larger premium to get this option, wiping out much of its value, if not all of it.

Transamerica Life Insurance (Stock Quote: AEG) offers a 40-year-old nonsmoking male a 30-year term policy for $800 a year. An identical policy with the return of principal feature costs $1,335 a year.

With the ROP policy you would get back the $40,050 spent on the premiums over 30 years.But if you took the cheaper policy and invested the $535-per-year savings at 6% a year, it would increase to $40,050 in just less than 29 years, according to the BankingMyWay Savings Goal Calculator.

Chances of averaging 6% over such a long period are pretty good. The Standard & Poor’s 500 returned about 10% a year in the 20th century, and you could invest in that through an index fund like Vanguard 500 Fund (Stock Quote: VFINX), or an exchange-traded fund like the SPDR 500 (Stock Quote: SPY.)


Earn more than 6% and you’d almost certainly be better off investing rather than buying the more expensive policy.

The returned premium is tax free, so a taxable investment would probably have to earn 7% or 8% to provide the same value after taxes were paid. Taxes would not be a factor if you chose a tax-free investment like a Roth IRA.

If you can afford the larger premium it would probably be better to use it for more coverage rather than a return-of-premium option. Use the BankingMyWay Insurance Shopping Tool to find a good policy.

Determining what state's law applies to a coverage dispute

In a coverage dispute the first question is what state's law will determine the coverage issue. That, in turn, is decided by the choice of law rules in the state where the lawsuit is filed.

As described in Clarendon Nat'l Ins. Co. v. Arbella Mut. Ins. Co., 60 Mass. App. Ct. 492, 495 (2004), Massachusetts uses a "functional choice-of-law approach that responds to the interests of the parties, the states involved, and the interstate system as a whole." In this approach Massachusetts courts rely on the Restatement (Second) of Conflict of Laws, sections 193, 188, and 6.

As described by the court in Clarendon, Section 193 "provides that the rights created by a contract of casualty insurance are to be determined by the local law of the State that the parties to the insurance contract understood would be the principal location of the insured risk, unless some other State has a more significant relationship under the principles of § 6."

The principal location of a homeowners policy insuring one house is the state where the house is located and the insured resides. The principal location of an auto policy issued for a single car is the state where the car is garaged and usually driven.

The issue becomes more complicated when a policy insures risks in many states. For example, a general liability policy may insure a business that has factories in several states. A motor vehicle policy could be issued to a trucking company that transports products all over the country.

In such instances a Massachusetts court turns to Section 6 of the Restatement, which lists seven factors to consider:

a) The needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.

My opinion is that taken as a whole those factors add up to gibberish. They give permission to a judge to apply the law of whatever state he or she feels like applying. The only caveat is that the location or locations of the underlying insured events is not a factor. See W.R. Grace & Co. v. Hartford Accident and Indem. Co., 407 Mass. 572 (1990); Michaud v. U.S. Fire Ins. Co., 2000 WL 16767.

Court of Appeal: Injured Insureds Do Not Need to Sue Insured Joint Tortfeasors to Claim Uninsured Motorist Coverage

In a somewhat surprising decision, the Court of Appeal for Ontario has held that an insured motorist does not have to sue insured joint tortfeasors in order to collect on the uninsured coverage in her own automobile insurance policy. Also the insurer does not appear to have a right of subrogation against the joint tortfeasors but only against the uninsured motorist.

This decision is properly understood as providing reasonable coverage for an insured from her insurer. It is a first party claim, not third party claim. The insured purchased coverage for this very type of situation from her insurer. The insurer picked a bad set of facts in this case and should have waited for a better case to pursue this issue - namely, where the joint tortfeasor was at least 25% liable. In this instance it is not even certain that the joint tortfeasor was 1% liable.

The decision is Loftus v. Security National, 2009 ONCA 618 (decision released Aug 21, 2009). Click here for a copy of the decision.

The plaintiff was injured after being hit by an uninsured motorist. The uninsured motorist was being chased by the police when he entered an intersection, lost control and struck the plaintiff.
The plaintiff sued the uninsured motorist and her own insurer, Security National, under the uninsured coverage of her policy. The uninsured motorist did not defend.

At first instance, on a Rule 22 motion, MacDougall J. found that Security National was liable to pay the plaintiff under the uninsured provisions of the policy, even though she had not commenced an action against the police/joint tortfeasors and even if the police/joint tortfeasors are assumed to be negligent.

The Court of Appeal for Ontario reviewed the relevant wording of the Uninsured Automobile Coverage Schedule ("the Schedule") contained in R.R.O. 1990, Reg. 676:

2. (1) The insurer shall not be liable to make any payment,

(b) where a person insured under the contract is entitled to recover money under any valid policy of insurance other than money payable on death, except for the difference between such entitlement and the relevant minimum limits determined under clause (a);

(c) where the person insured under the contract is entitled to recover money under the third party liability section of a motor vehicle liability policy;

The Court of Appeal then held that the key phrase herein is "entitled to recover money". The question then is whether the plaintiff is "entitled to recover money". If yes, then she cannot recover under the uninsured provisions of her own policy.

The Court of Appeal answered the question by finding that the phrase "entitled to recover" as it appears in ss. 2(1)(b) and (c) of the Schedule means entitled to recover "in fact" as opposed to entitled to recover "in law" and that an "injured insured is entitled to recover in fact only where a potential joint tortfeasor’s insurer admits liability to pay or where the injured insured obtains judgment against the insured joint tortfeasor."

The Court of Appeal went on to say that:

"We see no indication in the language of s. 265 of the Insurance Act or of the Schedule that it was the intention of the legislature to require victims of uninsured drivers to engage in potentially speculative and costly litigation against potential joint tortfeasors who may be insured rather than relying on the coverage paid for in their own policies of insurance."

The Court of Appeal also rejected submissions by Security National that this finding would result in double recovery by the insured. The Court of Appeal held that "recovery under the uninsured coverage is an alternative" and that obtaining judgment against her own insurer signifies an election not to subsequently pursue a claim against the joint tortfeasors.

The Courts in this instance simply did not want to find liability against the police for what was clearly the fault of the uninsured motorist and nor did the Courts want to punish the insured for refusing to pursue litigation against the police. The insured purchased auto insurance from the insurer for this very situation.

This inspires DADs and HUSBANDs

This poem comes from his book, Poems for Patriarchs available at: VisionForum.com

The Patriarch
by Doug Phillips

More noble than the valiant deeds of shining knights of yore,
More powerful than earthly plights that make the rich man poor,
More kingly than a royal throne or a lion with his pride,
Is he whose babes sleep well at night sure Daddy will provide.

There is a spirit in this land and Jezebel’s her name.
She’s calling you to leave your home for power, fun, and fame.
She wants your wife, your children too – she’ll never compromise,
Until your house is torn in two by listening to her lies.

But though a hundred thousand million men may fall prey to her lures,
And wives en masse leave home in search of “more fulfilling” chores,
Though preachers praise, and friends embrace, her pagan plan of death,
Stand strong and quit you like a man with every blessed breath.

Stand strong and rise, O man of God, to meet this noble call,
The battle is not new you see, it’s been here since the Fall.

Your wife is your helpmeet, my friend, and not another man’s,
So care for her and keep her far from Mistress Jezi’s plans.
Protect, provide, and give to her your undivided life,
This is the dear one of your youth, your precious bride, your wife.

And rally to those tiny ones who trust you for their care –
A lifetime spent discipling them’s a lifetime pure and rare.
For when they put their hand in yours and know a Daddy’s love,
You’re showing them a picture of the Father from above.

Look not toward worldly goal or gain, or for your liberty,
Look only into their sweet eyes to find your ministry.
Devote your heart and sacrifice and make your manly mark –
There is none so great as he who finds his call as patriarch.

Insurer for Pring-Wilson's mother argues no coverage for civil wrongful death suit

The sad, sordid tale of Alexander Pring-Wilson has made its way into the insurance coverage realm.

Pring-Wilson was a Harvard University graduate student who allegedly stabbed to death townie Michael Colono in an early morning fight in 2003. He was convicted of voluntary manslaughter; had the conviction overturned in an appeal that set new precedent regarding the admissibility of a history of violence by an alleged victim; had a second trial that resulted in a hung jury; and pleaded guilty to involuntary manslaughter.

Colono's estate then filed a civil action for wrongful death against Pring-Wilson.

In the latest chapter, last month Fire Insurance Company, which issued homeowners and umbrella policies to Pring-Wilson's mother, has filed a declaratory judgment action in the United States District Court for the District of Massachusetts seeking a declaration that Pring-Wilson is not covered under the policy. According to the complaint, Pring-Wilson's mother lives and the insured property is located in Colorado. Pring-Wilson was an emancipated adult attending school in Massachusetts.

Fire Insurance alleges that there is no coverage because Pring-Wilson is not a member of his mother's household and because the stabbing was not an "accident" within the meaning of the policy.

Under the Massachusetts choice of law doctrine, the federal court in Massachusetts will most likely apply the law of Colorado to determine the coverage dispute. (I'll discuss choice of law issues generally in a future post.) While I have never looked at the definition of "member of an insured's household" under Colorado law, I have looked at it under Massachusetts law. There are several cases that hold that an adult child not living with a parent is a member of the parent's household only if the absence from the household is intended to be temporary; financial dependence is also a factor.

Do you want to Argue or to Seek Truth?

FLOOD OF IDEAS v. 

IDEAS OF FLOOD

Before engaging in too much argument, I am now trying to ask folks if they are actually seeking Truth, or if they are just wanting to argue. 

The reason is that those seeking Truth may actually stay logical for a few moments longer than those just wanting to argue. 

For instance, a friend told me of a person who gave her the old "there are flood myths all over the world" argument. 

Correctly understood, this SUPPORTS the proposition that a Flood actually occurred. It does not tell you which one happened, or which one

is the most accurate, but it supports that the flood is in the consciousness of most of mankind in some form.

That takes you to the task of comparing the myths.

However, I have to remain patient as people who have barely glanced at these issues add and subtract all kinds of things from the Biblical Account that they rail against.

Recent examples:

-A fellow said that freshwater fish and eels could not exist for a year on the Ark

Of course, that is not even implied in the Biblical Text. (There are explanations for the fish survival, but the point is the adding to part).

-A "Documentary" on Tv calculated that it would take so long to load "every variety of animal that has ever existed into the Ark, even at 2 per second"

Again, that is just not what the text says. It says every type, or in modern day, every species. There are thousands of dog breeds, but there once two canines.

Modern science supports that easily.

But honestly, the "straw men" that are erected by folks arguing the "scientific" view when they have barely read what they argue so hatefully against drives me up the proverbial wall.

By the way, if they answer that they do not believe in Truth, they have disqualified themselves from ever arguing anything, for all time with anyone.  

Think about it.

Appellate Division holds that insured's fraudulent statements regarding lost income void all coverage for loss

In Lee v. Premier Ins. Co., 2009 WL 2438331 (Mass. App. Div.), the Massachusetts Appellate Division (a non-precedent setting court that hears appeals from the District Court)held that an insurer's fraudulent statements about his income voided his coverage not only for lost income but also for medical expenses.

The plaintiff, Lee, allegedly sustained injuries from a rear-end collision while operating a vehicle insured by Premier. Premier denied Lee's PIP claim, on the grounds of non-cooperation. Lee then sued Premier.

The evidence showed that in his PIP application and in an examination under oath Lee more than doubled the average weekly wage that he earned, and that he also exaggerated his annual income in 2003 in his examination under oath and at trial.

The Massachusetts Appellate Division held that in light of Lee's false statements with respect to his income Premier permissibly denied Lee's entire claim, including his claim for medical expenses. The court relied on Gechijian v. Richmond Ins. Co., 298 Mass. 487 (1937), which held:

when it is established . . . that the insured has knowingly made false statements, even in such a matter as value, for the purpose of influencing the adjustment of the loss, public policy demands that the contract be so construed as to discourage such conduct and to give full protection to the insurer.

Facebook in Litigation - 1

CNN recently reported that Facebook now is nearly as large as the population of the United States. There are about 307 million people living the U.S. and Facebook now says it has 300 million users.

Not surprisingly Facebook has now been used in litigation in Ontario. Here is an article by my colleague Tara Pollitt in which plaintiffs have had their credibility checked against their own Facebook webpages.

THE USE OF FACEBOOK IN LITIGATION by Tara Pollitt

Facebook, a social networking website, allows users to share content with other users such as photographs, videos, and by posting messages. A variety of privacy settings are possible, ranging from making one’s site completely open to everyone to restricting access to one’s “friends” – people who are chosen by the user and are permitted to view the user’s information and share their own information. Facebook has quickly become a resource in investigating claims and courts have overwhelmingly approved of its content as being relevant to issues in litigation.

The first reported decision regarding the use of Facebook at trial is Kourtesis v. Jouris[1]. The plaintiff testified that she had little social life post-accident. Photographs the defendant obtained from her publicly accessible Facebook account showed otherwise. In contrast to the evidence the plaintiff and her brother gave about a family trip to Greece where she sat at a café rather than participating in a festival, photographs from Facebook showed her celebrating on her brother’s shoulders. In the trial decision, Justice Browne referred to these photographs in concluding that the plaintiff had an active social life that was not diminished by her injuries. He dismissed the plaintiff’s claim for general damages.

The first reported motion regarding Facebook is Murphy v. Perger.[2] The defendant gained access to a publicly accessible site called the “Jill Murphy Fan Club” and discovered that there was also a private site created by the plaintiff’s sister but over which the plaintiff had control. She had granted access to her webpage to 366 “friends”. Justice Rady allowed the defendant’s motion to obtain production of material on the site, including photographs, holding that the information on the site was relevant as a useful means of assessing the plaintiff’s damages. She rejected the submission that the motion was merely a fishing expedition. She also rejected the argument that the information was a violation of the plaintiff’s right to privacy; the plaintiff could not have had a serious expectation of privacy given that 366 people had already been granted access to the site.
[1] [2007] O.J. No. 2677 (S.C.J.).
[2] [2007] O.J. No. 5511 (S.C.J.).

Appellate Division all but states that judges are crazy to deny motion to sever and stay 93A claim against insurer

In my last post I discussed the decision of the Massachusetts Appellate Division in Rodriguez v. Alvelo, 2009 WL 2438328 (Mass. App. Div.) to uphold the trial judge's decision not to sever a 93A claim against an insurer from the underlying claim against the insured.

The court also addressed the insurer's request that discovery against it be stayed. The insurer argued that it was entitled to a stay until after the adjudication of the underlying action to protect it from the irreparably prejudicial disclosure of confidential, privileged information contained in its claims file.

The court stated that the insurer "has an undeniably legitimate, if not compelling, interest" in protecting its work product, privileged communications, and other information the disclosure of which would prevent or impair its full defense of the underlying claim.

The court noted that there are non-precedential decisions on both sides of the issue (which many plaintiffs' and insurance defense attorneys can easily recite, having copied the same briefs over and over).

The court held that trial judges have discretion to decide whether discovery against an insurer should be stayed until resolution of the underlying matter. It noted that discovery of privileged or otherwise protected material is not allowed. It held, however, that the insurer in this case made no showing that materials in its file were not discoverable. Rather, the insurer had filed a "general motion to sever and stay" simultaneously with its answer, at a point at which there had been no request for any discovery of any kind by the plaintiff. The trial court therefore did not abuse its discretion in denying the motion.

The court then all but begged the insurer to move the trial judge to reconsider the decision, and the trial judge to do so:

In so ruling, we caution that prejudicial error would almost certainly result from any order for complete or unbridled discovery in this case. Having rejected the simpler, arguably more expeditious alternative of immediately severing and staying Rodriguez's G.L. c. 93A case, the trial judge has shouldered the potentially more time-consuming, labor-intensive tasks of scrutinizing Rodriguez's anticipated discovery requests and Premier's expected motions for protective orders, of fairly balancing the parties' competing discovery rights and interests, and of ruling in careful compliance with governing discovery rules. Permissible, practical procedures, including in camera review . . . of specific documents under seal identified by Premier as qualifying for protection, are available and must be undertaken by the trial judge. Nor is the judge precluded from reconsidering the question of a severance and stay, at least early in the procedures.

Appellate Division holds that decision to sever and stay 93A/176D claim from underlying claim is in trial judge's discretion

In Rodgriguez v. Alvelo, 2009 WL 2438328 (Mass. App. Div.) the Massachusetts Appellate Division affirmed a trial judge's decision not to sever a 93A claim against an insurer from the underlying action.

Following an automobile accident Rodriguez sued the driver of the car he was in for negligence and the driver's insurer, Premier, for breach of Mass. Gen. Laws 93A and 176D for failing to effectuate a prompt settlement.

Premier moved to sever the claim against it from the underlying claim, and to stay all discovery against it until the final disposition of the underlying claim. Insurers make such a motion in almost every case in which a bad faith claim is brought against it in the same lawsuit as the claim against the insured.

The trial judge denied the motion. At Premier's request, the judge reported the interlocutory finding the the Appellate Division.

The Appellate Division held that the denial of the motion to sever was within the discretion of the trial judge. The decision contains a lengthy discussion of the limited case law on the issue.

Massachusetts Appellate Division rules in favor of insurer in 93A/176D claim because insured presented no evidence of inadequate investigation

In O'Sullivan v. Hingham Mut. Fire Ins. Co., 2009 WL 2438329 (Mass. App. Div.), the Massachusetts Appellate Division overturned a trial judge's ruling that an insurer violated Mass. Gen. Laws ch. 93A.

O'Sullivan owned a building with a package store in it. (For blog readers not familiar with Massachusetts vernacular, a package store is a liquor store.) The store had a walk-in beer cooler. O'Sullivan discovered in October, 2004 that the back of the cooler had fallen through the floor to the crawl space below. She sought coverage from her businessowner's policy with Hingham.

The policy covered "loss caused by direct physical loss involving collapse . . . ." According to the policy terms collapse "does not include cracking, shrinking, bulging, or expanding."

Hingham sent an adjuster to inspect the floor. He concluded that the floor had "settled," not "collapsed."

A jury returned a verdict for O'Sullivan, finding that a collapse had occurred within the coverage. The trial judge then ruled that Hingham had violated Mass. Gen. Laws chs. 93A and 176D because its adjuster had conducted only a "cursory" inspection.

On appeal the Massachusetts Appellate Division upheld the jury's finding that the cooler had collapsed. However, the Appellate Division reversed the trial judge's ruling on the 93A count:

To prevail in an action for unfair settlement practices under G.L. c. 176D, § 3(9)(d), the plaintiff must show that the defendant "refus[ed] to pay claims without conducting a reasonable investigation based upon all available information." O'Sullivan made no such showing. She presented no evidence, expert or otherwise, of what Popoli had failed to do, or what additional steps he should have taken, in other words, what a reasonable investigation would have entailed. To the contrary, evidence was presented that Popoli spend between 30 and 45 minutes inspecting the outside and inside of the store, inspecting and taking measurements of the cooler, viewing the rot and deterioration beneath the floor though gaps in the raised boards, taking a number of photographs, and collecting a history from O'Sullivan. Far from a "cursory" inspection, the trial judge noted in his findings that [the adjuster] had "much probity and experience" and merely erred in this case.

Christians and Lawsuits-- Should A Christian Sue?

 

As a Christian, and a lawyer, I have been asked about this many times.  As with any question, we should consult the Scriptures first.

The Biblical text that is most often cited is Paul’s letter in 1 Corinthians 6:1-8:

If any of you has a dispute with another, dare he take it before the ungodly for judgment instead of before the saints? Do you not know that the saints will judge the world? And if you are to judge the world, are you not competent to judge trivial cases? Do you not know that we will judge angels? How much more the things of this life! Therefore, if you have disputes about such matters, appoint as judges even men of little account in the church!  I say this to shame you. Is it possible that there is nobody among you wise enough to judge a dispute between believers? But instead, one brother goes to law against another—and this in front of unbelievers!  The very fact that you have lawsuits among you means you have been completely defeated already. Why not rather be wronged? Why not rather be cheated? Instead, you yourselves cheat and do wrong, and you do this to your brothers. (NIV)

Let’s look at the passage carefully. The kind of cases involved in the passage are described in the text:

A “dispute,” that is “trivial” in nature, “between believers,” involving being “cheated” and “wronged” and this dispute could well be judged by a “man of little account in the church.” 

The type of actual dispute is not revealed, but from the description above it is clear that it involves a matter that is between two believers, where one feels cheated or wronged and appears--to others at least--as “trivial” in nature. The Bible expressly states that legal action in that situation is shameful.

An example of that might include a Christian church member suing another member for slander for unknowingly sharing partially false information in a prayer request about her, and hurting her reputation.  Or, it could involve a dispute between two members of a church suing one another over the giving of a poor reference for a job. (Yes, both of these are unfortunately based on real cases).

There is little doubt that these bring the reproach of men upon the church, and are horrible examples. However, Paul himself resorted to law twice when he was wrongfully arrested as a Roman citizen.  He also used the threat of law in Acts 16:37. When one examines the Biblical admonition carefully, there is a clear distinction depending upon the type or nature of the dispute.

For instance, cases that I handle generally involve serious injuries or death. Any case involving grievous injury or death, by definition, is not at all “trivial.”  I hasten to add that 98% of cases settle without trial, so even the most serious cases rarely see a courtroom. Mediation, which is based on Matthew 18, is often used with great success.

Further, these types of serious disputes are rarely actually “between believers” in any real sense. For instance, if I represent you because you were paralyzed when a truck rear-ended your car, I have to name the negligent driver of the truck (who may be a Christian) in order to obtain the compensation due from his auto insurance.  Recall as well, that insurance is purchased to assist us all in paying for accidental acts that may harm someone, and to help protect our assets in that event. It is exceedingly rare for any case to cost an insured driver one penny personally. Many cases are against large corporations that, of course, do not have souls, and therefore cannot be believers.

I may represent a Christian, against a nursing home chain for neglect in allowing terrible bedsores. This is usually a large corporation that often put profits over people. These cases are clearly not what is banned in the Corinthians passage.

Finally, cases that I handle, against negligent drivers, doctors, hospitals and nursing homes are not at all the type of cases that can be resolved by “men of little account in the church.”

While there are many other types of law, the type that I deal with is mentioned frequently in Scripture. Much of our civil injury law (called “tort law”) is actually based on the Bible’s passages.

For instance, the law governing dog bites in Tennessee states that if my dog is not known to bite I have no liability for it doing so. However, if my dog has a vicious nature and is known to bite then I am liable in tort law for all damages. Compare, Exodus 21:28:

If a bull gores a man or a woman to death, the bull must be stoned to death, and its meat must not be eaten. But the owner of the bull will not be held responsible. If, however, the bull has had the habit of goring and the owner has been warned but has not kept it penned up and it kills a man or woman, the bull must be stoned and the owner also must be put to death. However, if payment is demanded of him, he may redeem his life by paying whatever is demanded.

Or, look at the law regarding a slip and fall on a premises owned by another. If I create a condition that I know is dangerous and leave it as a virtual trap for another, I am liable in civil damages. Compare Exodus 21: 33:

If a man uncovers a pit or digs one and fails to cover it and an ox or a donkey falls into it, the owner of the pit must pay for the loss;

Other interesting accidents in Scripture include the negligent attaching of an axe head to an axe handle such that it flies off and kills someone while chopping wood (Deut. 19:5); and the dropping of a stone on an unseen man (Num. 35:22).

Also, the negligent person has a responsibility as well.  Sometimes people talk of lawsuits being a way of making another person responsible for one’s own misfortune. But, if not for lawsuits generally, we may still have Ford Pintos with exploding gas tanks on the road, burning people alive after very minor car accidents. The medicines we take would not be so thoroughly tested.  Nursing homes would not be under any incentive to give better care.

As you can see, the Bible does not forbid lawsuits, but it gives us much direction. Here is a Biblical checklist that may be helpful in evaluating a potential claim:

1.              Is this matter “trivial?” (If so, overlook it.) (1 Cor 6:2 & Col 3:13).

2.              Is this matter solvable by involvement of others at church? (1 Cor 6:4 & Matt 18:15).

3.              Are my motives selfish or vengeful? (If so, stop). (Phil 2:3)     

4.              Have I tried to resolve my claim before suit or court? (Proverbs 25:8).

 

In the end, some will say, my cases are about money. I understand the criticism.

 

However, as I may tell a jury, “Don’t give her money---give her back time…give her back years of pain…give her back a life without this suffering…give her back her quality of life.  But if you cannot give these things, then compensation is all we can ask for. It gives her freedom and it gives her choices. That is all we have to offer her.”

 

David B. Peel

 

More on an exception to the eight corners test

I posted here about an exception to the eight corners test stated in Farm Family Mut. Ins. Co. v. Whelpley, 54 Mass. App. Ct. 743, 747 (2002).

Andrew Caplan, a partner at Burns & Levinson, sent me a comment that made me realize that my post was not as clear as it should have been. Andy wrote:

Massachusetts state and federal cases go both ways on the issue of whether information derived from outside the complaint may serve to negate the duty to defend.

Yes. Farm Family Mut. Ins. Co. v. Whepley, 767 N.E.2d 1101, 1104 (Mass. App. Ct. 2002)( finding “rare exception” to general rule); Gateway Group Advantage, Inc. v. McCarthy, 300 F. Supp. 2d 236, 246 (D. Mass. 2003) (following Farm Family); Dash v. Chicago Ins. Co., 2004 WL 1932760, *5 (D. Mass. Aug. 23, 2004) (dicta).

No. Millipore Corp. v. Travelers, 115 F.3d 21, 35-36 (1st Cir., 1997), citing Nashua Corp. v. Liberty Mut. Ins. Co., 1997 WL 89163 (Mass. Super. Ct. Feb. 18, 1997) ("Where a complaint is susceptible on its face of a reading that brings the claim within the policy, the insurer cannot rely on facts outside the complaint to justify a unilateral refusal to defend."); Sterilite Corp. v. Continental Casualty Co., 17 Mass. App. Ct. 316, 324 n. 17, 458 N.E.2d 338 (1983)("[I]t is the claim which determines the insurer's duty to defend; and it is irrelevant that the insurer may get information from the insured, or anyone else, which indicates, or even demonstrates, that the injury is not in fact covered."); Essex Ins. Co. v. Berkshire Envtl. Consultants, Inc., 2002 WL 226172, *2 (D. Mass. Feb. 7, 2002); Metallized Prods., Inc. v. Travelers Ins. Co., 2003 WL 22481398, *3 (Mass. Super. Ct. Sept. 17, 2003).

Andy is correct that in most cases an insurer may not use information outside the underlying complaint to deny defense to an insured (although such information can be used to compel a duty to defend). The exception stated in Whelpley is quite narrow: it applies to facts that are (1) undisputed and (2) will not be litigated at the underlying trial, because they are irrelevant to the underlying claim.

In my previous post I discussed an example where an insurance policy covers only blue cars. The color of the car is undisputed. It will not be litigated at trial because the color of the car is irrelevant to liability. That would fall into the Whelpley exception.

Competing Duties: Duty of an Insured to Disclose Material Changes v. Duty of an Insurer to do Due Diligence

The duty to disclose a material change in risk in an automobile insurance policy was recently considered by Howden J. in the case DeKoning v. Vector Insurance, [2009] O.J. No. 3461 (S.C.J.).

The Court had to balance competing duties. An insured has a duty to disclose material changes to the policy. An insurer has a duty of due diligence to obtain publicly or readily available information.

An insured under an automobile liability policy failed to report her knowledge to her auto insurance company of the driving record of her dependent teenager who was listed on the policy as an occasional driver.

The insurer took the position that represented a breach of a statutory condition of the policy and permits the insurer to treat the policy as void ab initio and unenforceable.

In this instance, the guardian had added the 16 year old as an occasional driver to her policy by telephone through her broker. The insurer obtained the driving record of the teen showing that his record was clear. Nearly a year later, the son had his license suspended by reason of demerit point accumulation. He had several traffic convictions, including speeding. The guardian assisted the teen in ensuring that all fines were properly paid. The teen did not drive the insured motor vehicle until his suspension ended.

Neither the guardian nor the teen reported to the insurer the fact that his license had been suspended. They subsequently claimed that they did not know of a duty to do so.

The insurer never obtained a subsequent driving record which it could have done for a fee of $12.00.

A few months later, the son was driving with three passengers when a serious accident occurred resulting in one of his passengers suffering catastrophic injuries.

The catastrophically injured passenger obtained a judgment for over $18 million dollars. The insurer made itself a statutory third party throughout those proceedings and took the position that the policy was void ab initio. The limit for third party claims on the insurer was $1 million.

The mother and son brought an action against the broker and insurer, claiming that the policy of insurance is binding and enforceable and seeking a declaration that the insurer was obligated to provide them with a defence in the passenger action. They also claimed indemnity from the insurer for all damages and costs assessed against them in the passenger action.

The Court considered the duty of good faith on insureds to disclose material changes in risk to insurers. The Court noted that Statutory Condition #1 requires an insured to notify the insurer or agent (broker) of any change in the risk material to the contract. The Court reviewed case law which imposes an obligation on an insured to disclose material facts, and then noted that in this instance, only the insurer knew that a couple of traffic tickets and a license suspension were material. Further, the insurer was aware that the additional insured was a novice driver when it added him to coverage and the insurer did not take any additional steps to update its records with respect to his driving record.

The Court held that the guardian as the named insured did not fail in her duty to disclose a material change in the risk since it was not clear in the policy that the driving tickets and suspension were material changes.

The insurer had a duty of due diligence to obtain a further driving record. Therefore, the insurer had no ground in law to void the policy and was obligated to indemnify its insureds.

Superior Court discusses distinction between "leased worker" and "temporary worker"

In Central Mut. Ins. Co. v. True Plastics, Inc., 2009 WL 2603151, the Superior Court held that whether or not a worker was a leased worker, in which case there would be no insurance coverage pursuant to a general liability policy, or a temporary worker, in which case there would be coverage, was a disputed issue of fact.

Sanchez was injured while working on the premises of True Plastics, the insured. She was an employee of Dynamic Staffing, Inc., a company in the business of placing its employees at client companies.

True Plastics had a general liability policy which excluded coverage for a "leased worker" but provided coverage for a "temporary worker." Leased worker was defined in the policy as:

a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include "temporary worker."

Temporary worker was defined in the policy as:

a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions.

The court denied summary judgment to both True Plastics and the insurer because whether Sanchez was a leased worker or a temporary worker was a disputed issue of fact. Evidence supporting the conclusion that Sanchez was a leased worker included an affidavit that Sanchez was assigned to True Plastics for an indefinite time, and the agreement between Dynamic Staffing and True Plastics suggesting a leasing arrangement.

Evidence tending to show that Sanchez was a temporary worker included testimony that Sanchez was hired to fill a large new order for products and was manufacturing that product at the time of her injury.

The court's decision denying summary judgment is in line with the United States Court of Appeals in the case of Scottsdale Ins. Co. v. Torres, 561 F.3d 74 (1st Cir. 2009), which I discussed here. In Torres the court also denied summary judgment to both sides. It held that a placement for an indefinite period of time is not necessarily incompatible with the possibility that the worker was furnished to address a short-term workload condition. The court remanded the case for resolution of the question of how the injured worker's placement fit within the insured's ordinary course of business and the nature of its work flow.

Superior Court holds that binder trumps subsequent amendments to insurance policy

In Kopin Corp. v. One Beacon Am. Ins. Co., 2009 WL 2449880 (Mass. Super.), the Massachusetts Superior Court held that an insurance company was bound by the terms of a binder, despite its subsequent efforts to change the policy.

Kopin had an ocean marine open cargo insurance policy. As the court explained, an open marine cargo policy insures goods in transport from point of origin to final destination.

In March, 2005, Kopin contacted its insurance agent, GHM, to request to amend the policy to cover used merchandise it would export. GHM eventually issued a quote for coverage from IMU that included a used machinery clause.

Kopin requested that GHM provide the quoted coverage. GHM responded with an email stating, "You are bound."

In May, 2005, IMU informed GHM that it was moving its "new and renewal business" to a different division of its parent company. It offered a renewal quote "effective 4/20/05" for Kopin's policy. The quoted policy included endorsements that limited coverage.

In June, 2005, Kopin learned that two pieces of equipment it had shipped to Hong Kong had suffered rust and corrosion damage. The insurer, IMU, denied coverage on the grounds that the endorsements included in the May, 2005 quote excluded coverage.

The Superior Court held that the original quote trumped the subsequent endorsements and the renewal quote. The court stated:

One reason the Court so concludes is that the Quote, once accepted by Kopin and acknowledged by [the insurer], constituted a temporary, binding contract, known in the industry as a "binder." . . . As is the case here, a "binder contract, a commercial document, is to be read in accordance with its terms and not in accordance with the unexpressed terms which a party later wishes had been written into it."

Atheist Arguments

ATHEIST ARGUMENTS

I have had some arguments made against the truth of my faith in Christ, but they seem to be getting worse. As a former atheist myself, I have always made myself available to those seeking truth who have honest questions. I have questions too, sometimes. 

However, most of my discussions or debates with non-believers have been very respectful. Even when we do not agree, we need not be disagreeable. 

Lately, I am concerned about a trend in these discussions. The arguments are getting, well, silly. It was not always so. I enjoy a good give and take about truth.

For instance, both believers and non believers have questions that are not answered in most churches:

-When were the dinosaurs alive? Do they really appear in the Bible?

-Who did Cain marry? 

-Why does a good God allow suffering in the world?

However, here are some recent naïve quotes from those I have witnessed to:

“Jesus is only one of multiple figures in history and religion, and was not unique.”

Jesus was and is the most unique figure in history. Born unlike anyone else (virgin born Son of God), lived unlike anyone else (healed the blind, lived perfectly, forgave sins) then and died unlike anyone else (only stayed dead 3 days as He promised).  So, yeah, except for the way he was born  lived and died, nothing unique here at all.

“The sign of a fish became the symbol of Christianity is because Jesus was a Pisces.”

This was really said by a college student.  He thought he sounded smart. 

“We do not know what the original Greek in the New Testament actually said.”

Lots of Greeks scholars and preachers will be shocked that they do not know the language or the text they studied all their adult lives. We have many thousand manuscripts that date to near the time of the writing of the New Testament.

“Jesus was a vegetarian and where the Bible says He ate fish, it meant ‘relish.’”

The same Greek word used in these passages is used in connection with dragging in nets of fish.   Vegans sometimes use that argument to support their lifestyle. But, unless the fisherman also went fishing for relish, Jesus ate fish.

“All religions are the same.”

As mentioned above, Christianity is as different as its Founder. From Hindu to Buddhism, and Mormanism to Islam, a person’s soul must find its way to a pleasant place through works of some kind. There is no other religion that ever purports to assert that God’s own Son did the work that we could not, and invites anyone of any race or age to just trust in Him for salvation.

He invites you....

Walking into a parked auto is not being "struck" or "hit" by it

In Lewis v. Economical Insurance Group, [2009] O.J. No. 2853 (S.C.J.), Eberhard J. held that there is no coverage for walking into a parked car under the uninsured provisions of the Standard Automobile Policy (s. 265 Insurance Act) or under the Family Protection endorsement (OPCF 44R).

It seems to make sense.

The plaintiff suffered injuries when she struck her head on a steel pole that was protruding from a vehicle.

The defendant insurer brought a motion for summary judgment on the basis that (i) the plaintiff had failed to establish an unidentified vehicle had been involved or could not have been ascertained and (ii) that there is no coverage in any event under the uninsured provisions policy or under OPCF 44R. The insurer won the motion on the latter issue.

The wording of the OPCF 44R endorsement is that the plaintiff is only covered if the plaintiff is not "an occupant of an automobile who is struck by an automobile".

The wording of the policy is that the plaintiff is only covered "when not in an automobile ... if hit by an unidentified or uninsured automobile" (policy).

The Court held that the meaning of hit or struck is not ambiguous: the automobile did not hit or strike the plaintiff pedestrian. The pedestrian walked into the automobile.

Here are paragraphs 9 and 10 of the Court's endorsement:

"This is quite unlike the circumstance of being hit/struck by something hit by an automobile or falling out of a moving vehicle as it is the movement of the vehicle that applies the force that gives rise to the hit/strike."

"It is also unlike the interpretation of "hit/struck" where a moving automobile created a peril which caused the insured to take evasive action which resulted in his injury. There, the visual impact of the automobile caused the injury. In the present case the Plaintiff did not see the pole and walked into it. Nothing about the automobile impacted upon the situation."

Of Baseball and Employees

Op ed piece I did for the Portland Press Herald on getting rid of your deadwood.