Contacted by a life insurance company that says you're a beneficiary?

It may not be the scam it sounds like.

We've been hearing a lot lately from consumers who've received letters from life insurance companies saying that they're the beneficiary on a long-deceased loved one's policy.

The letters often include a form that the consumers need to fill out to receive the money, and the form requires them to provide sensitive personal information.

Not surprisingly, many consumers have been skeptical about these letters. But while it may sound too good to be true, the letters may be legitimate. (Keep reading and we'll tell you how to check.)

Here's the background: Until recently, many large life insurers didn't aggressively research whether policyholders had died, even when the person's date of birth suggested that they were almost certainly dead. (This isn't as easy as it sounds, particularly with records that predate the widespread use of social security numbers as an identifier.) Last year, insurance regulators and consumer groups started challenging the insurers to do a better job.

As a result, many life insurers have started checking the names of policyholders against the Social Security Administration's Death Master File. When the companies find an apparent match, they contact the person/s listed as the beneficiary.

But how to be sure that the letter is real? If you live in Washington state, you can contact us at 1-800-562-6900 or reach us 24/7 via our online complaint and information form. We'll get in touch with our contact person at the insurance company who can verify that the letter you received is legitimate.

If you don't live in Washington, here's the contact information for your own state's insurance regulator, who may be able to help.

Insurance agent's license revoked; charged with identify theft

Insurance Commissioner Mike Kreidler has revoked the license of a Federal Way insurance agent who forged documents and stole tens of thousands of dollars from a client.

Cecelia Villanueva, who's been selling insurance in Washington since 1994, has also been charged by the King County Prosecutor's Office with two counts of identity theft. Her arraignment is pending. (She's listed in the court filing as Cecilia Cabasco Sawyer.)

In 2002, Villaneuva, sold an annuity that was ultimately worth more than $148,000 to an elderly woman and the woman's neice. She wrongly listed the neice's ex-husband as the primary beneficiary.

The elderly woman passed away in 2005. According to investigators, Villaneuva got a copy of the woman's death certificate, and forging the ex-husband's signature, she filed a claim with the insurer for the annuity proceeds. She steered the money into a bank account that she'd opened in the ex-husband's name, and repeatedly forged his name on checks.

The bank records show that she spent tens of thousands of dollars on groceries, cell phone service, at a drugstore. One of the largest checks, for $6,000, was simply made out to herself.

Eventually, the neice asked about the annuity. Villanueva claimed that due to the poor economy, the value of the annuity had dwindled to just $83,000.

The insurance company that Villaneuva worked for says it is working with the family to repay the stolen money.

Villanueva's insurance license was revoked under the state's insurance laws barring agents from improperly witholding or misappropriating clients' money, demonstrating untrustworthiness, and for forging signatures.

Privacy Insurance

Here's an article by Toby Merrill of ACE USA on everything you need to know about privacy insurance.  He writes: 

Privacy, as it relates to an individual’s personally identifiable information, such as Social Security numbers, credit card and healthcare data, has become a cause célèbre of federal and state regulators. Increases in the scope of privacy laws continue to fuel a rise in publicly reported corporate data breach incidents. A company that suffers a significant data breach not only confronts the possibility of great financial loss, it may also suffer irreversible reputational damage—fueling a need for privacy insurance.

Directors and Officers Insurers Win Summary Judgment on Specific Litigation Exclusion

Post by Pete Dworjanyn

Directors and Officers policies are typically claims-made policies which attempt to exclude coverage for wrongful acts which occur after the inception of the policy but arise from a nucleus of facts which preceded the inception of the policy. As a result, questions as to whether later acts are “interrelated” with prior acts can be tremendously important. A recent decision by the United States District Court for the Central District of California, XL Specialty Insurance Co. v. Michael Perry, June 27, 2012, granted summary judgment to insurers on interrelatedness grounds and provides an interesting discussion of the issue.

The case arose out of the 2008 collapse of IndyMac Bank and bankruptcy of its holding company, Bancorp. The former directors and officers of IndyMac and Bancorp were subsequently sued in several venues for breach of fiduciary duties, security laws and other claims.  The opinion grouped these suits as eleven Underlying Actions, the first being known as the Tripp Litigation, a class action securities suit alleging IndyMac violated its own underwriting standards when originating loans.

Two coverage years were implicated: 2007-2008 (Tower 1) and 2008-2009 (Tower 2). Each tower consisted of eight layers of coverage with 10 million dollars per layer. The first four providers in each tower (ABC Insurers) provided coverage for: 1) Side A coverage - losses from claims against Directors and Officers of Bancorp for individual acts; 2) Side B – losses from Bancorp’s indemnification of its Directors and Officers, and; 3) Side C – losses sustained by Bancorp as a result of security laws violations.  The subsequent four providers in each tower provided Side A coverage only. The ABC policies were similar, as where the A policies, although there were some differences between the two groups.

Interrelated Wrongful Act Limitation

Both the Side ABC and Side-A policies limited their liability so any claim that arose from the same “interrelated wrongful acts” constituted a single claim. Furthermore, the policies noted all such “claims” would be construed as having been made at the time the first claim was made. The Side ABC policies defined interrelated wrongful acts as “wrongful acts which have as a common nexus any fact, circumstance, situation, event, transaction or series of facts, circumstances, situations, events or transactions.” The Side-A policies defined interrelated wrongful acts as “any wrongful act based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving any of the same or related, or series of related, facts, circumstances, situations, transactions, or events.”

Prior Notice Exclusion

The Side ABC policies excluded “any payment in connection with a claim based upon arising out of, directly or indirectly resulting from or in consequence of, or in any way involving: 1) any wrongful act or any fact, circumstance or situation which was been the subject of any notice given prior to the policy period . . . .” The Side-A policies excluded coverage for acts “based upon, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving any fact, circumstance or situation, transaction event or wrongful act which, before the inception date of this policy was the subject of notice given under any other [D&O policy].

The Court again rejected the defendants’ arguments that the language was ambiguous, noting further that the language described a broad relationship between subsequent claims and claims made during prior policies so that subsequent claims would be excluded under the Tower 2 policies.  In this part, the Side ABC policies were equal to the Side A polices and broader than the Side ABC polices’ interrelated wrongful acts limitation.  The Court held the difference between the interrelated wrongful acts limitation and the prior notice exclusion was subtle.  The interrelated wrongful acts limitation states claims that fall within the scope of “interrelated wrongful acts” will be deemed to have been made at the time that the first claim was made.  The prior notice exclusion states that the policy does not provide coverage for claims that are broadly related to claims that were noticed during a prior policy period.

Tripp Litigation Exclusion 

All of the Tower 2 policies excluded coverage for any claim “based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving the following: 1) the [Tripp Litigation]; or 2) any fact, circumstance, situation, event, transaction or series of facts, circumstances, situations, events or transactions underlying or alleged in the Tripp Litigation., regardless of any legal theory upon which such claim is predicated.

Court's Analysis 

The opinion first discussed the three policy limitations. In each instance, the court held the exclusion was unambiguous, and further that the language described a broad relationship between the subsequent claims and the claims made prior to the policy inception date. The court specifically rejected the idea that this broad relationship made the exclusions ambiguous. The court also held that the policy language did not require “alleged wrongs to be temporally identical” for them to constitute interrelated wrongful acts.  The opinion then applied its analysis to each of the 10 classes of underlying litigation, holding that all ten Underlying Actions were sufficiently related to the Tripp Litigation to be excluded under at least one clause of the policies.

Note: The decision has been appealed to the 9^th Circuit Court of Appeals.

"I need insurance. Who would you recommend?"

We get this question all the time. And sorry, but we can't steer you to a particular agent, broker or insurer. We're the state agency that regulates the insurance industry in Washington state, and in that role, it's not our place to endorse particular companies or agents.

That said, we do have some online tools that can help you pick who you want to deal with.

We have this agent and company lookup, where you can find local agents, companies that sell specific types of coverage, etc. If you look up a company, you can also see the number of complaints by year. And the agent/broker listings include any disciplinary actions taken against that person.

If you want to find out how many complaints we get about particular insurers, here's our complaint comparison tool. It helps you find out out how insurers compare to one another. You can compare health insurers, for example, or auto, or life, etc.

And because market share varies dramatically, we include a "complaint index" that makes it easier to make apples-to-apples comparisons between different companies.

Lastly, it's always a good idea to double-check by running the name of an insurer, agent or broker through our disciplinary orders database. It goes back to 2002, and includes details on violations, fines, and other orders we've issued.

Small Businesses: You Didn't Build That!

SMALL BUSINESS AND JOBS

President Obama recently got himself in hot water with a lot of hard-working business owners when he said, “If you’ve got a business, you didn’t build that.  Somebody else made that happen.”

Conservatives pounced on this statement as being arrogant and patronizing toward the risk-takers that actually employ others and create jobs.

Liberals claim the quote is out of context, and point out that we are all mutually helped by teachers, roads, infrastructure, firefighters and the invention of the Internet.

As a small business man myself, I have heard a lot of about jobs and small businesses in this long election cycle we have all had to endure. Here are some things that you might surprise you about small businesses. They may not be so small. A business under 500 employees usually qualifies.

A staggering 99.7 percent of all employer firms are small, paying 44 percent of total U.S. private payroll, and employing half of all private sector employees! Half! That is about 60 million jobs.

Maybe even more significantly, they generated 65 percent of net new jobs over the past 17 years, from 1993-2009. That is 9.8 million new jobs.

Small businesses are the ones that take risks.  Just look at the rate of failure. Only a quarter stay in business 15 years or more.  And, the majority of small businesses are started with owner’s own cash, bank loans and credit cards.

So, yes, we all drive on roads contracted for by the government. However, they were paid for tax dollars from people like me, and you. Further, they were built by private businesses simply under contract from the government.  The Internet was invented by the military, which is funded by our tax dollars. Firefighters, who are true heroes along with our soldiers and police, are paid with tax dollars.

Remember, the government cannot give you anything it does not first take from someone else.

The current administration wants to raise taxes on business owners with incomes over $250,000.00.  However, we should all recognize that precious few folks with incomes under that number could provide many jobs. 

Job creators are certainly struggling and lack confidence to hire you and your neighbors.  We are in crisis of confidence and both sides blame each other. 

We cannot tax out way to prosperity, we must grow there. 

SJC gives effect to anti-concurrent causation clause

Surabian Realty owns a professional office building in Foxborough, Massachusetts.  In June, 2009, heavy rains fell in the area of the property.  About thirty minutes into the storm, water stopped flowing down a parking lot drain that had become clogged with debris.  As a result, rainwater collected in the parking lot and seeped under the door of the building, flooding and damaging the lower level.

Surabian sought coverage from its insurer, NGM.  The policy contained an exclusion for loss or damage caused by water "regardless of any other cause or event that contributes concurrently or in any sequence to the loss."  The phrase in quotes is called an anti-concurrent causation clause, and is often an issue in coverage for hurricane losses where  a policy provides coverage for wind damage but excludes coverage for water damage.

The original water exclusion included surface water and water "that backs up or overflows from a sewer, drain or pump."  The sewer, drain or pump clause, however, was replaced by a policy endorsement under which "the most we [the insurer] will pay for loss or damage caused by water that backs  up or overflows from a sewer, drain or sump is $25,000." 

NGM denied the claim because the damage resulted at least in part from surface water, which was excluded by the policy.

In Surabian Realty Co., Inc. v. NGM Ins. Co., __ N.E.2d __, 2012 WL 2819398, the Supreme Judicial Court of Massachusetts noted that "surface water" has been defined by case law as "waters from rain, melting snow, springs, or seepage, or floods that lie or flow on the surface of the earth and naturally spread over the ground but do not form part of a natural watercourse or lake."  Rainwater that collects in a parking lot is surface water.  Rainwater that collects on the ground is surface water even if, but for an obstruction, the water would have entered a drainage system.

The court reviewed extrajurisdictional cases that stand for the proposition that water must have "occupied" a pipe or drain in order to have backed up or overflowed from it.

The court held, "Construing these clauses in combination, we interpret the insurance contract, as amended by the indorsement, to exclude damage caused by flood waters that spread over the surface of the ground without having entered a drain, but to cover damage caused by water that backed up after entering a drain." 

The parties agreed that the damage at issue was caused both by water that backed up after entering the drain and by water that, as a result of the blockage, never entered the drain.  (I'm not an engineer, but I would question why water would have backed up from the drain.  What was the force that pushed the water out of the drain?  I would think -- again, I'm not an engineer-- that water that entered the drain  would stay there, leaving no room for other water to enter it.) 

Applying the anti-concurrent causation clause, the court held that because one cause of the damage was covered and another was excluded, there was no coverage for the loss under the policy.

Limitation Periods in Actions Under the OPCF

Roque v. Pilot Insurance Company, 2012 ONCA 311 (C.A.)

The plaintiff was injured in an automobile accident in 1996. He commenced an action against the defendant driver in 1998 for $1.75 million.  He commenced an action against his own insurer in 2002.   Section 17 of the OPCF provides an.action against one's own insurer under the underinsured provisions of the policy must be commenced within one year from when the claimant knew or ought to have known the quantum of claims exceeds the defendant's motor vehicle liability limits. The plaintiff argued the limitation did not begin to run until his damages were quantified by settlement or judgment.  This interpretation had previously been accepted in Hampton v. Traders General Insurance Company (1996), 27 O.R. (3d) 285 (Gen. Div).  On the insurer's motion for summary judgment, the motion judge dismissed the action.  The Court of Appeal dismissed the appeal, overruling Hampton.  Justice Juriansz preferred the reasoning of Master Dash in McCook v. Subramaniam (2008), 172 A.C.W.S. (3d) 344 (S.C.) at para. 5:

The plaintiff’s case runs from when he has a body of evidence accumulated that would give him a “reasonable chance” of persuading a judge that his claims would exceed $200,000.

Roque had a DAC, medical reports and an economic loss report going back to 1998 and more than two years passed after he knew or ought to have known his claims exceeded $200,000. As a result, the action was statute barred. 

The Court did not accept the plaintiff`s submission that applying s. 17 would amount to a multiplicity of proceedings, since s. 258.4 of the Insurance Act requires an insurer to advise of the defendant`s policy limits.  Where an insurer fails to comply, the Court stated it would be prudent for a plaintiff to commence an action against its own insurer.

This decision should help to provide greater certainty with respect to the timing for claims under the underinsured provisions of the motor vehicle policy. 

My kid's delivering pizzas in his car. Does he need extra insurance?

Sorry, but the answer's usually yes. Most personal auto insurance policies won't cover you if you're getting paid to use your own car to transport people or property for business purposes.

In general, you'll need to buy a business or commercial auto insurance policy if you are a health care worker who occasionally uses your own car to take clients to appointments. The same is true if you use your own car to deliver flowers, newspapers, pizzas, etc.

If you have questions about your coverage -- and policies do differ -- contact your agent or insurance company directly.

Eastern Washington storm damage and insurance claims

Large parts of eastern and northeastern Washington suffered significant storm damage on Friday, when high winds and heavy rains ripped through the region, toppling trees, cutting power lines and damaging cars and homes. Flash floods also damaged some areas.

As homeowners, businesses and vehicle owners pick up the pieces, here are some key things to know about insurance claims:

Direct damage to insured structures by wind, wind-driven debris and falling trees is generally covered under standard homeowners and business coverage.

As for vehicles: If you have comprehensive coverage, that will also generally cover damage to a car or truck from falling limbs, etc.

Immediately contact your agent or insurer, who can help walk you through the claims process. If the damage is severe enough that you cannot remain in the home, your policy may include some coverage for temporary living quarters.

Flood damage is usually only covered if you had flood insurance. Contrary to what many people think, flood coverage is NOT part of a standard homeowners policy. In Washington, the first stop for flood coverage is often the National Flood Insurance Program, a federal insurance program sold through local agents.

As for the damage, be sure to take pictures. Avoid making permanent repairs or discarding damaged property until claims officials can document the damage or loss. If you can safely do it, try to minimize further damage, such as covering broken windows.

Here's a more-detailed list of tips for filing an insurance claim after a natural disaster.

Insurance tips: Sudden discovery...of a longtime problem

Consumers routinely call to file a complaint about denied homeowners insurance claims in which the problem is that they just discovered a long term problem. These tend to be things like mold, rot, mildew or deterioration.

The problem for these homeowners is that Insurance is designed to cover sudden and accidental damage, but not wear and tear for home care and maintenance that any homeowner is expected to address on their own. Some policies may allow coverage for damage caused within a matter of weeks -- and they may mean that plural literally, as in just two weeks -- to be considered sudden and accidental.

Generally, an insurer will inspect the damage to determine if it could have been caused suddenly or over a period of time. An example is mold damage that resulted from a leaking hot water heater, or a refrigerator water line that's been leaking, slowly rotting the kitchen floor joists.

The upshot is this: the longer an underlying problem has existed, the harder it is to successfully claim that the damage was sudden.

Update (9/25/2012): Here's a classic case of this sort of problem.

Rule making starts for essential health benefits

In 2014, when the rest of the Affordable Care Act kicks in, all health plans - whether they're sold inside the new online health exchange or outside - will be required to cover certain essential health benefits.

The essential health benefits will be based on the largest health plan in the small employer market -- Regence's Innova plan and must include all current state mandated benefits.

Specific coverages and any gaps that need to be filled will be determined through the rule making process started earlier this month, but all plans must include the following categories:

• ambulatory patient services
• emergency services
• hospitalization
• maternity and newborn care
• mental health and substance abuse disorder services - including behavioral health treatment
• prescription drugs
• rehabilitative and habilitative services and devices
• laboratory services
• preventive and wellness services
• chronic disease management
• pediatric services, including oral and vision care

A public hearing to determine the specific coverages and any additional benefits that are needed will be held this fall. Check our website for updates or sign up to get rule-making notices.

Duty to Defend - Winter Maintenance Contractor

Minto Developments Inc. v. Carlsbad Paving, 2012 ONSC 1574 (S.C.J.)

Minto brought an application seeking a declaration that Carlsbad and its insurer, Intact, were obligated to provide it with a defence.  Minto was a property owner that was named as a defendant in a slip and fall action.  Carlsbad contracted with Minto to provide winter maintenance on the property.  In the contract, Carlsbad agree to indemnify and save harmless Minto, to maintain a CGL policy with $2,000,000 limits and to add Minto as an additional insured.

Carlsbad refused to assume the defence.  It argued that the claim included allegations of negligence with respect to snow and ice removal, inspection, warning signs, breach of lease agreement and occupier's liability.  Its position was that the majority of the claims did not fall within the scope of coverage and stood on their own.

Justice Kershman held that the true nature of the Statement of Claim was that of a negligence case where the plaintiff slipped on snow and ice in the parking lot.  It therefore fell within the scope of coverage and Intact had a duty to defend Minto. 

Duty to defend issues arise fairly often in slip and fall cases where the property owner hires a contractor to maintain the property.  It is important to look closely at the Statement of Claim to determine the true nature of the claim; the mere insertion of a number of different allegations by the plaintiff will not necessarily be enough to take the claim outside of the scope of coverage.

Insurance tips: What's an "approved" mobile home park?

We've heard recently from a couple of manufactured home owners who didn't know whether they reside in what's known as an "approved park." When they filled out their homeowners insurance application, they checked the "no" box when asked if their home was located in an approved park.

Result: They ended up paying higher premiums than they needed to.

Check with your agent or insurer, but generally, an approved park means that the location must be a:

• planned and named community of manufactured homes,
• which have permanently installed water, electricity and sewage services
• which are collectively managed
• and whose residents recognize common bylaws or rules.

How to find old life insurance policies (and other unclaimed property)

The case: A woman called us last year, trying to track down a life insurance policy that her grandmother had bought in 1971. The policy had been sold by one company to another.

"Makes me wonder how many policies go unclaimed," she said.
A lot. According to the New York Times, hundreds of millions of dollars each year.

So how do you track down a relative's old policy?

Gather as much information as possible: name, insurer and any relevant documents. Try to find the policy itself, which will have a number on it. Make sure you have a copy of the death certificate.

Tip: If you can't find the company, try going through the person's financial records, looking for payments made to an insurer. Also, look through old mail -- the company may have sent periodic statements or billing reminders. If you know which company they had their auto= or homeowners coverage with, consider contacting that company. People often use the same insurer for life insurance.

Then, make sure the company still exists, or if it merged with another company. If you live in Washington state, we can help with this, for free. Call us at 1-800-562-6900. If you live in another state, call your state's insurance regulator for help.

If you can't find any information, even the name of the company, you may want to pay a search company to run your relative's name against insurance industry databases or to contact a large number of insurers directly. Examples include companies like MIB Solutions or The Lost Life Insurance Finder Expert. (Note: mentioning a company or product on this blog ≠ endorsement.)

Other places to check:

If the policy goes unclaimed for a long time, insurers are supposed to turn the money over to state unclaimed property funds. Run your relative's name through these free, state-run online search sites. There are companies that will offer to do this for you, but you can easily and quickly run the checks online yourself. Here's Washington state's official unclaimed property site. And here's a list of similar official unclaimed property websites in other states.

Tip: Online companies can also search for unclaimed property for you, but with a little time at your computer and the sites listed above, you can do the same thing, for free, yourself.

As for that life insurance case, we helped the woman figure out the current company holding the policy and file a claim.

"This is incredible," she wrote. "We can't thank you enough."
Bonus round: Here are our tips if you're buying life insurance or an annuity.

Homesite Insurance agrees to refund $386,000 in overcharges to policyholders

Homesite Insurance Company of the Midwest has agreed to refund hundreds of thousands of dollars that it overcharged homeowners insurance policyholders in Washington state.

Insurance Commissioner Mike Kreidler is also fining the company $30,000.

Due to a computer issue, the company says, it used rates last year that were different from the rates approved by Washington Insurance Commissioner Mike Kreidler for that time period. The rates it charged had been approved for an earlier period.

As a result, Homesite overcharged 4,504 consumers a total of $386,578. (It also undercharged 2,140 customers $154,241, but those policyholders won't have to pay that.)

The company has agreed to contact the overcharged consumers and issue refunds, plus 8 percent interest, by Sept. 30th.

SABS - Pursuing Litigation without a Mediator's Report

Cornie v Security National, 2012 ONSC 905 (S.C.J.)

This motion involved plaintiffs in four actions who commenced actions against their insurers for statutory accident benefits.

The Insurance Act imposes a mandatory mediation scheme in accident benefits cases.  Rule 19 of the Dispute Resolution Practice Code (DRPC) provides that mediation must be concluded within 60 days of the filing of an application.  Once mediation has failed, the plaintiff may pursue litigation.  In all four cases, the plaintiffs filed mediation applications and after 60 days passed without a mediator being appointed, they wrote to FSCO requesting a mediator's report confirming mediation had failed.  FSCO refused, taking the position that the 60 day period does not begin to run until a mediator is appointed.

The insurers brought motions to dismiss on the basis that mediation had not failed.  Justice Sloan dismissed the motion.  The 60 day period in the DRPC is mandatory.  The plaintiffs did not require a report from FSCO in order to claim that mediation failed through non-compliance with r. 19.  The plaintiffs were therefore able to show that mediation had failed and they were entitled to proceed with litigation.

This decision is a clever way to get around the lengthy back-up taking place at FSCO; however, does it transfer the backlog to the court system?

YOU GOT FIRED FOR THAT?

YOU GOT FIRED FOR THAT?

With jobs as hard to come by as they are, getting fired is a serious blow. I represent injured workers and car accident victims, and losing their job is something they all fear. But, people are only fired for really good reasons, right?
Wrong!

Consider these reported cases:

On July 2, 2012, near Miami Beach, a young lifeguard was assigned a portion of the city beach. He heard a commotion, and saw a man in trouble. He ran to help, and radioed his boss to cover his section.  The lifeguard saved the drowning man.

Then he was fired. 

Fired because he left his assigned beach zone to save a life!
Two other lifeguards protested, claiming they would have done the same thing.

Then they were fired.

Three of the remaining lifeguards resigned in protest. A total of six jobs lost.

The public outcry was so huge, that the young hero, Mr. Lopez, was actually presented a key to the city. The management company also offered him his job back, which he politely declined.
Surely, getting fired for doing the right thing is rare. Maybe it is not.

Consider the Detroit worker who found a dangerous loaded handgun in weeds while on the job.  He kept it safe, figuring a policeman would soon drive by, and he could turn it in. After work, having seen no cops, he drove it to the police department himself. He wanted to get it off the streets. The police discovered the gun had been stolen years earlier, and praised his efforts.


Then he was fired. 

Fired only two years from retirement after 23 years on the same job! He had broken a policy by having a gun at work.  Really?

In Ann Arbor, Michigan, a shoplifter was running out of the Whole Foods store, when a former US Marine employee caught up to him in the parking lot. The employee eventually caught him and, attempting a citizens’ arrest, held the suspect for police as they were on the way.  What loyalty! But then his boss, the manager, came and ordered that the thug must be released. The thief ran off into the night.

Then he was fired.

Fired on Christmas Eve, no less.  You see, Whole Foods has a policy against “touching” a customer.
Was a man who was stealing really a “customer?” I thought customers actually paid for the items they take out.

In the Whole Foods case, one could argue that no one was in danger when the employee chased him down. Surely, if customers were in danger, it would be a different result, right? Wrong!

A Wal-Mart shoplifter had one employee up against a break room wall, with a gun at his back. The gunman reportedly threatened the other three employees in the small room, but they were having none of it. They sprang into action, and wrestled the gun away from the crazed bandit, and held him for police.

Police officers told them they had done everything right.


Then they were fired.

All four of them were fired.

Wal-Mart claimed they broke a company policy by putting their fellow workers and customers at risk. Wal-Mart seemed unable to grasp that letting a desperate criminal armed with a gun lose in their store might put a person or two at risk. And what about the man with the gun at his back? Seems like he was at risk!

As it turns out, the thug was a convicted felon, who cannot legally own a firearm and would certainly not want to be caught with one. He also had many warrants out for his arrest, so he was probably very desperate. The gun, in fact, was loaded, and had a live round chambered to shoot.

Company policies were created to teach people what is right, and to protect the customers and the company.  I can understand why employees are not encouraged to chase down thieves outside the store, but some of these are indefensible among those with any common sense.

Maybe common sense itself was fired?
It sure is rare these days.

Collins & Lacy, P.C. Attorney Jack Griffeth Begins S.C. Bar Foundation Presidency

Jack has been a longtime volunteer with the S.C. Bar Foundation, affectionately known as "the heart of the Bar" for its philanthropic activities across the state. We are excited to see Jack lead the organization this year. You can read more about it below or on our Collins & Lacy website. For updates on Bar Foundation events and ways to get involved, follow Jack's personal blog, Jack Griffeth: A Man with a Stamp on Life & Law.

[COLUMBIA, S.C., July 11, 2012] - Collins & Lacy, P.C. attorney Jack Griffeth assumes the office of President of the South Carolina Bar Foundation on July 1, 2012.

The South Carolina Bar Foundation has long been regarded as the philanthropic arm of the South Carolina Bar. Its mission is to fund the advancement of justice by improving access, education and accountability.  Since 1987, the Foundation has awarded more than $43 million to various legal-related organizations that work on behalf of the justice community. The Foundation is governed by a 13-member Board of Directors.

“To me, the Foundation is not just an arm but the heart of the South Carolina Bar, and I am honored and humbled to lead the way in improving the lives of South Carolinians through the advancement of justice,” said Jack Griffeth. “As last year’s survey results showed, the Foundation creates a lasting impact with every donation dollar, and the support of our Bar members and community is invaluable.”

Jack Griffeth, a shareholder with Collins & Lacy, practices in the Greenville office. His 35-year practice of law has focused on defense trial work, representing employers in employment-related litigation and mediation.

“Jack has been an integral part of the Bar Foundation for several years, and we look forward to his continued commitment toward our mission,” said Foundation Executive Director Shannon Willis Scruggs.

Along with being a tireless advocate for the South Carolina Bar Foundation, Jack was the 2011 President of the Greenville Bar Association, Secretary/Treasurer for the S.C. Bar Foundation Board of Directors and a member of the House of Delegates for the 13^th Judicial Circuit.  He is a past member of the South Carolina Bar's nominations committee and past-president of the Bar's Alternative Dispute Resolution Council.  Jack is a certified mediator by the South Carolina Bar and speaks frequently on the subject of mediation.

Jack says his goal as president is to enhance the image of the Foundation as the heart of the S.C. Bar and broaden the base of giving to better serve the Foundation’s grantees.

About Collins & Lacy, P.C.

In 2012, Collins & Lacy, P.C., celebrates 28 years of providing legal services to South Carolina.  With offices in Charleston, Columbia, Greenville and Myrtle Beach, South Carolina, the firm’s primary focus is defense litigation, representing local, regional and national clients in the areas of construction, employment law, hospitality/retail & entertainment law, insurance/bad faith, products liability, professional liability, public policy, commercial transportation and workers’ compensation.   Collins & Lacy is committed to upholding the highest standards for integrity, civility and community service.  For more information, visit www.collinsandlacy.com.

Wildfire burning near Chelan

The Associated Press (via the Seattle Times) is reporting that 80 firefighters and three helicopters are trying to douse a 250-acre wildfire near Chelan.

Fire crews, we've been told, hope to have the fire mostly contained by tonight.

As the summer fire season begins here in Washington, here are some important tips about wildfire preparedness, insurance and claims:

-Tips on wildfires and homeowners insurance

-More info: Tips on disaster preparedness and filing homeowners insurance claims

-Printable home inventory checklist

-How to contact the Federal Emergency Management Agency (FEMA)

Interesting AP story: Insurers hire firefighters to protect Colorado homes

The Associated Press is reporting that insurance companies have been hiring firefighters and sending them to protect high-value properties threatened by the Colorado wildfires. From the article:

For insurers, hiring their own crew is worth the cost. They spend thousands on well-equipped, federally rated firefighters, potentially saving hundreds of thousands, if not millions, of dollars to replace a home and its contents.

Insurance companies began sending crews to wildfires around 2006, said Paul Broyles, former head of fire operations at the National Interagency Fire Center, which coordinates federal firefighting efforts from Boise, Idaho.

Man charged after filing $20,000 insurance claim for fake dead cat

OLYMPIA, Wash. _ A Tacoma man is facing attempted theft and insurance fraud charges after filing a $20,000 claim for a fictitious dead cat, using pet photos he lifted off the internet.

“We’ve handled some pretty unusual fraud cases, but this is one of the stranger ones,” said Insurance Commissioner Mike Kreidler.

Yevgeniy M. Samsonov, 29, has been charged with first-degree attempted theft and felony insurance fraud in Pierce County Superior Court. Arraignment is set for July 11.

On March 27, 2009, Samsonov was involved in a minor traffic accident in Tacoma. A driver behind him was stopped at a traffic light when her foot slipped off the brake. Damage to both vehicles was very minor.

Samsonov filed a claim that included chiropractic treatment of soft tissue injuries. The other driver’s insurer, PEMCO, paid him $3,452.

Two and a half years later, Samsonov sought additional payment from PEMCO. He said that in addition to the vehicle damage and medical claim, his beloved cat Tom had been in the car and killed in the accident.

The company issued him a check for $50 to compensate him for the cat.

Samsonov then told PEMCO that he’d paid $1,000 for the cat, who’d been like a son to him. He wanted to be paid $20,000.

He sent the company two photos he said he’d taken of his cat. (See below.)

A PEMCO claims representative did a Google Images search and discovered identical cat images appearing on websites, blogs, Facebook pages, and Wikipedia posts about cats. The two images Samsonov submitted are actually of two different cats. One is named Lacy. Neither belonged to Samsonov.

PEMCO canceled its $50 check and forwarded the case to Kreidler’s anti-fraud unit.

Supreme Court will not hear Giuliani appeal

The Supreme Court of Canada has refused leave to appeal the decision in Giuliani v. Halton.  A link to our commentary on Giuliani is found at http://insurance-coveragelaw.blogspot.ca/2012/02/minimum-maintenance-standards-ruled.html.  In Giulini, the trial judge held that the Minimum Maintenance Standards did not provide a defence where the snow accumulation  was less than 5 cm (as provided by s. 4 of the MMS for a Class 2 road).  In addition, s. 5 of the MMS did not establish a minimum standard for conditions that had not yet become icy. The Court of Appeal decision is found at: http://www.ontariocourts.ca/decisions/2011/2011ONCA0812.htm.

Giuliani leaves municipalities vulnerable to additional claims.  If the gap in the MMS is to be addressed, it will have to be done through legislation.

Fireworks and homeowners' insurance

Yes, it's tempting to shoot off fireworks around the Fourth of July. Here are a couple of key things to know:

• If fireworks are not legal where you live, you may jeopardize your insurance coverage if someone is injured or property is damaged as a result of your shooting them off.
• On the other hand, fireworks-related damage to your property typically is covered if someone else -- not a family member -- is responsible.

Insure.com also has an article with some more scenarios and tips.

Prescription drugs and Premera

Crosscut's Harris Meyer has a story today about a clash between our office and Premera, one of the state's largest insurers:

Since 2009, Premera Blue Cross’s LifeWise unit has sold a high-deductible plan called Wise Essentials Rx, the only catastrophic-type plan in the state offering drug coverage. Its enrollment quickly zoomed to 45,000. But that plan and Lifewise’s standard plan covered only generic, not brand-name, prescriptions.

Earlier this year, Premera’s two main rivals, Regence BlueShield and Group Health Cooperative, filed requests to switch their standard plans for individuals from full to generic-only drug coverage. Group Health said it doesn’t favor a generic-only benefit but feared its plan otherwise would get swamped with sicker enrollees who couldn’t get brand-name drugs in other plans. All three insurers have reported losing money in the individual market.

Those requests prompted Insurance Commissioner Mike Kreidler to issue an emergency rule in February barring generic-only coverage. He said patients with multiple sclerosis, some types of cancer, AIDS, rheumatoid arthritis and certain forms of mental illness can’t necessarily be treated effectively with generics. The insurers’ moves, he warned, would leave most Washingtonians in the individual market without adequate drug coverage.

Click the link above for more on this situation, and why we responded the way we did.

Fireworks on the Fourth of July Lead to a Dispute Regarding a Landlord and Its Insurers’ Right of Action Against a Tenant

Post by Logan Wells

The Fourth of July is fast approaching, and so our thoughts turn to fun, freedom, and of course, fireworks. With that in mind, this post discusses a 2002 opinion of the United States Court of Appeals for the Fourth Circuit in which the court found that (1) S.C. Code Ann. § 38-75-60 did not bar an insured landlord’s action against its tenant for damages resulting from a July 4^th blaze; and (2) the presence of the landlord’s insurers in the action would not have reduced the amount of the insured landlord’s damages for which the tenant could be found liable.

In Balcor Equity Properties XVIII v. Caligo Limited, in early June 1994, Caligo began an industrial cleaning project in Greer, South Carolina. Caligo staffed the project in part with employees from outside the Greer area and housed these employees in apartments leased from Balcor, including Units 161 and 166. During the evening of July 4, some Caligo employees residing in Units 161 and 166 were discharging fireworks onto the ground from their outside balconies. The employees subsequently began shooting bottle rockets and Roman candles at each other. Shortly afterward, the wooden deck of Unit 164 (which was not leased by Caligo, but which was situated between Units 161 and 166) caught on fire, and the resulting blaze caused more than $1,000,000 in damage to the complex.

Balcor had purchased fire insurance coverage for the apartment complex from four different insurance carriers. After the fire, the carriers jointly paid Balcor $991,796.41, which represented Balcor’s claimed damages less its $100,000 deductible. Balcor then filed suit against Caligo in the United States District Court for the District of South Carolina, claiming Caligo was liable for the conduct of its employees in discharging the fireworks and seeking to recover damages in the full amount of the loss caused by the fire. Specifically, Balcor alleged, inter alia, that Caligo breached Paragraph 10 of the lease contract, which stated, “You agree ... to indemnify us from any damage or loss we may sustain because of any fire or the extinguishing of such fire originating in the premises which damages our property.” Caligo generally denied Balcor’s claims and also asserted that the action was barred by S.C. Code Ann. § 38-75-60, which provides as follows:  

Notwithstanding any other provision of law, no insurer has a cause of action against a tenant who causes damage to real or personal property leased by the landlord to the tenant when the insurer is liable to the landlord for the damages under an insurance contract between the landlord and the insurer, unless the damage is caused by the tenant intentionally or in reckless disregard of the rights of others.

In addition, Caligo moved to join Balcor’s insurers as involuntary plaintiffs; however, after the carriers stipulated that they would be bound by the judgment, the district court denied the joinder motion. The district court also struck Caligo’s § 38-75-60 defense, ruling the statute did not apply to Balcor’s suit, and inter alia, granted summary judgment to Balcor as to its breach of contract cause of action.

Caligo appealed, arguing the district court erred in granting summary judgment as to the breach of contract cause of action, in denying its motion to join Balcor’s insurers, and in striking its statutory defense. The court reversed the district court’s grant of summary judgment on the breach of contract claim. In addition, the court concluded the district court correctly ruled that § 38-75-60 did not bar the breach of contract claim because the statute bars insurers’, not landlords’, claims. For the same reason, the court also determined that the statute would not have barred Balcor’s claim even if Balcor’s insurers had been joined as involuntary plaintiffs. Thus, the court concluded that any error in denying Caligo’s motion to join the insurers was harmless.

On remand to the district court, following a jury trial, judgment was entered in Balcor’s favor for $1,050,000, which represented the entire amount of Balcor’s fire damage. Caligo moved to amend the judgment, arguing that it should be responsible only for the $100,000 in fire damage for which Balcor was not compensated by insurance benefits. Caligo further argued that Balcor’s insurers should have been joined as involuntary plaintiffs, and if they had been, § 38-75-60 would have barred recovery of the amounts paid by the insurers to Balcor. The district court denied the motion, noting that Caligo’s argument had been rejected earlier by the Fourth Circuit.

Caligo appealed, alleging inter alia that the district court erred in denying its motions to join Balcor’s insurers as involuntary plaintiffs. Specifically, Caligo contended that because Balcor’s insurers paid Balcor $991,796.41 as a result of the fire, the insurers owned a portion of Balcor’s claim. Caligo continued that had the insurers been joined as involuntary plaintiffs, they would have been prohibited under § 38-75-60 from asserting their claims, and therefore Balcor’s damages would have been reduced by $991,796.41.

The court rejected Caligo’s argument, finding the district court correctly ruled that the court had rejected Caligo’s precise argument in the first appeal. Further, the court found not joining Balcor’s insurers did not increase the amount of damages for which Caligo could be found liable:

In any event, Caligo’s argument that Balcor’s damages would have been reduced if its insurers had been joined as involuntary plaintiffs is simply incorrect. In partial subrogation cases, the insured’s right of action against the wrongdoer is "single and indivisible, even though the insurer is subrogated to the rights of the insured to the extent of the loss paid." Spearman v. J & S Farms, Inc., 755 F. Supp. 137, 141 (D.S.C. 1990); see Pringle v. Atl. Coast Line R.R., 47 S.E.2d 722, 724 (S.C. 1948). Additionally, South Carolina follows the "collateral source rule," under which compensation from insurance proceeds will not reduce the amount of damages for which the wrongdoer is liable. See Citizens & S. Nat’l Bank of S.C. v. Gregory, 463 S.E.2d 317, 318 (S.C. 1995); Otis Elevator, Inc. v. Hardin Constr. Co. Group, 450 S.E.2d 41, 45-46 (S.C. 1994) (applying rule in contractual indemnity setting). Accordingly, as we determined [previously], any error in not joining Balcor’s insurers as involuntary plaintiffs did not increase the amount of damages for which Caligo could be liable.

Accordingly, the court found Caligo was not prejudiced by the denial of its joinder motion, and therefore, affirmed the judgment of the district court.

Freedom and Independence

Independence day in America is July 4. It is a day of fireworks, picnics and grilling out. Having recently visited Independence Hall in Philadelphia I was struck anew just how brave these few flawed founding fathers were. Standing up to the largest empire that existed. Troops were on the ground, and more were on the way. The battles would have to be fought here. If you host a battle, home field advantage is often overshadowed by the awful inevitable destruction. I just visited Arlington national cemetery. There are rows of white tombstones are far as you can see. Did you know that belonged to Robert E Lee originally? Anyway, those soldiers died for you and for me. For freedom. It occurred to me as I visit our national Capitol that few if any Americans would actually read the Declaration of Independence on this day. Doesn't sound like fun? How bout this? Have amazing stars explain and than read you -- or really perform-- this great document that we hardly have lived up to yet. Interested? Is it worth it to you? If so, gather round and watch 15 minutes. (That is 1/4 of an American Idol episode) http://www.youtube.com/watch?v=jYyttEu_NLU&feature=youtube_gdata_player Enjoy. Happy fourth of July