James Nolan brought a tort action against Rochester. When Rochester's insurer, Dryden, refused to defend or indemnify it Rochester brought a coverage action against Dryden. Dryden moved to dismiss on the grounds that Massachusetts courts may not exercise personal jurisdiction over it. In Nolan v. Barr & Barr, Inc., 2010 WL 2762682, Superior Court judge Kenton-Walker disagreed.
Dryden has a principal place of business in New York and is licensed to issue insurance policies in New York. P & J is a carpet-installation business located in New York. Dryden issued a general liability policy to P & J. The policy did not limit coverage to New York.
P & J teamed with Rochester, another New York carpet-installation company, to install carpeting at the Williams College Theater in Massachusetts. P & J added Rochester to the Dryden policy as an additional insured.
Judge Kenton-Walker held that Massachusetts courts may exercise personal jurisdiction over Dryden. Although on its insurance application P & J had represented that none of its business took place outside of New York, the policy did not exclude coverage for claims outside of New York. Judge Kenton-Walker held that it was reasonably foreseeable that the insureds would be sued in Massachusetts, and Dryden should have known that it would be required to defend them in Massachusetts.
Tuesday, August 17, 2010
Friday, August 13, 2010
Posting a comment on this blog
Readers, please feel free to post comments on this blog. To do so, click on the title of the blog post. At the bottom of the post click on Post a Comment. Type your comment and fill out the rest of the information requested.
Your comment will not appear immediately. Because this blog was getting so many spam comments I have to moderate posts. I will post any comment, positive, negative, agreeing or disagreeing with what I have written, as long as I am sure it is not spam.
Your comment will not appear immediately. Because this blog was getting so many spam comments I have to moderate posts. I will post any comment, positive, negative, agreeing or disagreeing with what I have written, as long as I am sure it is not spam.
Wednesday, August 11, 2010
Superior Court describes formula to apportion insufficient insurance limit among multiple claimants
I frequently write about the importance of having adequate insurance coverage, to protect the personal assets of the insured and to protect victims of mistakes -- or worse -- that the insured might make.
There are times, however, when even what seems to be adequate coverage is not enough to compensate injured people. The Superior Court described such a situation in Providence Mut. Fire Ins. Co. v. Morancy, 2010 WL 2763255.
Morancy involved a a teenager who got drunk at a party at Morancy's house and then crashed his car into a tree, injuring his four passengers. He had auto insurance with limits of $100,000 per person and $300,000 per accident. Those insurance funds were distributed among the passengers. The insurance did not come close to compensating the passengers for their injuries, one of whose medical bills alone exceeded $900,000.
The passengers then turned to Morancy's homeowner's insurance for additional compensation. The homeowner's policy had a limit of $500,000. That limit, in addition to the auto policy limit, was insufficient to fully compensate the passengers for their injuries. The insurer requested that the court allocate the limit among them.
There was little evidence presented to the court of the passengers' future medical cost or future lost earnings. The court chose to disregard pain and suffering damages. It used only the medical costs incurred by each passenger to determine the proper allocation.
The court subtracted from the medical costs the amount each claimant had received in settlement from the auto policy. It totalled those uncompensated damages and computed each passenger's percentage share in that total by dividing the individual uncompensated damages by the total uncompensated damages. It then distributed the $500,000 limit according to those percentages.
The public service portion of this post:
The passenger who was most severely injured was a tenth grade honor roll student. She worked part-time after school and was a cheerleader. Now she has serious mental impairments that affect her cognitive skills; she has lost vision in one eye; she cannot drive and has difficulty reading and using a computer; she is currently repeating twelfth grade in an attempt to pass the MCAS; it is unlikely that she will ever be able to work; and she cannot be left home alone.
The takeaway:
1. Don't drive drunk.
2. Don't get into a car with someone who is driving drunk.
3. Don't serve alcohol or let your kid serve alcohol to someone who will drive.
4. Tell your teenagers that if they can't get home safely you will come and get them, no questions asked.
There are times, however, when even what seems to be adequate coverage is not enough to compensate injured people. The Superior Court described such a situation in Providence Mut. Fire Ins. Co. v. Morancy, 2010 WL 2763255.
Morancy involved a a teenager who got drunk at a party at Morancy's house and then crashed his car into a tree, injuring his four passengers. He had auto insurance with limits of $100,000 per person and $300,000 per accident. Those insurance funds were distributed among the passengers. The insurance did not come close to compensating the passengers for their injuries, one of whose medical bills alone exceeded $900,000.
The passengers then turned to Morancy's homeowner's insurance for additional compensation. The homeowner's policy had a limit of $500,000. That limit, in addition to the auto policy limit, was insufficient to fully compensate the passengers for their injuries. The insurer requested that the court allocate the limit among them.
There was little evidence presented to the court of the passengers' future medical cost or future lost earnings. The court chose to disregard pain and suffering damages. It used only the medical costs incurred by each passenger to determine the proper allocation.
The court subtracted from the medical costs the amount each claimant had received in settlement from the auto policy. It totalled those uncompensated damages and computed each passenger's percentage share in that total by dividing the individual uncompensated damages by the total uncompensated damages. It then distributed the $500,000 limit according to those percentages.
The public service portion of this post:
The passenger who was most severely injured was a tenth grade honor roll student. She worked part-time after school and was a cheerleader. Now she has serious mental impairments that affect her cognitive skills; she has lost vision in one eye; she cannot drive and has difficulty reading and using a computer; she is currently repeating twelfth grade in an attempt to pass the MCAS; it is unlikely that she will ever be able to work; and she cannot be left home alone.
The takeaway:
1. Don't drive drunk.
2. Don't get into a car with someone who is driving drunk.
3. Don't serve alcohol or let your kid serve alcohol to someone who will drive.
4. Tell your teenagers that if they can't get home safely you will come and get them, no questions asked.
Monday, August 9, 2010
A really bad week leads to decision on res judicata effect of arbitrator's award on related action
Anthony Liquori suffered personal injuries in an automobile accident with Zachary Wyman on September 24, 2004, and was injured again in an accident with Robert Pelley on September 27, 2004.
Liquori settled his claim against Wyman for Wyman's $20,000 policy limits. He then sought underinsured motorist coverage from his own insurer, Travelers. In an arbitration of the underinsured motorist claim he submitted medical bills totalling $10,716.10.
The arbitrator ruled that based on the materials submitted, it was impossible to determine which medical bills were solely attributable to the Wyman accident and not to the Pelley accident. She held that the Wyman accident was not responsible for more than one third of his nine percent impairment rating, and awarded $4,752.93.
Liquori's claim against Pelley continued. He submitted to the court the medical bills he had submitted in the Wyman arbitration, plus some addiditonal bills.
Pelley moved to exclude from evidence the medical records and bills that had been submitted to the Wyman arbitrator, on the ground that the arbitrator's award was res judicata as to Liquori's total damages.
In Liquori v. Pelley, 2010 WL 2010875 (Mass. App. Div.) the Massachusetts Appellate Division held that there was no issue preclusion, because there was no identity of issues between the Wyman arbitration and the Pelley trial. In the Pelley trial the issue was the amount of Liquori's damages for injuries caused by the Pelley accident. In the Wyman arbitration the issue was the amount of Liquori's damages caused by the Wyman accident. The Wyman arbitration did not determine Liquori's total damages from both accidents. Even if the arbitrator implicitly determined damages from the Pelley accident, such finding was not essential to the arbitrator's determination.
Liquori settled his claim against Wyman for Wyman's $20,000 policy limits. He then sought underinsured motorist coverage from his own insurer, Travelers. In an arbitration of the underinsured motorist claim he submitted medical bills totalling $10,716.10.
The arbitrator ruled that based on the materials submitted, it was impossible to determine which medical bills were solely attributable to the Wyman accident and not to the Pelley accident. She held that the Wyman accident was not responsible for more than one third of his nine percent impairment rating, and awarded $4,752.93.
Liquori's claim against Pelley continued. He submitted to the court the medical bills he had submitted in the Wyman arbitration, plus some addiditonal bills.
Pelley moved to exclude from evidence the medical records and bills that had been submitted to the Wyman arbitrator, on the ground that the arbitrator's award was res judicata as to Liquori's total damages.
In Liquori v. Pelley, 2010 WL 2010875 (Mass. App. Div.) the Massachusetts Appellate Division held that there was no issue preclusion, because there was no identity of issues between the Wyman arbitration and the Pelley trial. In the Pelley trial the issue was the amount of Liquori's damages for injuries caused by the Pelley accident. In the Wyman arbitration the issue was the amount of Liquori's damages caused by the Wyman accident. The Wyman arbitration did not determine Liquori's total damages from both accidents. Even if the arbitrator implicitly determined damages from the Pelley accident, such finding was not essential to the arbitrator's determination.
Thursday, August 5, 2010
Another plug for liability insurance
I participate in a large listserve for local parents. One of the recent threads concerned problems with cakes from a local bakery. There was a long discussion about whether it was okay to post the name of the bakery or if doing so would create the risk of a libel lawsuit. One of the posters responded that for an additional $8.00 a year she added a rider to her homeowner's policy providing coverage for slander and libel. (In insurance terms slander and libel generally come within what is called "personal injury" coverage, an entirely different coverage from "bodily injury" even though the two are synonymous in other contexts.)
Years ago I defended a couple who was sued when they publicly opposed a telephone sex company renting space in the mixed use commercial and residential condominium building where they lived. After several years of litigation they not only prevailed but were awarded their attorney's fees. Had they not had personal injury insurance, however, the process could easily have bankrupted them or forced them into an unfair settlement.
Liability insurance provides not only indemnity (payment of damages to the claimant after the insured loses at trial or settles the case) but also defense, which is sometimes called lawsuit insurance. Because there is always a risk of being sued even when you have done nothing wrong, having such insurance can save you from the tens of thousands of dollars it can cost simply to have a groundless lawsuit dismissed.
Years ago I defended a couple who was sued when they publicly opposed a telephone sex company renting space in the mixed use commercial and residential condominium building where they lived. After several years of litigation they not only prevailed but were awarded their attorney's fees. Had they not had personal injury insurance, however, the process could easily have bankrupted them or forced them into an unfair settlement.
Liability insurance provides not only indemnity (payment of damages to the claimant after the insured loses at trial or settles the case) but also defense, which is sometimes called lawsuit insurance. Because there is always a risk of being sued even when you have done nothing wrong, having such insurance can save you from the tens of thousands of dollars it can cost simply to have a groundless lawsuit dismissed.
Tuesday, August 3, 2010
A crisis that will affect insurers, insureds, and everyone else
The Massachusetts court system is facing a massive budget crisis, and it's going to impact all of us in all kinds of ways. Because this is a blog about insurance law I won't go into how it will affect accused criminals and victims of crime, people trying to get divorced or to buy or sell a house, businesses, customers, employees, and . . . well, everyone in every aspect of their life.
Getting a firm date for a civil trial in Massachusetts has always ranged from frustrating to really, really frustrating. But now it's worse than ever. The last trial I had in Superior Court received about eight continuances, all but the first one at the initiation of the court, and several of them because there was no judge assigned to the courtroom.
It used to be that when I decided what county to file a case in, I would think about which courthouses had the best rotation of judges for the particular issue. Now I think about which county my case is most likely to ever see the light of day in a courtroom.
And, folks, that was the condition before the most recent round of budget cuts. Massachusetts Lawyers Weekly reports that the current round of budget cuts will require that 250 to 300 court jobs be eliminated and that 14 courthouses be closed.
How will these cuts affect insurance? Here's a minor example: Last week the Supreme Judicial Court, in Papadopoulos v. Target Corp., 457 Mass. 368 (2010), overturned well over a century of established law about when a landowner can be liable for someone slipping and falling on ice or snow.
The SJC replaced a fairly cut and dry standard -- natural versus unnatural accumulation -- with the standard of reasonableness. That means that there is whole new body of law that needs to be developed before plaintiffs can determine whether they have a viable claim and before general liability and homeowners insurers can know whether they should settle a case or defend it.
And that body of law can't be developed without judges with the resources to hear cases. Almost all the slip and fall on snow and ice cases that ten years ago would have gone before a judge, either on summary judgment or at trial, will now go to mediation or arbitration. That means no body of law will develop, and that means everybody--claimants, insureds, insurers, and the general public, will be acting on guesswork. One of the most important bases of our legal system --stare decisis--the system under which judges are bound by precedent, cannot occur without that precedent being made by the courts. If you walk outside in the wintertime; or if you are an insurance adjuster trying to determine the settlement value of a claim, a landowner or a businessowner or a homeowner trying to decide whether you need to put salt or sand on your sidewalk if there is a dusting of snow; of you are a plaintiff's attorney or a defense attorney trying to do the best job you can for your clients, you are the loser here.
For information about help court officials are requesting, click click here. You can check for periodic updates from the courts here.
Getting a firm date for a civil trial in Massachusetts has always ranged from frustrating to really, really frustrating. But now it's worse than ever. The last trial I had in Superior Court received about eight continuances, all but the first one at the initiation of the court, and several of them because there was no judge assigned to the courtroom.
It used to be that when I decided what county to file a case in, I would think about which courthouses had the best rotation of judges for the particular issue. Now I think about which county my case is most likely to ever see the light of day in a courtroom.
And, folks, that was the condition before the most recent round of budget cuts. Massachusetts Lawyers Weekly reports that the current round of budget cuts will require that 250 to 300 court jobs be eliminated and that 14 courthouses be closed.
How will these cuts affect insurance? Here's a minor example: Last week the Supreme Judicial Court, in Papadopoulos v. Target Corp., 457 Mass. 368 (2010), overturned well over a century of established law about when a landowner can be liable for someone slipping and falling on ice or snow.
The SJC replaced a fairly cut and dry standard -- natural versus unnatural accumulation -- with the standard of reasonableness. That means that there is whole new body of law that needs to be developed before plaintiffs can determine whether they have a viable claim and before general liability and homeowners insurers can know whether they should settle a case or defend it.
And that body of law can't be developed without judges with the resources to hear cases. Almost all the slip and fall on snow and ice cases that ten years ago would have gone before a judge, either on summary judgment or at trial, will now go to mediation or arbitration. That means no body of law will develop, and that means everybody--claimants, insureds, insurers, and the general public, will be acting on guesswork. One of the most important bases of our legal system --stare decisis--the system under which judges are bound by precedent, cannot occur without that precedent being made by the courts. If you walk outside in the wintertime; or if you are an insurance adjuster trying to determine the settlement value of a claim, a landowner or a businessowner or a homeowner trying to decide whether you need to put salt or sand on your sidewalk if there is a dusting of snow; of you are a plaintiff's attorney or a defense attorney trying to do the best job you can for your clients, you are the loser here.
For information about help court officials are requesting, click click here. You can check for periodic updates from the courts here.
Friday, July 30, 2010
Appellate Division holds that failure of insured to submit PIP package does not void PIP coverage due to noncooperation
In Advanced Spine Centers, Inc. v. Pilgrim Ins. Co., 2010 WL 2225530 (Mass. App. Div.), the PIP insurer mailed to the insured a PIP package following her injury in an automobile accident. The packet had been created by the insurer and included a PIP application form, an authorization to obtain medical and wage information, and a health insurance affidavit form.
The insured never filled out and returned the paperwork. The insured's attorney sent the insurer a copy of the operator's report for the accident, and a notice of her PIP claim. Her chiropractor submitted treatment notes and reports, an affidavit of no health insurance, and an authorization signed by the insured permitting the chiropractor to release the medical information necessary to process her PIP claim.
The court held that the insurer was required to pay the PIP benefits despite the failure of the insured to fill out and return the forms provided by the insurer, because the insurer had received all the material information it sought. It had therefore not been prejudiced.
The insured never filled out and returned the paperwork. The insured's attorney sent the insurer a copy of the operator's report for the accident, and a notice of her PIP claim. Her chiropractor submitted treatment notes and reports, an affidavit of no health insurance, and an authorization signed by the insured permitting the chiropractor to release the medical information necessary to process her PIP claim.
The court held that the insurer was required to pay the PIP benefits despite the failure of the insured to fill out and return the forms provided by the insurer, because the insurer had received all the material information it sought. It had therefore not been prejudiced.
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