Francisco and Gloria Delasnueces were in an accident while in a car insured by Plymouth Rock. They received treatment from Kantorosinski Chiropractic. Plymouth Rock initially paid some of the bills and denied some. It later made a "business decision" to pay all the bills.
In Kantorosinski Chiropractic, Inc. v. Plymouth Rock Assurance Corp., 2011 WL 4529392 (Mass. App. Div.), the Massachusetts Appellate Division held that summary judgment cannot be granted to a PIP insurer on a claim that it delayed payment merely because the insurer asserts that the reason for eventual payment was a business decision. (The remaining issue, once the PIP claim has been paid, is the award of attorney's fees.)
The court then took note of evidence offered by Plymouth Rock that the damage to the insured vehicle was minor and that after an independent medical examination the doctor concluded that there was no objective findings to support the need for further treatment. That evidence was sufficient to shift the burden to Kantorosinski to show that there is a genuine issue for trial.
Kantorosinski met that burden with evidence that at the time the IME doctor opined that there was no further need for treatment, the insureds were still experiencing pain, which improved with additional treatment. The court held that the evidence was sufficient to overcome Plymouth Rock's motion for summary judgment.
Tuesday, October 11, 2011
Thursday, October 6, 2011
Tuesday, October 4, 2011
U.S. District Court interprets earth movement exclusion
Habit OPCO leased a building that was damaged by construction at an adjacent site owned by the Greater Boston Food Bank.
The building rested on concreted piles and on fill. On December 7, 2007 GBFB began construction of a new building on the adjacent property. It drove concrete piles to a depth of almost 190 feet. Within a couple of weeks Habit employees noticed damage to its building such as cracked door frames. By mid-February the building had floor heaves, its ceiling tiles were shifting, and walls were cracking.
Habit's insurer, Philadelphia Indemnity, hired an expert who opined that the damage was caused by vibrations from the pile driving on the GBFB property.
Philadelphia Indemnity denied the claim for structural damage, citing the policy's earth movement exclusion. Habit argued that the earth movement exclusion bars coverage only for damage from naturally occurring earth movements and not from man-made events.
In Mulhern v. Philadelphia Indem. Co., __ F. Supp. 2d __, 2011 WL 3563126 (D. Mass.), the United States District Court for the First Circuit noted that the exclusion includes loss from "improperly compacted soil," which is a man-made condition. The court held that Philadelphia Indemnity was entitled to judgment to the extent that Habit is precluded from arguing that the policy covers damages caused by defects in the fill.
Philadelphia Indemnity argued that the anti-concurrent causation clause in the earth movement exclusion precluded coverage under Habit's theory that shock waves generated by the pile driving caused the structural damage to the building. The court denied summary judgment on that issue because there was a disputed issue of fact as to whether improperly compacted soil was a cause of damage or whether vibrations emanating from the pile driving were the exclusive cause.
Finally, the court held there was no coverage under the collapse clause of the policy because the damage to the building was not "an abrupt falling down or caving in of a building or any part of a building with a result that the building cannot be occupied for its intended purpose, because the claim was the the roof split, leaving a gap of .75 inches, and then cracked.
The building rested on concreted piles and on fill. On December 7, 2007 GBFB began construction of a new building on the adjacent property. It drove concrete piles to a depth of almost 190 feet. Within a couple of weeks Habit employees noticed damage to its building such as cracked door frames. By mid-February the building had floor heaves, its ceiling tiles were shifting, and walls were cracking.
Habit's insurer, Philadelphia Indemnity, hired an expert who opined that the damage was caused by vibrations from the pile driving on the GBFB property.
Philadelphia Indemnity denied the claim for structural damage, citing the policy's earth movement exclusion. Habit argued that the earth movement exclusion bars coverage only for damage from naturally occurring earth movements and not from man-made events.
In Mulhern v. Philadelphia Indem. Co., __ F. Supp. 2d __, 2011 WL 3563126 (D. Mass.), the United States District Court for the First Circuit noted that the exclusion includes loss from "improperly compacted soil," which is a man-made condition. The court held that Philadelphia Indemnity was entitled to judgment to the extent that Habit is precluded from arguing that the policy covers damages caused by defects in the fill.
Philadelphia Indemnity argued that the anti-concurrent causation clause in the earth movement exclusion precluded coverage under Habit's theory that shock waves generated by the pile driving caused the structural damage to the building. The court denied summary judgment on that issue because there was a disputed issue of fact as to whether improperly compacted soil was a cause of damage or whether vibrations emanating from the pile driving were the exclusive cause.
Finally, the court held there was no coverage under the collapse clause of the policy because the damage to the building was not "an abrupt falling down or caving in of a building or any part of a building with a result that the building cannot be occupied for its intended purpose, because the claim was the the roof split, leaving a gap of .75 inches, and then cracked.
Monday, September 26, 2011
Vote for me!
LexisNexis is inviting comments on its nominees for the 2011 Top 50 Insurance Law Blogs. If you enjoy my blog, please let them know. You can post comments here.
Friday, September 16, 2011
Appeals Court holds insureds should raise public policy issue at arbitration
Congratulations to my friend Marie Cheung-Truslow at Smith & Brink, who just won a nice victory in the Massachusetts Appeals Court. Marie is a fabulous attorney who frequently represents insurers on large loss subrogation matters and in reference proceedings, and who I have often turned to for advice.
Marie's client, Northern Assurance, provided a yacht insurance policy covering a yacht called "Blaze of Glory." The yacht was destroyed in a fire. Fire investigators concluded that the fire was intentionally set and that its point of origin was the Blaze of Glory. (The Appeals Court decision doesn't state whether the yacht's name was a clue in the case.)
The insureds made an insurance claim for the fire loss. They appeared for an examination under oath and provided numerous documents but, according the Northern, not all the documents that were requested. Northern denied coverage on the grounds that the insureds had failed to cooperate. It filed a declaratory judgment complaint. The insureds responded with a demand for arbitration, as they were entitled to do under the policy.
The arbitrator ruled in favor of Northern. The insureds filed a motion to vacate the arbitration award on the ground that the arbitrator had exceeded her authority and contravened public policy by shifting the burden of proof on the cooperation issue from Northern to the insureds. The trial judge agreed with the insureds and vacated the arbitrator's award.
In Northern Assurance Co. of Am. v. Payzant, 80 Mass. App. Ct. 23 (2011), the Massachusetts Appeals Court overturned the decision of the trial court judge. It held that the insureds had waived their burden-shifting argument by not raising it at arbitration and by affirmatively asserting at arbitration that the burden-shifting clause of the insurance policy applied.
The court held that the proper procedure would have been for the insureds to challenge the legality of the burden-shifting clause of the policy before the arbitrator. The arbitrator would have ruled on this issue, and the right to a judicial determination would have been preserved. Alternatively, the insureds could have refrained from demanding arbitration.
Marie's client, Northern Assurance, provided a yacht insurance policy covering a yacht called "Blaze of Glory." The yacht was destroyed in a fire. Fire investigators concluded that the fire was intentionally set and that its point of origin was the Blaze of Glory. (The Appeals Court decision doesn't state whether the yacht's name was a clue in the case.)
The insureds made an insurance claim for the fire loss. They appeared for an examination under oath and provided numerous documents but, according the Northern, not all the documents that were requested. Northern denied coverage on the grounds that the insureds had failed to cooperate. It filed a declaratory judgment complaint. The insureds responded with a demand for arbitration, as they were entitled to do under the policy.
The arbitrator ruled in favor of Northern. The insureds filed a motion to vacate the arbitration award on the ground that the arbitrator had exceeded her authority and contravened public policy by shifting the burden of proof on the cooperation issue from Northern to the insureds. The trial judge agreed with the insureds and vacated the arbitrator's award.
In Northern Assurance Co. of Am. v. Payzant, 80 Mass. App. Ct. 23 (2011), the Massachusetts Appeals Court overturned the decision of the trial court judge. It held that the insureds had waived their burden-shifting argument by not raising it at arbitration and by affirmatively asserting at arbitration that the burden-shifting clause of the insurance policy applied.
The court held that the proper procedure would have been for the insureds to challenge the legality of the burden-shifting clause of the policy before the arbitrator. The arbitrator would have ruled on this issue, and the right to a judicial determination would have been preserved. Alternatively, the insureds could have refrained from demanding arbitration.
Tuesday, September 13, 2011
US District Court holds medical review by PIP carrier not required when carrier disputes bill
McGovern Physical Therapy Associates provided physical therapy to a patient insured by Metropolitan for injuries he sustained in an auto accident. It submitted a request for PIP payment of $176 to Metropolitan.
Metropolitan paid McGovern $142.58, $34.42 less than the amount requested. It stated that "the amount allowed is based on provider charges within the provider's geographic region."
McGovern sued on behalf of itself and other providers, seeking reimbursement in all instances in which Metropolitan failed "to challenge the request for payment on its merits."
In McGovern Physical Therapy Assocs., LLC v. Metropolitan Property & Casualty Ins. Co., , the United States District Court for the District of Massachusetts denied McGovern's request to certify the case to the Supreme Judicial Court of Massachusetts. It held that the plain language of the PIP statute and the opinions of lower courts in Massachusetts "provide sufficient guidance" that its decision will not be "merely conjectural."
The court rejected McGovern's claim that the PIP statute requires review by a licensed practitioner, or a physical examination of the patient, whenever there is a dispute over the reasonableness of the charges. It held that a more plausible reading of the statute is that the review requirement applies only when the insurer denies a claim based upon an alleged lack of medical necessity for the services provided.
Metropolitan paid McGovern $142.58, $34.42 less than the amount requested. It stated that "the amount allowed is based on provider charges within the provider's geographic region."
McGovern sued on behalf of itself and other providers, seeking reimbursement in all instances in which Metropolitan failed "to challenge the request for payment on its merits."
In McGovern Physical Therapy Assocs., LLC v. Metropolitan Property & Casualty Ins. Co., , the United States District Court for the District of Massachusetts denied McGovern's request to certify the case to the Supreme Judicial Court of Massachusetts. It held that the plain language of the PIP statute and the opinions of lower courts in Massachusetts "provide sufficient guidance" that its decision will not be "merely conjectural."
The court rejected McGovern's claim that the PIP statute requires review by a licensed practitioner, or a physical examination of the patient, whenever there is a dispute over the reasonableness of the charges. It held that a more plausible reading of the statute is that the review requirement applies only when the insurer denies a claim based upon an alleged lack of medical necessity for the services provided.
Labels:
PIP
Monday, September 5, 2011
Appeals Court holds insurer is full of hot air
John Hanratty and Mary Blake Newman owned adjacent condominium units. Hanratty's air conditioner projected through the wall and into a yard area over which Newman held an exclusive easement. After her complaints were repeatedly ignored, Newman duct taped the air conditioner to make it unusable. Hanratty filed suit against her, seeking to restrain her from interfering with his air conditioner and to require her to stay ten yards away from him and his family. Newman counterclaimed for nuisance, trespass, and defamation, and sought an order that the air conditioner be removed.
Hanratty forwarded the counterclaim to his homeowner's insurer, Citation, which defended him under a reservation of rights. Hanratty exercised his option to select his own attorney, Michael Fee, but Citation was unwilling to agree his $260 per hour rate. Eventually the parties agreed that Fee would bill at $260 an hour, Citation would pay $130 an hour, and Hanratty would retain the right to seek the difference from Citation.
Citation filed a motion for declaratory judgment, seeking a determination that its policy did not provide coverage for the counterclaims. Hanratty counterclaimed, asserting that Citation breached the policy and its duty of good faith and fair dealing by refusing to pay Fee's full rate.
Hanratty and Newman settled the underlying case when Hanratty installed central air conditioning. (Was that so hard?) Hanratty assigned to Newman his counterclaim against Citation.
A Superior Court judge granted summary judgment to Citation on its declaratory judgment action, and a second judge dismissed the counterclaim against Citation. Newman appealed.
In Citation Insurance Co. v. Newman, 80 Mass. App. Ct. 143 (2011), the Appeals Court reversed the summary judgment decision. It held that the incursion of the air conditioner into Newman's yard constituted loss of use of tangible property. It also held that an easement is "tangible property."
Hanratty forwarded the counterclaim to his homeowner's insurer, Citation, which defended him under a reservation of rights. Hanratty exercised his option to select his own attorney, Michael Fee, but Citation was unwilling to agree his $260 per hour rate. Eventually the parties agreed that Fee would bill at $260 an hour, Citation would pay $130 an hour, and Hanratty would retain the right to seek the difference from Citation.
Citation filed a motion for declaratory judgment, seeking a determination that its policy did not provide coverage for the counterclaims. Hanratty counterclaimed, asserting that Citation breached the policy and its duty of good faith and fair dealing by refusing to pay Fee's full rate.
Hanratty and Newman settled the underlying case when Hanratty installed central air conditioning. (Was that so hard?) Hanratty assigned to Newman his counterclaim against Citation.
A Superior Court judge granted summary judgment to Citation on its declaratory judgment action, and a second judge dismissed the counterclaim against Citation. Newman appealed.
In Citation Insurance Co. v. Newman, 80 Mass. App. Ct. 143 (2011), the Appeals Court reversed the summary judgment decision. It held that the incursion of the air conditioner into Newman's yard constituted loss of use of tangible property. It also held that an easement is "tangible property."
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