Claims and Bad Faith Law Blog

TRICK OR TREAT! BUT NO ARBITRATION HERE!

In Morrow v. Community Health Sys's, Inc., No. 3-16-cv-1953, 2017 WL 4641797 (M.D. Tenn. October 17, 2017), the Court denied a defendant's motion to compel arbitration.  Rarely do any of us quote long passages from any source.  For one thing, quoting long swatches of someone else's writing is frowned upon in writing generally, and in writing about legal issues in particular.

But sometimes the way in which the story is told in the original is so concise and to the point that it cannot easily be improved upon.

Such is the case here.

The District Judge laid out precisely what claims were involved.  This is the predicate for why the Court denied arbitration of these claims (even if it is not the legal reason for its decision):

    The First Amended Complaint in this purported class action (Docket No. 73) alleges that Community Health Systems, Inc. (“CHS”) and its direct and indirect subsidiaries (“affiliates”) have a policy and practice of breaching their provider contracts with health insurers, causing monetary damages to third-party beneficiaries of those contracts, including Plaintiff and other potential class members. Plaintiff contends that CHS and its affiliates are required by their provider contracts to submit the bills of insured patients to their respective health insurance carriers and to accept the insurer's contractually agreed-upon discounted payment as full payment for those bills, minus any co-pays or deductibles owed by the patients.

    Instead, Plaintiff asserts, the policies and practices of CHS and its affiliates require CHS-owned hospitals to either (1) refuse to submit the medical bills to the patient's health insurance carrier; (2) submit the medical bills to the patient's health insurance carrier, but then refund the insurer's discounted payment and try to collect a larger payment from another source, usually the patient or a third-party tortfeasor; or (3) submit the medical bills to the patient's health insurance carrier, keep the insurer's discounted payment, and then still try to collect the balance of the undiscounted charges from another source, including the patient.

Small wonder that these claims are being pursued in the lawsuit in which they were alleged, albeit under one count or claim:  unjust enrichment.  The District Court in this case granted the defendant's alternative motion to dismiss as to alleged claims for breach of contract, intentional interference, and conspiracy.  The Tennessee Court applied substantive Alabama law to all these claims.

To say again, the Court totally denied the defendant's motion to compel arbitration.  Since there was no contract between the parties according to the Court's rulings, it follows that there was no contract provision which could require arbitration.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

ESTATE OF FORECLOSED HOMEOWNER COULD PURSUE BAD FAITH CLAIMS.

In Auto-Owners Ins. Co. v. Bolden, as Personal Representative, etc., and Reverse Mortgage Solutions, Inc., d/b/a Vertical Lend ISAOA/ATIMA, No. 9:16-cv-2961-DCN, 2017 WL 3923356 (D.S.C. September 7, 2017), the Court addressed several issues.

Chief among the important facts for our purposes was that, among other things, a homeowner died in a fire at her home while her home was being foreclosed.  The homeowner's estate made a claim for coverage.  The homeowners carrier did not pay the policy proceeds to the policyholder's estate.

Instead, the homeowners carrier paid part of the claim to the estate, and then proffered a check for the balance of the claim naming both the estate and the mortgagee as joint payees.  The estate refused the second check basically on the ground that the policyholder owned the property at the time of the fire loss and so her estate should be the sole payee now.

The homeowners carrier then filed a lawsuit claiming the right to an interpleader.  The Estate filed counterclaims in the carrier's lawsuit, for breach of contract and bad faith.  The homeowners carrier requested that the Estate's claims be dismissed partly because it, the carrier, had filed a motion for interpleader and also because, the carrier argued, the bad faith claims in essence died with the homeowner.

In this procedural posture, the Court allowed the Estate to pursue the homeowner's contract and bad faith claims, denied the carrier's motion to dismiss those claims, and refused interpleader in this case.

----------------------------------------------------------------------------------------------

Mark your Calendar!

You and your clients can sign up for health insurance starting next week on November 1, 2017 at https://www.healthcare.gov.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

FREE US ALL FROM MANDATORY ARBITRATION!

Senate Joint Resolution 47 would force people to arbitrate their disputes even if they do not want to.

Joint Resolution 47 would delete the Consumer Financial Protection Bureau's rule prohibiting mandatory arbitration.  Understand that the CFPB rule does not require people to sue.  Instead the CFPB rule allows people to sue and allows people to arbitrate, but only if they want to.

Repealing the CFPB rule would require mandatory arbitration and take away people's right to join together with other people in any class action to sue.

Urge your United States Senators today to vote for FREEDOM and against Joint Resolution 47!

This is America, after all.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

"THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT" CANNOT BE REVIEWED, JUDGE.

In Lowrey v. Oregon Mut. Ins. Co., No. 2:17-cv-00831-RSL 2017 WL 3769424 (W.D. Wash. August 29, 2017), a Stipulated Protective Order conceals discovery from the public.  The Stipulated Protective Order says that it is not a disfavored blanket or umbrella protective order, protecting everything marked "confidential."  Further, "[t]he parties acknowledge that this agreement is consistent with" local rules of Civil Procedure.  (Presumably, they meant to include the Federal Rules of Civil Procedure in that claim.)

It is not consistent with the Rules of Civil Procedure.

Whoever wrote the Stipulated Protective Order followed many earlier stipulated protective orders of the same ilk in many different kinds of cases.  They wrote that whenever certain information is designated "confidential," it can be used in that lawsuit so no party has an incentive to seek judicial review.

Upon the conclusion of the case, under this stipulation the designated material must either be destroyed or "returned" to the party whose lawyers designated the information as "confidential."

The Rules of Civil Procedure require a showing of "good cause" to get a protective order in the first place.  The Stipulated Protective Order in this case does not require a showing of anything for information to be secret and "confidential."  In particular, whoever wrote the Stipulated Protective Order did not mention the requirement of showing good cause.

To say again, the Stipulated Protective Order in this case is not unique.  It follows many earlier stipulated protective orders filed in many different kinds of cases.

It does not follow the Rules of Civil Procedure.

Which is the point, of course.

Dennis Wall is the author of "Attorneys Decide, Judges Sign Off: Protecting and Sealing Concealed Evidence Including in Insurance Coverage and Bad Faith Cases" published in New Appleman on Insurance (©2017 by LexisNexis).  He is currently at work on a book about agreed protective orders and how they take our money, foreclose on our homes, and change our lives.

-----------------------------------------------------------------------------------

SPECIAL ENROLLMENT PERIODS FOR MEDICARE/HEALTH INSURANCE MARKETPLACE.

Victims of Hurricanes Harvey, Irma, and Maria can catch a break courtesy of the Centers for Medicare and Medicaid Services (CMS).  CMS is inputting special enrollment periods for many Medicare beneficiaries and certain other persons who are trying to enroll in health plans offered through the Federal Health Insurance Exchange.  If you or someone you know is eligible for a special enrollment period, individuals and families disrupted by the hurricanes have the opportunity to change Medicare plans, change prescription drug plans offered through Medicare, and apply for healthcare coverage.  The special enrollment periods are offered in addition to the regular enrollment periods which begin November 1, 2017 for those who are eligible.  Check out the CMS website for more information and for applications.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

PERFECTION IS NOT REQUIRED. BUT MEDICAL EXPERT TESTIMONY IS: HOLDING.

In Duncan v. GEICO Gen. Ins. Co., No. 8:17-CV-40-T-30TGW, 2017 WL 4574605 (M.D. Fla. October 13, 2017), the Court held that perfection is not required in the handling of an Uninsured Motorist (UM) claim to avoid a bad faith claim in Florida. 

But medical expert testimony is required, the same Court held, if the bad faith UM claim is based on the carrier's alleged handling of the policyholder's permanent injury.  Since the plaintiff-policyholder did not introduce expert medical evidence into the record that he was permanently injured, the District Judge granted the UM carrier's motion for summary judgment on his bad faith claim.

 --------------------------------------------------------------------------------------------------

DESPITE BAD FAITH, REPORTING, CURRENT POLITICIANS:  HEALTHCARE COVERAGE IS REALLY STILL THERE.

Is Healthcare Coverage still available under the Affordable Care Act?  Absolutely.

Can you and can your clients still sign up?

Definitely.

Will you and will your clients be able to sign up now if you want?

Totally.

Answers to these and other important questions are reported in an excellent article by Haeyoun Park, "Yes, You Can Still Enroll in Obamacare:  Five Answers to Questions About Getting Covered" (New York Times online, posted on Saturday, October 14, 2017).

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

PLAUSIBLE PENNSYLVANIA BAD FAITH CLAIMS OVER UM INVESTIGATION AND EVALUATION.

After bad faith claims were dismissed under Pennsylvania law in this Federal case, amended bad faith claims related to alleged investigation and evaluation of uninsured motorist (UM) claim stated claims upon which relief could be granted, in Meyers v. Protective Ins. Co., NO. 3:16-CV-01821, 2017 WL 4516712 (M.D. Pa. October 10, 2017).

------------------------------------------------------------------------------------------------------------

DESPITE BAD FAITH, REPORTING:  HEALTHCARE COVERAGE IS REALLY STILL THERE.

Is Healthcare Coverage still available under the Affordable Care Act?  Absolutely.

Can you and can your clients still sign up?

Definitely.

Will you and will your clients be able to sign up now if you want?

Totally.

Answers to these and other important questions are reported in an excellent article by Haeyoun Park, "Yes, You Can Still Enroll in Obamacare:  Five Answers to Questions About Getting Covered" (New York Times online, posted on Saturday, October 14, 2017).

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

DESPITE BAD FAITH, REPORTING: HEALTHCARE COVERAGE IS REALLY STILL THERE.

Is Healthcare Coverage still available under the Affordable Care Act?

Absolutely.

Can you and can your clients still sign up?

Definitely.

Will you and will your clients be able to sign up now if you want?

Totally.

Answers to these and other important questions are reported in an excellent article by Haeyoun Park, "Yes, You Can Still Enroll in Obamacare:  Five Answers to Questions About Getting Covered" (New York Times online, posted on Saturday, October 14, 2017).

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

BAD FAITH, ADDITIONAL INSUREDS, AND CONSTRUCTION.

Additional insureds are a fertile source of bad faith and unfair practices claims against liability carriers.

So are construction cases.

Both of these threads came together in Pulte Home Corp. v. American Safety Indem. Co., 223 Cal. Rptr. 3d 47, 14 Cal.App.5th 1086 (Cal. 4th DCA, Div. 1, 2017).  In Pulte, a California DCA held that the evidence in the record was legally sufficient to support the trial court's finding that a Comprehensive General Liability carrier acted in bad faith when it denied a defense to an additional-insured general contractor.

----------------------------------------------------------------------------------------------------

2018 OPEN ENROLLMENT RUNS FROM NOVEMBER 1 THROUGH DECEMBER 15.  READY?

If you or your clients do not have health insurance coverage, check out and sign up at www.healthcare.gov.

You may not have heard the word that health care coverage is available -- right now, today, even as you read these words.  It's your right.  It's the law of the land!

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

BAD FAITH, ERISA, AND PREJUDGMENT INTEREST.

Prejudgment Interest was awarded on an ERISA claim in Hart v. Unum Life Ins. Co. of Am., No. C 15-05392 WHA, 2017 WL 4418680 (N.D. Cal. October 4, 2017), in large part because the evidence supported a finding that the insurance company acted in bad faith. 

A previous District Judge had held in the same case that the plaintiff, Nancy Hart, was entitled to benefits.  The carrier defended against the "'notion'" that it acted with bad faith or ill will because the original judge, who was of course charged with the question of determining Hart's entitlement to benefits, did not even discuss bad faith let alone find it in the conduct of the carrier in the case at bar.

By the time the prejudgment-interest issue was decided, the original judge had retired.  The successor District Judge rejected the carrier's purported defense:  "The rebuttal inheres in Unum's argument.   Judge Henderson had no reason to make explicit findings as to bad faith, ill will, culpability, and the like because his order decided only the question of whether Hart was entitled to benefits.  His initial silence did not constitute absolution."  [Emphasis added.]

The Court awarded prejudgment interest.

-----------------------------------------------------------------------------------------------------------------

HEALTH CARE COVERAGE.

If you or your clients do not have health insurance coverage, check out and sign up at www.healthcare.gov.

You may not have heard the word that health care coverage is available -- right now, today, even as you read these words.  It's your right.  It's the law of the land!

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

2018 OPEN ENROLLMENT RUNS FROM NOVEMBER 1 THROUGH DECEMBER 15. READY?

If you or your clients do not have health insurance coverage, check out and sign up at www.healthcare.gov.

You may not have heard the word that health care coverage is available -- right now, today, even as you read these words.  It's your right.  It's the law of the land!

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

SOMETIMES, BAD FAITH CLAIMS COME UNDER OTHER NAMES.

In Lowrey v. Oregon Mut. Ins. Co., No. 2:17-cv-00831-RSL, 2017 WL 3769424 (W.D. Wash. Order Dated August 22, 2017, Filed August 29, 2017), the Court signed a Stipulated Protective Order that will make it easier to conceal evidence and keep any future settlement a secret.  So secret that the Stipulated Protective Order does not say what kind of case this is, or even what the parties have alleged.

Here is what this case is about.  Here is what the parties have alleged, so far.  The Stipulated Protective Order intentionally or otherwise does not even hint at these things.

The plaintiff filed a complaint in the U.S. District Court for the Western District of Washington in May, 2017.  Her complaint was based on the defendant's refusal to hire her because she changed her gender from male to female.

The plaintiff alleged that she changed her gender after some 20 years of handling insurance claims including supervising others in the handling of insurance claims.  She alleged that after she told the defendant's interviewers that she, the plaintiff, had changed her gender, the defendant essentially discriminated against her when the defendant interviewed her for an open claims-adjuster position but refused to hire her.

Apparently, one of the defendant's stated reasons for refusing to hire her as a claims adjuster was that she did not have the experience that the defendant was looking for in a claims adjuster.

She alleged three claims:  sex discrimination, violation of a Washington statute protecting gender identification, and "retaliation" in connection with the violation of the Washington statute.  She sought damages including lost wages and benefits, punitive damages, and attorney's fees.  See Janet Lowrey v. Oregon Mut. Ins. Co., DE 1, Complaint, Filed May 26, 2017 (W.D. Wash. No. 2:17-cv-00831-RSL).  (NOTE TO MY READERS:  The blogging platform for this article, Typepad, does not permit access to the pdf's from the Court file that are pinpoint referenced in this article.)

Oregon Mutual Insurance Company filed its answer on June 30, 2017.  It carefully denied most of the plaintiff's allegations by reference to each numbered paragraph of the complaint.  It further listed 13 paragraphs of affirmative defenses also essentially denying the plaintiff's allegations.  Id., DE 7, Answer of Oregon Mutual Insurance Co., Filed June 30, 2017.  

The case has been set for Trial beginning on December 3, 2018.  It is expected to last 5 days.  Id., DE 10, Order Entered July 18, 2017.

What a lot of things the Stipulated Protective Order does not mention.  Many things will be mentioned here about this case, however, as this case proceeds through discovery.  Everything revealed here will be what becomes publicly available from the Court file.  With this article, we have already begun.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

UMBRELLA PROTECTIVE ORDERS IN INSURANCE BAD FAITH CASES.

Umbrella protective orders are often proposed and entered in insurance bad faith cases.  They forestall discovery in advance, and in the usual case they often act as a bar to disclosing information that might be damaging to the insurance company. 

Umbrella protective orders are discussed at length by Dennis J. Wall, "Attorneys Decide, Judges Sign Off:  Protecting and Sealing Concealed Evidence Including in Insurance Coverage and Bad Faith Cases," ©2017 Matthew Bender & Company, a member of LexisNexis, in New Appleman on Insurance / Critical Issues in Insurance Law, pp. 1-88 (Spring 2017).

Dennis Wall is at work on a book about how concealed evidence and secret settlements change our lives.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.