Disability Lawyer Rachel Alters Discusses ERISA Disability Lawsuits

Hundreds of ERISA disability lawsuits are filed every year as a result of the denial of disability insurance benefits. In this video, nationwide disability attorneys Rachel Alters and Gregory Dell discuss some of the most common issues that we see when and ERISA disability lawsuit needs to be filed. Hopefully this video will provide some insight into common issues that arise when an ERISA suit needs to be filed. Rachel Alters or any of the lawyers on her legal team can be contacted to discuss your claim.

Don’t Wait Too Long: Failure to Give Timely Notice under an EPL Policy May Preclude Coverage as a Matter of Law

Two years is too long to wait before reporting an EEOC charge to your EPL carrier, according to a recent a court decision from the Western District of Virginia. A company’s employment practices liability policy defined “employment claim” to include “a formal administrative or regulatory proceeding commenced by the filing of a notice of charges…including…a proceeding before the Equal Employment Opportunity Commission” and it required that notice of a claim be given to the carrier “as soon as practicable.”  The company received notice in April 2011 that a former employee had filed a charge with the EEOC alleging employment discrimination, but it did not report the charge to its carrier. More than a year later, after initially dismissing the charge, the EEOC found reasonable cause to believe discrimination had occurred and ordered the parties to engage in mediation in March 2013. The company waited another five months – to February 2013, nearly two years from the date of the original charge – before informing the carrier of the pending mediation. The carrier denied coverage due to the delayed report.

In later coverage litigation, the court sided with the carrier. The court held it was unreasonable as a matter of law for the company to have waited so long before notifying the carrier of the EEOC claim. The court reasoned that because the policy defined “employment claim” to include an EEOC charge, it was not reasonable for the company to wait until it knew a lawsuit would be filed before invoking the policy. The court also held that while the carrier was prejudiced by the delay, the length of the delay alone was sufficient to conclude that the company breached the policy’s reporting requirement. This serves as a not-so-gentle reminder to check your policy’s reporting requirements when you have information that might qualify as claim under your policy. While there may be arguments against a late notice defense in a given case, why give an insurance company the defense to begin with? The case is E Dillon & Company v. Travelers Casualty & Surety Company of America, Case No. 1:14CV00070, Western District of Virginia, and the court’s decision may be found here.

Drone Insurance Claim Victory

Our client, a custom photography firm specializing in high quality commercial photography, purchased insurance for its Hoverfly Scripta drone.

The Hoverfly was damaged when it crashed after losing power during flight.  Our client submitted an insurance claim for the damage.  The insurance company denied the claim, citing to an exclusion in the
Hoverfly 1Hoverfly 2

 

 

insurance policy which states that “covered property does not include property while airborne…”

Our argument was simple. The drone was not damaged while “airborne.”  In fact, quite to the contrary, the drone was damaged when it hit the ground.  Simple.  Claim covered.

As with most of our insurance claims, if we are successful, the insurance company must pay our attorneys fees and costs if we win.  If we lose, we will work for free.

Always remember, “NO” is not the end of the inquiry.  It is just the beginning.  In fact, I can’t win your case until the insurance company says “NO.”  So, don’t be discouraged or intimidated by an insurance denial.  Every case I’ve ever won all have one thing in common – they all started with “NO.”

Mark Nation

Duty to Defend in the face of an “Insured Contract”

In Mid-Continent Casualty v. Hunter Crane, 40 FLW D1371c, (Fla. 4th DCA June 10, 2015), the 4th DCA discussed a commercial general liability insurance company’s duty to defend under its CGL policy when its insured has contractually agreed to indemnify, defend and hold harmless one of the insured’s vendors.

Contractor, Cloutier Brothers, Inc. leased a crane and a crane operator from Hunter Crane. The Rental Agreement said that Cloutier would indemnify, defend and hold harmless Hunter Crane from any and all claims regardless of whether the claim was based on Hunter Crane’s negligence.

Robert Damiano was injured while working on the Cloutier construction site when a truss fell from the crane while be operated by the Hunter Crane employee. Damiano sued Hunter Crane, who in turn, filed a third party action against Cloutier, seeking contractual indemnification. Cloutier submitted the claim to its insurer, Mid-Continent.

The Mid-Continent insurance policy exempted from coverage “bodily injury” or “property damage” Cloutier was “obligated to pay . . . by reason of the assumption of liability in a contract or agreement.” There were two exceptions to this “contractual” exemption from coverage: (1) where Cloutier would have been liable “in the absence of the contract or agreement” or (2) where Cloutier “[a]ssumed” the liability “in a contract or agreement that is an ‘insured contract’, provided the ‘bodily injury’ or ‘property damage’ occurs subsequent to the execution of the contract or agreement.” Regarding the second exception, the Policy defined an “insured contract” as:

That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

In requesting a defense, Cloutier asserted the Rental Agreement was an “insured contract” falling under the exemption’s second exception. The Insurer countered that it had no duty to defend or indemnify.

Other courts addressing this “insured contract” language have held that the insurance will only apply to situations when the named insured is vicariously liable for the acts of another. Obviously, that is a severe limitation on the reach of the coverage provided by the “insured contract” language. The 4th DCA stated that the “insured contract” language should not be read so narrowly. Instead,

the ‘language indicates that policy coverage is not limited solely to vicarious liability, but that coverage extends to situations in which liability is shared’ by the insured/indemnitor and its indemnitee. Nor-Son, Inc. v. W. Nat’l Mut. Ins. Co., No. A11-2016, 2012 WL 1658938, at *3 (Minn. Ct. App. May 14, 2012); see also Steven G.M. Stein & Jean Gallo Wine, The Illusions of Additional Insured Coverage, 34-Spring Constr. Law. 14, 23 (Spring 2014) (“The newer language clearly covers a broader range of liability than that which is solely vicarious in nature.”).

Therefore, an indemnity agreement can be an ‘insured contract’ under the policy where the injury is caused by the indemnitee’s negligence, so long as the named insured ‘caused’ some part of the injuries or damages or is otherwise vicariously liable. See generally Harleysville Ins. Co. v. Physical Distribution Servs., Inc., 716 F.3d 451, 459-62 (8th Cir. 2013).

The 4th DCA then went on to say that underlying lawsuit contained no allegations that Cloutier “caused some part of the injury or damage.”

As a result, the allegations of Hunter Crane’s third party complaint did not demonstrate that Damiano’s injury was caused by either Cloutier or those working on Cloutier’s ‘behalf,’ so as to bring the Rental Agreement within the definition of an ‘insured contract,’ an exception to the exclusion from coverage. The eight corners of the complaint and the policy do not provide a basis for the Insurer’s duty to defend. Because the accident arose from a claim excluded from coverage under the policy, the Insurer has no duty of indemnification.

But remember, the “insured contract” language of the policy provides coverage if there is an indemnity agreement, and the bodily injury is “caused, in whole or in part, by you or by those acting on your behalf.” Here the underlying lawsuit pled that the bodily injury was caused in whole by Hunter Crane. The 4th DCA found that Hunter Creek was not working on behalf of Cloutier. The analysis in the case on the on “behalf” of issue is not persuasive.

It is unclear if the Supreme Court or other DCA’s will agree that Hunter Crane was not working on “behalf” of Cloutier. If Hunter Crane was not working on behalf of Cloutier, then who were they working for? Cloutier hired Hunter Crane. Cloutier paid Hunter Crane.   Presumably, Cloutier told the crane operator when to show up to work, when to leave, where to work, and what work to do throughout the day. If that isn’t working on behalf of someone, what is.

 

A Critical Tool to Advance Fair Housing Is Upheld by the Supreme Court

The U.S. Supreme Court ruled to keep a key piece of a landmark civil rights law intact this week in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. In its 5-4 decision, the Court upheld the disparate impact theory under the Fair Housing Act (FHA)—an important law passed in 1968 to increase fair housing opportunities for minority populations, decrease segregation, and eliminate discrimination in housing.

Sadly, 40 years after Congress enacted the FHA, segregation and unequal access to housing for minorities remain the norm. Decades of discriminatory policies and practices like exclusionary zoning, urban renewal, and redlining have perpetuated segregation and led to devastating effects on low-income and minority communities. These effects were magnified by the foreclosure crisis, which flowed in large part from the discriminatory practices of subprime lenders in minority neighborhoods.

The disparate impact theory of proving discrimination is critical to combatting these effects, because there is often insufficient evidence to meet the higher burden of proving intentional discrimination—also known as disparate treatment. As Justice Kennedy clarified in Thursday’s decision, the disparate impact theory “permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.” The Obama Administration has relied on the disparate impact theory to force important settlements with lending institutions accused of discriminatory practices, and to challenge local government policies that limit the housing opportunities available to racial minorities. 

The disparate impact theory is also a critical tool for responding to the spread of overly broad criminal background screening policies applied to housing applicants, and the increasing number of local governments passing crime-free and nuisance property ordinances under the guise of combatting crime. Although seemingly neutral, these ordinances have serious, harmful, and discriminatory consequences. By subjecting entire households to eviction when the police are called repeatedly to particular rental properties, these ordinances frequently punish domestic violence survivors for the acts of their abusers. They also reduce the supply of affordable rental housing in communities and target renters, who are disproportionately racial minorities, on the basis of minor offenses.

These are just some examples that demonstrate why disparate impact theory is a critical tool to advance fair housing throughout the country. Armed with today’s decision, advocates can continue to develop this tool to combat the ongoing harmful effects of segregation and discrimination. Beyond upholding claims based on disparate impact theory under the FHA, the Court confirms that this theory provides advocates with the ability to stop local governments from enforcing “arbitrary and, in practice, discriminatory ordinances.” 

Although today’s decision represents a great victory for housing advocates, it does include some warnings for those charged with implementing the FHA. It clarifies, for example, that courts will be prevented from using racial targets or quotas to remedy discrimination. There also remains the risk that the FHA will face new legislative challenges. As the Shriver Center’s Poverty Scorecard highlighted, proposals to undermine the disparate impact theory were brought forward in Congress this session, including HB 265, which would have prevented the Department of Justice from using disparate impact theory in enforcing the FHA. 

This case highlights the critical role of the FHA in the broader landscape of civil rights protections, and advocates can continue to develop its use in remedying the injustice of ongoing residential segregation and discrimination in our communities. As Justice Kennedy stated, “The FHA must play an important part in avoiding the . . . grim prophecy that ‘[o]ur Nation is moving toward two societies, one black, one white—separate and unequal.” 

Millions Can Keep Health Coverage Because of the Supreme Court’s Decision in King v. Burwell

Yesterday’s U.S. Supreme Court’s decision in King v. Burwell, which upheld tax credits for 6.4 million Americans, is a big story. It has implications for health care policy, tax policy, even presidential politics. But the most important story is about the individuals who count on the Affordable Care Act (ACA) for medical and financial security.

Take John, a 61-year-old industrial electrician, who was recently laid off from his job due to early onset Parkinson’s disease. His family now survives on income from retirement savings of about $30,000 a year. Although he always had health insurance through his job, John is now unable to work, and he and his wife obtain health coverage through the federal Marketplace. John receives a tax credit of $800 a month, leaving him with a monthly health insurance premium of $240. His health plan provides good coverage, which is important to John, because his treatment for Parkinson’s disease without health insurance would be extremely expensive.

The ACA is working for John and people like him. In fact, more than 10 million people now have quality, affordable health coverage through the Marketplaces who didn’t have it before. That includes 294,000 people who selected a plan and have paid their premiums in the Illinois Marketplace. Moreover, fewer Americans are uninsured: Gallup polls show a national uninsured rate of 11.9%, which is a 5.3% drop from 2013.

Because of the Supreme Court’s decision today in King, John and others like him can keep the tax credits that subsidize their health insurance coverage. In Illinois—one of the 34 states impacted by this decision—over 232,000 Marketplace enrollees (almost 80% of all enrollees) will now be able to keep their premium tax credits. Since each Illinois Marketplace enrollee receives an average tax credit of $211 per month, that totals $49 million in tax credits in the state.

This decision is a significant victory for millions of Americans working hard to join or remain in the middle class. Most of those who use the premium tax credits are in working families, either employees or entrepreneurs. Now, with tax credits intact, these families, many of whom earn less than $25,000, can continue to access the health care services that they need. In addition, this decision ensures a more certain future for the Affordable Care Act, which has brought health care coverage to millions of previously uninsured Americans. 

The Shriver Center will continue to monitor the impact of the Supreme Court's decision in King and will continue to work with our state and federal partners to advocate for high-quality and affordable healthcare for all Americans. We will be hosting a webinar with EverThrive Illinois on June 30 at 2:00 pm to discuss the implications of momentous decision. Please join us then!

 

Robertson v. BCBS Texas (D. Montana Apr. 15, 2015, No. CV 14–224–M–DWM): “Law and Justice Can Pass Like Ships in the Night”

In July 2011, Plaintiff Lana Robertson was diagnosed with diffuse systemic sclerosis, a rare autoimmune disease that causes the skin and other connective tissues in the body to tighten and harden. Without treatment, the disease can attack tissues in internal organs and is fatal once it infiltrates the tissues of the lungs or heart. Robertson’s treating physician, Dr. Richard Burt, Chief of the Division of Immunotherapy at Northwestern University Feinberg School of Medicine in Chicago, recommended as "medically necessary" a hemapoietic stem cell transplant (“the Procedure”).

Robertson, a plan participant under an employer-sponsored health benefits plan established by Defendant Stallion Oilfield Holdings, Inc. (“Stallion”) (Plan Administrator) and claims administered by Blue Cross and Blue Shield of Texas (“BCBS Texas”) (Claims Administrator), sought pre-approval from BCBS Texas for treatment with the FDA-approved Procedure’s protocol on November 8, 2013. BCBS denied the claim on the grounds that the Procedure was “experimental, investigational, and unproven.” The initial denial specifically stated that: “Per the data in peer-reviewed medical literature, autologous stem cell transplant is not effective, reliable, and safe for auto-immune diseases, including systemic sclerosis.”

Robertson appealed the decision twice and was denied twice (December 2013 and February 2014) by different independent review organizations (IROs). Each IRO denied Robertson’s claim on essentially the same grounds, namely that “[t]he proposed transplant for the treatment of systemic sclerosis is part of a phase 3 randomized clinical trial and is therefore considered investigational.” The IRO reviews did no more than simply endorse the position of BCBS Texas.

On September 6, 2014, Robertson sued Stallion and BCBS Texas in the District Court of Montana, claiming benefits under ERISA, seeking a declaration that the Plan provides coverage for the Procedure and attorneys’ fees.

BCBS Texas took the position that it did not abuse its discretion because (1) the Plan specifically excludes as Experimental/Investigational “[t]reatment as part of a clinical trial or a research study” which the treatment Robertson sought plainly was; and (2) because the Plan clearly deems Experimental/Investigational treatments not accepted as standard medical treatment” which the treatment Robertson sought plainly was not.

Robertson maintained that the Experimental/Investigational exclusion could not apply to services that are medically necessary and that, at the very least, the Plan is ambiguous and must be construed in her favor. Furthermore, Robertson advanced the argument that the Plan’s Experimental/Investigational exclusion was not plain, clear or conspicuous such that it negated her reasonable expectations of coverage.

On April 15, 2015, the District Court of Montana reluctantly sided with BCBS Texas’ position by holding that the insurer acted reasonably in denying preapproval of the Procedure because Robertson’s enrollment in the phase 3 clinical trial is explicitly excluded as Experimental/Investigation under the terms of the Plan. The Court even acknowledged that Blue Cross entities were making inconsistent determinations for the same procedure in different Blue Cross coverage jurisdictions based on varying Plan language. However, those disparate determination outcomes were not allowed to influence Robertson’s case.

The Court eloquently concluded its Opinion with the observation that: [t]he case is a troubling example of how sometimes the law and justice can pass like ships in the night. Robertson faces death as a result of a rare disease, the treatment of which her insurance will not cover despite her valid enrollment in the Plan
. . .
ERISA was enacted to protect the interests of participants in employee benefit plans. The masks of the law in this case conceal the person at risk of dying by a deferential standard of review and the rules of legal interpretation. Though the trial court determined that Blue Cross’s denial of benefit was legal, we disagree and would also argue it was neither reasonable nor moral.

See Robertson v. Blue Cross and Blue Shield of Texas, --- F. Supp.3d --- (Apr. 15, 2015).

On April 27, 2015, Robertson filed an appeal to the Ninth Circuit Court of Appeals. Our firm will be watching this case closely. If you have received denials for treatment on the grounds that the treatment is “experimental, investigation, or unproven” or not medically necessary, please contact our firm as we may able to help.

What to do if Your Roof has Wind or Hail Damage

I have handled many cases where the roof on a business or home has been damaged by wind or hail.

Storm damage to your roof is covered under your homeowners and business owners property insurance policy.

Many times, the insurance company will do the right thing.  Some times they don’t.  Common strategies to deny claims that I have seen include:

  • Sending out an engineer who writes a report that says there is no or little damage.
  • Agreeing to pay for only a portion of the roof.  Florida law requires that if 25% or more of the roof is damaged, then the insurance company must pay to replace the entire roof.
  • Saying that the roof has deteriorated because of age when, in fact, the roof never leaked until a severe wind or hail storm.  Most shingle roofs in Florida should last at least 20 years.
  • Saying that the problems are due to installation, design or construction errors.

I have litigated each of these issues many, many times against some of the world’s largest insurance companies.

In most cases, if I win, the insurance company has to pay my fees and costs, and if I lose, I’ll work for free.

Homeowners Insurance on Bainbridge Island

Homeowners insurance .......Did you know? Extended coverage's that can be added to most homeowners insurance policy: 1. Golf cart coverage. Own a golf cart? Then add it to your homeowners policy for liability insurance to be sure your covered while out on the course. 2. Own a rowing shell, kayak, SUP, small dingy with outboard? Any of these can be added to your homeowners insurance, for both liability and physical damage coverage 3. Have a child who is off to live in the dorm's at college? Many carriers offer an extension to cover children away at school and their belongings. ** must live in dorms** 4. Have a live in nanny or exchange student? Inform your carrier and your liability can extend over them as well! 5.Have a home office? Homeowners policies have an endorsement just for the small satellite home office. 6. Have a small B & B style rental on site? Some carriers will even offer a home based business supplement to cover risks like this. All just food for thought ... ASK US TODAY...your homeowner insurance may cover more than you truly know!

Homeowners Insurance on Bainbridge Island

Homeowners insurance .......Did you know? Extended coverage's that can be added to most homeowners insurance policy: 1. Golf cart coverage. Own a golf cart? Then add it to your homeowners policy for liability insurance to be sure your covered while out on the course. 2. Own a rowing shell, kayak, SUP, small dingy with outboard? Any of these can be added to your homeowners insurance, for both liability and physical damage coverage 3. Have a child who is off to live in the dorm's at college? Many carriers offer an extension to cover children away at school and their belongings. ** must live in dorms** 4. Have a live in nanny or exchange student? Inform your carrier and your liability can extend over them as well! 5.Have a home office? Homeowners policies have an endorsement just for the small satellite home office. 6. Have a small B & B style rental on site? Some carriers will even offer a home based business supplement to cover risks like this. All just food for thought ... ASK US TODAY...your homeowner insurance may cover more than you truly know!