Archive for the 'Property' Category

UPDATE – Recent Bills Affecting Subrogation!

Published by August Ober on July 6, 2011 in Auto, PIP/MedPay, Property and UM/UIM | 0 Comments

H.R 2205

The United States House of Representatives introduced a bill on June 16, 2011 aimed at tort reform. The stated intent of the bill is to improve the medical justice system and the short title is “Ending Defensive Medicine and Encouraging Innovative Reforms Act of 2011.” This bill has the potential to bar subrogation rights for workers compensation, health and casualty carriers.

House of Representative Bill 2205 (H.R. 2205) attempts to encourage states to create alternative medical liability laws and mandates specifics to be included in any such law enacted by a state. Incentive payments would be available to states that had successfully enacted and implemented such an alternative medical liability law. To ensure the incentive payments produce the desired results, the Secretary of Health and Human Services would require states to submit reports. The Secretary would then compile the data and annually measure whether there was (1) a reduction in the number of health care lawsuits initiated in a state; (2) a reduction in the amount of time required to resolve lawsuits in the state; and (3) a reduction in the cost of malpractice insurance in the state. If the alternative medical liability law produced the intended results, then the state would be eligible for an incentive payment. However, if the secretary determined that the state law had not produced the intended results, any subsequent health care lawsuits would be subject to further scrutiny and the bill lists a number of provisions for which a state must comply. For example, one such provision is a cap of $250,000 for noneconomic damages. A further provision provides a complete bar to pursue any subrogation rights or enforce any lien or credit against a claimant’s recovery. Although, Medicare is excepted from this bar to pursue subrogation rights or a lien, it would apply to any case that is settled or decided by a trier of fact.

This federal bill takes a unique approach to addressing medical malpractice reform. Although, the importance of subrogation recoveries is recognized as to the federal government and specifically preserved in the bill, the same consideration is not provided for other entities or businesses. If the bill is passed, only those states that struggle to produce the intended results would trigger the bar to subrogation.

Pennsylvania Senate Bill 1131

On June 28, 2011 Governor Tom Corbett signed into law the Fair Share Act, allowing for a change generally to “several” liability in comparative negligence actions. The new law applies to causes of action that accrue on or after its enactment. Pennsylvania joins a growing number of states that have sought and passed reforms to their joint and several liability laws. Now, when a Pennsylvania defendant’s negligence is determined to be less than 60% responsible, they will pay damages in accordance with the degree of fault assessed against them. However, there are a few exceptions, where a defendant’s liability remains joint and several, which are:

(i) intentional misrepresentation;
(ii) intentional tort;
(iii) a release or threatened release of a hazardous substance under the Hazardous Sites Cleanup Act; and
(iv) a civil action in which a defendant has violated section 497 of the Liquor Code.

Alabama Senate Bill 269

The Governor of Alabama recently signed Senate Bill 269, which excludes someone who handles only subrogation claims from the licensing and regulation requirements of an independent adjuster.

AS REPORTED BY THE NATIONAL ASSOCIATION OF SUBROGATION PROFESSIONALS

NASP – Litigation Skills Conference

Published by August Ober on March 24, 2011 in Auto, PIP/MedPay, Property and UM/UIM | 0 Comments

Mike Dougherty and A.J. Ober are in San Diego, CA this week attending the National Association of Subrogation Professionals - Litigation Skills Conference.

We have met many great attorneys and insurance professionals, while attending courses to improve our litigaton techniques and better represent our clients.

Proposed Change to PA Comparative Negligence Law

Published by August Ober on February 2, 2011 in Auto, Property and UM/UIM | 0 Comments

On January 27, 2011, changes to the PA Comparative Negligence law (42 Pa.C.S. § 7102) were proposed to the PA General Assembly under House Bill No. 1.

As the law currently stands, when liability is apportioned among multiple Defendants, all Defendants are deemed jointly and severally liable, regardless of their percentage of apportioned fault. This has long been referred to in Pennsylvania as the 1% rule.

For example, suppose a motor vehicle accident occurs and a Jury determines that Plaintiff is awarded $10,000.00. The Jury determines that liability is apportioned as follows: 70% to Defendant A; 29% to Defendant B; and 1% to Defendant C. Now further suppose that Defendant A and Defendant B are individuals that are not insured, but Defendant C is a large corporation with insurance. As the law currently stands, Plaintiff may rightfully seek the full $10,000.00 verdict from Defendant C only. This often occurs when one Defendant has “deeper pockets”, when compared to their Co-Defendants.

The opposite of PA’s current law is a pure several liability theory. Under several (rather than joint and several),Plaintiff could only recover 1% of the $10,000.00 verdict from Defendant C.House Bill No. 1 proposes somewhere in between. Here, if Defendant A is found 60% liable or more, they can be on the hook for the full verdict. But, any Defendant that is found less than 60% liable, only owes Plaintiff according to their apportioned percentage of liability.

It is important to note that House Bill No. 1 has yet to be approved, and will not likely be voted on for a few more months. Until then, the 1% rule is still in effect.

A.J. Ober, Esq.

CLASS ACTION FOR DEDUCTIBLE, Brenda Jones v. Nationwide, 2010 PA Super 90

Published by August Ober on August 23, 2010 in Auto, Bad Faith and Property | 0 Comments

This matter was a Class Action filed in the Pennsylvania Court of Common Pleas Philadelphia County by Insured Brenda Jones (and those similarly situated) against her Insurer, Nationwide Property and Casualty Insurance Company.

The basis of the claim was the Insurer did not reimburse the full $500.00 deductible, and instead reimbursed the Insured a pro-rata amount of the recovery, namely $450.00.

Insured’s suit claimed a breach of contract, bad faith, conversion and unjust enrichment by the Insurer. Insurer filed Preliminary Objections to the complaint asserting the complaint failed to state a cause of action.

The Common Pleas Court granted Insurer’s Preliminary Objections, without issuing an opinion. The Insured appealed the Court of Common Pleas decision.

The Superior Court of Pennsylvania affirmed the Court of Common Pleas, finding the pro-rata pay out was consistent with the Insured’s policy language and the insurance practices outlined in 31 Pa. Code § 146.8(c).

Insurers shall, upon the request of the claimant, include the first-party claimant’s deductible, if any, in subrogation demands. Subrogation recoveries shall be shared on a proportionate basis with the first-party claimant, unless the deductible amount has been otherwise recovered. A deduction for expenses can not be made from the deductible recovery unless an outside attorney is retained to collect the recovery. The deduction may then be for only a pro rata share of the allocated loss adjustment expense.

Said practices were created by the Pennsylvania Insurance Department, under the authority granted by the Pennsylvania General Assembly. See 40 P.S.A. § 1171, et seq. (Unfair Insurance Practices Act (UIPA)).

The Superior Court held the Insured’s remedy for alleged violations under the UIPA was to file a grievance requesting an investigation by the Insurance Commissioner. Thereafter the Commissioner may impose sanctions and seek civil penalties.

Lastly, the Superior Court reasoned that since the practices created by the Pennsylvania Insurance Commission “fits squarely within the scope of authority delegated by the General Assembly”, the ‘made whole doctrine’ was not violated (assuming arguendo that it was applicable).

The Court adopted the reasoning of Harnick v. State Farm Mutual Ins. Co., 2009 U.S. Dist. LEXIS 43126 (E.D. Pa., March 6, 2009). Harnick is a federal case and thus not binding upon the Pennsylvania Superior Court however, the Court found Harnick’s reasoning to be sound and directly on point.

To summarize, Pennsylvania Insurers may reimburse their Insureds deductible pro-rata, without fear of running aground of State or Federal law.

NASP: Eastern Pennsylvania Chapter Meeting

Published by August Ober on July 15, 2010 in Auto, Casualty, PIP/MedPay, Property and UM/UIM | 0 Comments

Yesterday I had the pleasure of attending the National Association of Subrogation Professionals, Eastern PA Chapter Meeting on behalf of WWR. The Conference was attended by both Legal and Insurance professionals and topics included Waiver of Subrogation Rights, Filing a Claim in Arbitration Forums and Fire Loss Investigation.