Recent Court Decisions in Insurance Law

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Richard C. Nelson, Esq.


Unfair Insurance Settlement Practices

The Appellate Division of the District Court rejected plaintiff’s arguments that an insurer is obliged to tender its best and highest settlement offer upon receipt of a demand letter. Even though liability was clear, it was reasonable for the carrier to make further inquiries about the plaintiff’s earning capacity and make offers at the low end of its internal range of values on the case in response to plaintiff’s demands that exceeded the high end of the range.

Newcomb v. O’Brien, 2016 WL 797, 652 (Feb. 24, 2016)

Extent of Worker’s Compensation Lien

The Supreme Judicial Court ruled that a worker’s compensation carrier’s lien does not apply to pain and suffering damages received by claimants in their settlements with third party tortfeasors. This ruling by the state’s highest court interpreting G.L. c. 152, § 15 was in accordance with a 2011 decision by the Massachusetts Appeals Court. The Court noted that the statute aimed at “reimbursing the worker’s compensation insurer and preventing the employee’s double recovery.” The Court went on to say that carrier could not be reimbursed for something it did not pay. Further, the statute provides adequate protection against situations where the parties “stack the deck” by allocating excessive amounts of the settlement to pain and suffering damages.

DiCarlo v. Suffolk Construction Co., Inc., 2015 WL10045032 (Feb. 12, 2016)

Excess Carrier’s Duty to Defend
New Hampshire

The New Hampshire Supreme Court ruled, as a matter of first impression, that an excess liability insurer’s duty to defend is triggered only when the primary insurer’s coverage is exhausted. The Court determined that the contrary language in a 2011 Opinion was merely dicta.

Old Republic Insurance Co. v. Stratford Insurance Co., 2016 WL 302212 (Jan. 26, 2016)

Intentional Loss Exclusion

The Maine Supreme Court ruled that a death resulting from a single punch was excluded from coverage under a homeowner’s policy. In a case of first impression, the Court was interpreting an exclusion for bodily injury resulting from “intentional and criminal acts or omissions” even if “such bodily injury…is of a different kind or degree than reasonably expected or intended.” The Court left undisturbed prior rulings finding coverage under similar circumstances when the exclusion applies only to “bodily injury or property damage that is expected or intended from the standpoint of the insured.”

Metropolitan Property and Casualty v. Benson, 128 A 3d 1065 (Dec. 1, 2015)