Articles Posted in Insurance Law

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In this insurance policy cancellation dispute, the Supreme Court (1) reversed the district court’s grant of summary judgment for the insurance company and remanded the case so that the insured may pursue its claims against the insurer, and (2) affirmed summary judgment in favor of the broker against the insured. The court held (1) Nev. Rev. Stat. 687B.360 requires strict compliance, and therefore, without an express statement of a policyholder’s right to request additional information about the reasons for a policy’s cancellation, the cancellation notice is ineffective; and (2) the relationship between an insurance broker who obtained an insurance policy for a client and the insured client in this case did not give rise to a duty to monitor the client’s premium payments and to alert the client when the policy is about to be canceled for nonpayment of premiums. View "O.P.H. of Las Vegas, Inc. v. Oregon Mutual Insurance Co." on Justia Law

Posted in: Insurance Law

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William Poremba (Appellant) was injured in an accident during the course of his employment with Southern Nevada Paving. Southern Nevada Paving, through S&C Claims (collectively, Respondents), accepted Appellant’s workers’ compensation claim and eventually closed the claim. Approximately four years later, Appellant sought to reopen his claim. Respondents denied the request. Appellant administratively appealed. The appeals officer denied Appellant’s attempt to reopen his claim. The district court denied Appellant’s petition for judicial review. The appeals officer and the district court apparently resolved the petition to reopen based on whether Appellant exhausted his funds from a settlement with third-parties involved in the accident on medical expenses. Appellant appealed, arguing, inter alia, that the appeals officer erred in granting summary judgment because he was not required to prove that he spent his excess recovery on medical expenses. The Supreme Court reversed, holding (1) Nev. Rev. Stat. 616C.390 does not require exhaustion or reimbursement as a condition precedent to reopening a workers’ compensation claim; and (2) insurers are only entitled to reimbursement from the portions of third-party recovery allocated to expenses within the scope of workers’ compensation. View "Poremba v. Southern Nevada Paving" on Justia Law

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In Employers Insurance Co. of Nevada v. Chandler, the Supreme Court held that an insurer may refuse to pay additional funds when a claimant reopens a workers’ compensation claim until the claimant demonstrates that he or she has exhausted any third-party settlement funds. In the instant case, Appellant, a construction driver, was injured by another driver during the course of his employment. Appellant filed a workers’ compensation claim, which his employer, through a workers’ compensation administrator (collectively, Employer), accepted. Employer eventually closed the claim. When Appellant was unable to return to work, he sought to reopen his claim, but Employer denied it. Appellant filed an administrative appeal. An appeals officer granted Employer summary judgment. At issue on appeal was whether Chandler precluded Appellant from reopening his claim because he spent settlement funds on expenses other than medical costs. The Supreme Court reversed, holding (1) a claimant may reopen his workers’ compensation claim after exhausting his settlement funds on nonmedical expenses; and (2) the appeals officer erred when issuing a decision without detailed findings of fact and conclusions of law. View "Poremba v. Southern Nevada Paving" on Justia Law

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Stephen Hansen was injured when Brad Aguilar struck Hansen’s vehicle. Hansen sued Aguilar, who was insured by State Farm Mutual Automobile Insurance Company. State Farm agreed to defend Aguilar under a reservation of rights. Aguilar agreed to a settlement with Hansen in which he assigned his rights against State Farm to Hansen. Hansen filed this action in federal district court alleging, among other claims, that State Farm breached a contract in its representation of Aguilar. The federal district court concluded that State Farm breached its contractual duty to defend Aguilar because it did not provide Aguilar with independent counsel of his choosing. State Farm moved for reconsideration. The federal district court granted the motion in part and certified two questions to the Supreme Court concerning Nevada’s conflict-of-interest rules in insurance litigation. The Supreme Court answered (1) Nevada law requires an insurer to provide independent counsel for its insured when a conflict of interest exists between the insurer and its insured; and (2) an insurer is only obligated to provide independent counsel when an actual of conflict exists, and a reservation of rights letter does not create a per se conflict of interest. View "State Farm Mut. Auto. Ins. Co. v. Hansen" on Justia Law

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Appellant, a self-employed delivery driver who contracted with FedEx Home Delivery for one of its delivery routes, fell and injured his shoulder while delivering packages. Under his FedEx service contract, Appellant was required to maintain workers’ compensation insurance, which he did through CorVel Corporation. Appellant received medical treatment, but with his physical restrictions, he could not complete his delivery route. Appellant hired a replacement driver until he canceled the service contract. Appellant sought temporary disability benefits, which CorVel denied. Appellant administratively appealed. The appeals officer denied both temporary total disability benefits and temporary partial disability benefits on the basis that Appellant could not establish a loss of any income without evidence of a salary. The district court denied Appellant’s petition for judicial review. The Supreme Court reversed, holding (1) for self-employed individuals, the lack of a salary associated with typical employment does not preclude an average monthly wage calculation for the purpose of determining lost income and rendering a workers’ compensation benefit decision; and (2) the appeals officer in this case should have determined the best method for calculating any loss to Appellant’s wages resulting from his industrial injury, taking into account both his business’s income and expenses. Remanded. View "Mensah v. CorVel Corp." on Justia Law

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Appellant was injured in a car accident. Appellant obtained a default judgment against both the driver and the owner of the other vehicle. Thereafter, Appellant brought this action under Nev. Rev. Stat. 485.3091, Nevada’s absolute-liability statute, against the owner’s insurer to recover upon the judgment under the insurance policy. The district court entered judgment in favor of the insurer. The Supreme Court affirmed in part, reversed in part, and remanded, holding that the district court (1) erred in declining to apply section 485.3091 to Appellant’s action, as a statutory third-party claimant can sue the insurer to enforce compliance with the statute; (2) properly dismissed Appellant’s claim for breach of the implied covenant of good faith and fair dealing, as the statute provides no express language that permits a third-party claimant to pursue an independent bad faith claim against an insurer; and (3) did not err in not awarding Appellant damages based upon a promissory estoppel theory. View "Torres v. Nev. Direct Ins. Co." on Justia Law

Posted in: Insurance Law

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In this insurance matter, the district court entered a final judgment and a post-judgment order. The Supreme Court affirmed the judgments of the district court. After the time for filing a petition for rehearing expired and no petition for rehearing was filed, the remittitur issued. Three days later, Appellants’ counsel filed a motion to recall the remittitur, claiming that he did not become aware of the order of affirmance due to technical difficulties created by a virus on counsel’s servers “as well as switching to a new case management system.” However, the court’s electronic record reflected that an official notice of the order of affirmance was sent to Appellants’ counsel’s electronic filing account, and an email was sent to two separate email addresses at Appellants’ counsel’s law firm. The Supreme Court denied the motion, holding that because Appellants’ counsel could have learned of the disposition in time to timely file a petition for rehearing, Appellants failed to demonstrate a basis on which the remittitur should be recalled. View "Fulbrook v. Allstate Ins. Co." on Justia Law

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Electrical problems at a plastic bag manufacturing plant led to an increased number of defective bags being produced. A dispute arose between the manufacturer and its insurer regarding what provision of the policy covered the losses associated with the defective bags and regarding what policy limit should apply to the manufacturer’s property loss. The district court submitted both issues to the jury. The jury awarded the manufacturer damages for breach of the insurance contract. The Supreme Court reversed, holding that the district court erred in sending the two questions to the jury because (1) categorizing the insured’s loss under the policy is a question of law and not a question of fact, and (2) determining which policy limit applies presents a question of law. Remanded. View "Fed. Ins. Co. v. Coast Converters, Inc." on Justia Law

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After four people died from carbon monoxide poisoning while sleeping in a room above a pool heater in a motel, the motel sought coverage for the deaths from its insurer. The insurer denied coverage based on two provisions of the motel’s general liability policy, the absolute pollution exclusion and the indoor air quality air quality exclusion. The federal district court determined that the policy exclusions were ambiguous and interpreted the ambiguity in the motel’s favor. On appeal, the federal court of appeals certified questions of Nevada law to the Nevada Supreme Court. The Court answered the questions in the negative, concluding that neither the pollution exclusion nor the indoor air quality exclusion clearly excluded coverage for carbon monoxide exposure under the circumstances of this case. View "Century Sur. Co. v. Casino W., Inc." on Justia Law

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Randall and Toni Faehnrich were Mississippi residents when they entered into an automobile insurance policy with Progressive Gulf Insurance Company that was negotiated, delivered, and renewed in Mississippi. The policy contained a choice-of-law provision providing that disputes about coverage shall be governed by Mississippi law. The couple subsequently divorced, and Toni moved to Nevada. While driving the Jeep that she and Randall co-owned, Toni was involved in an accident in which the couple’s two boys, who were Nevada residents when the accident occurred, suffered serious injuries. Randall presented a claim to Progressive for his sons’ injuries, but Progressive denied coverage, citing a household exclusion included in the policy that eliminated coverage for the boys’ claims against Toni. The district court held that the exclusion violated Nevada public policy, and, in accordance with Nevada choice of law rules, Mississippi law validating such exclusions did not apply. The Ninth Circuit Court of Appeals certified a question of Nevada public policy to the Supreme Court, which answered by holding that Nevada’s public policy did not preclude giving effect to the choice-of-law provision in the insurance contract, even when that effect would deny recovery to Nevada residents who were injured in Nevada. View "Progressive Gulf Ins. Co. v. Faehnrich" on Justia Law