Insurance Law

Dist. Ct. did not err in finding that defendant, who incurred over $300,000 in medical expenses associated with her gallbladder, owed same amount to plaintiff-medical-benefits plan as “covered dependent” under terms of said plan, where: (1) plaintiff paid said expenses; (2) terms of plan contained subrogation and repayment clauses; and (3) plaintiff subsequently obtained $1.5 million tort settlement arising out of her gallbladder treatment. Defendant conceded that plaintiff had paid her medical bills, and Ct. of Appeals rejected defendant’s claim that she did not owe plaintiff anything because defendant never signed any agreement with plaintiff to reimburse it for anything. Section 502(a)(3) of ERISA allowed plaintiff as fiduciary to bring instant action against defendant as beneficiary to obtain equitable relief to enforce provisions of plan. As such, defendant, who had received benefits of plan, was required to accept obligations of plan, and that plaintiff did not need to require defendant to execute plan’s subrogation and reimbursement clauses as prerequisite for seeking repayment of instant medical expenses. Fact that surgeries at issue took place three months after defendant’s 18th birthday, and that plaintiff did not ask for her consent as adult did not require different result.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in action by plaintiffs in underlying Resources, Conservation and Recovery Act (RCRA) action seeking under Rule 69 to recover insurance policy proceeds to partially satisfy approximate $50 million default judgment against defendant’s insured. Instant policies contained exclusions for “known claims” and “expected or intended” injuries, and such exclusions applied to preclude coverage, where record showed that: (1) insured knew about plaintiffs' environmental-related injuries prior to first policy going into effect in 2004; and (2) insured would reasonably have expected that plaintiffs’ similar injuries occurring after 2004 were attributable to insured’s same waste disposal conduct that occurred prior to insured‘s initial, pre-policy notice of plaintiffs’ claims, so as to qualify as expected or intended injuries. Fact that insured may not have known prior to January of 2007 that plaintiffs’ claims were covered by policy’s definitions did not require different result, since relevant inquiry is whether insured knew that it was engaging in activities that would cause some form of harm to plaintiffs’ properties prior to procuring insurance. Also, plaintiffs had argued in underlying lawsuit that insured had such knowledge about their claims prior to issuance of the initial policy so as to defeat their contrary contention in instant action.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in plaintiff-insured’s action seeking to recover its defense costs in underlying lawsuit under terms of policy issued by defendant. Record showed that: (1) underlying lawsuit, which was filed in 2003, asserted that plaintiff had breached contract, committed conversion and breached fiduciary duty; (2) instant claims-made policy provided that defendant would defend and indemnify plaintiff against “claims” “first made” in 2014-to-2017 period; (3) during 2016 trial in underlying lawsuit, plaintiff in underlying lawsuit asserted for first time in damages phase of case that instant plaintiff had failed to timely notify it of default of another entity; and (4) instant plaintiff thereafter informed defendant about damages argument and contended that said argument constituted new claim under policy. Under terms of policy, “claim” taking form of civil proceeding commenced by service of complaint spans entire action and not just legal theories in complaint that commenced action. As such, instant damages argument first presented in 2016 was part of civil action that began in 2003, and thus was not separate claim. Accordingly, defendant had no duty to defend damages argument, because operative claim was made in 2003. Ct. further noted that purpose behind instant claim-made policy indicates that each type of claim excludes other such claims, such that insurer’s risk exposure would be significantly more difficult to calculate if instant damages argument of underlying lawsuit could be both part of claim begun by complaint and claim itself.

Dist. Ct. did not err in granting plaintiff-insurance company's motion for summary judgment in action seeking declaration that it had no obligation to indemnify or defend insured in underlying personal injuries action, under circumstances where insured's ambulance that was involved with collision with defendant's vehicle was not listed on policy at time of accident. While defendant argued that ambulance was covered by policy because insured's agent sent email to plaintiff prior to accident requesting that ambulance be added to policy, Ct. of Appeals held that ambulance was not covered, where policy required that plaintiff approve change to policy, which did not occur prior to accident. As such, plaintiff was not obligated to defend or indemnify insured in underlying action. Fact that plaintiff had always implemented insured's requests to add/subtract vehicles to/from policy in past did not require different result.