Mehr Fairbanks Obtains Favorable Opinion From the Kentucky Supreme Court

July 24, 2023 | by Mehr Fairbanks Trial Lawyers

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On June 15, 2023, Mehr Fairbanks obtained a favorable opinion from the Kentucky Supreme Court related to a more than $15 million trial verdict in Magoffin County that Mehr Fairbanks obtained for its clients in October 2018. Following the jury’s verdict, the case was appealed by the insurance company. With the most recent decision, the Kentucky Supreme Court reversed a decision on appeal by the Kentucky Court of Appeals. The Supreme Court held that Kentucky case law “should not be construed as requiring a final judicial determination of coverage prior to filing a third-party tort claim against an insurer.” Importantly, the Court held that “the longstanding requirements of Wittmer v. Jones” continues to apply in insurance bad faith claims.

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Call us today at (859) 225-3731 or visit us here to request a free consultation with one of Mehr Fairbanks’ attorneys.

*The information contained within this post should not be considered legal advice or legal representation.

Mehr Fairbanks Trial Lawyers Obtains Over $5 Million Settlement in an Insurance Bad Faith Case

February 13, 2023 | by Mehr Fairbanks Trial Lawyers

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Mehr Fairbanks Trial Lawyers obtains a $5,750,000 settlement in a bad faith case against an insurer!

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Mehr Fairbanks Obtains a $475,000 Settlement in a Bad Faith Case

September 14, 2022 | by Mehr Fairbanks Trial Lawyers

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Mehr Fairbanks Trial Lawyers has obtained a $475,000 settlement in a bad faith case against an insurer.

Call our firm today for a free consultation if you believe that you have a bad faith insurance claim!

Former NFL Player Wins in ERISA Case

August 5, 2022 | by Mehr Fairbanks Trial Lawyers

Recently, a federal judge in Texas court ruled in favor of retired NFL player, Michael Cloud, determining that the administrators of The Bert Bell/Pete Rozelle NFL Player Retirement Plan (“Plan”) violated their fiduciary duties under ERISA in denying Cloud a full and fair application review. Cloud’s appeal concerned his eligibility for the highest level of disability benefits under the Plan, which was subsequently denied by the Defendants.

Cloud boasts an impressive NFL career, playing 7 seasons, including for the New England Patriots during their 2004 Super Bowl winning year. Cloud additionally played for the Kansas City Chiefs and the New York Giants between 1999 and his retirement in 2006. During his career, Cloud states that he injured “virtually every aspect of his body” as well as endured numerous cases of head trauma known as “dings” (an instance where a player’s vision goes black due to a hard hit to their head). One of Cloud’s last head injuries sustained in 2004 led to his early retirement, as the frequency and severity of the injuries had caused “cumulative mental disorders.” In 2010, Cloud began receiving benefits under the retirement Plan, and was found to be “totally and permanently” disabled in 2014. Subsequently, in 2016 Cloud applied for reclassification under the Plan but was denied both initially and on appeal.

Cloud brought an action against the Plan in 2020, alleging that his application for reclassification was never fully reviewed by the Defendants. He alleged that the Defendants (including six board members for the Plan) did not adequately review his over 1000-page application. Instead, a paralegal was made to write a summary of the application for the administrators. It has been speculated that the decision on the matter was already drafted before the administrators viewed the summary of the new appeal, as it cited to incorrect documents that belonged to the wrong benefits plan. Further, the denial letter included contradicting information with written minutes taken at the board meeting during their deliberation; the minutes state that the only reason for the denial was the Cloud did not show by clear and convincing evidence the existence of a new injury, while the letter additionally states that the application was made outside of a 180-day deadline among other timing issues. During closing arguments, counsel for Cloud stated that the issue of unfair denial is not new nor exclusive to Cloud, and that the Plan consistently failed to fully review applications by reviewing as many as 50 at a time with no discussion of the specific cases.

Mehr Fairbanks Obtains a $400,000 Settlement in a Bad Faith Case

June 14, 2022 | by Mehr Fairbanks Trial Lawyers

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Mehr Fairbanks Trial Lawyers has obtained a $400,000 settlement in a bad faith case against an insurer.

Call our firm today for a free consultation if you believe that you have a bad faith insurance claim!

Court Certifies ERISA Class Action Against Aetna

June 3, 2022 | by Mehr Fairbanks Trial Lawyers

A federal court in Pennsylvania recently certified a class of Plaintiffs under Defendant Aetna Life Insurance Co.’s disability benefits plan (“Plan”). The Plaintiffs alleged that the Defendants forced beneficiaries who had received payments for personal injury claims to send the payments back to the company in violation of ERISA.

The named Plaintiff, Joanne Wolff, first filed suit against Aetna in 2019 when the company asked for the repayment of over $50,000 in long-term disability benefits stemming from a temporary disability suffered by the Plaintiff after a car wreck. At the time of the request, Wolff told the Defendants that her employer, Bank of America, did not allow reimbursement, and negotiations ended in an agreement that that Wolff would pay $30,000 despite this fact.

This did not end the dispute, however, and Wolff along with an at least 48-member class now allege that Aetna violated ERISA when it required reimbursement payments of long-term personal injury disability payments. Aetna responded that class certification would be inappropriate, as the proposed class did not meet the specifications required for certification under the Federal Rules of Civil Procedure. Mainly, the Defendants argued that some of the members of the proposed class should be disqualified, thus the number of participants in the class did not meet the numerosity requirement. It argued that since some of the members of the class were from different companies, there was not sufficient typicality to fulfill the requirements under the Civil Rules and members under other employers should be disqualified, reducing the class number to 28. Aetna also argued that timing issues barred several more participants under the relevant statutes of limitations.

Judge Rules in Favor of Retired NFL Player in ERISA Dispute

June 1, 2022 | by Mehr Fairbanks Trial Lawyers

Recently, a federal judge in Texas court ruled in favor of retired NFL player, Michael Cloud, determining that the administrators of The Bert Bell/Pete Rozelle NFL Player Retirement Plan (“Plan”) violated their fiduciary duties under ERISA in denying Cloud a full and fair application review. Cloud’s appeal concerned his eligibility for the highest level of disability benefits under the Plan, which was subsequently denied by the Defendants.

Cloud boasts an impressive NFL career, playing 7 seasons, including for the New England Patriots during their 2004 Super Bowl winning year. Cloud additionally played for the Kansas City Chiefs and the New York Giants between 1999 and his retirement in 2006. During his career, Cloud states that he injured “virtually every aspect of his body” as well as endured numerous cases of head trauma known as “dings” (an instance where a player’s vision goes black due to a hard hit to their head). One of Cloud’s last head injuries sustained in 2004 led to his early retirement, as the frequency and severity of the injuries had caused “cumulative mental disorders.” In 2010, Cloud began receiving benefits under the retirement Plan, and was found to be “totally and permanently” disabled in 2014. Subsequently, in 2016 Cloud applied for reclassification under the Plan but was denied both initially and on appeal.

Cloud brought an action against the Plan in 2020, alleging that his application for reclassification was never fully reviewed by the Defendants. He alleged that the Defendants (including six board members for the Plan) did not adequately review his over 1000-page application. Instead, a paralegal was made to write a summary of the application for the administrators. It has been speculated that the decision on the matter was already drafted before the administrators viewed the summary of the new appeal, as it cited to incorrect documents that belonged to the wrong benefits plan. Further, the denial letter included contradicting information with written minutes taken at the board meeting during their deliberation; the minutes state that the only reason for the denial was the Cloud did not show by clear and convincing evidence the existence of a new injury, while the letter additionally states that the application was made outside of a 180-day deadline among other timing issues. During closing arguments, counsel for Cloud stated that the issue of unfair denial is not new nor exclusive to Cloud, and that the Plan consistently failed to fully review applications by reviewing as many as 50 at a time with no discussion of the specific cases.

Mehr Fairbanks Trial Lawyers Defeats Allstate in Discovery Dispute

May 17, 2022 | by Mehr Fairbanks Trial Lawyers

In late April, Mehr Fairbanks Trial Lawyers defeated Allstate Insurance Company’s motion for protective order of insurance claim files relating to a bad faith claim. In their opinion entered on April 28^th, the Circuit Court held that the probative value of the documents to the Plaintiff’s case outweighed any prejudice to the Defendant, thus denying Allstate’s claim that information within the documents should be protected from discovery during the ongoing litigation.

The case at issue arose after an automobile accident occurred in Tennessee. The parties reached a settlement for bodily injury claims, though the injured party subsequently filed suit for Underinsured Motorist (UIM) coverage in Kentucky court. The Plaintiff later moved to amend their complaint to include claims against Allstate for bad faith and Unfair Claims Settlement Practices. After this motion, the Plaintiff moved to compel discovery of Allstate’s complete copy of their insurance claim file. This motion was granted, and Allstate ordered to comply within 30-days. Allstate then moved for a protective order of the documents, stating that they should be shielded from discovery under both the work product doctrine and attorney-client privilege. The work product doctrine requires that documents that have been prepared by legal counsel in preparation for litigation should not be discoverable by the other party, as it would provide an unfair edge to opposing counsel. Attorney-client privilege protects the private information shared between an attorney and their client from discovery.

Since the discovery request relates to the bad faith claim against Allstate, the Court must make several considerations when determining whether to grant a protective order. First, the Court must classify the bad faith claim by determining whether it is first- or third-party. First-party bad faith claims occur when “the insured sues the insurer for failing to use good faith to resolve the insured’s claim.” The Court concludes that the current claim falls into this category, as it “concerns a claim between an insurer and its insured.” Next, the Court must consider whether any privilege exists which could exclude part of the requested document from discovery, though not its entirety. Here, the Court looks to established case law stating that, “attorney-client privilege and work product doctrine are generally inapplicable in first-party bad faith cases.” The Court states that even if the claim file includes information that is work product or is protected by attorney-client privilege, in this category of cases, “discovery of the entire claim file is appropriate.”

Fourth Circuit Limits ERISA Plan Administrators’ Ability to Use Discretion as Grounds for Denials of Coverage

May 16, 2022 | by Mehr Fairbanks Trial Lawyers

The Court of Appeals for the Fourth Circuit recently held that under ERISA, the “deferential review” standard is not a one size fits all seal of approval for plan administrators’ reasoning in denying claims. The case giving rise to this decision is Garner v. Central States and Southwest Areas Health and Welfare Fund Active Plan in which the Defendants denied the Plaintiff’s claim for the reimbursement of medical costs related to their back surgery. A court in North Carolina provided the original ruling in the case (later upheld by the Court of Appeals) that the plan at issue had “abused its discretion” in denying the claim.

The case boiled down to two significant issues relating to the determination that benefits would be denied, each addressed by the Court of Appeals. The first relates to the omission of an MRI scan in the documents to be analyzed by the first reviewing doctor in making their decision on the availability of benefits. This omission was held to be significant, as the results of the MRI were crucial to the Plaintiff’s treating doctor’s decision to operate. Secondly, no notes from the Plaintiff’s treating doctor relating to the decision to conduct surgery and discussion of the MRI were provided to the reviewing doctor.

The Plaintiff’s initial appeal was denied on the grounds that a second reviewing doctor had reached the same conclusions as the first. Thus, according to the Defendants, the lack of information provided to the first doctor did not preclude denial. The Court disagreed with this argument, stating that the issues with the first doctor’s review were not cured by the concurrence of the second doctor, as their opinion also misstated facts surrounding the Plaintiff’s need for surgery. As a result, the Court held that the Defendants’ denial of the claim was not “the result of a deliberate, principled, reasoning process.”

11th Circuit Holds that Settlement Amounts may Count as Basis for Bad-Faith Claims

April 14, 2022 | by Mehr Fairbanks Trial Lawyers

Recently, an 11^th Circuit Court in Florida held that when a private settlement constitutes an “excess judgment” under an insurance policy, the insured(s) can use the amount in the settlement to bring a bad-faith claim against their insurer. This decision overturns a previous 2019 decision (which was unpublished) stating that the only method through which insureds could establish a bad-faith excess judgment claim was after the case had reached a jury verdict at trial. The insureds in this case are now able to bring suit against their insurer, Geico Insurance, for allegedly agreeing to a settlement in excess of policy limits.

The policy at issue in this case was an auto insurance policy that gave coverage for up to $100,000 (per person) for bodily injury. The insureds under the policy were at fault in an accident, causing serious bodily injury to the other party, the costs of which exceeded the policy limits. When the parties could not reach an agreement during settlement negotiations, the injured driver sued the insureds in Florida state court. The insureds were then provided with counsel by Geico for the duration of the suit, as was dictated by their policy. The parties eventually reached an agreement in the form of a settlement, but the amount agreed upon drastically exceeded the policy limits. The terms of the settlement delineated that one of the insureds (the owner of the vehicle involved in the accident, but not the driver at the time) would pay to the injured party $474,000. This amount is small compared to the amount the settlement required of the at-fault driver, which came out to $4.47 million. The settlement also included that Geico would agree to not hold the insureds in breach of the policy through acceptance of the offer.

Florida state law provides that insureds may bring bad-faith insurance claims when the insurer grants an “excess judgment,” meaning that the insurer (in bad-faith) chose to accept a settlement agreement that exceeded policy limits. Under this principle, the insureds filed a claim against Geico, requesting damages amounting to the total agreed upon in the settlement that was over the $100,000 policy limit. Prior to this decision, the case against Geico would have been dismissed since the excess judgment was not award through a jury verdict after trial. Judge Kevin C. Newsom disagreed with this precedent, as his opinion on the matter stated, “a jury verdict is not a prerequisite to an excess judgment in a bad-faith action.” Judge Newsom’s reasoning relies on Florida state law, reiterating that when insureds are, “subject to excess judgments, they [can] prove causation in their bad-faith case.” Further, Judge Newsom states that previous opinions in lower courts which had relied on the older decision may not have properly interpreted the state law. He states that the reliance on the precedent was caused through a misinterpretation of another previous case in which a jury verdict happened to be present, which should not have resulted in a requirement that a jury verdict must exist in all cases.