Case Watch

Bad Faith

Texas Mut. Ins. Co. v. Ruttiger
Texas App. 1st Dist. Jan.17, 2008
Bad faith cause of action lies against workers’ compensation carrier. An individual was injured on the job. The workers’ compensation carrier refused to pay for the claimant’s surgery, and, as a result, the claimant was not able to obtain pain medication. The claimant sued his workers’ compensation insurer for physical pain and suffering, physical impairment, and mental anguish allegedly caused by the insurer’s bad faith refusal to pay for his pain medication. The court held that the bad faith claim was separate and apart from the workers’ compensation claim regarding the injury, and was, therefore, valid.

Exclusions

Straughter v. Hodnett
La.App. 2nd Cir. Jan. 9, 2008
Assaulted bar patrons’ claims against insured bar operator alleging public nuisance excluded by assault and battery exclusion. Bar patrons alleged they were assaulted by another patron at a bar, and sued the insured operator alleging a public nuisance. The court held that the assault and battery exclusion was sufficiently broad to preclude coverage for the nuisance claims.

General Liability

United States Fire Ins. Co. v. Scottsdale Ins. Co.
Texas App. 5th Dist. Jan.7, 2008
Court interprets liability policy to provide coverage under both CGL Form and CCPL form. The insurer issued a liability policy to an insured engaged in the business of operating and owning nursing homes in multiple states. The liability policy provided commercial general liability (CGL) coverage subject to a $2 million per location aggregate limit, and care providers professional liability (CPPL) coverage with a $1 million per location aggregate limit. The policy provided that, if two or more coverages applied to the same injury, the aggregate limit of coverage would be the highest limit out of all the applicable coverages. Seven suits were filed against the insured alleging personal injury and/or wrongful death arising from treatment at one of the insured’s facilities. The insurer argued that the suits were professional liability claims, and that only the CPPL coverage should be deemed to apply so that coverage was subject to the lower per location aggregate limit. The court disagreed and held that the claims also fell within the CGL coverage form, and, thus, the $2 million aggregate limit applied.

Personal and Advertising Injury

Maryland Cas. Co. v. South Texas Medical Clinics, P.A.
Texas App. 13th Cir. Jan. 10, 2008
Willful detention of employees while working triggers personal injury coverage. Former employees of a medical clinic brought suit against a doctor, alleging the doctor detained them to participate in unwanted hypnosis sessions while they were working. An insurer issued a liability policy that provided personal injury coverage to the insured doctor in connection with claims for false imprisonment. The court held that the employees’ claims alleged false imprisonment, and, thus, the insurer was under a duty to defend the insured.

Miscellaneous

Paj, Inc. v. The Hanover Ins. Co.
Texas Jan. 11, 2008
Texas reaffirms its notice-prejudice rule. The court held that an immaterial breach of a policy’s notice conditions does not deprive the insurer of the benefit of the bargain and, thus, cannot relieve the insurer of its coverage obligations. Prejudice must be demonstrated in order for an insurer to validly disclaim coverage based on late notice.

Tyler v. Shelter Mutual Insurance Co.
Okla. Jan. 29, 2008
Oklahoma Supreme Court concludes the term “Actual Cash Value” synonymous with the term “Fair Value.” Court held the legislative intent of Oklahoma statutes, together with analyzing current caselaw in Oklahoma affirms that “actual cash value” is synonymous with the terms “fair value” and “actual cash value.”

Case Watch is provided by the law firm of Goldberg Segalla LLP (www.goldbergsegalla.com). Editors are Richard J. Cohen, Daniel W. Gerber and Sarah J. Delaney.

Topics Carriers Texas Workers' Compensation Oklahoma