Daily Archives: January 14, 2010

Ninth Circuit Affirms Use of Genuine Dispute Doctrine in D&O Coverage Cases

Posted in: Case Updates, Directors & Officers Insurance, Insurance Bad Faith, News January 14, 2010

The genuine dispute doctrine has received much attention recently by the California courts.  Although the doctrine first arose in the Ninth Circuit Court of Appeals, there has not been much recent activity by the Ninth Circuit or the federal district courts located in California relative to this doctrine.  The Ninth Circuit jumped backed in the frey with its decision in  S.J. Amoroso Const. Co., Inc. v. Executive Risk Indem., Inc., 325 Fed. Appx. 548, 2009 WL 1154202 (9th Cir. 2009).

In S.J. Amoroso Const. Co., the Ninth Circuit upheld a district court decision dismissing a claim of bad faith against an insurer for denying coverage under a Directors & Officers insurance policy (“D&O policy”).

Paul Mason was an …

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District Court Applies Abuse of Discretion Standard of Review After Montour

Posted in: Abuse of Discretion, Case Updates, Conflict of Interest, ERISA, Insurance Litigation Blog, News, Standard of Review January 14, 2010

Recently, in Montour v. Harford Life & Accident, 582 F.3d 933 (9th Cir. 2009), the Ninth Circuit Court of Appeals, in one of its most important cases, adopted a new standard of reviewing ERISA abuse of discretion cases where the insurer has a conflict of interest.  The court held that a “modicum of evidence in the record supporting the administrator’s decision will not alone suffice in the face of such a conflict, since this more traditional application of the abuse of discretion standard allowed no room for weighing the extent to which the administrator’s decision may have been motivated by improper considerations.”  Further, the court in Montour explained that a reviewing court must also take into account the administrator’s …

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California Supreme Court Embraces 1:1 Punitive Damages Ratio

Posted in: Case Updates, News, Punitive Damages January 14, 2010

The California Supreme Court has embraced the principle suggested by the U.S. Supreme Court that a ratio of punitive damages to compensatory damages of one-to-one is the federal constitutional maximum where there is relatively low reprehensibility and the compensatory damages award is substantial.

In Roby v. McKesson Corporation, plaintiff Charlene Roby filed alleged a wrongful termination and harassment action against McKesson and her supervisor Schoener claiming she was fired because of a medical condition and a related disability. The jury found in favor of Roby on all causes of action and awarded compensatory damages of $3,511,000 against McKesson and $500,000 against the supervisor, Schoener. The jury also awarded punitive damages: $15,000,000 against McKesson and $3,000 against Schoener. The trial …

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California's 2009 Insurance Legislation: It Was an Important Year

Posted in: Case Updates, Disability Insurance, Disability Insurance News, Health Insurance, Legislation, News January 14, 2010

2009 was an important year for insurance legislation in California.  An excellent review of this legislation was posted on December 4, 2009 by the Barger & Wolen LLP legal blog (quoted verbatim from the blog) as follows: “LIFE, HEALTH AND DISABILITY INSURANCE”

1. AB 23: Cal-COBRA Premium Assistance

  • Establishes notice requirements that must be provided to eligible qualified beneficiaries regarding the availability of premium assistance under the American Recovery and Reinvestment Act of 2009 (ARRA).
  • Qualified beneficiaries eligible for federal assistance may elect coverage under Cal-COBRA, and those enrolled in Cal-COBRA as of February 17, 2009 may request the federal premium assistance.

2. AB 76: Life and Annuity Consumer Protection Fund

  • Extends the provision creating the Life and Annuity Consumer
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California Health Insurance Premiums Double in 7 Years

Posted in: Disability Insurance, Disability Insurance News, Health Insurance, News January 14, 2010

The National Underwriter reports that between 2002 and 2009, health care premiums in California rose almost 118%, a new study by the California HealthCare Foundation finds.  In the same period, California’s overall inflation rate increased 23%.  Single coverage premiums in California cost $5,133 annually in 2009, while premiums for family coverage were $13,525.

The survey also concluded that 73% of California employers offer health care coverage, compared to 60% of employers around the U.S.

So, what does all of this mean? Californians are paying more for less coverage.  Is health insurance reform needed?  You be the judge.…

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Calling In a Disability Expert

Posted in: Disability Insurance, Disability Insurance News, Insurance Litigation Blog, News January 14, 2010

Arthur Fries, an independent disability consultant and an expert I have known for many years, has written an article entitled “Calling In a Disability Expert” which appeared on November 16, 2009 in the National Underwriter.  Insurance consumers and consumer attorneys should review this article.  He posits that insurance consumers should hire consultants and/or attorneys with expertise in the disability insurance field. He explains that this is because disability claims are increasingly complex and insurance consumers cannot go it alone in the “David vs. Goliath” scenarios that typically play out between insureds and insurers.  Here are some snippets:

  • [T]here are issues related to how your clients conduct themselves in communicating their disability to their physician, how to handle a field claims
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Guardian to Offer Guaranteed-Issue Small Group Disability Income Insurance

Posted in: Case Updates, Disability Insurance, Disability Insurance News, Insurance Litigation Blog, News January 14, 2010

According to National Underwriter, Guardian Life Insurance Company of America is making it easier for employers with 2 to 9 employees to offer disability insurance benefits.  It says it now will let employers in that size range provide disability insurance on a guaranteed issue basis.  The guaranteed issue provision lets employers provide employees with some disability protection without them having to complete a medical exam or undergo medical underwriting.…

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Robert J. McKennon Co-Chairs ACI's Forum on Litigating Disability and ERISA Claims

Posted in: Events, News January 14, 2010

Robert J. McKennon, a partner in the law firm of McKennon Schlinder LLP co-chaired the American Conference Institute’s Forum on Litigating Disability and ERISA Claims. This event was held on June 15-16, 2009 in Boston, Massachusetts.  He was also a speaker on the topic of recent changes in insurance bad faith, ERISA and disability insurance law.

ACI’s conference on ERISA and Disability Insurance Claims Litigation provided attendees with information on important and timely topics that include:

  • The impact of MetLife v. Glenn on ERISA litigation
  • Recent changes in ERISA and disability insurance in California, Florida and New York
  • Impact of the new administration of ERISA and disability insurance claims litigation
  • Mediating disability insurance claims
  • Utilizing and working with medical experts
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California Supreme Court Holds that Only the Class Representative Needs to Meet the Standing Requirements of Proposition 64 to Pursue a Representative Action

Posted in: Case Updates, Class Actions, News, Unfair Business Practices/Unfair Competition January 14, 2010

Following the passage of Proposition 64 on November 2, 2004, in order to bring a representative claim under the unfair competition law (“UCL”), a plaintiff must meet the following standing requirements: (1) establish that he or she “has suffered injury in fact and has lost money or property as a result of such unfair competition” and (2) comply with the class action requirements as set forth in California Code of Civil Procedure Section 382. Bus. & Prof. Code §§ 17203, 17204 and 17535. After the passage of Prop 64, litigants continued to debate whether only the named plaintiff or all class members had to meet the more stringent standing requirements of injury in fact and loss of money or property as …

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Dispute Between Securities' Brokers Not Subject to FINRA Arbitration

Posted in: Case Updates, News, Securities/FINRA January 14, 2010

Several insurers who act as broker-dealers in connection with the sale of “securities” find themselves litigating in Financial Industry Regulatory Authority (“FINRA”) (formerly NASD) arbitrations when disputes arise. Sometimes, they prefer not to litigate in a FINRA forum under its rules. A very recent California Court of Appeals case discussed the types of disputes that are not subject to FINRA arbitration.

In Valentine Capital Asset Management, Inc. v. Agahi, 174 Cal. App. 4th 606 (2009), the court held that a dispute between securities’ brokers was not subject to arbitration pursuant to FINRA rules because the dispute did not relate to the brokers’ activities as members of FINRA-associated firms.

Valentine was the founder and president of Valentine Capital Asset Management, …

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