CALL US NOW
EMAIL US NOW
The Wednesday August 7, 2013 edition of the Los Angeles Daily Journal featured Robert McKennon’s article entitled: “Clear win for insureds, though scope uncertain.” In it, Mr. McKennon discusses how a highly anticipated decision by the California Supreme Court in Zhang v. Superior Court of San Bernardino (California Capital Insurance), 2012 DJDAR 10174, expands the availability of claims that can be brought under Bus. & Prof. Code 17200, a.k.a. California’s Unfair Competition Law, or UCL. The article discusses how in Zhang, the Supreme Court addressed the split among courts in California regarding the scope of the court’s prior holding in Moradi-Shalal v. Fireman’s Fund Insurance Companies, 46 Cal. 3d 287 (1988) and adopted a narrow interpretation of Moradi-Shalal. The article explains how the Supreme Court’s holding in Zhang will now allow insureds to bring claims under the UCL against insurers for unfair business practices, such as false advertising, so long as those claims do not rest exclusively on California’s Unfair Insurance Practices Act, or UIPA. This means that insureds will not just have breach of contract and bad faith claims against insurers, but may also have UCL claims too. The article is posted below with the permission of the Daily Journal.
McKennon Law Group PC Founding Partner, Robert J. McKennon, Receives 2013 “Top Attorney” Designation for Orange County, California Attorneys
McKennon Law Group PC is proud to announce that its founding partner, Robert J. McKennon, has been recognized as one of Orange County’s “Top Attorneys” and he appeared in the July 29, 2013 issue of the Orange County Register’s OC Metro Register magazine. [click here to see the issue]
Each year, OC Metro Register magazine, which is published monthly and distributed to all cities in Orange County, recognizes the top lawyers in the region in its “Top Attorneys” list. The list profiles attorneys who have a proven track record and expertise in their specific fields based on data compiled by AVVO. The OC Metro Register’s accompanying article on Mr. McKennon highlights his success in representing clients “in their fight for individual disability, life and ERISA insurance benefits.” Additionally, the article praised the California Insurance Litigation Blog, stating that “[m]any believe it to be the best insurance blog in California.”
In addition, for the 2012-2013 years, Mr. McKennon received the following awards and recognitions:
• Named in the Business Edition 2012 and 2013 Thomson Reuters/Super Lawyers annual list of the nation’s top attorneys in the insurance coverage practice areas.
• Awarded the designation of “2013 Top Rated Lawyer in Labor & Employment” by American Lawyer Media and Martindale Hubbell, leading providers of news and rating information to the legal industry.
• Awarded the designation of 2012-2013 “Southern California’s Top Rated Lawyers” by American Lawyer Media and Martindale Hubbell, leading providers of news and rating information to the legal industry.
• Awarded the designation of 2012-2013 “Top Rated Lawyer in Commercial Litigation” by American Lawyer Media and Martindale Hubbell, leading providers of news and rating information to the legal industry.
• Rated “AV Preeminent” by his peers, an achievement of Martindale Hubbell’s highest rating in legal ability and ethical standards.
• Featured in the Corporate Counsel magazine and The National Law Journal, both of which feature the Top Rated Lawyers in Insurance Law.
• Awarded AVVO’s highest rating of “Superb,” (receiving a score of “10” out of “10”) which also highlights an attorney’s competence, ethical conduct, professional ability, diligence and overall performance.
• Awarded the designation of “Super Lawyer” for Insurance Coverage in 2012 and 2013 by Southern California’s Super Lawyers magazine, as well as the Los Angeles and Orange Coast Magazines.
Robert J. McKennon recognized as one of Orange County’s “Top Attorneys”
McKennon Law Group PC’s founding partner, Robert J. McKennon, has been recognized as one of Orange County, California’s “Top Attorneys.” Mr. McKennon appeared in the Orange County Register’s July 29, 2013 issue of the OC Metro Register, which publishes an annual list of the top lawyers in the Orange County region based on data compiled by the AVVO rating service, one of the industry’s most respected ratings company. Mr. McKennon was recognized as a top attorney in the area of “Insurance.”
FAQs: Should You Hire an Attorney to Help You With Your ERISA Appeal?
The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog that deal with frequently asked questions in the insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance and ERISA areas of the law. This article in that series focuses on appealing a denial of your long term disability insurance claim for long term disability insurance benefits under ERISA.
The short answer is “Absolutely.”
If your claim for benefits under an ERISA plan is denied, you cannot immediately file a lawsuit to collect your benefits. Instead, you are required to file at least one appeal with the very same company that denied your claim in the first place. While the insurance company is perfectly happy to allow you to conduct the appeal without the help of an attorney, by doing so, you might be handicapping your chances of winning a lawsuit if/when the company denies your appeal.
When you appeal the denial of your claim for benefits, the insurance company NEVER TELLS YOU that you will not be allowed to use new evidence to support your claim in your lawsuit. In most cases, you will instead be limited to the documents in the insurance company’s file, called the Administrative Record. Thus, the worst thing you can do is simply tell the insurance company that you disagree with their decision and would like to appeal. But if you hire an attorney who has strong experience handling ERISA matters, including litigating them, that attorney can help ensure that your file contains all of the documents and information that you will need in your lawsuit and help to ensure that you timely file your appeal (if your appeal is not filed at all or if it is not timely, you may lose your right to sue for the benefits). An attorney can also help identify problems with the insurance company’s initial review, and make sure those problems are noted in the record for use in the litigation. In addition, when confronted with the arguments of experienced ERISA attorneys such as McKennon Law Group PC, the insurance company or plan administrator will often reverse itself and approve the claim for benefits.
Accordingly, when appealing a claim decision under a short-term disability insurance, long-term disability insurance, life insurance or annuity plans governed by ERISA, the best thing you can do to increase your chances on appeal is to hire an experienced ERISA attorney to help you through the process.
Ten Things to Know Before You File a Claim for Long-Term Disability Insurance Benefits
1. Make Sure You Have a Complete Copy of Your Plan/Policy – The first step when making a claim for long-term disability insurance benefits is to secure a copy of your policy. If your employer provided your insurance coverage, request a full and complete copy of your policy from Human Resources. Make sure you get a complete copy of the plan/policy, not just the Summary Plan Description. If you purchased your policy directly from the insurance company, or through an insurance agent/broker, you probably already have a copy of your policy with the application attached. If you cannot locate it, contact the agent/broker and/or the insurance company to request a copy of the policy.
2. Be Aware of all Deadlines – Many insurance policies contain deadlines requiring you to submit your claim within a certain period of time. It is important to be aware of these dates so you do not inadvertently waive your rights to benefits. In fact, you should try to make your claim as soon you realize that your disability prevents you from working to make sure that you do not accidentally miss a deadline.
3. Become Familiar with Your Policy’s Definitions/Provisions – Every disability insurance policy/plan is different. Be sure to read your policy/plan so that you are familiar with its terms. This will help you figure out what information you will need to provide to the insurer to support your claim for disability insurance benefits. The policy/plan will also include the definition of “Disability” or “Total Disability” that the insurance company will use to evaluate your claim. You will want to review policy/plan provisions so that you know some of the following:
- What are your total policy/plan benefits and how are they calculated?
- What is the elimination period?
- What are limitations on policy/plan benefits?
- Are there offsets to your policy/plan benefits and if so, what are they?
- What are the exclusions to coverage?
4. Request and Complete All Claim Documents – After you identify to whom you must submit your claim, you need to request and complete all of the claim documents/forms. This typically includes forms to be completed by you, your employer, and your medical health professional(s). It is very important that you promptly complete all of the documents and make sure they are submitted to the insurer. If you fail to complete all the required documents, the insurance company will likely deny your claim citing “lack of information,” regardless of the strength of your disability claim.
5. Gather Your Medical Records and Make Sure Your Medical Health Professional(s) Support Your Disability – When you decide to make a claim for disability insurance benefits, the most important documents you will submit to the insurance company are your medical records and the opinions of your medical health professional(s). The insurer will evaluate your records to determine whether it believes you are capable of performing your job duties in spite of your medical condition, diagnosis and restrictions and limitations. It is therefore important not only to make sure that you send the insurance company all of your medical records that support your claim, but also that your medical health professional(s) agrees that your condition prevents you from returning to work. If your medical health professional(s) thinks you can work is some manner, then the insurance company is very likely to follow their opinion and deny your claim. Make sure your medical health professional(s) understand your material and substantial occupational duties so they can correctly evaluate whether you can work and for how long.
6. Make Sure You Provide a Clear Explanation as to How Your Disability Prevents You From Returning to Work – Your claim for long-term disability insurance benefits depends on your being able to demonstrate that your medical condition, and associated restrictions and limitations, prevent you from performing your job duties. It is therefore important that you are able to explain to the insurance company why you can no longer work. For example, if you suffer from migraine headaches, you should explain that the headaches make it difficult for you to concentrate. Or if you have a back condition that prevents you from sitting for an extended period of time or lifting things, you must make that clear to both your doctors and the insurance company. You must give the insurance company a reason to approve your claim for benefits, and simply saying “I cannot work,” is not enough. You must be able to specifically explain why you are unable work.
7. Determine Whether You Want to, or are Required to, File For Social Security Disability Benefits, State Disability Benefits and/or Workers’ Compensation Benefits – Some policies require that you apply for Social Security Disability benefits, State Disability benefits and/or Workers’ Compensation benefits, if applicable, because they can take offsets for such benefits. You can be penalized with a reduced benefit payment if you do not comply with these provisions, so make sure to apply for these benefits if required.
8. Determine if You Have Short-Term Disability Coverage – All disability insurance policies have an “Elimination Period,” which is the time period between an injury and the receipt of benefits. In other words, it is the length of time between the beginning of an injury or illness and receiving benefit payments from an insurer. It is sometimes referred to as a “waiting” or “qualifying” period. Elimination Periods can be as long as 180 days, but if you have short-term disability insurance you should be able to receive benefits during the Elimination Period.
9. Know What Law Applies to Your Disability Claim – Which law applies to your disability claim depends on how you obtained your policy. If your employer provided your insurance coverage, it is more likely than not that your claim will be governed by a Federal law called ERISA, which stands for the Employee Retirement Income Security Act of 1974. If you purchased your policy directly from the insurance company, your claim will likely be governed by State law. If your claim is denied, your damages and potential remedies will likely be larger under state law, because you can sue the insurance company for past due and future benefits, as well as for bad faith (also known as a breach of implied covenant of good faith and fair dealing). The remedies available under ERISA are limited to past due benefits, and possibly attorneys’ fees if you prevail in your lawsuit.
Additionally, if your claim is governed by ERISA, then the plan’s language and definitions will control. However, if your claim is not governed by ERISA, but is governed by California’s or some other state’s laws, you should know this. If state law governs, you may be able to disregard the definition of total disability in your policy and use the applicable state law definition. This is especially true in California where the law is very friendly to consumers. Very often, we see insurance companies incorrectly use the definition of total disability, which can be outcome determinative to your claim. If you are not sure if your claim is governed by ERISA or state law or if you are not sure what legal definition of total disability applies to your claim, you should contact an experienced attorney.
10. Be Careful What You Post on Social Media Sites – Insurance companies have begun to check their claimant’s social media posts to see if they are acting in a way that is inconsistent with their claimed restrictions and limitations. While everyone likes to put their best foot forward on social media, if your Facebook or Twitter posts (writings or photos) conflict with your claimed restrictions and limitations, the insurance company may use your own words or photos as a basis to deny your claim. If you feel you must regularly update your Facebook or Twitter accounts, set them to private, do not accept friend/follower requests from anyone you do not know and be very careful about what you post.
Insurers Forfeit Their Protections Under Civil Code Section 2860 (Cumis Statute) When They Fail to Meet Their Duty to Defend Obligations
If you want to read an important case on Cumis counsel and the consequences to insurers who fail to fulfill their obligations relating thereto, we have one for you. J.R. Marketing LLC v. The Hartford Cas. Insurance Co., __ Cal.App.4th __ (May 17, 2013). This case has a lot to offer: Cumis counsel, attorneys’ fees, Buss allocations, duty to defend, and insurance bad faith issues. In this case, the California Court of Appeal for the First District handed down a very important decision that is highly beneficial to insureds and their independent counsel (i.e., Cumis counsel). Significantly, the court expanded upon the limitations on the ability of insurers to impose upon their insureds’ choice of defense counsel when they do not properly defend their insureds, most likely committing insurance bad faith. Specifically, the Court found that insurers who wrongfully refuse to defend their insureds are barred from maintaining suits against their insureds’ independent counsel for reimbursement of fees and costs charged by such counsel and are barred from relying on the protections afforded insurers under Civil Code section 2860.
J. R. Marketing involved an insurer who issued two commercial general liability policies to two insureds under which the insurer promised to defend and indemnify the named insured for certain business-related damages alleged against them. When several claims were brought against the insureds in California, also in non-California Courts, the insureds and several non-insureds, tendered the defense of the lawsuit to the insurer also requesting that it indemnify them under the two policies. The insurer initially denied its duty to defend under the policies, but after the insureds filed a lawsuit against their insurer, the insurer agreed to defend under a reservation of rights, but declined to pay for attorneys’ fees prior to its agreement to defend and refused to provide and pay for independent counsel pursuant to San Diego Fed. Credit Union v. Cumis Ins. Society Inc. 162 Cal.App.3d 358 (1984). However, the insurer then filed a cross-complaint seeking reimbursement of the fees and costs it had paid to Cumis counsel contending that they were unreasonable or unnecessary. The trial court later granted a motion for summary adjudication and ordered the insurer to pay all outstanding fee invoices sent by Cumis counsel within fifteen days. The insureds and non-insureds submitted bills for a whopping $15 million (you read that correctly!). The insurer paid them.
In reviewing the trial court’s order sustaining the insured’s demurrer to the insurer’s cross-complaint for reimbursement and other causes of action, the Court of Appeal focused on the issue of whether the insurer had a “quasi-contractual right rooted in common law to maintain a direct suit against” the insured’s Cumis counsel. First, the Court stated that although Civil Code section 2860 provides an insurer with certain protections, such as setting a limit of the rate of fees an insurer is obligated to pay to Cumis counsel, an insurer forfeits such protection when it fails to meet its duty to defend. As such, the Court held, because the insurer in J.R. Marketing failed to defend and accept tender of defense of the insureds, it forfeited “its right to rely on the statutory protection of section 2860 and to otherwise control the defense.”
Next, the Court addressed the key issue in this case; whether the insurer has also forfeited its right to seek reimbursement from the insured’s Cumis counsel by failing to meet its duty to defend. The Court of Appeals concluded that the insurer had. Initially, the Court acknowledged that under Buss v. Superior Court, 16 Cal.435 (1997), the insurer may well have a right to reimbursement for unreasonable or unnecessary fees. But, crucially, the Court found that the insurer cannot seek reimbursement from an insured’s Cumis counsel. The Court based its conclusion on an examination of the policies behind the enactment of Civil Code section 2860. The Court found that under California law, by refusing to defend, the insurer lost all right to control the defense, including the right to manage the financial decisions “such as the rate paid to independent counselor or the cost effectiveness of any defense tactic. Finally, because established California law deprived the insurer of the right to manage the defense, the Court explained that it:
[N]ow takes the law one slight step further by holding [the insurer] likewise barred from later maintaining a direct suit against independent counsel for reimbursement of fees and costs charged by such counsel for crafting and mounting the insureds’ defense where [the insurer] considers those fees unreasonable or unnecessary.
Although the Court clarified that the holding is limited to the facts of the case and that an insurer may still be able to claim that independent counsel engaged in fraudulent billing practices, the “slight step further” taken by the Court actually substantially limits the power wielded by insurers who breach their duty to defend insured. More importantly, the case enhances the ability of independent counsel retained by insureds to vigorously prosecute their clients’ cases without fear of a possible action for reimbursement by insurers. This case sends a strong message: insurers who reserve their rights and refuse to fund the defense of Cumis counsel take a big chance that they will be stuck paying those fees without any real ability to challenge them.
