Articles Posted in Insurance Law

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Several Iowa chiropractors brought this class-action lawsuit against Wellmark, Inc., Iowa’s largest health insurer, alleging that it conspired with competitors to fix prices, allocate markets, and engage in other anticompetitive conduct in violation of the Iowa Competition Law. The district court stayed the case pending further proceedings in federal multidistrict litigation (MDL) in Alabama brought under federal antitrust laws. The Supreme Court vacated the order staying this action, holding that the district court abused its discretion in staying the Iowa litigation pending further proceedings in the Alabama MDL because (1) resolution of the Alabama MDL could take years, and (2) there are considerable differences in the issues the two cases present. Remanded. View "Chicoine v. Wellmark, Inc." on Justia Law

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In 1986, the Iowa legislature enacted House File 2219 to provide for payment by healthcare service corporations for services performed by chiropractors. Following the Supreme Court’s decision in Mueller v. Wellmark, several Iowa-licensed chiropractors (collectively, Appellants) brought this action alleging that Wellmark, Inc. wrongfully imposes restrictions and pays lower rates for chiropractic services than for equivalent services offered by medical and osteopathic doctors in violation of Iowa Code 514F.2. The Insurance Commissioner concluded that section 514F.2 does not require health insurers to compensate the chiropractors equally with medical and osteopathic doctors in network. The district court affirmed the Commissioner’s decision. The Supreme Court affirmed, holding (1) the interpretation of section 514F.2 has not been clearly vested by a provision of law in the discretion of the Commissioner; (2) the statute regulates payments to providers; (3) Wellmark’s fees for chiropractic care are not based solely on licensure; and (4) ERISA preempts the application of section 514F.2 to self-funded health plans. View "Abbas v. Iowa Insurance Division" on Justia Law

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Insured filed a complaint challenging Insurer’s termination of workers’ compensation issuance. The insurance commissioner declined to consider the merits of the complaint on the ground that the complaint raised factual issues that could not be resolved by the agency. Insurer filed a petition for judicial review seeking a declaration that the insurance commissioner should have exercised jurisdiction over the dispute. The district court granted the commissioner’s motion to dismiss, concluding that Insurer lacked standing to litigate the issues. The Supreme Court dismissed Insurer’s appeal, holding that, under the circumstances presented and applying established caselaw, the appeal was moot. View "Auto-Owners Insurance Co. v. Iowa Insurance Division" on Justia Law

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Developers and a general contractor of an apartment complex purchased a primary commercial general liability (CGL) insurance policy from Arch Insurance Group and an excess CGL insurance policy from National Surety Corporation (NSC). Westlake Investments, LLC, which purchased the complex, sued the insureds for construction defects. Arch defended the suit on behalf of the insureds, and the parties eventually settled. Pursuant to the settlement agreement, the insureds assigned their claims against NSC on the excess CGL policy to Westlake. Thereafter, NSC initiated this declaratory judgment action seeking a declaration that it had no obligation to pay any portion of the judgment awarded to Westlake. Westlake counterclaimed for breach of contract. The district court granted partial summary judgment in favor of Westlake, concluding that property damage resulting from defective work performed by an insured’s subcontractor may constitute an accident that qualifies as an occurrence covered by the Arch policy, and therefore, the NSC policy. After a trial, the jury returned a verdict in favor of Westlake. The Supreme Court affirmed in part and reversed in part, holding that defective workmanship by an insured’s subcontractor may constitute an occurrence under the terms of the Arch policy incorporated by reference into the NSC policy. View "Nat’l Surety Corp. v. Westlake Invs., LLC" on Justia Law

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An SUV was being driven in the wrong direction on a highway when it collided with a semi-tractor-trailer. The SUV was totaled, and the SUV’s driver was killed. Second later, a motorcyclist ran into the SUV that was still in the middle of the highway. The drivers of both the semi and the motorcycle suffered injuries. The drivers jointly filed a petition for declaratory judgment against the insurer of the SUV asking the district court to declare that there had been two accidents for purposes of the insurance policy’s per-accident limit on bodily injury liability. The district court granted summary judgment for the insurer, concluding that the injuries suffered by the plaintiffs arose from one accident. The Supreme Court affirmed, holding that, under the terms of the SUV driver’s insurance policy, there was only one accident. View "Hughes v. Farmers Auto. Ins. Ass’n" on Justia Law

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An SUV was being driven in the wrong direction on a highway when it collided with a semi-tractor-trailer. The SUV was totaled, and the SUV’s driver was killed. Second later, a motorcyclist ran into the SUV that was still in the middle of the highway. The drivers of both the semi and the motorcycle suffered injuries. The drivers jointly filed a petition for declaratory judgment against the insurer of the SUV asking the district court to declare that there had been two accidents for purposes of the insurance policy’s per-accident limit on bodily injury liability. The district court granted summary judgment for the insurer, concluding that the injuries suffered by the plaintiffs arose from one accident. The Supreme Court affirmed, holding that, under the terms of the SUV driver’s insurance policy, there was only one accident. View "Hughes v. Farmers Auto. Ins. Ass’n" on Justia Law

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The Iowa Individual Health Benefit Reinsurance Association (“IIHBRA”), a nonprofit corporation, sued its members (“the universities”) for unpaid assessments it was statutorily obligated to collect. The universities filed a motion to dismiss the petition, arguing that the IIHBRA lacks the capacity to sue based on the 2001 amendment to Iowa Code chapter 513C. Chapter 513C initially included a provision stating that IIHBRA had the power to “sue or be sued,” but the 2001 amendment deleted that provision. Alternatively, the universities argued that the district court lacked subject matter jurisdiction because the IIHBRA is required to arbitrate under Iowa Code 679A.19. The district court granted the motion to dismiss. The Supreme Court reversed, holding (1) the 2001 amendment to chapter 513C left intact the IIHBRA’s capacity to sue under Iowa Code chapter 504A; (2) the IIHBRA is not subject to mandatory arbitration under Iowa Code 679A.19; and (3) therefore, the IIHBRA has the capacity to sue its members in district court for unpaid assessments. View "Iowa Individual Health Benefit Reinsurance Ass’n v. Stat Univ. of Iowa" on Justia Law

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Amish Connection Inc. purchased a business insurance policy from State Farm Fire and Casualty Company that only insured damage “caused by rain” if an insured event first ruptured the roof or exterior walls to allow the rain to enter. The policy covered a store Amish Connection operated in a leased space in a shopping mall. The store was damaged when an interior drainpipe failed, allowing rain from the evening’s rainstorm to flood the store. Amish Connection submitted a claim under its policy. State Farm declined the claim based on the rain limitation of the property. Amish Connection filed suit against State Farm for breach of its insurance contract. The district court granted summary judgment for State Farm based on the rain limitation. The court of appeals reversed, concluding that to the extent the limitation of coverage for damage “caused by rain” was ambiguous, it must be construed against State Farm. The Supreme Court vacated the judgment of the court of appeals and affirmed the judgment of the district court, holding that under the unambiguous terms of State Farm’s policy, damage from rainwater released by a breaking drainpipe during a rainstorm is not an insured loss because the damage was caused by rain within the meaning of the rain limitation. View "Amish Connection, Inc. v. State Farm Fire & Cas. Co." on Justia Law

Posted in: Insurance Law

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Wellmark, Inc., an Iowa-based health insurer that belongs to the national Blue Cross and Blue Shield (BCBS) network, contracted with health care providers in Iowa to provide services at certain reimbursement rates. Wellmark agreed to make those rates available both to self-insured Iowa plans that it administers and to out-of-state BCBS affiliates when those entities provide coverage for services provided in Iowa. Plaintiffs, a number of Iowa chiropractors, sued Wellmark, claiming that Wellmark had abused monopoly power in violation of the Iowa Competition Law. The Supreme Court affirmed the district court’s dismissal of some of the chiropractors’ antitrust claims and remanded on Plaintiffs’ remaining claims. On remand, Plaintiffs stipulated that their remaining antitrust claims regarding the agreements between Wellmark and both the self-insuring employers and the out-of-state BCBS affiliates were being asserted on a per se theory. The district court rejected Plaintiffs’ per se theories and entered summary judgment for Wellmark. The Supreme Court affirmed, holding that Wellmark’s arrangements with the self-insured employers and out-of-state BCBS licensees did not amount to per se violations of Iowa antitrust law. View "Mueller v. Wellmark, Inc." on Justia Law

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The Workers’ Compensation Commission found Employee to be totally and permanently disabled under the odd-lot doctrine and denied Employer and its Insurer (collectively, Employer) certain credits for disability payments previously received by Employee from other sources. The district court affirmed the Commission’s finding that Employee was totally and permanently disabled but reversed on the credit issue. The court of appeals reversed, holding (1) substantial evidence did not support the Commission’s award of permanent total benefits, and (2) the Commission was correct in its decision concerning the credits. On further review, the Supreme Court (1) affirmed the district court’s finding that substantial evidence supported the Commission’s findings that Employee was totally and permanently disabled under the odd-lot doctrine; and (2) reversed the district court’s judgment regarding the issues concerning the credit due Employer. View "Gits Mfg. Co. v. Frank" on Justia Law