Insurance Industry

Experience

Successful Representation of Insurance Company in Massive Flooding Claims

Client: Insurance Company

We represented an insurance company in connection with massive flooding claims following a significant rain event.  After working to resolve the underlying claims, we successfully litigated another insurer’s attempt to force our client to pay 100 percent of the costs relating to the loss, which ultimately involved a favorable appellate decision. 

Successfully Represented Insurance Company in Policy Dispute

Client: Insurance Company

We represented our client, an insurance company, in a dispute over the application of a $5 million commercial umbrella policy following a fatal car accident. The case involved the owner of a car dealership, whose son was driving a dealership car that struck and killed a motorcyclist and the motorcyclist’s estate. The estate and the owner of the dealership contended that the dealership’s commercial umbrella insurance policy covered the owner’s son because he was driving a car owned by the dealership, even though the son was not working for the dealership.  After significant discovery disputes and motions practice, we sought a writ of prohibition from the West Virginia Supreme Court of Appeals based, in part, upon what was eventually found to be “outrageous conduct” by the owner of the dealership during the course of discovery. Ultimately, the West Virginia Supreme Court agreed with our position that the commercial umbrella insurance policy did not apply, and all claims against our client were dismissed. 

Suit Against Insurer Dismissed on Favorable Terms

We represented a liability insurer in complex, multi-party coverage litigation relating to a theft by a security guard. The guard stole equipment from a manufacturing facility where he was assigned to work. To recover the theft loss the manufacturer sued its own insurer, seeking coverage for property damage. The property insurer then brought a third party complaint against the security company under a theory of negligent hiring of the employee-guard. The security company then sued our client seeking coverage and a defense in the suit. We defended our client in its position that its policy, with its limited theft endorsement and in the absence of a fidelity bond, did not provide coverage or a defense for employee theft, regardless of the negligent hiring theory. After refusing to order a defense, and denying all dispositive motions, the court granted our motion to bifurcate and delay the claims against our insurer-client, indicating a potential for denying all coverage. Achieving this position of leverage allowed us to obtain an agreed dismissal of our client on confidential, favorable terms.

Multi-party subrogation dispute as to liability for large fire losses

At the request of a large insurer, we defended an insured, commercial policyholder-tenant against subrogation claims from a landlord’s insurer who claimed our policyholder shared liability for a vehicle fire on the landlord’s premises. The fire resulted in hundreds of thousands of dollars in fire/smoke damage to the leased premises. There were actually two defendants, the second being the mechanic that our client, the policyholder-tenant, had hired to address electrical issues in the vehicle. Those electrical issues caused the fire, though the co-defendant tried to deny any fault. Accordingly, at the start of the case, we hired a fire causation expert who pinpointed the cause as faulty electrical repairs by the co-defendant. When the co-defendant still denied liability, we hired an auto mechanic expert to address the repairs that were made and the additional steps that should have been taken to prevent the fire. I then took the deposition of the co-defendant’s mechanic, using our expert input to discredit the position of the co-defendant. I also analyzed the level of damages claimed by plaintiff with the help of an adjuster-expert. Our efforts and analysis led to a favorable settlement at mediation in which we were able to effectively exonerate our client and avoid any substantial liability.

Sexual Assault Coverage Opinions and Defense Analysis

We assisted a large insurer in evaluating coverage issues, and then related liability and damages issues, pertinent to sexual assault claims against a commercial entity in multiple cases. One case related to a developmentally disabled victim. Another related to a physically handicapped victim. Our work allowed us to provide settlement recommendations in light of our detailed coverage opinions, apportionment of liability amid intentional acts and potentially non-delegable duties, and then compilation of relevant jury verdicts.

Represent Client in Breach of Insurance Contract Matter

The firm represents a national insurance company in this case. In it, the plaintiff contends the insurer has breached the insurance contract and violated the Kentucky Motor Vehicle Reparations Act (KMVRA) by seeking an examination under oath (EUO) and delaying a decision on their no-fault claim and before paying certain claims under their Personal Injury Protection coverage of their auto policy until an EUO is taken.

The plaintiff contends that even if an EUO is authorized by a court, the insurer must still pay the PIP claim within 30 days, and if they do not, then they are obligated to pay the claim as well as statutory penalties of 18 percent prejudgment interest and attorneys fees.

Represented Client Against Allegations of Mismanaged Self-Insured Funds

In order to provide reasonable cost insurance to local Kentucky school boards, the Kentucky School Board Association (KSBA) created the Kentucky School Board Insurance Trust (KSBIT) and in particular two self-insured funds – one for workers compensation and one for property and liability claims. KSBA directly managed the funds for many years, and in later years utilized an outside entity third party administrator to handle claims. Financial examinations conducted by the Kentucky Department of Insurance from 2005 forward revealed the funds were consistently in a deficit position. Despite calls from DOI examiners, DOI did not order any assessments, and KSBA did not seek any from its members. The Kentucky League of Cities assumed management responsibilities in 2010. Despite new efficiencies and cost savings, the funds continued to be in a deficit position and KLC called for an assessment of members in 2012. Ultimately, the funds went into rehabilitation in 2013, and large assessments totaling approximately $50 million were ordered by the Franklin Circuit Court. The firm represented the Kentucky League of Cities in litigation challenging its management of the two self-insured funds, and in particular the rates charged to members and its change of TPA. The claims against the Kentucky League of Cities were settled in late 2015. The rehabilitator’ claims against KSBA and the KSBIT Board remain pending.

Represent Insurance Company in Bad Faith & Breach of Contract After Personal Injury Claim

The firm represented a national insurance company against a personal injury plaintiff who pursued his own third party bad faith claim against the company as well as first party breach of contract and bad faith claims assigned to him by the insured. The case arose from a tragic car accident. A mine employee who left work allegedly fell asleep after working a double shift, crossed the center line and collided with the accident victim. The mine employee died in the accident, and the plaintiff victim suffered other catastrophic injuries allegedly rendering him unable to work again. He filed suit and subsequently added the mine that employed the tortfeasor as a defendant. He claimed his injuries arose from their negligent supervision of the tortfeasor. The insurer for the mine denied the claim and did not provide a defense, relying upon a total auto exclusion in their CGL policy. Ultimately, the insured assigned its rights against the insurer to the plaintiff and filed suit directly against the insurer. The case ended in a voluntary settlement.

Represent Client in First Party Bad Faith Claim from Auto Accident

The firm represented a national insurance company in a first party bad faith claim arising from an auto accident. In evaluating his underinsured motorist (UIM) claim, the insurer rejected a spinal outpatient surgery he had done claiming it was controversial and not recommended by the mainstream medical community. A jury ultimately entered a verdict exceeding his UIM limits. The insured claimed the insurer had acted in bad faith in its handling and evaluation of the claim, utilizing protocols intended to maximize company profits at the expense of the insureds and claimants. The claim was settled prior to trial.

Represent Insurer in Third Party Bad Faith Claim

The firm represented the insurer of a foundation repair company that was hired to repair the foundation of Plaintiffs’ home. The home was built on an Eastern Kentucky mountaintop, which had previously been the site of a surface mine. The deed to the property declined any warranty for the condition of the soils on the property. Subsidence began to cause cracking inside and outside the home. The Plaintiff ultimately sued the insured repair company and the insurer denied the claim based on the “subsidence” and “contract” exclusions in the policy. The court ultimately concluded there was coverage under the policy. Thereafter, the insurer defended the claim against the insured and that claim was subsequently settled. The plaintiffs thereafter filed a third party bad faith claim against the insurer. The insurer defended the claim on several grounds, including that the insured’s liability for causing the damage to the home was not “reasonably clear” or “beyond dispute” and as such no bad faith claim could lie against them. The case was settled prior to trial.

Represent Client in First Party Bad Faith Claim from Auto Accident Involving Mine Worker

The firm represented a national insurance company in a first party bad faith claim by its insured. The case arose from a car accident. A mine employee, who left work, allegedly fell asleep and collided with another vehicle. The occupants of the second vehicle claimed significant injuries. These accident victims filed suit and subsequently added the mine that employed the tortfeasor as a defendant. They claimed their injuries arose from the mine’s negligent supervision of the tortfeasor. The insurer for the mine initially defended the claim but later denied the claim and withdrew a defense, relying upon a total auto exclusion in their CGL policy. After the defense was withdrawn, the mining company failed to assume their own defense and, after failing to answer requests for admission, a judgment totaling $40 million was ultimately entered against it. The insured sued the insurer, claiming there was coverage under the policy, and/or that it waived its right to deny coverage by initially defending without a written reservation of rights. It also claimed the denial was in bad faith. The state trial court ultimately ruled there was coverage under the policy, and thus the insurer was responsible to pay the $40 million judgment entered against the insured. The trial of the bad faith claim was scheduled for a later date. The court’s coverage decision was appealed, and during the appeal a global settlement was reached on all claims.

Represent Medical Malpractice Insurer in Mass Tort Matter

The firm represented a medical malpractice insurer in seeking a declaratory judgment that the relevant policies covering certain individual cardiac physicians did not cover intentional acts and that any verdict amount assigned to any of the intentional torts alleged in the complaint were outside the coverage of the policy.

Represent Medical Malpractice Insurer in Bad Faith Claim

In this case, the plaintiff’s estate claimed the medical malpractice carrier had acted in bad faith in handling and settling an underlying malpractice claim against the insured doctor. The plaintiff claimed that doctor ran a “pill mill” and improperly prescribed several narcotic medicines to the decedent who eventually overdosed. During this same time period the defendant doctor was cited by the state medical licensing board and thereafter restricted from prescribing medicines. The defendant doctor defended by claiming that he provided the decedent proper warning and that if taken as prescribed no overdose would have occurred. He retained two experts who were prepared to testify that the doctor complied with the standard of care and/or that his conduct did not cause the overdose. The case ultimately settled for less than the policy limits a little more than a year after it was commenced. The bad faith case followed, with the decedent’s estate claiming that the insurer had acted in bad faith by unduly delaying a claim where liability was reasonably clear and making offers less that the true claim value. After initial written discovery was exchanged, the insurer moved for summary judgment on the bad faith claim on several grounds, including that the doctor had not consented to settlement until the day of settlement and because the doctor’s liability for causing the overdose was not beyond dispute and absent such clear liability, an insurer was entitled to make no offer and proceed to trial without exposing itself to bad faith liability. The court ultimately concluded no additional discovery was needed to address these issues and entered summary judgment. The plaintiff filed a motion to vacate the order under Rule 59 and this, too, was denied. The case is currently pending before the Kentucky Court of Appeals.

Received Summary Judgment in Case Involving Allegations of Age Discrimination

We represented our client, Humana, in a matter involving a former employee, who alleged our client violated the Age Discrimination in Employment Act and Ohio’s nondiscrimination statute under theories of discrimination, retaliation, and disparate impact. We won summary judgment on all of the plaintiff’s claims. After thoroughly reviewing the company’s reduction-in-force procedures which resulted in the plaintiff’s termination, Judge Beckwith agreed the plaintiff could not “establish a prima facie case of age discrimination relative to his termination in the reduction-in-force because he has not provided additional direct, circumstantial, or statistical evidence tending to indicate that he was discharged because of his age.” (Gilster v. Humana Marketpoint, Inc., S.D. Ohio, Case No. 1:14 CV 961, 1/19/16).

Received Summary Judgment in Favor of Insurance Company

Client: An Insurance Provider

We represented our client, an insurance provider, who was named in a lawsuit following a boating accident. Several young adults were using the boat during the accident, which resulted in several serious injuries. One of those injured sued several insurance companies seeking a declaration as to the scope and amount of all coverages provided by the named insurers, a declaration as to the scope and amount of any underinsured motorist coverage, and other coverage possibly available. Specifically, the plaintiff sought a declaration concerning the scope and amount of coverage provided under certain homeowners and automobile insurance policies issued by our client. We ultimately received complete summary judgment in favor of our client as the court determined there was no coverage under either policy.

Successful representation of insurance company

After an explosion at a fertilizer plant in Louisiana, Thomas Drennan represented our client, an insurance company, in a case to determine whether the plant owner qualified as an additional insured, and to determine the extent of the contractual liability owed to the plant owner by the named insured. Mr. Drennan thoroughly reviewed the underlying contract and the insurance policy, and identified the most effective arguments in support of the client’s position. As a result, following a two-week trial, he successfully managed to cap our client’s liability at an amount far less than the potential exposure. He also convinced the appellate court and the Louisiana Supreme Court to affirm the result.

Successful representation of insurance company in advertising dispute

Thomas Drennan represented an insurance company when its insured faced a claim advanced by two men who claimed the company, a fast food chain, had taken their idea for an advertising mascot. The plaintiffs alleged they had presented the idea to the chain, and the chain used the idea without compensating the plaintiffs. The chain then sought coverage from our client, the insurance company, under the advertising injury portion of the liability insurance policy. Mr. Drennan moved for summary judgment on a number of grounds, and convinced an Illinois state court to grant summary judgment in favor of the client, resulting in no liability under the policy.

Verdict in favor of global client leads to continued representation

Our client, a global insurance company, provided re-insurance coverage to a group of insurance carriers. We were retained to provide both written and live expert testimony and opinions about the meaning and interpretation of various insurance policies and contracts during a coverage arbitration in London, England. In addition to the legal research that was required, we attended an extensive training to be a witness in the foreign hearing due to the differences in procedures in the United Kingdom. The case was resolved successfully for our client and we still get cases today because of it.

Manufacturer of Asbestos Products v. Insurance Company

Served on our trial team as counsel to insurer in multi-million dollar dispute over coverage for asbestos bodily injury. The dispute involved issues of policy limits for product liability versus non-product liability. After years of discovery, briefing, and a trial of issues relating to the types of asbestos exposure experienced by underlying plaintiffs, we succeeded in obtaining an arbitration ruling in our client's favor on the issue exhaustion of policy limits.

Successful Defense and Appeal of Declaratory Judgment Action for an Insurer in a Liquor Liability Case

We represented a large commercial insurer in a liquor liability case where the plaintiff sought the policy limits of $5 million in damages. Our client insured an establishment that served alcohol to a patron, who struck a pedestrian with her car after leaving the establishment. The pedestrian sued the driver, the insured establishment, the nightclub, and our client, seeking in part a declaratory judgment that our client was obligated under an umbrella policy to pay for the insured establishment’s liability. We represented the insurer through the entire case, from pleadings through successful appeal. We won summary judgment at the trial court, and the West Virginia Supreme Court of Appeals affirmed on appeal that the loss was subject to an exclusion under the policy and, thus, was not covered under the insurance policy. The ruling resulted in zero liability for our client.

Defended insurance company against allegations of bad faith

On behalf of an insurer client, I successfully litigated and resolved an insurance coverage claim seeking $1.5 million in coverage and an additional $2.2 million in punitive damages for alleged bad faith. The claim involved storm damage that allegedly occurred on dozens of roofs at an insured homeowners association. I led the team which first reviewed and analyzed historical documentation and communications relating to the financial, maintenance, and governance issues at the association. I then worked with experts to understand the alleged damages and roof conditions. Armed with data about the association’s roofs and finances, I then deposed the homeowners’ association president, treasurer, and maintenance chairperson. I was able to gain admissions of reasonable handling by our client and admissions of past roofing and maintenance issues unrelated to storm damage. I used these admissions to file a detailed motion for summary judgment, which helped lead to a successful mediation and settlement in February 2014.

Successfully Defended a Large Regional Insurer From a Challenge to their Product and Rate

Client: Large regional insurer

We successfully defended a challenge by an insured to a new personal lines product and corresponding rate filed with the West Virginia Insurance Commissioner.  We defended the insurer before the proceeding, before the West Virginia Insurance Commissioner, on appeal to the Circuit Court and successfully briefed and argued the insurer's position before the Supreme Court of Appeal of West Virginia.  The product and rate filing had already been in use in West Virginia at the time the insured filed the rate, so a decision to invalidate the product or rate would have been significant.

Appellate Counsel in High Profile Litigation Involving Personal Guaranties on Failed Real Estate Construction Loans

As counsel to the Kentucky Commissioner of Insurance in his capacity as Liquidator of Kentucky Central Life Insurance Company (KCL), secured reversal of trial court's order denying the enforceability of over $100 million in personal guaranties owed to client, as well as reversal of $ 1 million in discovery sanctions imposed by the trial court against our client and its former law firm. Case was followed closely by press due to involvement of prominent real estate developers and serious implications for all creditors and shareholders of KCL.

Continued representing Liquidator of KCL upon remand in what became the largest continuous lawsuit of that $1 billion statutory insolvency. After several years of litigation, the case was resolved by confidential settlement.

Commissioner of Insurance, Janie A. Miller, in her capacity as Liquidator of Kentucky Central Life Ins. Co. v. Webb, Nos. 1998-CA-2487-MR, 2000-CA-0039-MR, 2000-CA-0212-MR, 2000-CA-2619-MR, 2000-CA-2638-MR, 2002 Ky. App. LEXIS 1462 (Ky. App. July 12, 2002).  Click HERE to view the decision.

Recovery of Substantial Funds in Commercial Transaction, Breach of Contract

As counsel to the Kentucky Commissioner of Insurance in his capacity as Liquidator of Kentucky Central Life Insurance Company (KCL), served as lead counsel to the Liquidator of KCL in extensive litigation against the Bank of Louisville involving a series of complex commercial transactions and claims for breach of contract through the course of summary judgment proceedings, settlement negotiations, and mediation. After years of opponent’s vigorous litigation to aggressively oppose our client’s claims, settlement of case to recover $27 million for our client.

Accidental Death Insurance Policy

Represented insurer in the Circuit Court in Mingo County, West Virginia in a case related to an insurer’s accidental death and disability insurance plan. Plaintiffs claimed that the policy regarding accidental deaths was not explained properly; however, the court stated that the language in the policy was clear and unambiguous. The court granted summary judgment for our client and dismissed the case with prejudice.

Allegations of Breach of Insurance Contract

We represented an insurance company in a suit for breach of insurance contract and bad faith arising out of insurance company’s decision not to pay benefits under an occupational accident insurance policy. The case was removed to federal court and summary judgment was granted in favor of the insurance company.

Allegations of Breach of Insurance Contract and Bad Faith

We represented an insurance company in a suit for breach of insurance contract and bad faith arising out of the client’s decision not to pay benefits under an automobile accident insurance policy. The case was removed to federal court and eventually settled at mediation.

Allegations of Breach of Insurance Contract and Bad Faith

We represented a company in a matter where the insurance company refused to defend or indemnify our client in a third-party law-suit arising out of our client’s business operations. We brought claims in federal court for breach of insurance contract and bad faith. The case was resolved prior to mediation for all possible damages awardable under the insurance contract, including attorneys’ fee, costs and interest.

Amicus Curiae Brief

Filed an amicus curiae brief in the Supreme Court of Appeals of West Virginia on behalf of an insurance trade association in support of prevailing party. Client argued that a circuit court had previously erred in granting partial summary judgment in a case related to deliberate intent coverage and a claim that policy language was ambiguous. The Court overruled the circuit court’s decision, resulting in a significant victory for the insurance industry.

Anonymous Department of Insurance v. Big Six Auditing Firm

We represented an insurance liquidator who alleged that the auditor defendant was negligent in auditing the financial statements for the insolvent insurance company and that the negligence caused damage to the company's estate.  This case involved complex concepts of insurance, accounting, and auditing. The discovery process included the depositions of over 25 witnesses, including 5 expert witnesses. On the first day of trial, the defendant settled for a multi-million dollar sum. During the case, Dinsmore & Shohl prevailed on nearly every motion. Significantly, the trial court allowed Dinsmore's litigation team to pursue damages against the defendant based upon a deepening of the insolvency theory.