by KPMLAW | Feb 20, 2019 | KPMBlog, News, Profiles, Uncategorized
Written by Gary Reinhardt, Esq. Editors Note: This article first appeared in the Winter 2019 Edition of SIU Today Rate evasion refers to when an individual materially misrepresents information on an insurance application. The applicant evades a higher premium, or obtains insurance she may not be eligible for, by submitting or omitting material information on the insurance application. Rate Evasion can lead to an insurer voiding the policy ab initio, or from inception. Many in the industry also refer to this as “rescission.” When an insurer voids/rescinds a policy, it does so on the basis of fraud in the inducement, essentially claiming that the insurer would never have contracted with the applicant had the applicant told the truth. The remedy is to put each party back to where they were prior to the contract. The insurer refunds the premium paid and treats the policy as if it never existed. Voiding/rescinding the policy differs from a claim denial. An insurer can void a policy, often resulting in non-coverage for a valid claim one that would ordinarily be covered by the terms and conditions of the policy. Voiding also allows the insurer to escape liability from any prior non-disclosed claims and from any claim that might arise subsequently. Denying coverage impacts only the particular claim at issue. The policy remains in force and subject to providing coverage for any prior claims and any that may arise. This is important because carriers may intend to cancel a policy rather than voiding a policy. This keeps the carrier exposed while it completes the statutory cancellation procedures and timeframes. Rate evasion indicators, or “Red...
by KPMLAW | Feb 19, 2019 | KPMBlog, News, Profiles, Uncategorized
Written by Matthew Liller, Esq. Edited by Bill Pfund, Esq. Nearly all insurance policies require that an insured cooperate with their carrier during the investigation of a loss. Many policies also require the insured to submit to an Examination Under Oath (E.U.O.) should the carrier so elect. But what happens if the insured is under criminal investigation for the same circumstances as the loss? Can the carrier force the insured to testify at an E.U.O. during the pendency of a criminal proceeding despite the Fifth Amendment’s Constitutional protection against self-incrimination? The Supreme Court of the United States has made clear that the Fifth Amendment not only protects an individual against being involuntarily called as a witness against himself in a criminal prosecution, but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings. Lefkowitz v. Turkey, 414 U.S. 70, 77 (1973). Perhaps the most common circumstance under this rubric is a house fire. Soon thereafter, the insured reports a substantial loss for the structure and destroyed personal belongings. Subsequent investigation by authorities reveals suspicious circumstances, and criminal arson charges are then brought against the insured. The insurance carrier wishes to invoke its contractual right to require an E.U.O. The insured, of course, has an interest in not making any statements – particularly any under oath – about the circumstances related to ongoing criminal charges, as any and all statements could then be used against them in the criminal case. Under Virginia law, substantial compliance with a “cooperation clause”...
by KPMLAW | Feb 19, 2019 | KPMBlog, News, Profiles, Uncategorized
Written by Nick Marrone, Esq. Edited by Rachel Riordan, Esq. As an adjuster working on Virginia worker’s compensation claims, you are likely aware of the penalties that can accrue on compensation that is not timely paid. Under § 65.2-524 of the Virginia Workers’ Compensation Act (“the Act”), “[i]f any payment is not paid within two weeks after it becomes due, there shall be added to such unpaid compensation an amount equal to 20% percent thereof…” What does this mean? It is pretty straightforward: If a claimant is under an award for compensation benefits and the Insurer fails to issue payment within two weeks of those benefits being due the claimant would be entitled to 20% of the total amount of compensation not issued within two weeks of being due. However, the Insurer does have some defenses to a claim for penalties. Under that same section of the Act, the 20% penalty will not be due if “the Commission finds that any required payment has been made as promptly as practicable and… there is good cause outside the control of the employer for the delay…” What sort of situation would meet this exception? The Commission has held that compensation timely issued to the claimant’s attorney who failed to provide the payment to the claimant in a timely fashion met the exception. The Commission has also found that a payment issued to the claimant’s address of record which was never received and then promptly reissued once the Insurer had notice it was not delivered also met the exception despite the payment being reissued after the two week period. Often when a...
by KPMLAW | Feb 19, 2019 | KPMBlog, News, Profiles, Uncategorized
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by KPMLAW | Jan 26, 2019 | KPMBlog, News, Profiles, Uncategorized
By Brian A. Cafritz Removing a case to Federal Court is often one of the first important strategic moves a defendant can make in litigating a lawsuit. Knowing the inherent advantages that typically come with Federal Court, Plaintiffs will often plead the case in a way that precludes Federal Removal. Sometimes, the rush to Federal Court can backfire, and in the recent case of Scott Carmine v. Glen Poffenbarger, et al., Civil Action No. 1:18-cv-1288, Judge Anthony Trenga in Alexandria Division of the Eastern District of Virginia sanctioned the defendant for attempting to remove the lawsuit when such a move was not proper. Carmine was a medical products liability case where the Plaintiff alleged permanent and disabling injuries from a bone graft procedure. Plaintiff sued his doctor (Dr. Poffenbarger), 5 product manufacturers whose components were involved in the surgery (the Medtronic Defendants), and the Hospital and physicians group. Of the defendants, only the hospital and physicians group were Virginia citizens. On the day before the deposition of Plaintiff’s expert, the expert reconsidered, and he testified that Dr. Poffenbarger did not breach the applicable standard of care. Dr. Poffenbarger was scheduled to be deposed one week after the expert, but just days before that deposition, the Medtronic Defendants removed the case to Federal Court. The removal created extreme disruption to the state court’s scheduling and docket. Specifically, the removal caused Dr. Poffenbarger’s deposition to be canceled, the defendant’s expert designation to pass, and the trial date scheduled for the next month to be missed. The Medtronic Defendants contended that the collapse of Plaintiff’s experts would require the dismissal of Dr....
by KPMLAW | Jan 26, 2019 | KPMBlog, News, Profiles, Uncategorized
Written by Brian Clarry, Esq. Edited by Bill Pfund, Esq. “[C]ommon-sense is opposed to making one man pay for another man’s wrong.” ~Oliver Wendell Holmes, Jr., Agency, 5 Harv. L. Rev. 1, 14 (1891). Sadly, this is not the law in Virginia. If you own (or insure) a business that requires your employees to do some form of traveling, whether in a company vehicle or their own, it is important to be aware of your potential liability and take proactive measures to reduce risk. Whether you are a traditional freight carrier, a home services company, a residential or commercial cleaning company, a medical transporter, a provider of roadside assistance services, or even a food truck owner—it is necessary to prepare a plan for handling liability arising out of motor vehicle accidents involving employees. Plaintiffs will sue you, the entity-employer, under a theory of “respondeat superior,” which is a form of vicarious liability that holds an employer responsible for the wrongful acts of its employees, if the wrongful act was done in the course and scope of his or her employment. The question, then, is whether your driver was in the scope of his employment when involved in a motor vehicle accident (or other allegedly wrongful conduct). Obviously, the answer to that question depends on the driver’s itinerary. See Bryant v. Bare, 192 Va. 238, 245 (1951) (“In any case, it has been said to be clearly impossible to formulate a general rule governing all cases…”). The Virginia Supreme Court called it a “vexatious and perplexing” task to determine whether an employer should be held liable based on his employee’s...
