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MASSACHUSETTS INSURANCE LAW |
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JUNE 2008 MAY 2008 June 2008 - MA SJC Issues Ruling On PIP Medical Review And Subrogation Issues The Supreme Judicial Court has issued two decisions regarding Personal Injury Protection (“PIP”) No Fault benefits. In Boone v. Commerce Insurance Company 451 Mass. 192 (2008), the court held that an insurer can terminate PIP medical payments based on an IME obtained from a physician who was not the same specialty as the billing or treating physician. The statute governing PIP provides in part, that an insurer shall not refuse to pay a claim for PIP medical benefits:
The claimant sought PIP benefits for chiropractic services and the insurer refused to pay the benefits based on an IME conducted by an orthopedic surgeon. The claimant argued that the insurer had violated the statute because the orthopedic surgeon was not licensed under the same chapter as the chiropractor. The SJC disagreed, adopting the industry position that the same specialty requirement only applied if the insurer denied coverage based solely on a medical review of the bills, and did not apply when the physician conducted an IME. Andre Sansoucy of Melick, Porter& Shea LLP submitted an amicus brief in support of the industry position on behalf of the Massachusetts Insurance Federation. In Enterprise Rent-A-Car Company of Boston, Inc. v. Arbella Mutual Insurance Co, 451 Mass. 264 (2008), the court held that the self-insured owner of a rental vehicle could seek subrogation against an insurer that issued a personal auto policy to the operator of the vehicle. Enterprise rented a vehicle to Joseph Navis. Navis was involved in an accident, and Enterprise paid PIP benefits to three passengers in the rental vehicle. Enterprise pursued a subrogation claim against Metropolitan, Navis’ personal auto insurer. The court held that Enterprise could pursue a subrogation claim against Metropolitan, based on an allegation that Navis was at fault. MAY 2008 - Rescission and Reformation In Hingham Mutual Fire Insurance Co. v. Merrcurio, 71 Mass. App. Ct. 21 (2008), the Appeals Court held that Hingham Mutual was not entitled to rescind or reform an umbrella policy issued to the Mercurios, even though they did not list their seventeen year old son, Daniel, as an operator on the insurance application. Daniel lived with his parents but owned his own vehicle and had his own insurance. Daniel was involved in an accident while driving a friend’s car, and the issue was whether his parent’s umbrella policy applied to claims arising out of that accident. The application asked for a list of all vehicles “owned, leased or furnished for regular use”, and then stated “List All Members Of Household And All Operators Of Vehicles/Watercraft As Required By Company.” The court concluded that the application was ambiguous because the question could be read to seek only the operators of the vehicles listed on the application, as opposed to all vehicles or watercraft owned by anyone living in the household. As a result, the Mercurio’s response to the question was not a misrepresentation, and Hingham Mutual was not entitled to rescission. Hingham Mutual was also not entitled to reform the policy to exclude Daniel as an insured. The definition of insured included relatives under the age of 21 who lived with the insureds, and Hingham Mutual did not show, by clear and convincing evidence, that the policy terms were the result of a mutual mistake. MAY 2008 - Use of Automobile – Resisting Arrest The Appeals Court has held that automobile polices did not apply to injuries suffered by a police officer when a driver resisted arrest after he was stopped for a traffic violation. Bonina v. Marshall, 71 Mass. App. Ct. 904 (2008). Officer Jusseaume pulled over a vehicle operated by Jason Marshall, and officer Bonina stopped to assist. The officers concluded that Marshall was under the influence of drugs, and struggled to place him into custody. During the scuffle, Marshall “placed at least one hand on a fixed object in the rear of his pickup truck in order to avoid having handcuffs placed on him.” Bonina sought coverage under both the liability coverage issued to Marshall and his own uninsured and underinsured coverage. Both coverages applied only to injuries arising out of the use of an auto. The Appeals Court concluded that neither coverage applied because the connection with the use of the vehicle was too remote. The court reasoned that “Marshall's failure to submit to arrest effectively broke the chain of causation between the operation of the truck and the injury.” Id. at 906.
December 2007 DECEMBER 2007 - UNINSURED MOTORIST COVERAGE
In Hale v. Elco Administrative Services, 69 Mass. App. Ct. 878 (2007), the Appeals Court held that a renter complied with the notice provision of a policy when he notified the company of the accident within 24 hours, even though he did not mention any personal injury at that time, and did not inform the company that he had suffered an injury until more than four months after the accident. The plaintiff rented a car from Enterprise Rent-A-Car and Enterprise provided uninsured coverage to him pursuant to a motor vehicle bond. He was involved in an accident on January 4, 2004 and reported the accident to Enterprise the following day. He did not, however, mention any personal injuries until his attorney sent a claim letter on May 7, 2004. The court concluded that the plaintiff’s initial notice had complied with the notice requirement. Symptoms which led to his claim had not appeared at that time so he was not required to mention a possible personal injury. The court explained that “[t]he UM policy does not state a continuing duty to inform the insurer of changes in physical condition days after the accident…” DECEMBER 2007 - HOMEOWNERS COVERAGE
In Utica Mutual Insurance Co. v. Fontneau, 70 Mass. App. Ct. 553 (2007), the Appeals Court held that a homeowners’ policy provided coverage for a claim against the insured that arose out of an accident on property that was adjacent to the resident premises. The policy insured lot 378 and excluded coverage for excludes coverage for “bodily injury” “arising out of a premises ... owned by an insured ... that is not an ‘insured location.’ ” The policy defined “insured location” as “the ‘residence premises' ” or “any premises used by [the insured] in connection with [the residence premises]”. The accident occurred on a dirt track in lot 380 that was sometimes used to access lot 378. The dirt track was the most convenient way to get from lot 380 to lot 378. The insured stored antique cars in the lower backyard of lot 378. After learning the cars had been vandalized, the insured arranged to meet Edward Burbank, a police officer, at lot 380. When Burbank arrived, he walked down the dirt track to investigate the area in lot 378 where the insured stored the antique cars. Burbank was injured on lot 380 as he walked back on the dirt track. The court concluded that Utica had a duty to defend an amended complaint filed by Burbank. That complaint triggered the duty to defend because it alleged that the dirt track was used to gain access to lot 378 and otherwise used in connection with that lot. On the duty to indemnify, the court explained that three factors were relevant for determining whether a site was used in connection with a residential premises within the meaning of the policy: “(1) the character of the use as a residentially related activity; (2) the distance between the residence and the site; and (3) the resulting reasonable foreseeability of the risk of the connected activity on the site to the insurer.” In the circumstances of this case, those criteria demonstrated that the coverage applied. The storage of antique automobiles qualified as a residential activity, and. the situs of the accident was near the boundary line of lot 378. Finally, the use was foreseeable to Utica Mutual, considering that it had insured the property since 1989, the insured had stored antique cars there since the early 1990’s, and the dirt track “provided the only vehicular access and the most convenient pedestrian access to the lower backyard of 378.”.
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| » Liability Law | |||
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