Assignment of Claim Only Works if Over Deductible
Post 4845
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In February 2019, Lauryn Frazier, a minor, was involved in a motor vehicle accident. Frazier was a dependent resident relative insured under a policy issued by USAA Casualty Insurance Company (“USAA”) which provided personal injury protection (“PIP”) benefits and medical payment coverage. Emergency Physicians, Inc. (“Emergency Physicians”) provided emergency services and care to Frazier as a result of the accident and charged $753 for its services. USAA applied the bill to the policy’s $1,000 deductible, indicating in an Explanation of Reimbursement form that the bill was subsumed by the deductible.
In USAA Casualty Insurance Company v. Emergency Physicians, Inc. d/b/a Emergency Resources Group, as assignee of Lauryn Frazier, No. 5D2023-0746, Florida Court of Appeals, Fifth District (July 26, 2024) resolved the dispute.
FACTS
Emergency Physicians, as assignee of Lauryn Frazier, sued USAA for PIP benefits. USAA admitted coverage for the accident but alleged that Emergency Physicians’ bill fell below the policy deductible and as such, was the full and complete responsibility of the insured/claimant.
Emergency Physicians asserted that USAA’s declaration page cannot be relied upon as evidence that Adams elected a deductible, and thus, because the deductible form was not executed, there was no evidence of a knowing $1,000 deductible election. The court was required to determine whether USAA properly reduced its payment of PIP benefits by imposing the $1,000 deductible.
The trial court entered its order granting Emergency Physicians’ motion for summary judgment and denying USAA’s motion for summary judgment. The court found that pursuant to the statute, an insurer must offer the option of electing a PIP deductible to the named insured at the time the initial application is taken and prior to each annual renewal, and pursuant to deposition testimony, the deductible form was not provided to the named insured prior to the policy renewing. Therefore, the court concluded, USAA did not comply with the statute.
ANALYSIS
In its motion for rehearing, USAA argued that deposition and affidavit testimony and the insurance contract were more than sufficient evidence to support its assertion that a deductible applied in this case and that Emergency Physicians provided no evidence to contradict the sworn testimony attesting to the accuracy and authenticity of the applicable insurance contract.
The Court of Appeals agreed with USAA that the trial court’s findings are contrary to the record evidence. USAA employees testified that the declarations page reflected Adams’ choices.
USAA testified that it sent the policy issue packet, which included the deductible form, when Adams first purchased her policy and a similar renewal packet was sent at every renewal period. Accordingly, the trial court’s findings were not supported by the record.
The affidavits and deposition testimony were sufficient to show that Adams elected a deductible. Moreover, the declaration page, which the trial court previously found to be part of the policy, clearly indicates that a PIP deductible applied.
Accordingly, because USAA provided sufficient evidence that Adams elected a deductible and because a deductible form is not required, the trial court erred in granting Emergency Physicians’ motion for summary judgment. Moreover, because Emergency Physicians did not contradict USAA’s deposition and affidavit testimony, there are no genuine issues of material fact.
The Court of Appeals reversed the order granting Emergency Physicians’ motion for summary judgment and remanded the case for entry of final summary judgment in favor of USAA.
ZALMA OPINION
This case went through motions for summary judgment and an appeal over less than $1,000, the amount of the deductible chosen by the insured when the policy was acquired. Clearly both parties expended more money on lawyers and court time than the amount in dispute. USAA established that the insured selected a deductible and was, therefore, personally responsible for the first $1,000 of medical bills. Since the bill was less than the deductible USAA had no obligation to pay. Neither side won.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
