August 2014 – Duane Morris Insurance Law

August 19, 2014September 10, 2014 by Duane Morris

Six-Month Delay Bars Coverage in NJ Under Claims-Made Policy

For a claims-made policy, the policy holder is to provide notice of a claim: (1) during the same policy period in which the policyholder received the claim and (2) “as soon as practicable.” Otherwise, the claim may be denied because of late notice. New Jersey has determined that six months or more is not “as soon as practicable.”

Holding: The Superior Court of New Jersey, Appellate Division, held in Templo Fuente de Vida Corp. v. National Union Fire Insurance Company of Pittsburgh, P.A., that: (1) notice of a claim was not provided “as soon as practicable” when sent six months after service on the insured of the underlying complaint and (2) an insurer on a claims-made policy does not have to show that it was prejudiced by the late notice.

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August 19, 2014September 10, 2014 by Duane Morris

California Court of Appeal Issues Ruling Regarding Attorney Fee Awards

A California Court of Appeal has affirmed the concept that a successful defendant who is entitled to an attorney fee award can seek an award which is greater than the fees actually billed by the insurance appointed defense counsel who represented the defendant.

In Syers Properties III, Inc. v. Ann Rankin et. al., 226 Cal.App.4th 69 (2014), defendants successfully obtained a judgment of nonsuit in a legal malpractice action. Defendants were entitled to attorney fees by reason of their fee agreement with the plaintiff which entitled the prevailing party to attorney fees. Defense counsel sought and successfully obtained an award of attorney fees which were not tied to the rates actually charged for the representation by presenting evidence to the trial court that a reasonable rate for the representation was actually higher than the rates charged. The court noted that the benchmark for a fee award is reasonableness and there is no requirement that the reasonable market rate mirror the actual rate billed. In concluding that a reasonable rate could exceed the actual rate billed, the court acknowledged that attorneys who do work for insurance companies often work at what are arguably below market rates (in part because of the volume of work). Thus, because counsel was able to convince the trial court that the skill, expertise and experience necessary to successfully litigate the case would reasonably have been charged at higher rates, the court of appeal concluded that the trial court was within its discretion in concluding that a higher rate was reasonable and justified.

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August 6, 2014September 9, 2014 by Philip R. Matthews

Third Circuit Issues Decision Concerning Medicare Secondary Payer Act in New Jersey

On July 29, 2014, the Third Circuit issued an interesting court decision concerning the Medicare Secondary Payer Act (MSP) that may provide guidance to the parties in tort litigation, particularly in New Jersey tort litigation, in a case styled Taransky v. United States. The Taransky case involved a slip and fall accident involving a settlement by a tortfeasor who tried to resolve the Medicare lien in the settlement process. The case pitted two statutes against each other, the Medicare Secondary Payer Act and a New Jersey statute prohibiting tort claimants from recovery twice under medical insurance and liability insurance. In the end, the Third Circuit found that the plaintiff had to reimburse Medicare from the tort settlement for medical bills incurred by Medicare. Continue reading “Third Circuit Issues Decision Concerning Medicare Secondary Payer Act in New Jersey”