On June 11, the West Virginia Supreme Court unraveled significant progress this State has made in recent years to improve West Virginia's insurance climate. In 2005, the West Virginia Legislature repealed a law that enabled a third party to sue an insurance company under a contract to which it is not a party. Earlier this month, the West Virginia Supreme Court of Appeals, in its decision in Michael v. Appalachian Heating, LLC, No. 35127 (June 11, 2010), held that third parties can sue insurance companies under the West Virginia Human Rights Act.By way of background, in 1981, the West Virginia Supreme Court gave third parties the right to sue insurance companies under the Unfair Trade Practices Act (UTPA). This created a fundamental problem for insurance companies doing business in our State because they were no longer able to accurately underwrite -- or price -- the risk of a particular policy. This drove consumers' prices up because companies had to account for the … [Read more...] about How Will West Virginia Supreme Court’s Decision Affect Insurance Consumers?
West virginia supreme court of appeals
On May 20, 2015, the West Virginia Supreme Court of Appeals concluded in BPI, Inc. v. Nationwide Mutual Insurance Company that its prior decision in Cherrington v. Erie Insurance Property & Casualty Co. should be applied retroactively to any pending claim not rendered final prior to that decision, effectively confirming that defective workmanship causing bodily injury or property damage can properly be characterized as an “occurrence” under commercial general liability insurance policies in those pending claims.In 2013, the West Virginia Supreme Court of Appeals addressed the issue of defective workmanship causing bodily injury or property damage and held in Cherrington that defective workmanship is properly characterized as an “occurrence” under a commercial general liability insurance policy subject to applicable policy exclusions. That decision altered the law in West Virginia with regard to that issue, and the new principle was applied to the 2004 … [Read more...] about West Virginia Supreme Court of Appeals Clarifies Retroactive Application of Cherrington to Pending Cases
In yet another decision arising from the construction of a home, the West Virginia Supreme Court of Appeals (“WVSCA”) in SER Nationwide v. Wilson, No. 15-0424 (W.Va. October 7, 2015) examined coverage under a commercial general liability ("CGL") policy issued to a contractor who allegedly negligently constructed the home, failed to complete construction, and failed to pay suppliers and subcontractors. The circuit court ruled that Nationwide’s commercial general liability policy issued to the contractor required it to defend and indemnify for any damages that may be recovered by the homeowners based upon the court’s finding that at least one claim triggered coverage. The causes of action asserted against the contractor included breach of contract, breach of the covenant of good faith and fair dealing, defamation, unfair and deceptive practices, fraud and intentional misrepresentation, conversion, unconscionability, injunctive relief, and … [Read more...] about West Virginia Supreme Court Finds No Duty to Defend or Indemnify Under CGL Policy For Contractor’s Work
The West Virginia Supreme Court of Appeals (“WVSCA”) recently rejected a circuit court decision finding that a tenant is an “equitable insured” under his landlords’ homeowner’s policy, which had precluded the landlords’ insurer from pursuing a subrogation claim against the tenant for damages caused to the premises. In rejecting this argument, the WVSCA clarified that a tenant, who is neither a named nor definitional insured under his or her landlords’ homeowner’s insurance policy, is not an insured by the mere fact that the tenant may have an insurable interest in the leased property. Consequently, the insurer was permitted to proceed against the tenant with a subrogation claim for damages caused to the insured property. This case provides important instructional guidance for insurers whose policies apply to properties used for rental purposes in West Virginia. Farmers & Mechanics Mutual … [Read more...] about West Virginia Supreme Court Clarifies Application of Landlords’ Homeowner’s Insurance Policy to Tenant’s Insurable Interest
In a rare Medicaid payment decision, the West Virginia Supreme Court of Appeals last week reversed the decision of the Bureau for Medical Services (“BMS”) regarding reimbursement of liability insurance costs for nursing facilities. Heartland of Beckley WV, LLC v. Bureau for Medical Services, No. 15-0595 (W. V. S. Ct. October 26, 2016). The Court reversed a BMS limitation on reimbursement to insurance premiums only, and required BMS to allow a broad range of costs, including all direct legal expenses, settlements, and judgments. The Court remanded the case for further fact-finding on whether the total costs were "out of line" with similar facilities.In the rate decisions at issue, BMS had denied reimbursement for any insurance program costs other than actual insurance premiums paid by the skilled nursing facilities (owned by HCR). Because the facilities were covered by high-deductibles or high retention policies, most insurance program costs were disallowed, … [Read more...] about West Virginia Supreme Court Issues Rare Medicaid Payment Decision