Cleveland Law Library Weblog

Man Who Lost Son in Car Accident Returns $150,000 of $600,000 in Over-Payment of Under-Insured Proceeds in Quarters

A court of appeals recently ordered a doctor who lost his son in a car accident to return $600,000 in over-payment of under-insured insurance proceeds. In a huge surprise, the doctor paid $150,000 of that sum in quarters. According to the WSJ, this sum weighed so much that the doctor had to borrow a friend's trailer to haul them to the lawyers' offices, where he dumped them in the lobby. Click here to read the full story.  

Ohio Supreme Court Will Soon Permit Insurance Law Specialization

Starting October 1, 2011, the Ohio Supreme Court will recognize a new area of specialization in insurance law. According to the Court's Commission on Certification of Attorneys as Specialists, “Insurance Coverage Law is the area of law involving issues between insurers and policy holders concerning the rights and responsibilities that arise under insurance policies.” For more information, read the Court's Press Release. The text of the specialization area amendment is also available from the Ohio Supreme Court.

Recently Introduced Bills of Interest

The Ohio General Assembly introduced a flurry of bills last week, some of which are summarized here:

HB 61  MILITARY CUSTODY DETERMINATIONS - To prohibit a juvenile court from making custody determinations or modifications in a case in which one of the parents is called to active military service with any reserve component of the United States armed forces or Ohio militia.

HB 13 SOCIAL SECURITY NUMBERS - To prohibit the inclusion of Social Security numbers on motor vehicle registration renewal notices

HB 30 TRAFFIC LAW PHOTO-MONITORING - To require any local authority that enforces any traffic law by means of traffic law photo-monitoring devices to erect signs on every highway or freeway that is part of the state highway system and that enters that local authority, informing inbound traffic that the local authority utilizes traffic law photo-monitoring devices to enforce traffic laws.

HB 41  SECURITY SYSTEMS - To require the licensure of persons operating security systems companies, to provide for the registration of individuals performing specified types of security systems work, to provide for the requlation of security systems companies and employees, and to establish the Security Systems Advisory Board in the Department of Commerce

HB 45 WILD/EXOTIC ANIMALS - To require persons who possess dangerous wild animals or exotic animals to obtian a personal possession permit and to establish requirements regarding the possession and care of dangerous wild animals and exotic animals

SB 54 INSURANCE COVERAGE - Prohibit certain insurers from limiting coverage for injuries occurring as a consequence of an insured's use of alcohol

SB 59 MEDICAL NEGLIGENCE - Establish pilot program mandating arbitration for claims of medical negligence.

BILLS PERTAINING TO CRIMINAL LAW:

HB 22 ANIMAL CRUELTY - To increase certain penalties for cruelty to animals and to require a child under fifteen years of age who commits cruelty against a companion animal to undergo psychological counseling.

HB 15, SB 23 : INVOLUNTARY SERVITUDE/TRAFFICKING IN PERSONS

SB 9 FELONY SEX OFFENSE PROSECUTION - To permit a prosecution of felony sex offense or kidnapping offense involving a victim under 13 years of age to be commenced at any time after the commission of the offense.

HB 57 SEX OFFENDER REGISTRATION - To provide notice to a long-term care facility and its residents when a registered sex offender indicates an intent to reside or registers an address within the facility's specified geographical notification area.

SB 17 REPEAT OVI OFFENDERS - To increase certain penalties for repeat OVI offenders.  (See article:  Senate Bill Targets Repeat DUI Offenders by Aaron Marshall, The Plain Dealer, Mar. 1, 2007)

SB 21 DOMESTIC VIOLENCE - To adopt the Uniform Interstate Enforcment of Domestic Violence Protection Orders Act.

SB 22 SEXUALLY VIOLENT PREDATORS - To require that sexually violent predators who are released from prison be monitored by global positioning system devices.

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Should Insurance Companies Pay Cities for Fire Trucks Sent to Auto Accidents?

Many cities in Ohio bill insurance companies of the at-fault driver for the costs of sending fire trucks to accidents. Insurance companies have accused the City of Cleveland of needlessly sending equipment to minor accidents in order to run up the bill. A Plain Dealer review of accident reports for a one week period indicated that Cleveland sent ladder trucks to 22 out of 29 accidents, including one fender bender with a parked car.

Insurance companies assert that they should not even have to pay legitimate police or fire charges, because these are paid by tax dollars. Most cities do not have any penalty for non-payment. According to a State Farm Insurance Company employee, no Ohio law requires such payments. Source:  Where's the Fire? by Susan Vinella and Leila Atassi, The Plain Dealer, Feb. 17, 2007.

For more information, see:  Accident Response Fees.com; Municipal Accident Response Fees by Insurance Information Institute; Ominous Trend: Growth of Municipal Accident Response Fees by Tami Stanton and Joe Thesing, Namic Issue Brief, April 2006.

If Insurer Does Not Ask on Application, Insured Need Not Tell

Under federal common law, an insured does not have a duty to disclose symptoms or medical history information not requested by an insurer.   Metropolitan Life Ins. Co. v. Conger (Jan. 16, 2007), Sixth Circuit App. No. 06-5009. 

Commercial Insurance Policy Transferrable to New Owners

The Ohio Supreme Court held that a commercial general liability insurance policy was transferrable to a new business owner, even though the policy had an anti-assignment clause, if the covered loss already occurred.  The court limited such recoveries to situations where the predecessor and successor companies specifically contracted to transfer the coverage.    Pilkington N. Am. Ins. v. Travelers Cas. & Sur. Co. (Dec. 20, 2006), 2006-Ohio-6551,  see also  Environmental Cover Transfers to New Owners by Roberto Ceruceros, Business Insurance, Dec. 21, 2006. 

Reimbursement Insurance Required for Consumer Goods Services Contracts and for Warranties on Vehicle Protection Products

New Ohio law H.B. 442 requires that product warranties on vehicle protection products, such as theft alarms, must be covered by a warranty reimbursement insurance policy.  Consumer goods service contracts must also be covered by reimbursement insurance policies. The act subjects consumer goods service contracts and vehicle protection product warranties to the Consumer Sales Practices Act.  Other changes are made concerning consumer goods service contracts, and also with regards to mutual protective associations, group life insurance, and investment and reinvestment exceptions concerning life insurance and annuities.  See Final Bill Analysis; NAMIC Commends Ohio Governor, Legislature for Farm Mutual Modernization Legislation, NAMIC Online, July 19, 2006. 

Proposed Federal Insurance Regulation: More Federal Preemption?

The U.S. Senate introduced S.B. 2509, otherwise known as the "National Insurance Act of 2006".  The bill creates an "optional federal charter system", giving life and property & casualty insurers the option of being regulated under a federal system, rather than the states.  As of this writing, the bill has not been posted on Thomas.  The House is considering the State Modernization and Regulatory Transparency Act (SMART act), which will streamline state insurance regulation. See State Lawmakers Balk at Growing Trend of Federal Preemption by Andrew G. Simpson, Jr., Insurance Journal, April 10, 2006, and Regulatory Modernization Tops Industry's Legislative Agenda for 2006 by Britton Wells, Insurance Journal, Jan. 26, 2006.  Several groups have voiced opposition to the Senate bill.  See  BIG “I” STRONGLY OPPOSES OPTIONAL FEDERAL REGULATION BILL, by Independent Insurance Agents and Brokers of America, April 5, 2006. 

Homeowners Insurance Policy Did Not Cover Sexual Battery by Homeowner

The Sixth Circuit affirmed the decision of the Northern District Ohio, finding that a homeowner's insurance policy did not cover sexual battery committed by the homeowner.  The policy indemnified the homeowners if they would be sued for bodily injury.  The definition of bodily injury specifically excluded emotional distress, humiliation and mental anguish.  Bodily injury was defined as, "physical injury, sickness or disease."   The court found that physical contact did not constitute physical injury, and neither did the physical symptoms of emotion distress.  Moreover, the insurance policy precluded recovery for "willful and malicious acts."  State Farm Fire and Casualty Co. v. Wilson, Sixth Circuit Case No. 04-4263, 04-4264, October 7, 2005.