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While insurers are aware of the mounting claims and damages from California’s destructive Carr Fire and Mendocino Complex Fire, many are unaware that on November 13, 2018, a group of law firms known as the “Northern California Fire Lawyers” filed a class-action lawsuit against Pacific Gas & Electric, a Northern California utility company that provides natural gas and electric services to approximately ten million people throughout a 70,000 square mile service area. Insurers should understand that any damages caused by the Northern California fires may not have been caused by an “act of God.” Instead, insurers should identify these claims as having potential subrogation.

In the world of claims handling and insurance subrogation, knowledge is power. We often see the aftermath of clients waiving significant subrogation interests or paying on claims that, had the law or issues been recognized and understood, would have turned out differently. Information is the most valuable commodity our industry possesses, and its free for the taking. All that is required is a minor investment of time and a willingness to learn.

A.O. Smith Corporation, a manufacturer of water heaters located in Milwaukee, Wisconsin, recently announced a recall of over 616,000 water heaters that are being blamed for causing numerous house fires due to the gas burner (flame arrestor) screen on several models developing a tear, resulting in excessive radiant heat which can cause a fire hazard if it is installed on a wood or other combustible floor.

Matthiesen, Wickert & Lehrer, S.C. (“MWL”) is pleased to announce that Katherine Sandoval has joined our insurance litigation team as an associate attorney in our Orange, California office. Katherine’s litigation experience adds to a wealth of experience at MWL’s very busy California office, which is already teeming with talent and expertise.

Pedestrian deaths now make up 16% of the total traffic deaths in the U.S. In an effort to address this growing public safety concern, state legislatures are scrambling to pass new laws that regulate and define who is at fault when a pedestrian is struck. To effectively handle personal injury and workers’ compensation subrogation claims you must be familiar with the laws that govern the liability of motorists and the duties of pedestrians when crossing the street. This article contains a link to our Pedestrian and Crosswalk Laws In All 50 States chart that covers the laws that regulate the relationship between and the duties of motor vehicles and pedestrians crossing the street for all 50 states.

The federal government mandates that trucking companies operating interstate comply with their financial responsibility obligations by having an insurance policy that includes a MCS-90 Endorsement, a qualifying surety bond, or a sufficient business operation for self-insurance. By far, the most common mode of compliance is the MCS-90 Endorsement. This endorsement requires the issuing insurance carrier to pay a claim when an injured party obtains a judgment against their insured, in situations where coverage is denied or not otherwise warranted. This endorsement shifts the risk of loss away from the public by guaranteeing that an injured party will be compensated, even if the insurance carrier has a valid defense based upon a condition in the policy.

Subrogation in the Hawkeye State appears to be as simple and routine as driving through Iowa itself. But, applying the statute is more akin to driving through a cyclone. Simply stated, the simplicity of subrogating workers’ compensation benefits in Iowa is an illusion riddled with confusing traps and pitfalls that can destroy a workers’ compensation carrier’s subrogation rights. Fortunately, these landmines can be easily side-stepped and avoided by instituting a few simple procedures. In this article, we will address three of biggest traps you need to avoid to obtain a successful recovery in Iowa.

In many insurance claims involving deer collisions, the insured is struck by the swerving car or truck or it comes upon wreckage in the road that resulted from the collision. Subrogating the vehicle that swerved to avoid the deer is often an after-thought, if a thought at all. However, aggressive subrogation professionals should remember that prudent drivers who react appropriately when confronted with a deer in the headlights can usually avoid the devastation and carnage that results from acting inappropriately.

Where there’s smoke, there’s subrogation. At least it often works out that way. The adage is certainly true in the case of Gree dehumidifiers. If you have anything to do with property insurance, you have most likely been exposed to multiple claims involving Gree dehumidifiers. Gree’s mistakes have cost American homeowners and property insurance companies well over $30 million. These translate into subrogation opportunities that should not be ignored. There’s also an important lesson here for other manufacturers as to how not to respond to a product defect.

Everyone in Michigan is financially frustrated with the high price of auto insurance. Recently, Detroit Mayor, Mike Duggan, along with eight other motorists filed a suit in U.S. District Court in an effort to expedite removal of Michigan’s no-fault system. The litigation comes as insurance premiums continue to rise, and after two bills were presented in the Michigan Legislature aimed at eliminating the no-fault system. The average cost of insurance premiums in Detroit is $6,197 per driver, whereas the average in California’s tort jurisdiction is $1,518. Removing the no-fault system would return Michigan to a tort jurisdiction and rates are predicted to drop by 50% if that happens.

Gary L. Wickert will be presenting a MWL webinar on “The Complete Guide to Selecting, Hiring, and Using the Right Expert in Subrogation Cases” on October 23, 2018 from 10:00 – 11:30 a.m. (CDT). MWL webinars are free to attend and are open to all who want to attend. To learn more about this webinar or to register for it, click HERE.

We only hear half of what we listen to. Perhaps that’s why most people instinctively use tautology when they write or speak. Tautology is the use of different words to say the same thing or repeating the same thing twice, often in the same sentence. Most people don’t even know they’re doing it. Tautology clutters otherwise simple communication. It doesn’t diminish clarity, but it should be avoided in formal writing and speaking. Insurance and subrogation professionals communicate for a living and should be aware of one of the most common mistakes made in professional and interpersonal communication.

Even non-standard auto insurers enjoy getting checks in the mail. The effective subrogation of Med Pay, PIP, UM/UIM, and collision claims by non-standard auto insurers means money coming into a segment of the insurance industry that historically has been better at paying it out. The reasons this segment has been somewhat subrogation-challenged are many but is emphasized by the fact that the non-standard auto insurance market is highly-specialized, geographically-segregated, and transaction heavy. It’s time for non-standard auto carriers to aggressively step up their subrogation game and pursue those responsible for causing losses and claims so they can return those claim dollars to the carriers that paid them and insureds who desperately need them.

We are just as guilty as everyone else. Words matter, and in our industry, they are our tools. Therefore, using the right words would seem to be a priority. This article will set the record straight on whether subrogable is or isn’t a word and addresses a handful of insurance terms that are most often misused and misinterpreted as well.

Work Comp Third-Party Settlement Not Subject to Aitken Reduction. On August 2, 2018, the Arizona Supreme Court overruled the Court of Appeals with regard to settlement situations. No longer is an employee able to settle without notice to the workers’ comp carrier and quickly seek a court determination of the employer’s percentage of fault.

Gary L. Wickert will be presenting a MWL webinar on “The Complete Guide to Selecting, Hiring, and Using the Right Expert in Subrogation Cases” on September 25, 2018 from 10:00 – 11:30 a.m. (CDT). MWL webinars are free to attend and are open to all who want to attend. To learn more about this webinar or to register for it, click HERE.

On May 1, 2018, Pele spoke, and Hawaii’s Big Island was rocked with the first of more than 50 earthquakes, representing the collapse of the crater floor at Puu Oo, the open vent below Kilauea’s summit crater and lava lake. Rivers of lava destroyed over 600 homes, making it the most destructive eruption in modern times. Even before the lava had cooled to form a tomb of solid rock over the once thriving neighborhoods, many escaped from their homes with their most valuable possession — their homeowner’s policy. There is no such thing as volcano or lava flow insurance, but it is possible for an all-risk homeowner’s policy to provide some coverage.

Georgia has joined fifteen other states which have outlawed the use of hand-held cellphones and mobile devices while driving. A new law signed by Governor Nathan Deal makes watching movies, shooting video, and even the mere “holding” of hand-held devices while in the vehicle—even while stopped—illegal. House Bill 673 allows drivers to talk on the phone or text if they use hands-free technology. It was signed May 2 and took effect on July 1.

A generation ago, subrogation professionals were almost unheard of. Over the years, however, as prudent businesses and insurance companies began to insist on their statutory and contractual rights of subrogation, the profession has grown. On February 8, 2018, the Texas Supreme Court issued an opinion that grants subrogation adjusters and claims handlers the ability to sign medical expense affidavits under § 18.001 of the Texas Civil Practice and Remedies Code.

Subrogation professionals often assume that if a state employs or recognizes the “Made Whole Doctrine”, then the insured must be totally reimbursed for its out-of-pocket deductible and any uninsured losses before a carrier can subrogate. Unfortunately, this over simplistic view and application of the Made Whole Doctrine is not only erroneous, but it also results in reduced subrogation recoveries for carriers across the country. The obligation of an insurer to reimburse some or all of its insured’s deductible has very little to do with the Made Whole Doctrine in most states. Daniels v. State Farm Mut. Auto. Ins. Co., 2018 WL 3424941 (Wash. App. 2018), a brand-new decision by the Washington Court of Appeals affirms this.

On April 3, 2018, the Wisconsin Legislature enacted 2017 Wis. Act 235 which substantially changes certain rules governing civil litigation in Wisconsin. Included in this Act are new rules regarding discovery practice and the Rules of Civil Procedure. As these new rules take effect, it is anticipated that these changes will result in uncertainty and increased motion practice. It is important that all Wisconsin litigators and insurance carriers become aware of these changes.

On April 5, 2018, the Wisconsin Supreme Court held that the operative event which triggers a notice of claim requirement in an underinsured motorist (UIM) policy is the tender of the tortfeasor’s underlying policy limit and not the accident itself. This holding overrules a published Wisconsin Court of Appeals’ decision that required an insured to provide notice to their carrier of a UIM claim “as soon as possible after the incident.”

Who covers what when an employee is involved in an accident while driving a personal vehicle for business purposes? It is a question as old as insurance itself. It should come as no surprise that the Holy Grail for trial lawyers is obtaining coverage for an employee’s personal vehicle through the employer’s commercial auto policy. Not only are policy limits usually significantly higher, but the dynamics of engaging a commercial policy in litigation are often considered more favorable than a claim against the employee’s personal auto policy alone.

Georgia has joined fifteen other states which have outlawed the use of hand-held cellphones and mobile devices while driving. A new law signed by Governor Nathan Deal makes watching movies, shooting video, and even the mere “holding” of hand-held devices while in the vehicle—even while stopped—illegal.

Driving in the left lane for anything other than passing is not only illegal, its unsafe and results in thousands of accidents annually. If a driver is parked in the left lane on a four-lane highway and isn’t passing someone or making a left turn, the driver is breaking the law in most states and can be ticketed – no matter what speed they’re traveling. When looking for deeper pockets or additional defendants in auto collision litigation, don’t overlook the driver who violates Left Lane Laws as a possible defendant should an accident and damages result from an accident that otherwise could have been avoided. This article contains a link to our newest chart on Left Lane Laws in all 50 states.

A long-standing controversy in Pennsylvania workers’ compensation subrogation has been resolved in a manner most unfriendly to Pennsylvania small businesses and the entire workers’ compensation industry. On June 19, 2018, the Pennsylvania Supreme Court hung their hat on a mistaken turn of a phrase found within § 319 – the Pennsylvania workers’ comp subrogation statute. The Court held that the phrase “instalments (sic) of compensation” within § 319 refers only to indemnity benefits – not medical expense benefits.

Driving in the left lane for anything other than passing is not only illegal, its unsafe and results in thousands of accidents annually. If a driver is parked in the left lane on a four-lane highway and isn’t passing someone or making a left turn, the driver is breaking the law in most states and can be ticketed – no matter what speed they’re traveling. When looking for deeper pockets or additional defendants in auto collision litigation, don’t overlook the driver who violates Left Lane Laws as a possible defendant should an accident and damages result from an accident that otherwise could have been avoided. This article contains a link to our newest chart on Left Lane Laws in all 50 states.

If a workers’ compensation subrogation claim can be resolved quickly – even before the employee settles the third-party action filed by him – it improves the cost-effectiveness of the result. According to a recent federal circuit court decision, it appears that in Colorado, even if the employee has filed suit, a carrier can file a separate third-party suit for subrogation against the same defendants. This decision is significant because it provides subrogation professionals with another useful tool with which to resolve its subrogation liens well before the employee’s claim settles and without the concomitant demands for reduction of the lien that usually accompany negotiations between the employee and tortfeasor.

It is hard to participate in any activity without being asked to read and sign some sort of release, exculpatory agreement, or liability waiver in advance. A key tool of risk management is the exculpatory agreement – a generic term which can refer to a provision in a contract, the back of a receipt or invoice, or the simple act of clicking “accept” during an online purchase. These risk management tools may include liability waivers, releases of liability, assumption of risk agreements, pre-injury releases, disclaimers of liability, sign postings, etc. Knowing how, when, and why such clauses are enforceable has become indispensable for today’s claims professionals and a necessity for knowing whether liability or subrogation claims can be pursued.

There is little law in California regarding subrogation/reimbursement and/or future credit rights of an employer or workers’ compensation carrier when an employee makes a third-party recovery because of legal malpractice in the handling of the employee’s attorney. This is surprising, given that California usually leads the nation on cutting-edge issues like this. However, despite the paucity of law on the subject, a recent Workers’ Compensation Appeals Board order seems to congeal the limited precedent out there into a ruling that prohibits the carrier from subrogation/reimbursement rights or the right to a future credit out of a legal malpractice tort recovery.

Ridesharing has officially arrived in New York, and confusion over New York no-fault insurance and PIP Loss Transfer has arrived with it. Third-party tort claims are limited by New York’s no-fault laws, and a PIP carrier who has paid benefits to a driver or passenger has no traditional subrogation rights. Loss transfer is an opportunity for a PIP carrier to recover from the negligent motorist’s insurer the first-party benefits it paid because of an accident. Unfortunately, when PIP benefits are paid to an Uber driver or rider, there is significant confusion regarding whether loss transfer will be allowed.

If a plaintiff or defendant in an auto accident lawsuit can be shown to have been using a cell phone or other hand-held devices at or near the time of the accident, and the state in which the accident occurred has a law prohibiting such activity, the action might constitute “negligence per se.” Knowing when and whether a technical violation of a cell phone law has occurred can be critical to the result obtained in adjusting losses, pressing a subrogation claim, or trying a lawsuit. Familiarity with the technical aspect of such laws, and whether they exist in the state in which an accident occurs, has become a necessity of claims handling.

The concept of experience ratings shouldn’t be a mystery. Experience ratings reward insureds who have a favorable loss history and penalize insureds who do not. So, how does subrogation fit into all of this? In theory, subrogation recoveries serve as a debit to actual loss totals and primary losses, thereby directly affecting the experience modifier. In short, one or two subrogation recoveries can mean the difference between a debt modifier and a credit modifier. Controlling experience modifiers becomes the key for insureds interested in holding their premiums to a minimum under the experience rating process.

E-cigarettes are advertised and sold as a safer alternative to traditional cigarettes. The jury is still out on it, but its becoming increasingly clear that these products come with some unanticipated risks. Specifically, the need for more power in smaller packaged batteries, which can lead to battery cell explosions. Injuries from e-cigarette battery explosions can be heinous and the property damage resulting from their explosions can be extensive. Holding e-cigarette battery manufacturers accountable for the resulting injuries and property damage has several obstacles.

Matthiesen, Wickert & Lehrer, S.C. is growing! We would like to announce the joinder of three new attorneys to our firm—one in California (Charlene Busch), one in New Orleans (Sara Huffman), and one in our Wisconsin office (Lee Wickert). On behalf of everyone here at MWL, we would like to welcome them all to our firm.

Delays in Referring File to Subrogation Counsel Can Be Expensive. The moment you know a lawsuit has been filed by an insured or an injured employee, the fuse is lit. Many states have short statutes that eliminate or significantly reduce your recovery rights if timely action is not taken. In Colorado, failure to intervene means automatic reduction of your lien by more than one-third. In Connecticut, the fuse is thirty days, after which you lose your entire subrogation interest. Similar land mines exist in Iowa and many other states.

Extinguishing Third-Party Liability as a Prerequisite to Contribution. The absence of a simple sentence in a release signed by the claimant after settling a liability claim is costing liability carriers millions of dollars in contribution recoveries across the country. By the time they are discovering the mistake, it is too late.

When multiple insurers provide coverage for a single loss or accident, things can get confusing. Coinsurance can arise as a result of conscious risk-sharing or accidentally when two policies have overlapping coverage. Litigation involving who pays what, when, and in what order has become a cottage industry involving both subrogation and contribution. Understanding all concepts and applying them to the facts of a claim or loss is enough to make your head explode.

On February 29, 2018, the Wisconsin Legislature amended § 102.29 in several places, clarifying that a leased or loaned employee who “has the right to make a claim for compensation” is barred from filing a third-party lawsuit. The law is effective as of March 2, 2018 and applies to workers’ compensation claims made or civil tort claims filed on or after that date.

Gary Wickert and Jim Busenlener will be providing a complimentary webinar on Longshore & Harbor Workers’ Compensation on April 11, 2018 from 10:00 to 11:30 a.m. (CDT). For more information or to register for this webinar, click HERE.