Jeffrey P. Gale, P.A. // Where the Insurance Policy is Delivered Can Matter

P1010047-300x225We recently resolved a case involving a reimbursement dispute under an Occupational Health & Disability Insurance Policy. Our client, an independent trucker, had sustained catastrophic injuries from being struck by a motor vehicle as he was changing a tire while parked in a gore on I-95 in Florida. He was hospitalized in intensive care and was unable to return to work for nearly two years. Thankfully, he was covered under the insurance policy, which paid his medical bills and lost wages.

The insurance policy contained language entitling the carrier to be reimbursed in full from any money our client was paid as a result of the accident.

We sued two individuals and a company seeking damage compensation for our client. After litigating the case for more than three years, we secured a reasonable settlement. We held the money in trust pending resolution of the Occupational Health & Disability Insurance carrier’s reimbursement claim. Unable to work out the claim amicably, we filed a petition to resolve the claim with the court that handled the underlying personal injury case. (Anticipating problems in resolving the reimbursement claim amicably, we asked the court to retain jurisdiction for that eventuality. Doing so allowed us to keep a smart judge and avoid a new filing fee.)

The policy contained the following language: “The Policy is governed by the laws of the jurisdiction in which it is delivered.” The insurance carrier was home based in another state and the policy was made available to large companies throughout the United States who used independent drivers like our client, through a trust company based in Washington, DC. The carrier argued that Washington, DC law applied to the reimbursement claim since the policy was delivered to the trust in DC. Under DC law, the terms of the policy would control. This would effectively enable the carrier to recover 100% of the underlying settlement without our client netting anything. (The underlying case had exceedingly difficult liability issues. The most at-fault person, who was intoxicated, had no insurance and died penniless before we got the case. We ended up suing a separate company, which was responsible for highway assistance, for failing to have proper warning lights on its vehicle. We received a sizeable settlement, but the amount paid by the OH&D carrier was more sizeable.) We argued that Florida law, in particular, Florida Statute 768.76(4), applied to the reimbursement dispute. Under this statute, the court would be allowed to reduce the reimbursement amount owed by taking various equitable factors into consideration including procurement costs and comparing the settlement amount to the full value of the case. See Jeffrey P. Gale, P.A. // Resolving Health and Disability Insurance Liens in Personal Injury Cases Under Florida Statute 768.76. 

Despite the existence of numerous potentially helpful and harmful legal concepts — e.g., contract language ambiguities, lex loci, choice of law, remedial v. procedural law, make whole doctrine — and solid case law favoring equitable distribution — e.g., Ingenix v. Ham, 35 So.3d 949 (Fla. 2nd DCA 2010) and Osler v. Collins, 870 So.2d 65 (Fla. 2nd DCA 2003) — the question of delivery was always foremost on the radar. Since courts favor enforcing the agreements of consenting parties, we figured our judge might simply focus on the insurance policy’s delivery language to guide her decision.

Turns out, Florida law was on our side.

Our client never received a copy of the OH&D policy. Rather, he received a certificate of the policy from the large Florida company for which he was providing trucking services as an independent contractor. This is common in situations like ours where the covered individual does not deal directly with the insurance company. Likewise, the Florida company did not receive a copy of the policy. Instead, it received packets containing the certificates to give to the independent contractors upon their signing up for the coverage.

Chapter 627 of the Florida Statutes addresses insurance rates and contracts. Section 627.402(3) provides as follows:

“Policy” means a written contract of insurance or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements, and papers that are a part thereof. The term “certificate” as used in this subsection does not include certificates as to group life or health insurance or as to group annuities issued to individual insureds.

In other words, unless the policy is one for “group life or health insurance or as to group annuities issued to individual insureds,” the certificate is considered the equivalent of a policy. The subject OH&D did not qualify as one of those exempted policies. Hence, even though the policy itself was not been delivered in Florida, delivery of the certificate of the policy in Florida qualified as the same thing.

Armed with this information, we were able to resolve the reimbursement lien so that our client was able to keep most of his settlement money.

These cases (and those cited therein and to them) explain the issue:

Most insurance policies contain choice of law language. With individual policies, like for motor vehicle insurance, where the insured deals directly with the carrier or an insurance agent, the delivery issue is simple. Under Florida law, the carrier is required to deliver the policy to the insured. Moreover, where such a policy is procured in Florida, the policy will name Florida law as the choice of law. With polices like the OH&D in our case, which was procured through a different avenue, policy language can be nebulous and the issue of where the policy was delivered can result in factual disputes.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

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