Advanced No-Fault Issues
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Transcript of Advanced No-Fault Issues
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Advanced No-FaultIssues
Handling Complex Auto Insurance
Coverage DisputesWednesday, February 29, 2012
Crowne Plaza Little Rock
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Advanced No Fault Issues
Gerry Schulze
Baker Schulze & Murphy
11219 Financial Centre Pkwy Suite 315
Little Rock, AR 72211
(501) 537-1000 (501) 537-1001 (Fax)
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No Fault in Arkansas
Arkansas No Fault Statute Ark Code AnnSec. 23-89-201 et seq
Medical and hospital benefits. 23-89-202(1)
Income Disability Benefits. 23-89-202 (2)
Accidental Death Benefits 23-89-202 (3)
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Medical and Hospital Benefits
All reasonable and necessary expensesfor medical, hospital, nursing, dental,
surgical, ambulance, funeral expensesand prosthetic services incurred withintwenty-four (24) months after theautomobile accident
Up to an aggregate of $5,000 per person
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Medical and Hospital Benefits
May include nonmedical care andtreatment rendered in accordance with a
recognized religious method of healing Expenses for hospital room charges may
be limited to semi-privateaccommodations.
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Reasonable and Necessary
To make sense of this, we have tounderstand what reasonable and
necessary medical expenses mean inthe context of personal injury litigation.
Ponder v. Cartmell, 301 Ark. 409, 784S.W.2d 758 (1990) is a landmark
decision in this context
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Reasonable
So long as an individual has usedreasonable care in selecting a physician,
she can recover from the wrongdoer forthe full extent of her injury.
Defendant cant second-guess the doctorschoice of treatment.
If the doctor is negligent, the originaltortfeasors negligence is still the legalcause of the additional damage sustained.
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Necessary
Necessary means causally related to thetortfeasors negligence
If a plaintiff proves that her need to seekmedical care was precipitated by thetortfeasors negligence, then theexpenses for the care she receives,
whether or not the care is medicallynecessary, is recoverable.
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A different rule in no fault
State Farm Mut. Ins. Co. v. Hill, 47 Ark. App. 21,883 S.W.2d 867 (1994).
When a man commits a tort he incurs by force
of the law a liability to damages, measured bycertain rules. When a man makes a contract heincurs by force of the law a liability to damages,unless a certain promised event comes to pass.But unlike the case of torts, as the contract is by
mutual consent, the parties themselves,expressly or by implication, fix the rule by whichthe damages are to be measured
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Reasonable and Necessary
This tells us what isnt the rule. But whatis the rule?
"Read the Statute and Read the Policy."State Farm Mut. Auto. Ins. Co. v.
Beavers, 321 Ark. 292, 295, 901 S.W.2d13 (1995)
Sometimes you would have to look atthe policy language, but it often isntmuch more help
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Concerns about Hill
During the course of [the defense chiropracticexpert] the trial court, on its own motion,granted Mrs. Hill a directed verdict
All the Court of Appeals did was conclude thatPonder v. Cartmell was inapplicable to a breachof contract suit.
On remand, there was a defense verdict. Thatcase was reversed and remanded for a thirdtrial on an expert testimony issue. Hil v. StateFarm Mut. Auto.Ins. Co., 56 Ark.App. 67, 937S.W.2d 684 (1997)
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Reasonable and Necessary
This is a long way to we dont know.
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Income Disability
) INCOME DISABILITY BENEFITS.Seventy percent (70%) of the loss of
income from work during a periodcommencing eight (8) days after the dateof the accident, and not to exceed fifty-two (52) weeks, but subject to a
maximum of one hundred forty dollars($140) per week.
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Income Disability for non-
income earners In the case of a nonincome earner, the benefits
shall consist of expenses not to exceed seventydollars ($70.00) per week, or any fractional part
of a week, which are reasonably incurred foressential services in lieu of those the injuredperson would have performed without incomeduring a period commencing eight (8) days after
the date of the accident and not to exceed fifty-two (52) weeks.
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Income Disability
The statute provides for income disabilitybenefits beginning eight days after the
accident up to 52 weeks after theaccident.
Glenn v. Farmers and Merchants Ins.
Co. 649 F. Supp. 1447 (W.D. Ark. 1986)
no income disability benefits could be duemore than 52 weeks after the accident.
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Death benefits
$5000. Well, its something
And its not subject to subrogation
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Subrogation
That there is no subrogation lien unlessand until the injured insured is madewhole for his injury. Ryder v. State Farm Mut. Auto. Ins. Co,
371 Ark. 508, 268 S.W.3d 298 (2007);
General Accident Insurance Company v.Jaynes, 343 Ark. 143, 33 S.W.3d 161
(2000), The Travelers Insurance Co. v. O'Hara,
350 Ark. 6, 84 S.W.3d 419 (2002)
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Made Whole Formula
South Central Arkansas Electric
Cooperative v. Buck, 354 Ark. 11, 117
S.W.3d 591 (2003).
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Amount of loss, including all elementssuch as
Nature, extent, and duration of injury medical expenses,
lost income or earning capacity (past andfuture),
pain and suffering, etc. Is that greater than the amount
recovered? Amount of Judgment/Settlement:
Reduce costs and fees
Add in the amount received in insurancebenefits
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Damages suffered versus
benefits received The costs of recovery will very frequently
make it impossible to be made whole.
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The question whether an insured hasbeen made whole is an equitable
question for a judge rather than a juryquestion. Farm Bureau Cas. Ins. Co. v.Tallant, 362 Ark. 17, 207 S.W.3d 468
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Policy limits?
It is not necessary to get policy limits forthe made whole doctrine to apply.
Shelter v. Kennedy, 347 Ark. 184, 60S.W.3d 458 (2001)
but it certainly doesnt hurt either.
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Exclusions
There are statutory exclusions, but theyare not exclusive
Intentionally causing injury to oneself Causing injury in commission of felony or
while fleeing the police.
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Exclusions
The insurer is free to include otherexclusions
E.g. Bohot v. State Farm Mut Auto Ins.,2012 Ark. 22 (Jan. 26, 2012). This coverage does not apply to bodily
injury sustained by any person to theextent that benefits theefor are in whole or
in part paid or payable under anyworkmens compensation law, employersdisability law, or any similar law.
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Exclusions
In Bohot the exclusion applied eventhough the particular treatment at issue
was not covered by workerscompensation because the physicaltherapy was not ordered by the workerscompensation doctor.
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Rejection of coverage in
writingWith online insurance marketing so
common, how does a customer reject inwriting?
Barwick v. Government EmployeeInsurance Co., Inc., 2011 Ark. 128(2011). All it takes is an electronicallygenerated record containing anelectronic signature. Thats valid underthe Uniform Electronic Transactions Act,
Ark. Code Ann. Sec. 25-32-101 et seq.
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Who is covered?
The coverages provided in 23-89-202shall apply only to occupants of the
insured vehicle and to persons struck bythe insured vehicle, includingpedestrians, bicyclists, motorcyclists,persons in a horse-drawn wagon or cart,
and persons riding on an animal, and tonone other.
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However,
However, the coverages shall not beapplicable, or payable, if the prescribed
minimum coverages are afforded tothose occupants and to persons struckby the insured vehicle, either as anamed insured or additional insured
under another valid and collectibleautomobile insurance policy.
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Who is the insured? When are
you insured?Note that this acknowledges that you
can have no-fault coverage on your own
vehicle whether you are in your car ornot.
Look at the policy on your car and on thevehicles of family members to see if
theres coverage.
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Property Damage
Property damage claims can be difficultbecause of the reality of automobile
financing.
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Property damage
In all cases involving damage to motorvehicles, the measure of damages shall
be the difference between the value ofthe vehicle immediately before thedamage occurred and the value after thedamage occurred, plus a reasonable
amount of damages for loss of use of thevehicle. 27-53-401
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Fair Market Value
Fair market value means the price thatthe property would bring on the open
market in a sale between a seller who iswilling to sell and a buyer who is willingand able to buy after a reasonableopportunity for negotiations. AMI 2221.
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What can you take into
consideration? I have argued its the amount the willing
buyer and the willing seller should
agree on. The willingness of the seller may well
be influenced by the fact that the sellerwould have to sacrifice some of the
benefit of owning the vehicle.
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Not a total loss
When proving damages for property thatwas not a total loss, the difference in fair
market value may be established by thereasonable cost of repairing thedamaged property. Zhan v. Sherman,323 Ark. 172, 913 S.W.2d 776 (1996)
Minerva Enter., Inc. v. Howlett, 308 Ark.291, 824 S.W.2d 377 (1992).
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Property Owner may Testify
A property owner may testify as to his or heropinion of the value of damaged property.Hickman v. Carter, 315 Ark. 678, 870 S.W.2d
382 (1994). The Arkansas appellate courts givethe factfinder some latitude in its decision inawarding damages when arriving at a fair-market-value figure and have not required
exactness on the proof of damages. Crooms v.Capps, 101 Ark.App. 221, 274 S.W.3d 364(2008).
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