O'Meara, Leer, Wagner & Kohl, P.A. News

Iowa Joins Growing Number of States to Weigh In on Asbestos-Related Litigation

March 24th, 2017

On March 23, 2017, Iowa Governor Terry Branstad signed into law Iowa Senate File 376 (2017), which stands to significantly impact the future handling of asbestos-related litigation in the state.  The new law first contains a section entitled the “Asbestos Bankruptcy Trust Claims Transparency Act,” which requires Plaintiffs and their attorneys to disclose claims and recoveries from bankruptcy trusts established to compensate people injured from breathing in dust from asbestos-containing products manufactured or sold by now-bankrupt companies.   Failure to properly disclose any claims against these asbestos trusts could force the dismissal of the litigated cases against viable defendants.   Also, the new law contains a section called the “Asbestos and Silica Claims Priorities Act” which requires certain medical disclosures and other proof requirements before pursuing a claim for nonmalignant diseases. Notably, this section also provides for a “two-disease rule”  meaning there are separate applicable statutes of limitations for malignant and non-malignant diseases.  Finally, the law contains a section titled “Successor Corporation Asbestos-Related Liability Fairness Act,” which provides limits on claims against companies that assumed or incurs potential liabilities based upon operation of law, such as through a merger or consolidation.

Iowa joins neighboring South Dakota (SD Senate File 138, passed March 2017) as the latest in a growing number of states to enact some form of legislation aimed at curbing apparent fraud in asbestos litigation.   Prior to 2017, nine other states enacted similar legislation,  namely Georgia (2007);  Ohio and Oklahoma (2013); Wisconsin (2014); West Virginia, Texas, and Arizona (2015); and Tennessee and Utah (2016).  Similar legislation is being introduced in many other states.  Also, several attempts have been made to pass the “Furthering Asbestos Claims Transparency” (FACT) Act at a Federal level.  Presently, H.R.906 is working its way through committees in Washington D.C. Read the new law here.

Minnesota Court of Appeals Rejects Employer’s Attempt to Recoup Amounts Paid to Third Parties Due to Employee’s Negligence

March 21st, 2017

On March 20, the Minnesota Court of Appeals published an opinion affirming a district court’s ruling barring an employer from bringing a negligence claim against its employee for amounts paid to indemnify the employee from third-party claims. First Class Valet Services, LLC v. Gleason, A16-1242 (Minn. Ct. App. 2017).

Minnesota Supreme Court Reaffirms WCCA’s Limited Role On Appeal

February 10th, 2017

On February 8 the Minnesota Supreme reversed the Minnesota Workers’ Compensation Court of Appeals decision to award benefits in a head injury claim and held the WCCA (1) erred when it ruled on an issue not raised on appeal; (2) erred when it reversed the compensation’s judge’s determination that there was adequate foundation for a psychologists opinion; and (3) erred when it substituted its view of the evidence for that adopted by the compensation judge. Gianotti vs. vs. Independent School District 152 and RAM Mutual Insurance CoRead more here.

Condo Developer Held Liable for Design and Construction Defects Under MCIOA—Is it Finally Time for a Change?

February 10th, 2017

OLWK Associate Attorney Lance Meyer recently co-authored an article regarding the Minnesota Court of Appeals decision in 650 N. Main Assoc. v. Frauenshuh, Inc., in which the court held a developer liable under the Minnesota Common Interest Ownership Act for both design and construction defects.  Read the article here.

Pre-Treatment Assignments of No-Fault Benefits Prohibited by Auto Policy’s Anti-Assignment Clause

January 15th, 2017

It has become more and more common for medical, diagnostic, and chiropractic providers to require patients to assign their interests in basic economic loss benefits under the No-Fault Act to the provider as a precondition to treatment.  The provider then utilizes the assignment to seek direct payment from the patient’s automobile insurance company.  American Family Insurance Company recently challenged the enforceability of such assignments.  This week, the Minnesota Supreme Court ruled in American Family’s favor.

In Stand Up Multipositional Advantage MRI, P.A. v. Am. Family Ins. Co., A15-0843, the supreme court held that assignments obtained by Stand Up Multipositional Advantage MRI, P.A. (SUMA) were prohibited by an anti-assignment clause contained in its patients’ American Family automobile insurance policies.  The court’s reasoning provides valuable insights for insurers to consider in responding to assignment-of-benefits issues in the future, whether pressed by providers under the No-Fault Act or vendors under other first-party policies.

Recognizing that it has not resolved whether anti-assignment clauses in insurance policies are, as a rule, enforceable, the court explored two different approaches to determining the enforceability of anti-assignment clauses.  The court first discussed what is characterized as the “majority rule” around the country that anti-assignment clauses in insurance policies preclude pre-loss assignments but not post-loss assignments.  The court observed that the reasoning behind the “majority rule” is based on a presumption a post-loss assignment does not alter an insurer’s exposure to the risk insured under a policy.

However, significant for insurers going forward, the court, at the urging of Amici The Insurance Federation of Minnesota and The Property Casualty Association of America, also considered how the general common law contract anti-assignment rule recognized in Travertine Corp. v. Lexington-Silverwood, 683 N.W.2d 267, 270, 274 (Minn. 2004), impacted the at-issue assignments.  The court confirmed that under the Travertine rule, as long as an anti-assignment clause is clear and does not conflict with statute or public policy, the contract is not assignable.

Ultimately, the court concluded that it need not determine which rule applies to the at-issue assignments because American Family’s anti-assignment clause would be valid and enforceable to prohibit the SUMA assignments under either rule.  The court reasoned that the assignments at issue were prohibited “pre-loss” assignments under the majority rule because the assignments occurred prior to treatment and billing—the “loss” as defined under the No-Fault Act.  The court further reasoned that the assignments were prohibited under the Travertine rule because the American Family anti-assignment clause was clear and not in conflict with statute or public policy.  In so holding, the court distinguished Star Windshield Repair, Inc. v. W. Nat’l Ins. Co., 768 N.W.2d 346, 350 (Minn. 2009), in which the court did not enforce a contract’s anti-assignment clause because to do so would conflict with Minnesota statutory provisions.

The court ended its discussion by noting that there were valid policy considerations presented by both sides as to whether the pre-loss assignment of no-fault benefits should be permitted despite a policy’s anti-assignment clause and that it is up to the Legislature to amend the No-Fault Act if it desires a different outcome.

In the end, the decision leaves open the question of whether post-loss assignments of first-party policy proceeds are permitted under the majority rule or prohibited by Travertine.  However, it is implicit in the court’s opinion that the court continues to recognize that contract principles can and do apply to insurance policies and that anti-assignment clauses in contracts, including insurance policies, are generally enforceable unless they conflict with statute or public policy.

Amici The Insurance Federation of Minnesota and The Property Casualty Insurers Association of America were represented before the supreme court by Dale O. Thornsjo and Lance D. Meyer from this office.

If you have questions regarding the supreme court’s decision or any other insurance coverage or no-fault issues, please contact Dale, Lance, or one of the other members of our Firm’s Insurance Coverage Practice Group or Motor Vehicle Practice Group at (952.831.6544).

You can read the full text of the case by clicking here.

In Dram Shop Cases, Notice of Claim Provided to Liquor Seller’s Insurer Is Insufficient Notice to Seller, Barring Claim

December 31st, 2016

In Buskey et al. v. American Legion Post #270, an unpublished decision, the Minnesota Court of Appeals affirmed its stance that dram shop action claimants must provide notice of claims to licensees (i.e., “licensed retailers of alcoholic beverages or municipal liquor stores”) within 240 days of retaining an attorney pursuant to the unambiguous language of the Civil Damages Act, Minn. Stat. § 340A.801.  Notice to a licensee’s insurer is not enough, and failure to do so is a bar to any claims.

Read more here.

Happy Holidays from O’Meara Leer Wagner & Kohl!

December 21st, 2016


Out-of-State Insurers Responsible for Paying Minnesota No-Fault Benefits

December 8th, 2016

For years, insurers who chose not to do business in Minnesota did not need to conform their polices to Minnesota’s No-Fault Act, even when their insureds and their insured vehicles were involved in accidents within the state.

This week, in Founders Ins. Co. v. Yates, A15-1174, the Minnesota Supreme Court changed this rule.  Based on a plain language reading of the statute, the court held that an out-of-state insurer is required to provide benefits “when its insured is in an accident in Minnesota and the insured vehicle is in Minnesota, even though the insurer is not licensed by the State of Minnesota to issue motor vehicle insurance.” Minn. Stat. Section 65B.50, Subd 2.  The statute specifically states that “every” policy “wherever issued” must provide the benefits.  Out-of-state insurers who chose not to be licensed to issue policies in Minnesota are not exempted.

This decision raises questions about the breadth of the analysis, such as whether this applies to liability limits, etc.  For now, this ruling represents a significant change for those carriers that have foregone licensure in this state.  If an insured person and vehicle are in the State of Minnesota and the insured is injured in a motor vehicle accident, the policy must provide Minnesota’s No-Fault benefits.

If you have questions regarding the supreme court’s decision or other liability related issues, please contact a member of our Liability Practice Group at (952- 831-6544).  To read the full text of the case, click here.

MN Court of Appeals Holds that Failure to Sue Tortfeasor Precludes UIM Claim

November 14th, 2016

In Ronning v. State Farm, A16-0538, the Minnesota Court of Appeals ruled in a published decision that insureds who fail to sue the tortfeasor may not bring a claim for underinsured motorist benefits because their claim has not ripened.

In this case, an insured who suffered permanent injuries in a car accident failed to sue the tortfeasor because he missed the statute of limitations.  The insured brought a malpractice action against its attorney and settled out of court.  The insured then made a claim for underinsured motorist benefits from State Farm and purportedly sent a Schmidt-Clothier notice, informing of the tentative settlement with its attorney.

In arguing his claim should go forward, the insured claimed the statutory language in the No-Fault Act requiring the insured be “legally entitled to recover damages” only meant proof of fault and damages, not the recover-from-tortfeasor condition that is articulated by the court in Employers Mut. Cos. v. Nordstrom, 495 N.W.2d 855, 857 (Minn. 1993) (finding that “a recovery from the tortfeasor’s liability insurance is a nonarbitrable condition precedent to bringing an underinsured claim.  Until there has been a recovery from the tortfeasor’s insurer, the claimant’s underinsured claim simply has not matured.”).  Further, the insured argued he may proceed with his unripe claim “so long as he ‘credits’” his insurer for the full liability limits of the tortfeasor’s insurance.  The court of appeals rejected both arguments, finding the insured had a more appropriate remedy in the malpractice lawsuit against his attorney.

If you have questions regarding the court of appeals’ decision or other liability related issues, please contact a member of our Liability Practice Group at (952- 831-6544).  To read the full text of the case, click here.

O’Meara Leer Wagner & Kohl Announces New Partners

September 15th, 2016

O’Meara Leer Wagner & Kohl announced that firm attorneys Sarah Foulkes, Sarah Hunter, Brian McSherry and Brian Thompson have been named as Partners.

Sarah Foulkes represents  employers and insurers in workers’ compensation and asbestos matters, Sarah Hunter and Brian Thompson  in workers’ compensation litigation, and Brian McSherry in construction, products and retail and hospitality matters.

“Together, these four partners represent our core values with excellent reputations earned within the legal and business communities,” said Shamus O’Meara, Managing Partner.

Read full press release here: 2016 New Partner Press Release