Insurance & Reinsurance

Stradley Ronon secured summary judgment for Selective Insurance in a flood insurance case filed in the U.S. District Court for the Western District of New York. The case was filed after the plaintiffs submitted a claim to Selective Insurance relating to flood-related damage to the foundation of their Keuka Lake house. Selective Insurance paid a portion of the claim, but denied coverage for the remainder of the plaintiffs’ claim, which included the cost to rebuild the entire house. The plaintiffs eventually filed suit seeking policy limits, but never submitted a sworn proof of loss to Selective Insurance setting forth the specific items of damage caused by flood as required under the terms of their flood insurance policy. After a failed mediation required by the court, Stradley Ronon filed a motion for summary judgment on the grounds that plaintiffs had failed to timely submit a signed and sworn proof of loss for the additional damages being sought. Judge Michael Telesca granted the motion for summary judgment, finding that both the policy and Selective Insurance’s denial letters clearly placed the plaintiffs on notice that they needed to file a proof of loss within 60 days of the loss. Judge Telesca expressly rejected the plaintiffs arguments that they had substantially complied with policy requirements, and that the equitable doctrines of waiver and estoppel precluded Selective Insurance from relying upon the proof of loss provision. 

After sustaining damage during Superstorm Sandy, the owner of a garden-level condominium filed a claim for flood damage under a policy issued by Stradley Ronon client Wright National Flood Insurance Company under the National Flood Insurance Program. Wright denied requests for additional insurance benefits under the policy, asserting the unit was a basement as defined by the policy because the condo was entirely below ground level. After hearing all the evidence, the U.S. District Court for the District of New Jersey found Wright’s land surveying expert was the most persuasive, and determined that the apartment was below ground level and thus excluded under the relevant policy. The court ordered judgment in favor of Wright.

Stradley’s insurance practice secured the Commonwealth Court's approval for the sale of millions of dollars in financial assets owned by the estate of Reliance Insurance Company. The Pennsylvania Insurance Department, which is liquidating Reliance, decided to sell some financial interests belonging to the company. After identifying potential purchasers and inviting them to make purchase proposals, the department engaged in an auction process that yielded two final bidders. They each made final bids, with a real estate investment firm submitting the winning bid of $9.6 million.

In preparing its final bid, however, the winning firm had a paperwork problem that delayed completion of its bid. The department allowed the firm extra time to complete the paperwork – time that was not given to the second bidder. Anticipating that the second bidder would protest this as unfair when the department sought court approval of the sale, the department hired Stradley to file for approval and fight off any protest. Complicating matters further was the fact that the deal with the winning bidder had to close quickly, or else that firm could – and would – walk away.

Shortly after court approval was sought, the disappointed bidder did, in fact, intervene, and asked the court to block the sale. It proposed that the court conduct a final, court-supervised round of bidding, and also suddenly promised to pay $9.9 million for the assets ($300,000 more than the winning bidder’s final bid). In response, Stradley quickly prepared and filed an opposition, and also asked the court to expedite consideration so the deal with the winning bidder could close in time, if approved.

The Commonwealth Court granted the department’s request to expedite, rejected the disappointed bidder's request to block the sale, and approved the sale as proposed by the department. In reaching this decision, the Court agreed with all of the arguments put forward by Stradley. This decision represents an important precedent protecting the department’s ability to conduct asset sales in insurance company liquidations without interference from disappointed bidders. As a result of the Court's approval, the transaction with the winning bidder promptly closed.

Stradley secured summary judgment for XLHealth, a division of UnitedHealthcare, in a breach of contract action brought by XLHealth’s automated-mail processing vendor. After extensive discovery and with settlement discussions deadlocked, the parties cross-moved for summary judgment, taking diametrically opposed positions on an issue of contract ambiguity. Chief Judge Conner adopted Stradley’s position, granted summary judgment in XLHealth’s favor, denied the vendor’s cross-motion, and dismissed the case in its entirety.

Stradley secured a victory for the Armour Group, a Bermuda-based group of companies that focuses on identifying, structuring and transacting value opportunities within the insurance and reinsurance sectors, in the Pennsylvania Commonwealth Court. Armour sought regulatory approval from the Pennsylvania Insurance Department for its proposed acquisition of several insurers in the OneBeacon Insurance family of companies. Once public notice of the proposed transaction was issued, a series of OneBeacon policyholders applied to block it. After the Department rejected intervention and approved the sale, the policyholders appealed to the Commonwealth Court. Stradley represented Armour in opposing the policyholders’ appeal and otherwise sought affirmance of the Department’s actions. 

In a 2-1 precedential decision, the Court sustained the Department’s decision to reject the policyholders’ participation and dismissed the challenge to the Department’s approval of the transaction, as Stradley advocated.

Stradley secured the dismissal of an appeal by Standard Fire’s co-defendant, Chernoff Diamond & Co. LLC, of a summary judgment entered in Standard Fire’s favor by the United States District Court for the District of New Jersey.  The Third Circuit Court of Appeals agreed with Stradley’s argument that Chernoff did not have standing to assert the rights of Plaintiff simply because Chernoff no longer had Standard Fire to share in any potential exposure, and issued a brief opinion quoting the argument in Stradley’s brief and dismissing Chernoff’s appeal for lack of standing. This win is a positive development for “Write Your Own” flood insurance carriers in National Flood Insurance Program jurisprudence because the Third Circuit’s opinion bolsters the important concept that a WYO carrier’s liability to a policyholder is separate and distinct from that of an insurance agent.

Stradley Ronon represented Aetna Health Inc. in connection with its application for regulatory approval regarding its acquisition of Coventry Healthcare of Delaware Inc. In addition to the various regulatory filings, the matter involved an evidentiary hearing before the Delaware Department of Insurance. The merger relates to an ongoing effort to consolidate entities within an insurance holding-company system which will increase Aetna’s presence in the fast-growing government sector.

Stradley Ronon successfully tried a significant insurance claim for Reliance Insurance Co. (in Liquidation). The claimant, who was given therapeutic radiation, developed severe neurological complications following the treatment. Stradley defended causation by contending that the neurological deficits that developed were caused by an autoimmune response, and not because of the treatment, and that the insured was not guilty of malpractice. Stradley secured a victory before a referee appointed in the Reliance liquidation.

Stradley Ronon successfully represented before the Pennsylvania Office of Open Records several health insurance plans seeking to protect their competitive information from public disclosure. The Office of Open Records agreed with the plans’ arguments that the details of their health and wellness incentives programs are exempt from disclosure under the Pennsylvania Right-to-Know Law. Under these programs, the health plans offer rewards when members make healthy lifestyle choices. The requester, a member of the news media, sought non-public and internal plan information about these programs with respect to individuals enrolled in the Pennsylvania HealthChoices program, which is administered by the Department of Human Services. The Office of Open Records ruled that the information is exempt under the law, basing the ruling on the plans’ arguments and evidence, which demonstrated that the details of the rewards programs are kept confidential and are a matter of competition between the plans.

Stradley Ronon secured a victory for a leading student loan servicer in the U.S. District Court for the Eastern District of Pennsylvania. The plaintiff brought claims that the servicer violated the Federal Debt Collections Practice Act and the Fair Credit Reporting Act, based on generalized allegations that his loans were not valid. Judge Gerald Austin McHugh dismissed the case with prejudice, finding that the plaintiff alleged no facts to suggest that his loans were invalid, or that the loan documents were unenforceable.

For more than two decades Stradley Ronon has served as UnitedHealth’s mid-Atlantic regional counsel, effectively and efficiently handling more than 400 cases and claims for UnitedHealth and its subsidiaries and affiliates throughout the mid-Atlantic region and in other states (e.g., Ohio, New York, Michigan and Florida). The majority of these cases are healthcare/ERISA litigation, and involve, ERISA benefit claims; non-ERISA claims; Medicare/Medicaid; provider disputes; prompt pay claims; stop loss claims; termination of contractual arrangements; coordination of benefits and care; third-party administration of benefits, life and disability benefit disputes; and counterclaims for fraud or overpayment. These cases range from single plaintiff claims to large, complex class actions.