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Edward J. Currie, Jr., Currie Johnson Griffin Gaines & Myers PA, Jackson, MS recently won a summary judgment on behalf of two workers comp insurers, sister companies owned by the same parent, who were sued for bad faith cancellation of a renewal policy and denial of coverage when the insured employer as an uninsured employer had to pay workers comp benefits to an injured employee. The insured had paid the estimated premium for the initial policy, which was audited by the insurer after expiration of that policy. The audit revealed a higher payroll for the initial policy year, and an additional premium was billed to the insured employer for the initial policy year. That policy was renewed by a different sister insurer. The sister insurer for the renewal policy also issued an adjusted premium endorsement for the second policy for additional premiums based on the prior year’s audit. The insured contested the additional premium and after a subsequent audit, the additional premiums for the prior policies were adjusted downward and a refund from the initial policy year was issued and accepted by the insured. The insured continued to contest the additional premium for the renewal policy and failed to pay the adjusted premium after receiving a cancellation notice. The renewal policy was cancelled pursuant to the statutory method for non-payment of premium, and several weeks after cancellation the employee’s injury occurred. The insured as an uninsured employer paid the comp claim and sued both workers comp insurers alleging bad faith cancellation of the renewal policy and claiming that the renewal insurer under the language of the policy was not entitled to charge the additional premium. The Court sustained the motion for summary judgment on grounds that the policy allowed the insurer to cancel the policy for any reason, based upon unambiguous cancellation language, and therefore the plaintiff employer had no cause of action on the policy or for bad faith. Scotty’s Recycling, LLC v. American Home Assurance Co. and New Hampshire Ins. Co., No. 3:11cv341-DPJ-FKB (S.D. Miss. 9/9/13). Congratulations, Ned!


Do you have a triumph to share? Send a brief summary and a recent photograph to David Fuqua at dfuqua@fc-lawyers.com


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