Insurance Dispute Lawyer Blog

In what can only be considered a confusing lapse in digital security, Sony announced another breach of their network security in late May. This news comes on the heels of the major shutdown that aggravated a world of gamers. As the length of downtime nears a month, questions linger as to how much knowledge the electronics giant had regarding system vulnerabilities and why a breach was what it took to search for solutions.

Relating to a vulnerability regarding password resets, the most recent security breach is a major headache for Sony. The Playstation 3 Network, albeit free, is relied upon by millions of users for online gaming and, more importantly, includes a wealth of personal information for all of these users. Within the first security breach, this personal information, unfortunately, also includes billing details that could lead to vulnerability for customers who only wished to enjoy their games as sold.

Regarding the most recent breach, reports indicate that users will know their account has been compromised if they received an email indicating that their password had been changed. While the information made vulnerable in this act remains unclear, it is just yet another incident in a problematic series of events that raise significant questions about the protection being utilized by Sony and the amount of negligence that may be at play. Negligence claims involve an injured party suing a defendant for the damages suffered that were avoidable through the direct intervention of that party. In short, negligence claims deal with the 'avoidable;' news reports that have come out regarding this matter indicate that Sony was aware of the vulnerability.

The full extent of what information the hackers were able to attain is still unclear and may require litigation to fully understand. However, the facts clearly indicate this case will test the specific definition of cyber security and the expectations of companies to protect the information of users, regardless on the price of said service. Following the case will be crucial not only for those individuals who may have had their information breeched but also for those looking to better understand the law and how it applies to issues like this. For that reason we will continue to blog on the matter and provide updates as they become available.

The Berniard Law Firm handles a wide variety of negligence cases, technology related or not, and would be happy to discuss this or any other matter with potential clients. Contact our offices today for more information.

Homeowners across the Louisiana coast were affected by Hurricane Katrina. Many of those affected are still dealing with the stressful experience of rebuilding their homes, communities, and lives. Homeowners insurance is a boon to many when natural disaster strikes. Unfortunately, insurance companies do not always make recovery of benefits easy on the afflicted homeowner. The insurance recovery process can be overwhelming, and may be complicated by the often necessary instigation of litigation. Insurance negotiations can be complicated by differing interpretations of policy provisions. Many different provisions governing recovery are involved in insurance contracts. The interpretation of the language of the contract by the court plays a pivotal role in deciding the amount of damages an insured is entitled to recover.

The recent Fifth Circuit Court of Appeals case French v. Allstate Indemnity Co., illustrates that the recovery of damage benefits from an insurance company is not always a straight forward process. In French , homeowners in Slidell, Louisiana sued their homeowners insurance provider, Allstate Indemnity Co., to recover additional damages resulting from wind damage to their residence caused by Hurricane Katrina. The plaintiffs initially won a judgment in their favor in the United States District Court for the Eastern District of Louisiana , but they appealed, arguing that they were entitled to additional damages beyond the original award. The insurance company paid less than the full amount of the liability limit under the homeowners insurance policy. The District Court held that, since their repair costs would exceed their policy limit, they were entitled to at least the full limit and awarded them judgment accordingly.

On appeal, the plaintiffs argued that they were entitled to further damages under two provisions of their policy, an Extended Limits Endorsement provision and an Additional Living Expenses provision. They argued that the lower court erred in denying them recovery under these provisions. The court applied Louisiana case law which dictates that the language of the policy controls and “constitutes the law between the insured and insurer.” When an insurance contract is subject to interpretation "'[w]ords and phrases ... are to be construed using their plain, ordinary and generally prevailing meaning,’ unless the words have acquired a technical definition." The appellate court reviewed the original award to determine if the lower court erred in their interpretation of these provisions and in denying recovery to the plaintiffs.

The Extended Limits Endorsement allowed for a certain amount of additional damages above and beyond the actual cash value of the insured’s home. The court found that the language of the provision indicated that, in order to recover under this provision, the insured had to show they had repaired or replaced their damaged property. They must also have insured their home to 100% of its value. The plaintiffs did not meet either of these requirements, and the court found the denial of an additional award under this provision was appropriate.

The Additional Living Expenses provision allowed for recovery of damages for "the reasonable increase in living expenses necessary to maintain [a] normal standard of living when a direct physical loss we cover . . . makes your residence premises uninhabitable." The court determined that the plaintiffs had to show additional living expenses they had actually incurred. Since they had not yet begun repairs on their home, and continued to live in the residence, they were properly denied additional recovery under this provision.

Knowledge of the interpretation of insurance contract provisions is important when negotiating an insurance settlement or in litigation for recovery of damages. If you or a loved one has been affected by Hurricane Katrina you need an experienced law firm to help you navigate negotiations with your insurance company and to represent you in court should it be necessary. If you are looking for legal representation, the Berniard Law Firm has experience working with the victims of Hurricane Katrina and their families as well as a variety of storm and general insurance dispute issues.

Continue reading " Insurance Contract Interpretations and the Affect on Recovery of Damages " »

Previously on the Personal Injury blog, we have explored that auto insurance policies commonly include coverage exceptions for damage or injury that arises from intentional acts. Another typical limitation concerns criminal acts, whereby the insurer's obligation to cover losses is limited or entirely avoided when the policyholder's claim is related to his or her own illegal activity. Similarly, life insurance policies that contain accidental death benefits usually include a provision that reduces or eliminates the pay-out when the policyholder's death occurs while he or she is engaging in illegal activity. This very provision was at the center of an unpublished opinion by the U.S. Court of Appeals for the Fifth Circuit following a one-car accident in Lafayette Parish, Louisiana.

In 2002, Bryan Redeaux was killed in a single-car accident. At the time of his death, he was covered by a life insurance policy issued by the Southern National Life Insurance Company, Inc. that named his mother, Connie Redeaux, as the beneficiary. Southern paid Connie Redeaux $10,000 in life insurance benefits but denied her claim for accidental death benefits based on a policy exclusion “for a loss which in any way results from ... injury or death occurring as a result of the commission of a crime or the attempt to commit a crime.” The coroner reported that at the time of the accident, Bryan Redeaux's blood alcohol concentration ("BAC") registered 0.21 percent, which was twice the legal limit under Louisiana law. Connie Redeaux filed suit in state court seeking to recover the policy's accidental death benefits. The action was removed to federal court due to the applicability of the Employee Retirement Income Security Act. The parties filed cross-motions for summary judgment, and the district court granted Connie Redeaux's. Southern appealed.

The court, after reviewing the trial record, determined that it was "undisputed that the insured was operating a motor vehicle at the time of his death and that his BAC was 0.21 percent, more than twice the legal limit under Louisiana law." It rejected Connie Redeaux's argument that the policy exclusion did not apply because no criminal charges were filed against her son; it is well established in the Fifth Circuit that "[t]he failure of the state criminal justice system to prosecute an individual ... by no means constitutes an affirmative finding that the individual is absolved of any crime.” Thus, the court held that "the insured committed the crime of operating a vehicle while intoxicated under Louisiana law," and reversed the district court's judgment.

Although Louisiana generally endorses the view that "exclusionary provisions are to be strictly construed against the insurer with any ambiguity construed in favor of the insured," policy holders should ensure they understand all limitations and exclusions. While Connie Redeaux's loss of her son was tragic and her attempt to maximize her recovery under the policy understandable, the application of standard contract principles could produce no other result given the clear langauge of the policy.

Continue reading " Single-Car Wreck in Lafayette Parish Involving Alcohol Leads to Dispute Over Life Insurance Policy " »

Previously on our personal injury blog, we have seen that an automobile liability insurance carrier's coverage of a substitute vehicle is determined by the language of the insurance policy. Courts apply "ordinary contract principles" and interpret the policy's language, and this interpretation "is usually a legal question that can be properly resolved in the framework of a motion for summary judgment." Indeed, when the language of a policy is "clear and unambiguous a reasonable interpretation consistent with the obvious meaning and intent of the policy must be given."

The court's interpretation of an insurance policy's language was central to the summary judgment in the recent case of Newman v. State Farm Mutual Auto Insurance Co., et al. In this case, the Third Circuit Court of Appeal for the State of Louisiana reviewed the Beauregard district court's grant of the Clarendon American Insurance Company's motion for summary judgment. On June 30, 2007, Ann Newman's car was rear-ended by Leslie Roshong on Louisiana Highway 109 between Leesville and Vinton. Roshong was driving his personal vehicle, a 2006 Dodge Ram pickup truck, to a site in Vinton where he was to set up a mobile home that he moved from DeRidder as part of his business, Arrow Mobile Home Movers. Newman filed suit against Roshong and the insurer of his truck, State Farm. She later amended her complaint to add Clarendon, the provider of auto liability insurance for Arrow. Clarendon filed a motion for summary judgment, asserting that it did not cover Roshong's personal truck. The trial court agreed and dismissed Newman's claims against Clarendon. On appeal, Newman argued that two of the endorsements in Roshong's policy with Clarendon which concerned interstate commerce extended coverage to the accident. The court found these endorsements inapplicable because Roshong's truck did not carry a permit from the Interstate Commerce Commission (as required by one) and did not leave the state of Louisiana on the day in question (as required by the other). The court concluded that "there is no genuine issue of material fact as to coverage under the Clarendon policy, as under the clear language of the policy, neither [endorsement] provision provides coverage for the accident at issue." Further, "the trial court committed no error in its interpretation of the Clarendon policy." Thus, the court upheld the summary judgment in favor of Clarendon.

It is understandable that Newman would want to ensure to include in litigation all insurance companies who may be liable for her damages related to the accident. However, courts will not overlook the plain language of an insurance policy to invent ways for a litigant to recover from an insurer who had no contractual connection with the incident in question. This decision reflects Louisiana's public policy concern that insurance companies must be permitted to limit their liability by contract in order to, for example, cover a driver's personal vehicle without committing to cover other vehicles owned by the driver's business. Without this ability to define coverage, insurance companies would face too much exposure and would likely withdraw from the market.

Continue reading " Third Circuit Explains Process for Court's Interpretation of Insurance Policy in Vernon Parish Wreck " »

Infomercials, commonplace in the wee nights for insomniacs, often push the envelope of how groundbreaking and innovative their products are. Using notions of mystery and incredible results, these product "debuts" draw the viewer in by promising results, and features, that commonplace items cannot. While most people would take these promises with a grain of salt, the notion that the product may not even resemble the claims presented is something that seems improbable. In the case of "As Seen on TV" product Smooth Away, this actually is the case as plaintiffs have begun to voice their displeasure of the false reality surrounding this hair removal item.

Smooth Away is a hair removal product that is pitched through the premise that it is a pain-free solution for hygiene purposes. Advertised as an instant and painless manner to tackle shaving needs, Smooth Away has had a very solid sales cycle due to these very attractive promises. The truth, however, behind the New Jersey-based corporation's product is not so simple. While their claims are smooth, the truth is much more rough and cloudy.

Marketed online and in local stores like Walgreens and others, it is without question that Smooth Away has found a niche in the marketplace. What's more, sales appear to be solid as buyers, mostly women, are looking for what is being promised: a simple, painless and easy way towards hair removal. The cost of trusting this product, though, is enough to be concerned with.

Current research reveals that the Smooth Away product is not a miraculous new substance that is revolutionary to the world. Instead, it appears to be a rehash of a product many people use everyday. Smooth Away, instead of being composed of the "flex crystals" the company purports, appears to actually be made up of a material texturally similar to 3M sand paper. What's more, this item purported to be relatively "pain free" often leaves users with burning sensations and chafed skin.

While additional charges against the company involve the fact that their claims of instant hair removal and pain free utilization fall dangerously close to medical 'promises' that require FDA approval. All in all, however, the very fact that a hardware store staple is being marketed as a beauty tool is dangerously close to the sort of misleading sales pitch that leads to a lot of distrust. At best this is merely a company taking advantage of fancy language. At worst it's an example of a company making claims that it cannot substantiate. It is our position that this is a matter for the courts to decide.

The video game world was rocked recently by the shutdown of the Sony Playstation 3 Gaming Network. While a free service, the fact that gamers were unable to connect to the network and play their favorite games against both friends and strangers added a wrinkle to an already complex competition between the electronics giant and Microsoft's X-Box system and network. However, a more significant wrinkle much less publicized exists: Sony was forced to shut down their network due to a breach by external individuals that exposed their personal data.

Most likely ending as a Multidistrict Litigation (MDL) situation wherein the litigation will be handled in one court and affect the rulings and settlement opportunities of people across the country, this situation affects hundreds, if not millions, of Americans. Headquartered in California, Sony still does not have a definitive answer for its customers regarding this situation. Yesterday's news that 10 million credit card numbers may have been exposed in a data breach that involved a known vulnerability is all the more staggering.

When someone puts their faith, and personal information, in the hands of a company, let alone a giant like Sony, they believe this data will be kept secure. However, for this breach to occur, and for the company to admit it was a known issue, provides the legal basis for judicial recovery. Only time will tell what becomes of this privacy and information issue but the protection of secure data is paramount. What Sony will do to reassure its customers that they can continue to trust them remains to be seen.

The courts have consistently found there is a strict liability on the part of corporations to maintain the information of its clients in a secure manner. When they breach this duty, the courts have followed suit in holding reasonable accountability in place as to how the company should have acted while taking into account unforeseeable circumstances. The twist is the aforementioned admission on the part of Sony that the breach involved an existing and known vulnerability of the system. Proponents of suing Sony for damages would see this as a red flag similar to an automobile company, for instance, continuing to sell a car with a weak brake system.

As time goes on more and more people will begin to realize the significance of this network shutdown goes well beyond a delay in their favorite games. While the immediate impact for many has been missing out on all of the features of their favorite games, very serious breaches of corporate policy and expectations. Attorneys have begun to investigate this matter and the Berniard Law Firm is at the forefront.

If you have any questions regarding this matter, please contact our offices immediately.