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Keywords

contractlawsuitbreach of contractdamagestrialmotionsummary judgmentworkers' compensationbad faithmotion for summary judgmentjury instructions

contractbreach of contracttrialverdictmotionsummary judgmentworkers' compensationbad faithmotion for summary judgment

Related Cases

Bertelsen v. Allstate Ins. Co., 796 N.W.2d 685, 2011 S.D. 13

Facts

Bonnie Bertelsen, an in-home registered nurse, was severely injured in a car accident while driving a company vehicle. After her workers' compensation claim was denied by AIG, the Bertelsens notified Allstate of their medical payments claim under their personal automobile insurance policy. Despite confirming the denial of the workers' compensation claim, Allstate failed to pay the medical benefits, leading the Bertelsens to incur significant medical expenses and ultimately file a lawsuit for breach of contract and bad faith against Allstate.

Bonnie worked as an in-home registered nurse for Universal Pediatric Services (UPS). On December 26, 2005, Bonnie was severely injured in an automobile accident while driving a UPS vehicle to a patient's home to perform her nursing duties.

Issue

Did the trial court err in denying the Bertelsens' motion for summary judgment on their breach of contract claim and in its jury instructions regarding the bad faith claim?

Whether the trial court erred by denying the Bertelsens' motion for summary judgment on their breach of contract claim.

Rule

Insurers covering bodily injury are required to pay medical benefits immediately when workers' compensation coverage is denied, and a denial of a claim that is not fairly debatable may indicate bad faith.

Insurers covering bodily injury are required to pay medical benefits immediately when workers' compensation coverage is denied.

Analysis

The Supreme Court held that Allstate breached its contractual and statutory duty to pay medical benefits immediately after AIG denied Bonnie's workers' compensation claim. The court emphasized that Allstate's obligation was clear from the statutory language, and the trial court's failure to instruct the jury accordingly prejudiced the Bertelsens' ability to present their case. The court also noted that the trial court's rejection of the previous ruling created confusion regarding the issues of breach and bad faith.

The Supreme Court held that Allstate breached its contractual and statutory duty to immediately pay medical benefits for bodily injury after Bonnie's workers' compensation claim was denied.

Conclusion

The Supreme Court affirmed in part, reversed in part, and remanded the case for trial on the issues of contract damages and the bad faith claim, instructing the trial court to properly inform the jury of Allstate's breach of duty.

We affirm in part, reverse in part, and remand with directions for proceedings consistent with this opinion.

Who won?

The Bertelsens prevailed on their breach of contract claim, as the court found that Allstate had a clear duty to pay medical benefits which it failed to fulfill.

The jury ultimately returned a verdict awarding the Bertelsens $33,000 for breach of contract but rejecting their bad faith claim.

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