SCIF Faces $1,131,000 Damages Award

Palm Medical Group, Inc. v. State Compensation Insurance Fund (2008):

In a stunning blow the First Appellate District has reinstated a jury verdict awarding Palm Medical Group, Inc. $1,131,000 in damages against SCIF for excluding it from its Preferred Provider Network (PPN) from 2001-2002.  The jury verdict was based upon a duty fair procedure SCIF owed as a quasi-governmental entity to Palm.

This case is significant for non-SCIF insurers for two reasons.  First, the court refused to consider Palm’s arguments regarding its MPN application.  In other words, this case says nothing about SCIF’s duties owed when considering MPN applications.

Second, SCIF only owed a duty because of its quasi-governmental nature.  Private insurers and corporations do not owe such a duty.

Applicant’s attorneys and lien claimants are starting to cite this case for things that it does not say.  If you face such an argument beware of the misinformation.

 

Opinion Filed March 25, 2008.

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