As an Oregon court said: “”We have observed in previous cases of this kind that there are three standard approaches to valuation: the market data approach, the income approach, and the cost approach. Bend Millwork v. Dept. of Revenue, 285 Or 577, 592 P2d 986 (1979); Medical Building Land Company v. Dept. of Rev., 283 Or 69, 582 P2d 416 (1978); Swenson v. Dept. of Revenue, 276 Or 1, 553 P2d 351 (1976). The appropriateness of a particular valuation method or combination of methods is not determined by fixed principles of law, but is a factual determination that depends on the record developed in each case. See Medical Building Land Company v. Dept. of Rev., supra at 78-79. Because we try this case ‘anew upon the record,’ we must determine which of the above approaches to valuation, under the facts of this case, best reflects the ‘true cash value’ of the property. In making this determination, we emphasize that we are performing our function as fact-finder, not our function as a corrector of legal errors.”
[City of Bend v. Juniper Utility Company, An Oregon Corporation; J. L. Ward Company, An, No. A137087 (Or.App. 04/06/2011) ]

Therefore, it depends, on the question posed and the type of property involved to determine which method is best.

I am curious. Do you know if there was a criminal complaint filed and, if so, what was the outcome?

It appears to me that the reasonable value of the services is what the willing seller — the doctor — is willing to take and what the willing buyer — the patient — is willing to pay.

Dr. Budetti stated his message to fraud perpetrators: “We know criminals will continue to
try everything they have to outsmart us and out run us. But these days they’re beginning to learn that they can’t hide. They are more likely to get caught, and when they do, the penalties are going to hurt.”

I am encouraged that CMS, HHS, the FBI and the Justice Department are working to defeat fraud and make it too expensive for the fraud perpetrators.

Mr. Dennis Jay of the Coalition Against Insurance Fraud wrote to me and said: “We meet with CMS on a weekly basis to help with their regional healthcare fraud summits and build a permanent public/private partnership. It will take a couple more years for results to come to the surface, but so far we’ve been impressed. I would agree — and have stated publicly — that Medicare fraud efforts have been a joke, but no longer.”

I am impressed with the actions of the HHS, FBI and Justice Department. I am against wasting money. The $161 million spent to create a program whose effectiveness cannot be quantified might better be used to hiring more prosecutors so that the anti-medicare-fraud task force can prosecute the criminals in all states.
Regards,
Barry Zalma

Your blog is an important addition to the relatively-little content on insurance law developments available on the internet. Thanks. I have posted a link to your blog on my own website.

Relative to the issue you mention on the very limited duties of agents/brokers to insureds and the Workmen’s Auto Insurance decision, Dairy America, Inc. v. New York Marine, 2010 U.S. Dist. Lexis 31846 (S.D. Ca. 2010), states:
“An insurance agent or broker assumes only those duties found in any agency relationship such as reasonable care, diligence, and judgment in procuring the insurance requested by an insured. An insurance broker generally has no duty to volunteer that an insured should obtain different or additional insurance coverage. The rule changes, however, when – but only when – one of the following three things happens: (a) the agent misrepresents the nature, extent or scope of the coverage being offered or provided … , (b) there is a request or inquiry by the insured for a particular type or extent of coverage … , or (c) the agent assumes an additional duty by either express agreement or by holding himself out as having expertise in a given field of insurance being sought by the insured.
…
. . . It is the insured’s responsibility to advise the agent of the insurance he wants, including the limits of the policy to be issued. … Ordinarily, the person seeking liability insurance knows better than the insurance agent the extent of his personal assets, and the premium he can afford or is willing to pay. In the absence of an express agreement to ensure adequate coverage or a holding out by the agent to assume greater duties otherwise implied in the agency relationship, the onus is thus squarely on the insured to inform the agent of the insurance he requires.
Internal quotations and citations omitted.”

Lowe v. Whitehead Cargo Consultants LLC, 2011 U.S. Dist. Lexis 5294 (S.D. Tx. 2011), held that an “insurance agent” owes no duty of good faith and fair dealing to an insured.

This rule may be appropriate where insureds are businesses who have sophisticated risk management personnel determining their own insurance needs, but I have a real problem with application of the rule to consumer insurance. My own practice extensively deals with marine insurance. Marine insurance policies, including yacht and boatowners’ policies, are not reviewed or regulated by insurance commissioners. Over the past few years, insurers have developed and often enforce broad exclusions from coverage that eviscerate the coverage average consumers expect they will receive when they buy a policy through an agent of a major national insurer. When they have a claim for a fire or sinking, they may find denial of coverage for loss of probably their most valuable asset other than their home due to exclusion from what they are told is all risks coverage of any damage arising from failure of reasonable care or due diligence of any person, not just the insured, in the operation or maintenance of the yacht, unseaworthiness, wear and tear, electrolytic or galvanic action, and corrosion. So any negligence of the insured in the operation, or even of independent third party contractors in the maintenance, of the watercraft, excludes coverage, even from ensuing loss. WOW!

An unreported decision, Progressive Classic Ins. Co. v. Pitts, Cause No. 09-1094 (W.D. Wa. 11/29/10), is the only case that seems to limit this nonsense. It held that Washington law requires that courts “avoid any interpretation of an insurance contract that would render the policy nonsensical or ineffective” “considering the purpose of marine insurance.”

The long and short is not only are many of the yacht and boatowners’ policies being sold in today’s market not appropriate to the needs of the insureds, but the agents and brokers have no legal responsibility to tell the insureds that the product they are being sold is virtually worthless and better products are available. SHAME!

Best wishes and thanks.

Chuck Davis

–
Charles M. Davis
4767 Wharf St.
Bow WA 98232
Phone 360-766-3223
Fax 360-766-4014
Website http://www.davismarine.com