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Published: Wednesday, 7/19/2006

Judge rejects Manor Care's claim on insurance payouts

A judge has ruled against Manor Care Inc. in an ongoing legal dispute with a former insurance company over how much the Toledo nursing home operator was obligated to pay if found liable in patient claims of negligence.

U.S. District Judge James Carr ruled this week that the local company's interpretation of a policy it had with First Speciality Insurance Corp. until June 1, 2000, was incorrect, essentially meaning the company was obligated to pay more of each claim.

Manor Care sued in 2003, alleging that the Missouri insurer did not properly follow the terms of the policy purchased to supplement self-insured coverage.

In a sample case of allegations of four injuries, each resulting in a finding of $1 million in damages, Manor Care's interpretation was that it would pay $500,000 and First Speciality would pay the remaining $3.5 million.

Under the Missouri company's view, Manor Care would have to pay $500,000 on each injury, or $2 million, and First Speciality would pay the remaining $2 million. Judge Carr found that interpretation to be correct.

No total figure or number of cases in dispute was disclosed.

An attorney for Manor Care could not be reached for comment. A conference on related matters in the case is set for Aug. 25.

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