Monthly Archive for January, 2010

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JANUARY 2010 BAD FAITH CASES
INSURED’S ALLEGATIONS THAT HE DISCLOSED HIS ABILITY TO WORK PART-TIME SUFFICIENT TO SURVIVE MOTION FOR SUMMARY JUDGMENT (Philadelphia Federal)

In Hayes v. American International Group, a physician made a claim against his disability insurance after suffering disabling cervical and lumbar injuries at work. The insured alleged that, as part of the initial claim evaluation, he disclosed the fact that he continued to work five hours a week after the accident. The insured received disability payments for approximately four years until his benefits were terminated.  The insurer terminated the insured’s benefits because he had been observed through surveillance performing activities inconsistent with his claimed disability, including engaging in the practice of medicine. The insured sued his carrier for bad faith alleging that the insurer had no reasonable basis for denying his claim because the insurer knew, at the time that it found him to be totally disabled, that he was able to work part-time, and therefore, acted unreasonably when it terminated his benefits because he was observed practicing medicine. 

The court denied the insurer’s motion to dismiss the bad faith claim finding that the insured’s factual allegations were sufficient to state a plausible claim at that stage of the proceedings that the insurer acted unreasonably and in bad faith in denying his claim.

Date of Decision: December 1, 2009

Hayes v. Am. Int’l Group, Civil Action No. 09-2874, United States District Court for the Eastern District of Pennsylvania, 2009 U.S. Dist. LEXIS 111397 (E.D. Pa December 1, 2009) (McLaughlin, J.).

 

JANUARY 2010 BAD FAITH CASES
NO BAD FAITH DESPITE ALLEGED MISREPRESENTATIONS BY INSURANCE AGENT (Middle District)

In Serino v. Prudential Insurance Company of America, pursuant to the disability insurance policy, the insurer stopped paying the insured’s disability benefits once the insured reached the age of sixty five. The insured sued the carrier for breach of contract and bad faith. The insured claimed that the insurance agent had orally represented that the policy entitled him to lifetime disability benefits. The court held that the plain language of the policy expressly provided the insurer with a reasonable basis for denying the insured benefits after his sixty-fifth birthday. The court granted the insurer’s motion for summary judgment.

Date of Decision: November 18, 2009

Serino v. Prudential Ins. Co. of Am., 706 F. Supp.2d 584, Case No. 3:09-CV-0466, United States District Court for the Middle District of Pennsylvania, 2009 U.S. Dist. LEXIS 114246 (M.D. Pa. November 18, 2009) (Kosik, J.).