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In Bybel v. Metro Life Insurance Company, the insured was an obstetrician/gynecologist at a hospital until she suffered a shoulder injury while delivering a baby when an obese patient pushed her.  She tried receiving treatment without surgery, but that was unsuccessful, so the insured eventually had surgery, which was also ineffective.  At the time of the court’s decision, the insured still suffered from constant shoulder pain and weakness.

The insured returned to work after her surgery, but she could only work part-time and could not perform major surgeries and other important procedures.  She eventually was terminated from her position.  The insured then filed an unsuccessful claim for wrongful termination, as the board ruled that she was properly terminated because she was physically unable to work.

The insured had a disability insurance policy with the insurer, and she notified the insurer of her disability a little more than a year after her last full day of work.  The insurer initially completely denied the insured’s claim for disability, but it later determined that the insured was actually residually disabled for a period of six months after her last day of work.  The insurer paid the insured 50% of the total disability benefits for that period.

Despite receiving some benefits under her policy, the insured proceeded to sue the insurer for breach of contract and bad faith.  She alleged that the insurer breached its duty under the policy to pay full disability benefits and exhibited bad faith by denying her claim for benefits without a reasonable basis and recklessly disregarded that lack of a reasonable basis.

Concerning the breach of contract claim, the court determined that because a genuine issue of material fact existed as to whether the insured was fully disabled under her policy with the insurer, it had to deny the insurer’s Motion to Dismiss the claim.

Regarding the bad faith claim, the insured had alleged that the hospital’s decision to terminate her ignored “the functional limitations that were repeatedly and consistently set in place in her treating physicians’ reports, her occupational evaluation, her functional capacity evaluations, and her two independent medical examinations.”

The insured was able to present evidence that the insurer “failed to consider all the evidence before it, failed to provide all available information it had to the consultants it retained to evaluate [the insured’s] claim, and misrepresented the evidence it had in describing [the insured’s] condition to its key consultant.  The insurer, on the other hand, did not present any significant evidence to refute the insured’s claim, instead simply relying on its position that the insured was not entitled to total disability or residual disability benefits.

The court thus determined that there were genuine issues of material fact with respect to the insured’s bad faith claim, and it therefore denied the insurer’s Motion.

Date of Decision:  November 18, 2010

Bybel v. Metro. Life Ins. Co., Civil Action No. 09-570, United States District Court for the Eastern District of Pennsylvania, 2010 U.S. Dist. LEXIS 122367, (Nov. 18, 2010) (Stengel, J.)