Dist. Ct. did not err in granting defendant-plan administrator’s motion to dismiss plaintiffs’ claim for bad-faith denial by defendant-plan administrator of their application for coverage for mental health benefits under employer’s self-insurance medical plan. Record showed that while defendant was hired by employer to approve or deny claims for benefits, defendant had no contractual relationship with plan beneficiaries like plaintiffs. Ct. of Appeals found that plaintiffs could not pursue instant bad-faith claim under Wisconsin law, since plaintiffs had no contractual relationship with defendant. Dist. Ct. could also dismiss plaintiffs’ related claims for statutory interest and punitive damages, where: (1) statutory interest claim required finding that there were “overdue payments”, and plaintiffs could not recover interest for alleged benefits wrongly denied; and (2) plaintiffs could not recover punitive damages, where plaintiffs’ substantive claims had been dismissed.
Federal 7th Circuit Court
Civil Court
Insurance