Insurance Law

Dist. Ct. erred in failing to grant defendant-insurance company’s motion for summary judgment in plaintiff-insured’s action alleging that defendant breached insurance contract by failing to provide coverage in directors-and-officer’s liability policy. Terms of policy covered claims that occurred between October of 2011 to October of 2012, and excluded “all notices of claims of circumstances ‘as reported’” under policy issued to plaintiff by different insurance company (Chubb). Record showed that in 2012 plaintiff sent notice of underlying lawsuit to Chubb and sought coverage for lawsuit under defendant’s policy. Ct. of Appeals found that “as reported” language in defendant’s policy precluded coverage in underlying lawsuit because exclusion covered all notices of claims reported to Chubb at any time.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action seeking declaration that it owed no duty to indemnify defendant-insured on default judgment entered against defendant. Record showed that underlying action was not covered by insurance policy issued by plaintiff because claim occurred outside relevant 2012 to 2013 time period covered by policy. Moreover, while defendant argued that plaintiff was estopped from denying coverage because it had assisted defendant in defending underlying claim, defendant failed to establish any prejudice arising out of plaintiff’s actions in assisting with defense in underlying action, since: (1) defendant, through its own retained attorney, always maintained control of legal defense in underlying action; and (2) defendant had settled underlying action without knowledge or input from plaintiff.

In ERISA action alleging that defendant-plan administrator improperly denied plaintiff-beneficiary’s claim for work-related long-term disability benefits through former employer’s benefits plan, Dist Ct. erred, when upholding instant denial, by applying arbitrary and capricious standard of review, where record showed that defendant had failed to issue decision on plaintiff’s internal appeal of said denial within deadline mandated by ERISA regulations. Ct. rejected defendant’s claim that use of arbitrary and capricious standard was appropriate, because it had substantially complied with ERISA regulations by issuing denial only eight days after said deadline, and further found that doctrine of substantial compliance does not apply to ERISA’s regulatory deadlines. As such, remand was required for Dist. Ct.’s determination as to whether instant denial of benefits was appropriate under de novo standard of review.

Dist. Ct. erred in granting defendant-plan administrator’s motion for summary judgment in plaintiff-employee’s ERISA action alleging that defendant wrongfully denied her application for short-term and long-term disability insurance benefits based on plaintiff’s claim that she could no longer perform duties of her job or perform material duties of her regular occupation. Defendant labored under conflict of interest, where relevant insurance plans granted defendant discretionary authority to determine benefits and imposed on plaintiff obligation to pay such benefits when due. Moreover, defendant’s denial of said benefits was arbitrary and capricious, where: (1) plaintiff had previously qualified for Social Security Disability benefits; (2) physician who conducted mental residual functional capacity assessment found that plaintiff had understanding and memory limitations that precluded her from performing skilled work; (3) DOT title for plaintiff’s past relevant work and for her regular occupation required that plaintiff perform skilled work; and (4) plaintiff’s inability to perform skilled work qualified her for disability benefits under relevant insurance policies. Also, record lacked any evidence to cast doubt on conclusion made by said physician, and defendant otherwise merely considered only evidence that supported its denial of benefits.