Insurance Law

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiffs’ class action complaints alleging that insurance policies issued by defendants violated section 224(e) of Insurance Code, since, although said policies allowed plaintiffs to receive some annual dividends based upon defendants’ profits, it still permitted defendants to have discretion to set dividend amounts. While plaintiffs argued that section 224(e) required defendants to allow plaintiffs to have “full annual participation” with respect to said dividends, which required defendants to distribute to policyholders any surplus profits beyond contingency-reserve limits, section 224(e) does not regulate dividend amounts. Moreover, Ct. rejected plaintiffs’ claim that term “participate” as used in section 224(e) requires defendants to provide set dividend amount and further found that section 243 of Insurance Code does not limit insurer discretion to set dividend amount.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in plaintiff-insured’s action alleging that defendant breached terms of its insurance policy by failing to provide defense or indemnity in underlying action alleging that plaintiff used DirecTV’s satellite television programming for its businesses without paying for higher commercial subscription rate. While defendant’s policy provided coverage for claims against plaintiff’s companies for “slander, invasion of privacy, defamation or humiliation,” Dist. Ct. could properly find that instant policy did not cover underlying lawsuit, since there was no reasonable interpretation of underlying lawsuit that could possibly place underlying lawsuit within category of libel, slander or defamation. Moreover, underlying lawsuit contained no allegations that plaintiff made any kind of statement, let alone make any false or defamatory statement about DirecTV.

Dist. Ct. erred in dismissing plaintiff-doctor’s action under ERISA, alleging that defendant-health care plan underpaid plaintiff for medical services rendered to one of plaintiff’s patients, and that defendant owed statutory penalties based on its failure to timely furnish plan documents upon plaintiff’s request. While Dist. Ct. dismissed plaintiff’s underpayment claim based on plaintiff’s failure to identify specific plan provision that covered services at issue in plaintiff’s claim, plaintiff need not cite in her complaint specific plan provision establishing coverage at amount billed by plaintiff. Also, Ct. rejected Dist. Ct.’s ruling that plaintiff, as assignee of patient-plan participant, could not seek statutory penalties based on defendant’s failure to timely provide requested documents that pertained to defendant’s calculation of plan benefits, since: (1) assignee designated to receive plan benefits is considered beneficiary and can sue for unpaid benefits; and (2) bringing lawsuit against plan for said benefits requires access to information as to how defendant determined usual and customary billing rate.

Dist. Ct. erred in granting defendant-insurance company’s motion for summary judgment  in plaintiff-employee’s ERISA action, alleging that defendant improperly discontinued long-term disability benefits under one of its policies, where, although terms of policy generally limited such benefits for two years, plaintiff successfully established exception to said limitation, where she had qualifying radiculopathy diagnosis. Defendant improperly ignored opinions of four doctors, including one of its own, who diagnosed plaintiff with radiculopathy in favor of one doctor, who also recommended that additional testing be done to determine plaintiff’s medical status. As such, defendant’s denial was arbitrary, especially where defendant declined to pursue additional testing as recommended by one of its doctors.