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Tag Archives: Bad Faith

Cassim v. Allstate Insurance: Attorney’s Fees in Contingency-Fee “Bad Faith” Cases

Posted in: Attorneys' Fees, Bad Faith, Disability Insurance, ERISA, Health Insurance, Insurance Litigation Blog, Legal Articles July 26, 2019

Since 2004, when the California Supreme Court ruled that a “portion” of contingency attorney’s fees are recoverable in bad-faith insurance cases, plaintiffs and their lawyers have been able to recover attorney’s fees based in part on the specific terms of the contingency-fee retainer agreement.  For starters, in order to recover attorney’s fees in these actions, a policyholder must prove that (1) contractual benefits were withheld in bad faith, and (2) reasonable fees were incurred by the policyholder to recover those benefits.  However, any attorney’s fees incurred merely to prove the alleged “bad faith” claims are not recoverable at all; only fees incurred to prove actual coverage are recoverable.  Cassim v. Allstate Insurance, 33 Cal.4th 780, 811 (2004).

In Cassim

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Court Finds Regional Claims Administrator Qualifies as a “Managing Agent” of an Insurance Company, Justifying an Award of Punitive Damages

Posted in: Auto Insurance, Bad Faith, Breach of Contract, Duty to Settle, Insurance Litigation Blog, Punitive Damages May 29, 2019

When insurance companies, including those offering disability, life, health or accidental death policies, engage in conduct that is sufficiently egregious, a court may award punitive damages against the insurance company.  California Civil Code Section 3294 (“Section 3294”) provides that where the defendant is guilty of oppression, fraud or malice, the plaintiff may recover punitive damages for the sake of example and by way of punishing the defendant.  If the defendant is a corporation, such as an insurance company, the defendant is liable for punitive damages if the act of oppression, fraud or malice was authorized or ratified by an officer, director or managing agent of the corporation or if the officer, director or managing agent was personally guilty of such …

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Court Says the Development of a Disabling Condition after Surgery for an Unrelated Condition Does Not Preclude Recovery of ERISA Disability Benefits under Pre-Existing Condition Exclusion

Posted in: Disability Insurance News, ERISA, Insurance Litigation Blog, Pre-existing Conditions January 16, 2019

Insurance companies often seek to exclude insureds from coverage through their long-term disability (“LTD”) plans by asserting the pre-existing condition exclusion.  If an applicant for LTD benefits has a non-disabling condition or becomes disabled as a result of a condition that developed after corrective surgery for an unrelated condition, is the applicant excluded from receiving benefits?  In a plaintiff-friendly decision, Hines v. Unum Life Ins. Co. of Am., 2018 WL 6599404 (N.D. Ohio Dec. 17, 2018), the court held that the plaintiff-disability claimant could not be excluded from coverage due to a vision disability on either the basis that she had received a diagnosis for a non-disabling condition before she became disabled or that she had developed a new …

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Court upholds Commissioner’s Contention: A Single Insurance Code Violation Can Constitute Bad Faith Without Evidence of a General Business Practice

Posted in: Bad Faith, Insurance Bad Faith, Insurance Commissioner, Insurance Litigation Blog, Policy Interpretation, Regulations, Unfair Business Practices/Unfair Competition October 02, 2018

Every insurance policy, including disability, life, health or accidental death policies, contains an implied covenant of good faith and fair dealing between the insurance company and the insured.  This covenant requires that insurance companies refrain from acting in a way that unreasonably jeopardizes, impairs or interferes with the rights of the insured to receive the benefit of the insurance contract.  The Unfair Insurance Practices Act (California Insurance Code Sections 790, et seq., “UIPA”) was enacted to regulate the business of insurance by defining and prohibiting practices which constitute unfair methods of competition or unfair or deceptive acts or practices.

California Insurance Code Section 790.03(h) (“Section 790.03(h)”) enumerates a list of sixteen specific unfair claims settlement practices that insurance companies are …

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Orange County Lawyer Publishes Article in July 2018 edition by Robert J. McKennon Entitled “Insurers’ Intermediaries: The Implications of Actions Taken by Agents, Employers, and Third-Party Administrators”

Posted in: Accidental Death or Dismemberment, Agent/Broker, Bad Faith, Disability Insurance, ERISA, Health Insurance, Legal Articles, Life Insurance July 13, 2018

In July 2018, The Orange County Bar Association published an article written by Robert J. McKennon and Stephanie L. Talavera of the McKennon Law Group PC in the Orange County Lawyer.  The article addresses the liability implications of the relationship between insurers and various types of intermediaries.  As the article explains, depending on the nature of the relationship between the insurer and others involved in the process, the insurer may be held liable for the actions of those who act as its intermediaries.  The article gives tips on how to make an insurer vicariously liable for the acts of those functioning as intermediaries in the insurance process.

Insurers’ Intermediaries: The Implications of Actions Taken by Agents, Employers and Third-Party Administrators

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Agents, Brokers and Rescission of Insurance Policies

Posted in: Accidental Death or Dismemberment, Agent/Broker, Disability Insurance News, Insurance Bad Faith, Insurance Litigation Blog, Life Insurance, Long Term Care Insurance April 09, 2018

Generally, an insurer need not investigate statements made in an application for insurance, subject to certain exceptions. Instead, the potential policyholder or applicant must fully disclose all known material information. If a potential insured does not correctly disclose information on an application (even innocently), the insurer may later try to rescind the insurance policy. When an insurer “rescinds” a policy, it renders the contract as if it never existed and frees both parties from their obligations under the contract. Practically, this means that the insurance company is no longer obligated to pay the claims for life insurance, accident insurance, health insurance, long-term care insurance or long-term disability insurance benefits and the policyholder no longer has to pay the policy’s premiums. …

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Bad Faith Claims Handling: California Department of Insurance Investigates Aetna’s Health Claim Denials

Posted in: Bad Faith, Breach of Contract, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Bad Faith, Legal Articles February 21, 2018

On our blog, we frequently discuss the improper tactics insurers use to deny legitimate claims for life, health, disability and other forms of insurance. For our latest article on the pervasive problem in health insurance claims denials, see https://mslawllp.com/la-times-report-pervasive-problem-of-improper-health-insurance-denials/. Mckennon Law Group PC has had much experience litigating against health insurers who deny legitimate medical claims. We know this is a rampant problem. So, it was not shocking to us that at least one very large health insurer, Aetna, took highly improper actions to deny medical insurance claims.

On February 12, 2018, the California Department of Insurance (“CDI”) issued a press release confirming its investigation of Aetna, one of the largest health insurance providers in the U.S. California Insurance …

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Court Rejects Third Party Administrator's Demurrer to Insurance Bad Faith Claim Based on Plaintiffs' Theory of Joint Venture Liability

Posted in: Bad Faith, Breach of Contract, Case Updates, Disability Insurance, Disability Insurance News, Insurance Bad Faith, Insurance Litigation Blog, Non-ERISA January 24, 2018

Implied in every insurance contract is a promise of “good faith and fair dealing,” which means that the insurer must not take unreasonable steps to prevent an insured’s right to receive benefits under the policy. To comply with its promise to act in good faith, the insurer must adhere to certain duties, such as the duty to adequately investigate a claim made by an insured. An insurer acts in bad faith when it fails to meet those duties unreasonably and without proper cause. Determining whether there has been bad faith conduct is important, in part, because it directly affects the insured’s potential recovery. If the insurer is found to have acted in bad faith, the insured may have access to …

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Does ERISA Apply to County and City of Los Angeles Employee Disability Benefit Plans? Why You Should Care

Posted in: Bad Faith, Church Plans, Disability Insurance, ERISA, Government Plans, Insurance Bad Faith December 08, 2017

Do you have a long-term disability claim with the County of Los Angeles, City of Los Angeles or another Los Angeles government organization? If so, you might be wondering: do the limited remedies available under a federal law called the Employee Retirement Income Security Act of 1974 (“ERISA”) apply to your claim? It is crucial that you determine whether the specific Los Angeles or County of Los Angeles employee welfare benefit plan at issue is governed by California’s insurance bad faith laws, ERISA, or the Los Angeles County Code. The answer will dramatically affect your recoverable damages.

ERISA applies to most employer-sponsored disability, life, health, retirement and many other employee benefit plans. ERISA exempts only two types of employer plans …

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Top 8 Tips for When You Take Your Insurer to Court

Posted in: Accidental Death or Dismemberment, Breach of Contract, Insurance Bad Faith, Life Insurance, Non-ERISA November 29, 2017

If you have a claim that has been wrongfully denied or are currently in the claims handling process, it is important to always keep in mind the potential impact of your conduct on future litigation. When dealing with a sophisticated insurance company, you want to put your best claim forward and be prepared for the potential need to file a lawsuit. In this article, we discuss our top eight tips for when you take your insurer to court, from the importance of hiring an attorney with relevant experience to preparing for the long haul that is litigation against an insurance company.

1. Hire an attorney with experience in insurance litigation who actually goes to trial.
This may seem like a …

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