Liability of Insurance company?
grendal
You have to read the blog article and then the complaint.
Note: Aflac didn't deny the claim, and there are gaps in the
complaint.
Considering that within a week of the insurance policy being written
the daughter was murdered, I can understand Aflac's position. The fact
that the Police wouldn't rule out the mother, in writing, is also a
potential red flag too.
Thoughts?
Stuart A. Bronstein
> Considering that within a week of the insurance policy being
> written the daughter was murdered, I can understand Aflac's
> position. The fact that the Police wouldn't rule out the mother,
> in writing, is also a potential red flag too.
Statistically some people will die immediately after taking out a
life insurance policy, while others will live years longer than their
actuarially determined life expectancy. AFLAC made the calculations,
this case should have come within their calculations, and they should
pay off.
If they have evidence that the beneficiary is the murderer, they
might have a decent claim. But apparently they don't.
Mike Jacobs
> http://www.chicagonow.com/blogs/chicago-bar-tender/2009/11/mother-of-...
>
> You have to read the blog article and then the complaint.
I read the former but not the latter.
> Note: Aflac didn't deny the claim,
Says who? According to the blog article, "In November 2004, AFLAC
denied the claim due to 'insufficient proof of loss'"
> and there are gaps in the complaint.
There usually are. Minor factual mistakes in a pleading do not
mandate dismissal. It need merely allege sufficient facts to state a
claim on which relief can be granted. Undoubtedly the complaint at
issue states that AFLAC issued a policy of life insurance, that
plaintiff was a beneficiary, that the person whose life was insured
died, that the beneficiary made a claim for benefits, and that this
claim was denied. Together with a prayer for relief (a demand for
money judgment, or perhaps a declaration of coverage) that is all that
is required.
> Considering that within a week of the insurance policy being written
> the daughter was murdered, I can understand Aflac's position.
That fact undoubtedly led to this case being investigated by the
insurer's "fraud unit" or whatever they call it - most insurers have
similar, "hard case" units to look into those claims where a scam is
suspected.
> The fact
> that the Police wouldn't rule out the mother, in writing, is also a
> potential red flag too.
Quite likely so.
> Thoughts?
On what? The way insurance claims work is, the claimant presents a
claim, and the insurer evaluates it and either accepts or denies it.
So long as the insurer acts in good faith, and has some colorable
reason for their decision, it has no potential liability to the
claimant beyond the possibility of losing a suit for the covered
amount - so, the insurer has EVERY reason to deny a claim on which
they have ANY colorable reason to do so. Which is, in fact, what
MOST insurers do.
The claimant's remedy is then to sue for the denied benefit. She
will have the burden of proving her entitlement to receive that
benefit, i.e. to prove that all necessary conditions of her claim have
been met, and then the insurer has the burde to prove any exclusions
that the insurer claims may apply.
Here, it appears part of the conditions for a claim include a duty of
the insured to timely submit a "[]sufficient proof of loss" in the
form the insurer requires. Whether what the mom submitted was
sufficient, where it fails to identify the murderer, is part of what
the court will have to decide.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
Mike
> On Nov 24, 6:16 pm, grendal <im_gu...@hotmail.com> wrote:
>
>> http://www.chicagonow.com/blogs/chicago-bar-tender/2009/11/mother-of-...
>>
>>
>> Note: Aflac didn't deny the claim, and there are gaps in the
>> complaint.
>
Well, not quite, IMHO. They didn't say "we're not paying off on it,
ever, no-how, no-way." They seem to have said "we're not paying until we
have full documentation that there's an actual claim, under our terms,
to pay and, due to inactivity, we're closing the file for now. It can be
re-opened upon providing full documentation of the claim."
However, I do agree that it would seem that there HAS been full
documentation provided and that they should go ahead and pay it.
Seth
Mike Jacobs <mjaco...@gmail.com> wrote:
>There usually are. Minor factual mistakes in a pleading do not
>mandate dismissal. It need merely allege sufficient facts to state a
>claim on which relief can be granted. Undoubtedly the complaint at
>issue states that AFLAC issued a policy of life insurance, that
>plaintiff was a beneficiary, that the person whose life was insured
>died, that the beneficiary made a claim for benefits, and that this
>claim was denied.
Wouldn't it be, rather, that the claim was not paid? Saying it was
denied gives an easy out, that it's still open.
>On what? The way insurance claims work is, the claimant presents a
>claim, and the insurer evaluates it and either accepts or denies it.
>So long as the insurer acts in good faith, and has some colorable
>reason for their decision, it has no potential liability to the
>claimant beyond the possibility of losing a suit for the covered
>amount - so, the insurer has EVERY reason to deny a claim on which
>they have ANY colorable reason to do so. Which is, in fact, what
>MOST insurers do.
That is probably why New York law provides for triple damages in the
event an insurance company deals in "bad faith". That puts the bar a
bit higher, since a colorable reason might be considered bad faith.
>Here, it appears part of the conditions for a claim include a duty of
>the insured to timely submit a "[]sufficient proof of loss" in the
>form the insurer requires. Whether what the mom submitted was
>sufficient, where it fails to identify the murderer, is part of what
>the court will have to decide.
I would think that can't be a requirement, else no murder victim
(whose killer wasn't convicted) need have life insurance paid.
Seth
David Chesler
> Here, it appears part of the conditions for a claim include a duty of
> the insured to timely submit a "[]sufficient proof of loss" in the
> form the insurer requires. � Whether what the mom submitted was
> sufficient, where it fails to identify the murderer, is part of what
> the court will have to decide.
I ran into a very similar situation with SBLI. They sent me a copy of
the original policy, and it said it would pay upon proof of death. I
gave them a death certificate. They said "We will not pay because the
'cause of death' is listed as 'pending'". I said "That is irrelevant,
the insured individual is dead and I've provided proof. What possible
item could be the cause of death that you would not pay? You are
adding conditions not in the policy." The policy, which provided
enough to cover burial expenses, had been in effect since the deceased
was in college -- it was some sort of teaser rate on a whole life,
even with her untimely death the payout wasn't much more than the
present value of all the premiums, and the beneficiary was still her
father, not her spouse - was paid when they got the updated death
certificate three months later, and included value accrued until the
time of payout, so it never got litigated.
It's like Jerry Seinfeld says about reservations. Anyone can MAKE a
reservation, the hard part is HONORING it.
--
- David Chesler <che...@post.harvard.edu>
Free Cory Maye
Mike Jacobs
> In article <9609ce85-087b-42b1-a75f-0eef32225...@g26g2000yqe.googlegroups.com>,
> Mike Jacobs �<mjacobs...@gmail.com> wrote:
>
> >Minor factual mistakes in a pleading do not
> >mandate dismissal. � It need merely allege sufficient facts to state a
> >claim on which relief can be granted. � Undoubtedly the complaint at
> >issue states that AFLAC issued a policy of life insurance, that
> >plaintiff was a beneficiary, that the person whose life was insured
> >died, that the beneficiary made a claim for benefits, and that this
> >claim was denied.
>
> Wouldn't it be, rather, that the claim was not paid? �Saying it was
> denied gives an easy out, that it's still open.
Either way. Both state the claim sufficiently IMO in a notice-
pleading jurisdiction.
But which way do you think would give the "easy out" that the claim is
"still open"? A denial _closes_ the claim and, if wrongful, is a
breach of the insurance contract. OTOH, saying the claim simply was
"not paid" is the version that implies the claim may still be open.
And, if it's still open, the insurer is not in breach _yet_, so long
as they are still conducting a reasonable investigation (that is, they
cannot avoid their contractual responsibility by simply stringing the
claimant along forever, without making a decision, for no good
reason).
> >On what? � The way insurance claims work is, the claimant presents a
> >claim, and the insurer evaluates it and either accepts or denies it.
> >So long as the insurer acts in good faith, and has some colorable
> >reason for their decision, it has no potential liability to the
> >claimant beyond the possibility of losing a suit for the covered
> >amount - so, the insurer has EVERY reason to deny a claim on which
> >they have ANY colorable reason to do so. � Which is, in fact, what
> >MOST insurers do.
>
> That is probably why New York law provides for triple damages in the
> event an insurance company deals in "bad faith".
Right, and that's why I qualified the above summary of how it "really
works" with, "So long as the insurer acts in good faith" their damages
are limited to the contract amount.
>�That puts the bar a
> bit higher, since a colorable reason might be considered bad faith.
Don't you mean, _lack_ of a colorable reason might be considered bad
faith?
Do you understand what "colorable" means? Maybe not, in the context
of our other thread involving the nature of claims of ownership to
property (which I have already said my piece in, and bowed out of),
where we established that a "claim" is _not_ synonymous (as popular
usage would have it) with "frivolous claim" but rather is just a
neutral term meaning a "legal position" one takes in the course of a
dispute. Calling a claim or argument "colorable" means the legal
position one is taking _does_ have some reasonable basis. Taking
some legal position which _lacks_ any reasonable basis is pretty much
synonymous with acting in bad faith.
> >Here, it appears part of the conditions for a claim include a duty of
> >the insured to timely submit a "[]sufficient proof of loss" in the
> >form the insurer requires. � Whether what the mom submitted was
> >sufficient, where it fails to identify the murderer, is part of what
> >the court will have to decide.
>
> I would think that can't be a requirement, else no murder victim
> (whose killer wasn't convicted) need have life insurance paid.
I think you're probably right about that, but one of the factual
pieces of information any lawyer would surely want to see, in
analyzing the situation, is the actual insurance contract, so he can
read and parse for himself what it says. It would be a potentially
big mistake to simply _assume_ what the policy "must" say, based on
your flights of logic, or on what you think makes the most sense.
Mike Jacobs
> On Nov 25, 11:42�am, Mike Jacobs <mjacobs...@gmail.com> wrote:
>
> > Here, it appears part of the conditions for a claim include a duty of
> > the insured to timely submit a "[]sufficient proof of loss" in the
> > form the insurer requires. � Whether what the mom submitted was
> > sufficient, where it fails to identify the murderer, is part of what
> > the court will have to decide.
> �I ran into a very similar situation with SBLI. They sent me a copy of
> the original policy, and it said it would pay upon proof of death. I
> gave them a death certificate. They said "We will not pay because the
> 'cause of death' is listed as 'pending'". I said "That is irrelevant,
The cause of death _IS_ relevant, and in fact is the issue most often
litigated in life insurance cases - because most policies are written
to provide double indemnity (twise the face value) in case of
accidental death, _no_ coverage in case of suicide, and the face value
in all other cases. If the cause of death is not listed yet, the
insurance company doesn't know yet how much (if any) it will have to
pay the beneficiary.
> the insured individual is dead and I've provided proof. What possible
> item could be the cause of death that you would not pay?
Suicide = no pay
Accident = double pay
> You are adding conditions not in the policy."
Had you read the policy? What did it say?
>�The policy ...
> was paid when they got the updated death
> certificate three months later, and included value accrued until the
> time of payout, so it never got litigated.
That was proper, on both sides. The insurer was allowed to wait
until they knew what the value of the claim was (0, x, or 2x) and then
they paid what was owed, with interest.
grendal
[SNIP]
> I think you're probably right about that, but one of the factual
> pieces of information any lawyer would surely want to see, in
> analyzing the situation, is the actual insurance contract, so he can
> read and parse for himself what it says. � It would be a potentially
> big mistake to simply _assume_ what the policy "must" say, based on
> your flights of logic, or on what you think makes the most sense.
>
In all of this, they didn't deny the claim. Not to haggle words but
when a claim is denied, that means its over and done with.
Unless there's an appeal, its done with. Aflac left the door 'open' by
saying when the info can be submitted, they'll re-open the claim.
Meaning its currently closed, but not denied.
The interesting thing is that Aflac does normally pay out their
claims. At least the industry reports show this...
Its that this claim is interesting and that it falls in to a gray
area.
Its my understanding that when you get an insurance policy, you submit
your initial paperwork and a check, so you're 'covered'. However the
paperwork goes to the underwriters and they could deny you coverage
and return your check.
It was in this initial period that the woman became deceased.
(Murdered).
Its not like we're talking about a person who had a policy in effect
for months/years and then got killed in an accident.
I mean haven't we seen it before? A man takes out an insurance policy
against his wife and weeks later she dies mysteriously while he's out
of the country? (Ok so its a bad tv movie plot we've seen over done in
the 70's and 80's cop shows....) [Add 90's and now 00's too.]
I don't know police policy, but isn't it weird that they wouldn't rule
the mother out as a suspect in writing?
Mike Jacobs
> On Nov 29, 9:02 am, Mike Jacobs <mjacobs...@gmail.com> wrote:
> [SNIP]
>
> > I think you're probably right about that, but one of the factual
> > pieces of information any lawyer would surely want to see, in
> > analyzing the situation, is the actual insurance contract, so he can
> > read and parse for himself what it says. It would be a potentially
> > big mistake to simply _assume_ what the policy "must" say, based on
> > your flights of logic, or on what you think makes the most sense.
>
> In all of this, they didn't deny the claim. Not to haggle words but
> when a claim is denied, that means its over and done with.
> Unless there's an appeal, its done with. Aflac left the door 'open' by
> saying when the info can be submitted, they'll re-open the claim.
> Meaning its currently closed, but not denied.
Okay, I'm agreeing with you there. Next point?
> The interesting thing is that Aflac does normally pay out their
> claims. At least the industry reports show this...
As do _most_ insurers, really. It's _not_ a shell game, it's a vital
industry that makes risky modern business ventures and other
activities economically possible. But, whenever some "red flag" comes
up that indicates there maybe are grounds to deny a claim, any
sensible company will step VERY CAREFULLY from that point on if they
continue their investigation - or, they may just outright deny the
claim and let the chips fall where they may.
Most larger insurers today have a special division that handles the
"problem" claims where there may be some evidence of fraudulent or
false claims or of criminal activity by a beneficiary. That's
probably what happened here, and an internal referral to the AFLAC
"fraud division" for further handling would be justified IMO on the
basis of the timing of the murder, _alone_ (even without more facts to
support possible fraud or criminal activity by the mother, at that
stage).
> Its that this claim is interesting and that it falls in to a gray
> area.
Yes, it is, and yes, it sure does.
> Its my understanding that when you get an insurance policy, you submit
> your initial paperwork and a check, so you're 'covered'.
That's called a "binder," and covers you up until the underwriters
have a chance to decide whether to _continue_ the coverage beyond the
date they make their decision to accept the underwriting of your
risk. If the underwriters _decline_ the policy, that does NOT AFFECT
the coverage that was granted for the brief period it took them to
make this decision. So, that is an interesting side issue, but I'm
sure it was not the reason behind AFLAC's decision in this case to
close its claim file pending further investigation.
> However the
> paperwork goes to the underwriters and they could deny you coverage
> and return your check.
Yes, but you still WOULD have been covered during the time it took
them to make that decision, and they would be responsible for any
covered loss during that time, pursuant to the binder. And, if some
covered loss DID occur, you can bet they would KEEP and deposit your
check, then they may CANCEL (or non-renew) your policy after the loss
occurred and would then send you the UNEARNED portion (if any) of your
initial premium money back.
If the underwriters want to decline coverage, they must do so in
accord with their internal underwriting principles and state law,
based on the facts as they existed AT THE TIME OF THE APPLICATION
(whether those facts were already known from the initial application,
or were discovered by their subsequent investigation). The company
canNOT legally decline coverage based on anything that happened AFTER
the binder was issued. But that's not what happened here.
If the insurer _could_ legally do THAT, then no sensible insurer would
EVER choose to issue a policy after (what would otherwise be a
covered) loss occurred during the "binder" period, rendering
meaningless the whole concept of an insurance binder:
"What? You say you totalled your new Ferrari while driving it off
the dealer's lot, after we issued you a binder number and assured you
it was fully covered? Well, we lied. Sorry. Here's your premium
money back."
> It was in this initial period that the woman became deceased.
> (Murdered).
The binder issue is not why the timing is relevant; the timing is
relevant because it is evidence of some possible collusion in the
criminal causation of death _by_the_beneficiary_. Isn't Mom, the
beneficiary, the one who took out the policy on Daughter's life and
paid the premium? Or at least, there may be reason to believe Mom
_knew_ (before the murder) that Daughter had just taken out a policy
on her own life, in a substantial amount, with Mom as beneficiary, or
that Mom had been unusually involved in _persuading_ Daughter to take
out such a policy (with nefarious ulterior motives).
Note, I am _NOT_ saying that one could sufficiently prove ANY of those
things about the particular Mom in question in OP's post; just that
those are the KIND of things that an insurer would consider and weigh
in making ITS decision. I'm trying to explain the insurer's analysis
and thought processes, not pass premature judgment on the beneficiary.
> Its not like we're talking about a person who had a policy in effect
> for months/years and then got killed in an accident.
Right. The quickness with which death followed the life insurance
application is relevant, but in this case that does _not_ appear to be
because the underwriters would have had any basis on which to refuse
to underwrite this risk, at the time the application was sent in and
the binder was issued. Rather, it was relevant because this one-two
punch is the kind of thing that is more likely to happen whenever a
beneficiary/policyholder takes out a policy on someone else's life
whom they then plan to kill. And therefore, that once-remote
possibility (that the beneficiary had murderous intent at the time the
policy was issued) just went up another several percentage points in
probability, based simply on the suspicious timing of the death.
> I mean haven't we seen it before?
Yes, that scenario is frequent fodder for crime-thriller movies and TV
shows. Although by now it is a cliche that has been beaten into the
ground by B-grade scripts, I highly recommend one of the earliest
examples of the genre, a noir flick from the 40's called "Double
Indemnity."
> I don't know police policy, but isn't it weird that they wouldn't rule
> the mother out as a suspect in writing?
Not at all. Until a murder is solved and the case is closed,
_everybody_ is a possible suspect. There is no useful purpose served
by "ruling out" any person, in writing, as _not_ being a suspect.
Getting back to the original case, what it seems AFLAC was trying to
do was to have their cake and eat it too. They wanted to avoid making
an outright denial, which could leave them open to a claim of bad
faith if there were no reasonable basis for that denial; but they
wanted the policyholder/beneficiary to be the one who had to PROVE her
entitlement to the claim, which she would have to do only if SHE were
the one who sued THEM. They seem to have accomplished their purpose
handsomely, since the Mom has now sued AFLAC and has the burden of
proof of her compliance with all policy conditions for making a
claim. OTOH, if AFLAC wishes to seriously pursue its (possible)
affirmative defense that "Mom was the murderer"* that is an issue on
which AFLAC bears the burden of proof.
* Of course, that is what this case is really all about, although we
have all been extremely careful up until now, to avoid telling the
emperor that he is naked. If there DOES turn out to be sufficient
evidence to support such a defense, it would of course completely bar
any recovery by Mom, since the "clean hands" doctrine generally
prevents a criminal from using the court system to assist him/her in
profiting from his/her own wrongdoing. But that still might not get
AFLAC off the hook; they might still have to pay the policy benefits
to decedent's ESTATE instead of to Mom as the named beneficiary.
Then, of course, _IF_ that happens, convicted-murderer Mom (or
"civilly liable for wrongful death Mom") would also be barred by the
clean-hands doctrine from taking any share of Daughter's estate, and
the estate would pass to Daughter's REMAINING heirs as if Mom were
already dead too. That's exactly what happened with the OJ case,
where the money for Nicole's death is going to benefit HER CHILDREN
but not to benefit OJ (who, as surviving spouse, would otherwise have
been her primary heir).
In a national trial-techniques course many years ago where I
volunteered to sit on a mock jury for the lawyers who were putting on
a mock trial as an educational exercise, the issue was one very
similar to this case - a suspicious death, a life insurance claim, and
a policy which paid double if it was an accidental death, but nothing
if it was a suicide.
I don't recall the exact details of the Colonel-Mustard-In-The-
Conservatory-With-A-Candlestick type of factual scenario, nor do I
recall either side's arguments in detail, but I do recall that each
side had the BURDEN OF PROOF on the affirmative case it was trying to
present: the claimant had the burden to prove it was an ACCIDENT and
therefore that the payout should be DOUBLED; while the insurer had the
burden to prove that the death was a SUICIDE and thus the beneficiary
should get NOTHING.
For some reason, everyone seemed to assume that the ONLY possible
outcomes of the trial were (a) a verdict for plaintiff in the amount
of $2x, or (b) a verdict for the defense, in the amount of $0. Since
no one was disputing that the hypothetical decedent had actually DIED,
and that the face amount was $x, my suggestion to my fellow mock
jurors was that we "split the baby" and award SINGLE indemnity ($x) to
the plaintiff, on grounds that NEITHER side had sufficiently proven
the facts they had the BURDEN to prove if they wanted some DIFFERENT
result. That went over like a lead balloon, although I still think it
would have been the right thing to do, and if it had been a REAL trial
instead of a mock one, I probably would have made everyone on the jury
sit there and discuss it for a week or so, until they came around to
my point of view (or decided they wanted to go home more, whichever
came first).
Seth
grendal <im_g...@hotmail.com> wrote:
>I don't know police policy, but isn't it weird that they wouldn't rule
>the mother out as a suspect in writing?
I suspect that their policy is _never_ to do that sort of thing.
Seth
Barry Gold
[Concerning a scenario in which the normal default heir murdered the
deceased, and therefore is not allowed to inherit -- the estate goes
to whoever it would have gone to if that heir had died first.]
> That's exactly what happened with the OJ case,
>where the money for Nicole's death is going to benefit HER CHILDREN
>but not to benefit OJ (who, as surviving spouse, would otherwise have
>been her primary heir).
While the rest of Jacob's post is IMHO correct and on-point, I think
this part is factually wrong. Nicole Brown was his _ex_-wife, so he
wouldn't have been in a position to inherit, unless she had made a
will in his favor and never changed it. In the latter case, of
course, the estate would _still_ have bypassed OJ and gone to her
"contingent" beneficiaries, the ones in the part about, "If my spouse,
Orenthal James Simpson, predeceases me, my estate shall be divided as
follows:..."
--
Barry Gold, webmaster:
Conchord: http://www.conchord.org
Los Angeles Science Fantasy Society, Inc.: http://www.lasfsinc.org
Mike Jacobs
> While the rest of Jacob's post is IMHO correct and on-point, I think
> this part is factually wrong. Nicole Brown was his _ex_-wife,
I'm sure Barry's right, and I stand corrected. I don't claim to be
an OJ-case-trivia expert and this factoid slipped my grip, although
I'm sure it seems a pretty obvious one to anyone familiar with the
case.
Serves me right for trying to draw an illustrative example out of a
well-known, widely publicized case and getting the actual facts (or at
least the reported facts) wrong. Perhaps it helps to figure out why.
Thinking about it, I realize I did so because my goal was _not_ to
describe or analyze the OJ case factually (in which event, fact-
checking would have been in order to support each such assertion).
Rather, I had started with a point of law I wanted to discuss (the
"clean hands" doctrine), and since I _already_ knew what type of fact
scenario I was looking for to make the concepts more concrete, I
grasped for an exemplar but hurriedly picked a real-life case that
didn't quite fit.
Seth
>> Wouldn't it be, rather, that the claim was not paid? �Saying it was
>> denied gives an easy out, that it's still open.
>
>Either way. Both state the claim sufficiently IMO in a notice-
>pleading jurisdiction.
>
>But which way do you think would give the "easy out" that the claim is
>"still open"?
If the pleading says it was denied, the insurance company demonstrates
that it was not denied but is still open, and the pleading (claim)
fails.
If the pleading says it was not yet paid, and the length of time is
unreasonable (several years after a death certificate was provided
certainly seems an unreasonable length of time to me for determining
whether a claim is payable.
> A denial _closes_ the claim and, if wrongful, is a
>breach of the insurance contract. OTOH, saying the claim simply was
>"not paid" is the version that implies the claim may still be open.
>And, if it's still open, the insurer is not in breach _yet_, so long
>as they are still conducting a reasonable investigation (that is, they
>cannot avoid their contractual responsibility by simply stringing the
>claimant along forever, without making a decision, for no good
>reason).
So why plead that the claim was denied when, instead, the insurance
company is working at a snail's pace to "investigate"?
>> That is probably why New York law provides for triple damages in the
>> event an insurance company deals in "bad faith".
>
>Right, and that's why I qualified the above summary of how it "really
>works" with, "So long as the insurer acts in good faith" their damages
>are limited to the contract amount.
The threat of triple damages might help keep them further from the
edge.
>>�That puts the bar a
>> bit higher, since a colorable reason might be considered bad faith.
>
>Don't you mean, _lack_ of a colorable reason might be considered bad
>faith?
No, lack of a colorable reason is bad faith.
> Calling a claim or argument "colorable" means the legal
>position one is taking _does_ have some reasonable basis.
I think the sets "no reasonable basis" and "bad faith" may not be
quite identical.
> Taking some legal position which _lacks_ any reasonable basis is
>pretty much synonymous with acting in bad faith.
The forward implication seems obvious. The backward one, less so.
>> I would think that can't be a requirement, else no murder victim
>> (whose killer wasn't convicted) need have life insurance paid.
>
>I think you're probably right about that, but one of the factual
>pieces of information any lawyer would surely want to see, in
>analyzing the situation, is the actual insurance contract, so he can
>read and parse for himself what it says. It would be a potentially
>big mistake to simply _assume_ what the policy "must" say, based on
>your flights of logic, or on what you think makes the most sense.
Sure, if I were involved in any actual case, the actual contract is
what matters. Since we apparently don't have access to that, we have
to do what we can; in this case, I was making a general point about
what a policy couldn't say (in the sense that a state Insurance
Commissioner wouldn't let them get away with it).
Seth
Mike Jacobs
> In article <8cc21607-a5a2-4607-8c17-c9d84f450...@e22g2000vbm.googlegroups.com>,
> Mike Jacobs <mjacobs...@gmail.com> wrote:
>
> >On Nov 28, 6:19 pm, se...@panix.com (Seth) wrote:
> >> Wouldn't it be, rather, that the claim was not paid? Saying it was
> >> denied gives an easy out, that it's still open.
>
> >Either way. Both state the claim sufficiently IMO in a notice-
> >pleading jurisdiction.
>
> >But which way do you think would give the "easy out" that the claim is
> >"still open"?
>
> If the pleading says it was denied, the insurance company demonstrates
> that it was not denied but is still open, and the pleading (claim)
> fails.
Agreed, unless the court rules (on plaintiff's proof by motion) or, at
the conclusion of trial so instructs the jury, that an "unreasonable
delay" in closing a claim can be treated by the insured as
"constructive denial." That's why I said either form of pleading
(alleging an outright denial, OR alleging that an unreasonably long
time had gone by without payment being made), would probably be
sufficient to survive a motion to dismiss and get to the jury. Then,
the jury could decide whether the length of the delay, under all the
circumstances, constituted "constructive denial" of the claim,
assuming the issue gets that far and the judge has not already so
ruled upon a pre-trial motion.
> If the pleading says it was not yet paid, and the length of time is
> unreasonable (several years after a death certificate was provided
> certainly seems an unreasonable length of time to me for determining
> whether a claim is payable.
It seems so to me too. But I don't know if a judge in OP's state
would deem it so as a matter of law, or would allow the issue to be
decided by the jury. In either event, ISTM the pleading is on its
face sufficient to survive a preliminary motion to dismiss, no matter
which way it is worded.
> > A denial _closes_ the claim and, if wrongful, is a
> >breach of the insurance contract. OTOH, saying the claim simply was
> >"not paid" is the version that implies the claim may still be open.
> >And, if it's still open, the insurer is not in breach _yet_, so long
> >as they are still conducting a reasonable investigation (that is, they
> >cannot avoid their contractual responsibility by simply stringing the
> >claimant along forever, without making a decision, for no good
> >reason).
>
> So why plead that the claim was denied when, instead, the insurance
> company is working at a snail's pace to "investigate"?
All I'm saying is that, in a notice-pleading jurisdiction, a slightly
inartful choice of words (that is, failure to say the "magic words")
does NOT doom a pleading to dismissal, so long as it appears to state
circumstances which, if believed AND if all permissible inferences
therefrom were to be drawn in favor of the plaintiff, would entitle
the plaintiff to some form of relief from the court.
One of the permissible inferences from "they haven't paid me yet" is,
"It's been an _unreasonably_long_time_ and they still haven't paid me
yet so the law should treat this as a constructive denial." The jury
may disagree - we were only talking about whether the issue survives
long enough to even REACH the jury.
> >> That is probably why New York law provides for triple damages in the
> >> event an insurance company deals in "bad faith".
>
> >Right, and that's why I qualified the above summary of how it "really
> >works" with, "So long as the insurer acts in good faith" their damages
> >are limited to the contract amount.
>
> The threat of triple damages might help keep them further from the
> edge.
Are we disagreeing here? I don't think so. Didn't we both just say
the same thing, in different words?
"'So long as the insurer acts in good faith' their damages are limited
to the contract amount. But, New York law provides for triple damages
in the event an insurance company deals in 'bad faith'." That
summary combines both of our statements verbatim, and IMO is a correct
statement of the law (both halves).
> >> That puts the bar a
> >> bit higher, since a colorable reason might be considered bad faith.
>
> >Don't you mean, _lack_ of a colorable reason might be considered bad
> >faith?
>
> No, lack of a colorable reason is bad faith.
Isn't that what I just asked? Who's on first? No, what's on first.
Or, are you trying to say that an insurer may be hit with 3x damages
under NY law for acting in bad faith _EVEN_IF_ the insurer _had_ a
colorable reason for the denial? I'm not disagreeing with that
either - there can be _other_ grounds for a bad faith finding besides
LACK OF a colorable reason for denial.
However, the way you worded it made it sound like HAVING a colorable
reason IN AND OF ITSELF is what might be considered evidence of bad
faith. I don't think that is EVER the case, and that's why I thought
you mis-stated yourself.
> > Calling a claim or argument "colorable" means the legal
> >position one is taking _does_ have some reasonable basis.
>
> I think the sets "no reasonable basis" and "bad faith" may not be
> quite identical.
I'm not disagreeing with you there either. Why are you making this
so difficult?
I never said the 2 sets were congruent. But you SEEMED to be saying
that if an insurer HAS "a colorable reason" then THAT FACT ALONE may
be sufficient evidence of bad faith. It's not. And it is
syntactically inappropriate to word your statement the way that you
did, to imply that it IS. Try this as an alternative:
"That puts the bar a bit higher, since even with a colorable reason an
insurer's actions might still be considered bad faith."
Isn't that better? It makes clear that the finding of insurer bad
faith is IN SPITE OF the insurer's having a colorable reason for the
denial, not BECAUSE they have a colorable reason.
> > Taking some legal position which _lacks_ any reasonable basis is
> >pretty much synonymous with acting in bad faith.
>
> The forward implication seems obvious. The backward one, less so.
Agreed. Acting without a colorable reason is always bad faith, but
bad faith does not always consist of acting without a colorable
reason. Sometime an insurer could have a colorable reason for their
acts and STILL be deemed to be acting in bad faith for some OTHER
reason.
> >> I would think that can't be a requirement, else no murder victim
> >> (whose killer wasn't convicted) need have life insurance paid.
>
> >I think you're probably right about that, but one of the factual
> >pieces of information any lawyer would surely want to see, in
> >analyzing the situation, is the actual insurance contract, so he can
> >read and parse for himself what it says. It would be a potentially
> >big mistake to simply _assume_ what the policy "must" say, based on
> >your flights of logic, or on what you think makes the most sense.
>
> Sure, if I were involved in any actual case, the actual contract is
> what matters. Since we apparently don't have access to that, we have
> to do what we can; in this case, I was making a general point about
> what a policy couldn't say (in the sense that a state Insurance
> Commissioner wouldn't let them get away with it).
Okay. I agree it is highly probable that the state's insurance
regulators would void, as unenforceable, any provision in an insurance
contract clause which says words to the effect of "In the event the
death of the person whose life is insured is ruled a homicide, we will
not have any duty to decide the claim, much less to pay out, until
someone (other than claimant) is convicted of a crime for committing
that homicide."
Seth
Mike Jacobs <mjaco...@gmail.com> wrote:
>On Dec 8, 5:32 pm, se...@panix.com (Seth) wrote:
>> In article <8cc21607-a5a2-4607-8c17-c9d84f450...@e22g2000vbm.googlegroups.com>,
>> Mike Jacobs <mjacobs...@gmail.com> wrote:
>> >On Nov 28, 6:19 pm, se...@panix.com (Seth) wrote:
>> >> Wouldn't it be, rather, that the claim was not paid? Saying it was
>> >> denied gives an easy out, that it's still open.
>> >Either way. Both state the claim sufficiently IMO in a notice-
>> >pleading jurisdiction.
>> >But which way do you think would give the "easy out" that the claim is
>> >"still open"?
>> If the pleading says it was denied, the insurance company demonstrates
>> that it was not denied but is still open, and the pleading (claim)
>> fails.
>Agreed, unless the court rules (on plaintiff's proof by motion) or, at
>the conclusion of trial so instructs the jury, that an "unreasonable
>delay" in closing a claim can be treated by the insured as
>"constructive denial." That's why I said either form of pleading
>(alleging an outright denial, OR alleging that an unreasonably long
>time had gone by without payment being made), would probably be
>sufficient to survive a motion to dismiss and get to the jury.
So a claim that says "they denied it" doesn't necessarily fail when
the insurance company says "No, it's still open" because they can
respond "You're taking so long that it's constructive denial"? In
that case, sure, both versions are equivalent. I thought it was
better to state a claim involving only true and provable (or at least
judgment-call where you think the jury will agree) statements, namely
"they haven't paid yet and they should have had plenty of time by
now." But I'll take your word for it that it doesn't matter.
>It seems so to me too. But I don't know if a judge in OP's state
>would deem it so as a matter of law, or would allow the issue to be
>decided by the jury. In either event, ISTM the pleading is on its
>face sufficient to survive a preliminary motion to dismiss, no matter
>which way it is worded.
Can such a motion be based on proof that a claim is false, or is it
only based on the law? If the latter, sure, either one is sufficient
to get past it; but if the former, it's easier if they can't show the
falsity of any part of the claim.
>> So why plead that the claim was denied when, instead, the insurance
>> company is working at a snail's pace to "investigate"?
>
>All I'm saying is that, in a notice-pleading jurisdiction, a slightly
>inartful choice of words (that is, failure to say the "magic words")
>does NOT doom a pleading to dismissal, so long as it appears to state
>circumstances which, if believed AND if all permissible inferences
>therefrom were to be drawn in favor of the plaintiff, would entitle
>the plaintiff to some form of relief from the court.
So the defendant can't get the case dismissed based on the falsity of
a claim (as worded); I thought that was the case, but I wasn't
certain.
>One of the permissible inferences from "they haven't paid me yet" is,
>"It's been an _unreasonably_long_time_ and they still haven't paid me
>yet so the law should treat this as a constructive denial."
Would it better be worded as "(1) They haven't paid me yet. (2) I
filed the claim X years ago. (3) X years is more than enough time for
them to investigate and pay."? That provides a clear chain of
reasoning so that no difficult inferences need be drawn in order to
show that the claim is legitimate in law.
> The jury may disagree - we were only talking about whether the
>issue survives long enough to even REACH the jury.
Of course; everything is up to the jury.
>> The threat of triple damages might help keep them further from the
>> edge.
>
>Are we disagreeing here? I don't think so. Didn't we both just say
>the same thing, in different words?
Pretty much; I'm just not certain that a "colorable claim" suffices to
avoid being "bad faith". The latter concept, especially, is fuzzy
enough that there might be something in the overlap (especially if
it's up to a jury).
>> >> That puts the bar a
>> >> bit higher, since a colorable reason might be considered bad faith.
*** ^particular, in these specific circumstances,
>> >Don't you mean, _lack_ of a colorable reason might be considered bad
>> >faith?
>> No, lack of a colorable reason is bad faith.
^^
>Isn't that what I just asked? Who's on first? No, what's on first.
>
>Or, are you trying to say that an insurer may be hit with 3x damages
>under NY law for acting in bad faith _EVEN_IF_ the insurer _had_ a
>colorable reason for the denial?
Yes. I don't think it's likely, but I believe there could be a case
where it happens.
>However, the way you worded it made it sound like HAVING a colorable
>reason IN AND OF ITSELF is what might be considered evidence of bad
>faith.
What I meant was that having a colorable reason might not
automatically suffice to prove lack of bad faith.
>> > Calling a claim or argument "colorable" means the legal
>> >position one is taking _does_ have some reasonable basis.
>>
>> I think the sets "no reasonable basis" and "bad faith" may not be
>> quite identical.
>
>I'm not disagreeing with you there either. Why are you making this
>so difficult?
See the interpolated words (at ***) above. I obviously don't always
write as clearly as I'd wish.
>"That puts the bar a bit higher, since even with a colorable reason an
>insurer's actions might still be considered bad faith."
>
>Isn't that better?
That's exactly what I meant. Thank you. (That's why the one of us
who is an attorney isn't me.)
Seth
grendal
> In article <f4a543f0-2051-4517-be52-4a668ba5e...@u36g2000prn.googlegroups.com>,
> Mike Jacobs �<mjacobs...@gmail.com> wrote:
> >> So why plead that the claim was denied when, instead, the insurance
> >> company is working at a snail's pace to "investigate"?
>
> >All I'm saying is that, in a notice-pleading jurisdiction, a slightly
> >inartful choice of words (that is, failure to say the "magic words")
> >does NOT doom a pleading to dismissal, so long as it appears to state
> >circumstances which, if believed AND if all permissible inferences
> >therefrom were to be drawn in favor of the plaintiff, would entitle
> >the plaintiff to some form of relief from the court.
>
> So the defendant can't get the case dismissed based on the falsity of
> a claim (as worded); I thought that was the case, but I wasn't
> certain.
>
> >One of the permissible inferences from "they haven't paid me yet" is,
> >"It's been an _unreasonably_long_time_ and they still haven't paid me
> >yet so the law should treat this as a constructive denial."
>
> Would it better be worded as "(1) They haven't paid me yet. �(2) I
> filed the claim X years ago. �(3) X years is more than enough time for
> them to investigate and pay."? �That provides a clear chain of
> reasoning so that no difficult inferences need be drawn in order to
> show that the claim is legitimate in law.
>
Sorry to interject but the case is in IL . Insurance laws are governed
state by state and NY has some strange laws on the books.
The insurance company does pay their claims. According to industry
trackers, XXXXXXXXX has been the #1 insurance carrier of their type
for the past 7+ years. I raise this because this isn't a case where
the company is known to act in bad faith.
This lawsuit is a bad example of trying to show an insurance company
making excuses not to pay. I mean heck, lets face it, their legal fees
are going to probably be more than the amount of the policy. (No
offense Mike, but even in this economic melt down, lawyer's rates
really haven't dropped. ;-)
If you want an example of an insurance company acting in bad faith,
look at Louisiana and the Hurricane where people's roofs got ripped
off, rain came in, and the high winds pushed water inland and did
extensive damage. The companies balked claiming that it was flood
damage and that they weren't responsible....
I forget all of the details but I think many can recall the lawsuits.
Here, you have a person getting a policy and before the 'ink is dry',
they get killed (murder) and the insurance company won't pay out to
the beneficiary because the police won't exonerate her in writing?
You can take that to a jury and I don't think they'll side with the
mother of the deceased.
And when I say that the ink wasn't dry, I mean that the policy hadn't
cleared the underwriters yet. So there may be language in the policy
governing the probationary period. (Time the policy is signed through
the time when the underwriters approve the policy.)
Lets paint a little hypothetical background story... we all like
that... ;-)
Suppose the woman who was killed was a drug dealer and she knew that
there was a 'hit' out on her. So she took out this life insurance
policy to give her mother a little something extra because she knows
she can't hide forever...
This is just a hypothetical story, and we may have seen something like
this on one of the police drama's over the years.
(Maybe the victim was a male and he was trying to do something for his
estranged wife and kid... but you get the idea.)
She gets the policy and her past catches up to her within the week. Do
you then think that the Insurance company should honor the policy?
There are a couple of things we don't know. 1) What is actually said
in the policy. 2) All of the details that the police have and that the
insurance company has.
>From a legal standpoint, this case is interesting because it deals
with contracts and potential fraud or bad faith from either side.
IMHO, had the person gotten killed in an accident like a bus
overturning on the expressway, or something that was clearly not
'murder' or that they hid a medical condition... I believe that a
check would have been cut ASAP.
Mike Jacobs
> Mike Jacobs <mjacobs...@gmail.com> wrote:
> >On Dec 8, 5:32 pm, se...@panix.com (Seth) wrote:
<snip>
> >either form of pleading
> >(alleging an outright denial, OR alleging that an unreasonably long
> >time had gone by without payment being made), would probably be
> >sufficient to survive a motion to dismiss and get to the jury.
>
> So a claim that says "they denied it" doesn't necessarily fail when
> the insurance company says "No, it's still open" because they can
> respond "You're taking so long that it's constructive denial"?
Pretty much, yes, that's so. But such a factual riposte by a
defendant would not be relevant on a motion to dismiss - since, on a
motion to dismiss, the court must _assume_ the truth of all the well-
pleaded allegations of the complaint, and of all permissible
inferences therefrom in the light most favorable to plaintiff.
In that light, an allegation (in an insurance-bad-faith suit, the kind
we are talking about here) saying that "they denied my claim" could be
true _either_ because the insurer in fact used the "magic
word" ("denied") in replying to the plaintiff's claim, _or_ because
one of the permissible inferences from an undue delay in responding
would be a finding of "constructive denial." The jury is not
_required_ to reach that conclusion, but at least the reasonable
possibility of them doing so makes resolution of this issue into a
matter for a _later_ stage of the proceeding, and merits denial of the
preliminary motion to dismiss.
At the dismissal stage, all that matters is whether the complaint,
however it is worded, states a claim that _could_ entitle plaintiff to
relief, _if_ all the facts therein were proven. Which is why my
previous post said that _either_ form of pleading (of the 2
alternatives we've been talking about) would probably be sufficient to
survive dismissal for failure to state a claim on which relief can be
granted, and would permit the plaintiff's case to be presented to the
jury. The jury, of course, would _then_ have to decide whether the
delay was in fact (i.e., in the jury's opinion, is what that really
means) so lengthy as to constitute a "constructive denial."
> In
> that case, sure, both versions are equivalent. I thought it was
> better to state a claim involving only true and provable (or at least
> judgment-call where you think the jury will agree) statements,
Yes, generally that is the best idea. But to paraphrase what we were
talking about, it was this: In case a pleading _is_ inartfully worded,
just how bad does it have to be before it will get the case thrown out
(dismissed) on a preliminary motion? And my answer was, in effect,
that it can be pretty darn sloppy and still pass muster AT THAT
STAGE. Not that I'm recommending that approach, or anything. It's
still a good idea to be as accurate as possible in relating the known
and presumed facts as well as the inferences one WANTS THE JURY TO
DRAW from those facts, in a complaint.
In drafting a complaint, a careful drafter reasons backwards from the
conclusion he wants the jury to draw. Here, one essential fact which
must be proven as part of an insurance-bad-faith plaintiff's prima
facie case (or even just a breach-of-contract case) is a DENIAL of the
plaintiff's (pre-suit) insurance claim. The jury can find that fact
of denial either upon _direct_ evidence of an undisputed
"denial" (e.g., a denial letter to the claimant in which the insurer
used that "magic word") _or_ the jury can reach that conclusion, and
find a "constructive denial," on the basis of some OTHER facts, such
as unreasonable delay. All I'm saying is, if the ACTUAL FACTS (as we
now assume, from OP's post and the actual complaint referenced there)
indicate that ALL that ever happened was unreasonable delay, then it
is permissible, and sufficient, for the complaint to allege either
"denial," period; _or_ to allege some FACTS showing _constructive_
denial.
Alleging that a "denial" occurred is _not_factually_false_ if, in
fact, there are grounds on which the jury could find either actual
_or_constructive_ denial. In other words, that allegation is a
statement of the ULTIMATE fact that the plaintiff needs to have
proven, and DOES NOT necessarily indicate that the plaintiff intends
to rely, as the basis for such proof, on evidence that the insurer
actually used those magic words at any time before suit was filed. In
fact, such an allegation may be both well-pleaded and factually true
even if the insurer NEVER had used the words "your claim is denied" in
any communications with the claimant/plaintiff.
If you've followed me this far, you know I think that such a complaint
(alleging "denial") _is_ well-pleaded and _is_ sufficient to survive a
motion to dismiss, WHETHER OR NOT the insurer ever uttered the "magic
word." However, the ultimate TRUTH VALUE of that complaint is
something that CANNOT be determined UNTIL the jury comes back with its
verdict, because the question of whether or not the underlying facts
are _in_fact_ sufficient to warrant the conclusion of "constructive
denial" is something ONLY THE JURY CAN TELL; that is a subjective
matter of THE JURY'S OPINION.
And that startling conclusion, Seth, gets us back to the ongoing and
very interesting discussion you and I have been having, over in a
different thread about theft and ownership, concerning what the
"truth" (in an absolute, black-or-white sense) has to do with legal
proceedings. Isn't that cool? Everything is connected. Wow.
> namely
> "they haven't paid yet and they should have had plenty of time by
> now." But I'll take your word for it that it doesn't matter.
It _does_ matter in terms of ultimate proof, i.e. in terms of whether
the jury will finally BELIEVE the plaintiff has proven he is entitled
to relief, and award him a verdict. In fact, there is a real
possibility the jury will say to each other, once they begin
deliberations, "This guy hasn't proven that the insurer denied his
claim. All he has shown us is that they are taking a long time.
That's not enough." That is one possible verdict.
But, it does _not_ matter in terms of surviving a motion to dismiss
and being allowed to go on to the next stage - discovery and motions
practice, where the exact shape of the factual and legal issues that
will be presented at trial sometimes (usually) get trimmed a bit (or a
lot) and/or get additional theories added on.
One aspect of what you are talking about is, the problem of conforming
the pleadings to the proof, or vice versa. That is not a problem in
most modern "notice-pleading" jurisdictions, which allow the pleadings
to be amended, even after the verdict is in, to conform to the actual
proof offered at trial - and at that post-verdict point, even the
formality of amending the pleadings is often skipped, since (for the
most part) all that matters to the verdict is the _actual_ proof that
was allowed to be offered at trial, and the judgment that gets entered
upon the verdict.
OTOH in an old-fashioned, "form-pleading" jurisdiction, the pleadings
must precisely conform to a pre-set template and must state the actual
facts which the plaintiff intends to prove, and those facts must of
course be sufficient to merit relief; in addition, the proof at trial
is not allowed to vary from the facts pleaded. So, if (by the time a
case gets to trial) the theory of recovery has turned out to have some
holes in it and another theory is looking better, or if a few
additional facts look like they would enhance plaintiff's chances to
win, that's just too bad, he is out of luck and out of court.
Going back to the deepest roots of tort law, frex, ancient law did not
even recognize a cause of action for negligence, only for intentional
trespass, so pleaders had to artfully word their complaints to allege
a form of "trespass on the case" before courts finally came around and
acknowledged that negligence was in fact a separate, newly recognized,
tort because it did not require proof of _intent_ to violate any right
of plaintiff's (or of intent to cause harm).
The discussion in the preceding 2 paratraphs is of merely historical
interest now, though, because IIRC no USA state still adheres to old-
fashioned "code pleading" (although, _Twombly_ and _Iqbal_ represent a
disturbing SCOTUS trend, binding the Federal courts back in that
direction, requiring precise factual allegations to survive a M to D).
> >It seems so to me too. But I don't know if a judge in OP's state
> >would deem it so as a matter of law, or would allow the issue to be
> >decided by the jury. In either event, ISTM the pleading is on its
> >face sufficient to survive a preliminary motion to dismiss, no matter
> >which way it is worded.
>
> Can such a motion be based on proof that a claim is false, or is it
> only based on the law? If the latter, sure, either one is sufficient
> to get past it; but if the former, it's easier if they can't show the
> falsity of any part of the claim.
A motion to dismiss is based _only_ on the way the complaint is
actually worded, and assumes the truth of all those allegations _and_
of all permissible inferences therefrom that favor the plaintiff whose
adequacy of pleading is being challenged by the motion. SO, such a
motion is a purely legal one, asserting that the facts alleged in the
complaint are insufficient as a matter of law to state a claim upon
which relief can be granted.
If the defendant wants to raise contrary factual issues, then it needs
to either file a motion for "summary judgment," or take the case to
trial and present their opposing facts to the jury there. Summary
judgment means the movant (here, defendant insurer) is asserting that
there is no GENUINE dispute of material facts and that those facts
entitle defendant to judgment as a matter of law.
To get there, in this thread's case, AFLAC could not just rely on its
pleadings or on bald, unsupported denials of the facts stated in the
complaint, but would have to file an affidavit (evidence under oath)
indicating that, frex, they did _not_ ever deny the plaintiff's
insurance claim (assuming for this example, hypothetically, that
plaintiff did _not_ have an alternative, "constructive denial" theory
available as another option to prove up his case). Perhaps defendant
would attach as an exhibit a copy of their letter to the claimant
indicating they were "still investigating," but that is not essential,
so long as their affidavit asserts they never stated a denial.
Using the Anderson-Catrett-Matsushita approach, defendant could also
file a MSJ with _no_ supporting affidavit, asserting the _absence_ of
any proof of that essential element of plaintiff's case). Then, if
plaintiff could not come up with any contrary EVIDENCE to show
existence of a _genuine_ dispute as to whether denial of his insurance
claim ever occurred, summary judgment would be granted to the insurer.
However, in the case at hand, plaintiff's most likely response to such
an SJ motion would be that the "reasonableness" of the length of time
the insurer had taken for its investigation - and therefore the
question of whether or not that delay constituted a "constructive
denial" - was the type of "fuzzy," subjective issue that is almost
always a jury question and, therefore, SJ should be denied, to permit
plaintiff to get past that hurdle and present his facts to the jury
where _the_jury_ could decide whether the facts sufficiently showed
unreasonable delay amounting to constructive denial. IOW, to
successfully oppose SJ, plaintiff does not have to prove conclusively
that _he_ should win instead of defendant; rather, he merely needs to
show that there _is_ a disputed issue of material fact, an issue which
remains to be decided by the jury.
> >> So why plead that the claim was denied when, instead, the insurance
> >> company is working at a snail's pace to "investigate"?
>
> >All I'm saying is that, in a notice-pleading jurisdiction, a slightly
> >inartful choice of words (that is, failure to say the "magic words")
> >does NOT doom a pleading to dismissal, so long as it appears to state
> >circumstances which, if believed AND if all permissible inferences
> >therefrom were to be drawn in favor of the plaintiff, would entitle
> >the plaintiff to some form of relief from the court.
>
> So the defendant can't get the case dismissed based on the falsity of
> a claim (as worded);
Correct; if what you mean by "falsity of a claim" is, the ACTUAL
insufficiency of the plaintiff's allegations (that is, the "real"
facts are to the contrary and do not entitle plaintiff to relief),
that's what trials are for. That defense posture states a classic
"factual dispute" to be resolved by the jury at trial, not an issue of
law to be resolved on a motion to dismiss.
Although, if defendant's proof of contrary facts is strong enough so
as not to brook any genuine dispute (that is, if plaintiff has _no_
facts on _his_ side from which a favorable inference could reasonably
be drawn, sufficient to raise a jury question) then defendant may
still get the case thrown out on SJ, upon proper proof of the
undisputed facts being in defendant's favor. This, of course, is the
main reason why a plaintiff cannot just willy-nilly say any old damn
thing he wants in a complaint, heedless of the real-world truth value
of those allegations; to do so without some COLORABLE basis in fact
and law to support those allegations makes it a frivolous and
groundless complaint, one which would open the plaintiff to possible
sanctions under Federal Rule 11 (or the state equivalent) in addition
to getting his claim summarily dismissed.
> I thought that was the case, but I wasn't
> certain.
Yep.
> >One of the permissible inferences from "they haven't paid me yet" is,
> >"It's been an _unreasonably_long_time_ and they still haven't paid me
> >yet so the law should treat this as a constructive denial."
>
> Would it better be worded as "(1) They haven't paid me yet. (2) I
> filed the claim X years ago. (3) X years is more than enough time for
> them to investigate and pay."? That provides a clear chain of
> reasoning so that no difficult inferences need be drawn in order to
> show that the claim is legitimate in law.
Yes, that's good. But, difficult, shmifficult, your wording _also_
requires the inference of "constructive denial" to be drawn - it just
makes the presence of that permissible inference plainer. Your
wording _is_ better, _because_ it is clearer, but it still does not
negate the need for the jury to draw the ultimate fact (constructive
"denial") as an inference from those underlying facts you state.
> > The jury may disagree - we were only talking about whether the
> >issue survives long enough to even REACH the jury.
>
> Of course; everything is up to the jury.
Well, if you've followed me this far, that's close but not _quite_
accurate. Everything that is still in GENUINE FACTUAL DISPUTE
regarding a MATERIAL factual issue, by the time the case GETS to the
jury, is what will be presented to, and is up to, the jury.
Everything _else_ (that is, every other factual issue, and every
purely legal issue) that existed in the case before that, which was
capable of being resolved as a matter of LAW by the judge, will have
been, so that the jury is only presented with those factual issues
that still are in genuine dispute. All other legal issues that were
ripe for resolution before then, will already have been decided by the
judge, and all other factual issues (those not genuinely in material
dispute) will have been resolved either by dismissal of a part of the
complaint (if it failed to state a compensable claim, even taken in
the light most favorable to plaintiff) or by summary judgment (if
plaintiff was unable to come up with _evidence_ supporting his well-
pleaded but factually false material allegations) or by stipulation
(if the parties agree on the truth of a certain essential fact and
don't want to waste the jury's time on a dog-and-pony show to prove
it) or by admissions of a party (a form of discovery with a final
result much like a voluntary stipulation, if the responding party does
not choose to dispute the fact as to which the propounding party seeks
an admission of its truth).
> >> The threat of triple damages might help keep them further from the
> >> edge.
>
> >Are we disagreeing here? I don't think so. Didn't we both just say
> >the same thing, in different words?
>
> Pretty much; I'm just not certain that a "colorable claim" suffices to
> avoid being "bad faith".
Agreed, either in the context of a motion for sanctions to dismiss a
frivolous complaint (which is where you would talk about a plaintiff
having a "colorable claim" or not), _or_ in the original context we
were talking about, of the insurer's claim handling practices (alleged
as part of the underlying basis for a suit against an insurer for the
_tort_ of bad faith claims handling).
I think you are now mixing up these 2 related but quite distinct
concepts, Seth, which deal with chronologically distinct phases of a
proceeding and possibly different types of cases. The concept of a
"frivolous, bad faith claim or complaint" may arise procedurally in
ANY type of suit, and arises procedurally _after_ the (allegedly in-
bad-faith) complaint is filed. That is where we would talk about a
_plaintiff_ not having a "colorable claim."
OTOH the concept of "bad faith denial" of an insurance claim is a
factual, not procedural, issue that arises ONLY in a case based on the
alleged tort of bad-faith insurance claims handling practices, a type
of case where the insurance claimant (usually, the insured or an
intended beneficiary) is the plaintiff, and the insurer is the named
defendant. In such a case, the reason a complaint even gets filed in
the first place is in order to allege that the insurer had PREVIOUSLY
denied the plaintiff's claim, and that the insurer (_defendant_) did
so in bad faith (i.e. without any colorable reason, _OR_ for some
_improper_ reason, of which there are too many to catalogue here).
As to the (pre-suit) claim-denial process in an insurance-bad-faith
case, i.e. the underlying FACTS which a plaintiff would have to allege
in a complaint for the tort of bad-faith claims handling, an insurer's
mere assertion that it had a "colorable basis" to deny a claimant's
pre-suit claim is not a talisman which is always sufficient to protect
the insurer from evil consequences simply by invoking it. Any of
numerous other, improper, reasons for the denial could also give rise
to a claim for the tort of "bad-faith claims handling" (a tort whose
name, for convenience, we usually abbreviate to simply "bad faith" -
but, as apparently happened to you here, doing so can lead to
confusion with other, separate issues such as the issue of sufficiency
of a suit complaint vs. bad-faith filing of a groundless suit by a
plaintiff).
> The latter concept, especially, is fuzzy
> enough that there might be something in the overlap (especially if
> it's up to a jury).
>
> >> >> That puts the bar a
> >> >> bit higher, since a colorable reason might be considered bad faith.
>
> *** ^particular, in these specific circumstances,
>
> >> >Don't you mean, _lack_ of a colorable reason might be considered bad
> >> >faith?
> >> No, lack of a colorable reason is bad faith.
>
> ^^
>
> >Isn't that what I just asked? Who's on first? No, what's on first.
>
> >Or, are you trying to say that an insurer may be hit with 3x damages
> >under NY law for acting in bad faith _EVEN_IF_ the insurer _had_ a
> >colorable reason for the denial?
>
> Yes. I don't think it's likely, but I believe there could be a case
> where it happens.
Yes, I agree. I was just trying to pin down whether that was what
you meant by what you were saying. And, as it turns out, it was.
> >However, the way you worded it made it sound like HAVING a colorable
> >reason IN AND OF ITSELF is what might be considered evidence of bad
> >faith.
>
> What I meant was that having a colorable reason might not
> automatically suffice to prove lack of bad faith.
Agreed. Hopefully you can see why I drew a different inference
originally, from the way you originally worded it.
> >> > Calling a claim or argument "colorable" means the legal
> >> >position one is taking _does_ have some reasonable basis.
>
> >> I think the sets "no reasonable basis" and "bad faith" may not be
> >> quite identical.
>
> >I'm not disagreeing with you there either. Why are you making this
> >so difficult?
>
> See the interpolated words (at ***) above. I obviously don't always
> write as clearly as I'd wish.
Okay.
> >"That puts the bar a bit higher, since even with a colorable reason an
> >insurer's actions might still be considered bad faith."
>
> >Isn't that better?
>
> That's exactly what I meant. Thank you. (That's why the one of us
> who is an attorney isn't me.)
De nada.
Barry Gold
>Here, you have a person getting a policy and before the 'ink is dry',
>they get killed (murder) and the insurance company won't pay out to
>the beneficiary because the police won't exonerate her in writing?
Well, as others have pointed out, the police just don't "exonerate"
somebody. The most they do is _not_ charge them with the crime in
question, and/or charge somebody else.
So, yes, if the insurance company is suddenly making it a condition
that the beneficiary be exonerated in writing, I think that would be
unreasonable and "bad faith". OTOH, if what they _really_ said was,
"We're waiting to see if she gets indicted for the murder," then it
_is_ reasonable. There really _is_ some reason to think she might
have murdered him for the insurance, and that is a valid reason for
denying payment.
My money is on the latter, with the "exonerate in writing" stuff being
a spin that her lawyer put on it. But it's _possible_ that some
functionary was stupid enough to give that as an excuse.
>You can take that to a jury and I don't think they'll side with the
>mother of the deceased.
Probably not, at least until the murder is either solved or shelved.
And I suspect that one of those will happen long before the suit comes
to trial. One way or another, that mother and her lawyer are probably
going to look stupid. Either she'll be facing trial for the murder
(and the insurance co. will have a valid reason not to pay until after
she _is exonerated -- that is, found Not Guilty by a jury), or they
will have paid off the claim.
Or perhaps they will simply _offer_ to pay the claim. Now she will be
faced with a choice:
a) take the money now, and forget about anything "extra" for bad
faith (because the offer will come with a release of all other
claims)
b) go on with her lawsuit, and try to convince a jury it was "bad
faith" when the insurance company offered payment long before the
"bad faith" lawsuit went to trial.
>And when I say that the ink wasn't dry, I mean that the policy hadn't
>cleared the underwriters yet. So there may be language in the policy
>governing the probationary period. (Time the policy is signed through
>the time when the underwriters approve the policy.)
That's not the usual meaning of "before the ink was dry". It's
colloquial for "a short time later".
>Lets paint a little hypothetical background story... we all like
>that... ;-)
>
>Suppose the woman who was killed was a drug dealer and she knew that
>there was a 'hit' out on her. So she took out this life insurance
>policy to give her mother a little something extra because she knows
>she can't hide forever...
[snip]
>She gets the policy and her past catches up to her within the week. Do
>you then think that the Insurance company should honor the policy?
Yes. I do. Unless the victim lied on the application. (E.g., if she
listed her occupation as "housewife" when her actual occupation was
"seller of illegal drugs".) In the latter case, I think they _would_
have a valid reason to cancel the policy -- for fraud.
But that would have nothing to do with still being in the "binder"
period (between when the application is accepted and when the
underwriter accepts it). Fraud of that sort would be a valid reason
for canceling _any_ policy -- except most life insurance policies are
"incontestable" after a certain period, usually two years. SO if she
lives more than two years after buying the policy, they will pay out
regardless of what she put on her application (assuming they didn't
catch the fraud and revoke it during that two year period).
Robert Bonomi
>grendal <im_g...@hotmail.com> wrote:
>>Here, you have a person getting a policy and before the 'ink is dry',
>>they get killed (murder) and the insurance company won't pay out to
>>the beneficiary because the police won't exonerate her in writing?
>
>Well, as others have pointed out, the police just don't "exonerate"
>somebody. The most they do is _not_ charge them with the crime in
>question, and/or charge somebody else.
>
>So, yes, if the insurance company is suddenly making it a condition
>that the beneficiary be exonerated in writing, I think that would be
>unreasonable and "bad faith". OTOH, if what they _really_ said was,
>"We're waiting to see if she gets indicted for the murder," then it
>_is_ reasonable. There really _is_ some reason to think she might
>have murdered him for the insurance, and that is a valid reason for
>denying payment.
Can we put an end to this?
Seen in another forum -- a representative for the insurer stated (a) the
claim is still open, (b) they have 'non death-related' questions that the
policyholder has failed to address, (c) that they are still awaiting said
answers. That _that_ is what is holding up the settlement.
[ take the above as hearsay' reportage -- I, personally read it, but don't
have the actual cite to hand. Discovered through a Google search on the
case, a week or so ago -- toward the top of the search results returned. ]
grendal
> > She gets the policy and her past catches up to her within the week. Do
> > you then think that the Insurance company should honor the policy?
>
> Is that a LEGAL question? �It doesn't sound like it.
>
Well, that the thing.
She was murdered during the probationary period.
Suppose that the underwriters decided that she wasn't fit to be
insured?
(I mean that there's a lot that we don't know)
Barry brought up the 'F' word. Fraud.
I don't know what's written in the policy but when you have a sudden
unexpected death, the 'F' word always comes up.
I mean if you know that there's a contract out on your life, and you
take out a life insurance policy, is that fraud?
(That's really the question.)
I'm sorry, but I kind of find this interesting because the law is
supposed to be fair (yeah I'm wearing a blindfold too. ;-)
You have to balance the rights of the insurance company against the
rights of the beneficiary.
If the Insurance company reasonably suspects fraud, they are within
their rights to deny a claim. The beneficiary is within her rights to
sue. While one can claim bad faith, the judge or jury has to determine
if the insurance company acted with bad faith.The one fact of the
case, the fact that the murder occurred within a week of the signing
and before the end of the probationary period, proving bad faith could
be a stretch. IANAL and you never know what will happen.
When you talk about risks, going to trial, that's the real risk.
Seth
grendal <im_g...@hotmail.com> wrote:
>On Dec 16, 11:08�am, A Michigan Attorney <miattor...@gmail.com> wrote:
>Suppose that the underwriters decided that she wasn't fit to be
>insured?
What happens in other types of insurance is that they cancel the
policy, usually with some notice ("We decided not to issue this
policy, so it's cancelled effective one week from today, and we'll
refund the unearned portion of your pre-paid premium.")
>Barry brought up the 'F' word. Fraud.
>
>I don't know what's written in the policy but when you have a sudden
>unexpected death, the 'F' word always comes up.
It's _always_ a possibility, but frankly, I think the 'M' word is the
more likely one in that case.
>I mean if you know that there's a contract out on your life, and you
>take out a life insurance policy, is that fraud?
If you aren't asked about it and you don't mention it, then no, it's
not fraud.
>You have to balance the rights of the insurance company against the
>rights of the beneficiary.
It has the right to ask any question not prohibited by law, and to use
the answers to determine whether (and at what price) to issue a
policy, unless prohibited by law. It has lots of smart people whose
jobs involve figuring out which questions are worth asking, and how to
treat the responses.
>If the Insurance company reasonably suspects fraud, they are within
>their rights to deny a claim. The beneficiary is within her rights to
>sue. While one can claim bad faith, the judge or jury has to determine
>if the insurance company acted with bad faith.The one fact of the
>case, the fact that the murder occurred within a week of the signing
>and before the end of the probationary period, proving bad faith could
>be a stretch.
If the lawsuit were filed a week later, I'd agree. Years later, the
probability that the policy beneficiary will ever be convicted is
extremely low.
> IANAL and you never know what will happen.
>
>When you talk about risks, going to trial, that's the real risk.
"12 people who aren't smart enough to get out of jury duty, deciding
which side has the better lawyer."
Seth
Barry Gold
>She was murdered during the probationary period.
>
>Suppose that the underwriters decided that she wasn't fit to be
>insured?
>(I mean that there's a lot that we don't know)
>
>Barry brought up the 'F' word. Fraud.
>
>I don't know what's written in the policy but when you have a sudden
>unexpected death, the 'F' word always comes up.
>
>I mean if you know that there's a contract out on your life, and you
>take out a life insurance policy, is that fraud?
>(That's really the question.)
Well, keep in mind that in most contract situations, you are not
required to disclose everything you know to the other party.
E.g., you go to an open house and see a painting on the wall. It's
not signed, but you recognize the style as that of a famous artist.
You: That's an interesting painting.
Homeowner: Yes, I inherited it from my aunt, I was her only living
relative. She had a lot of junk art that I threw out, but I liked this
one.
You: (Wincing at the thought of other valuable artwork that may have
been destroyed) Well, I like it too.
Homeowner: You're the first person besides me who liked it. I'm
moving to a smaller place, and I'm not sure where I'll have room to
hang it.
You: I'll give you $200 for it.
Homeowner: Done. (Takes the painting down, gives it to you for $200
cash)
That's a perfectly legal transaction.
So, if you know there's a mob hit out on you, you don't have to tell
the insurance company. That's not fraud. But you _do_ have to answer
their questions truthfully. They will probably ask your occupation
and any hobbies you regularly engage in. Saying you're a pharmacy
worker when your actual work is dealing illegal drugs on the street is
fraud. So is leaving out the fact that you go skydiving every
weekend.
But it might be OK to answer "bill collector" when the "bills" you
collect are for a loan shark and involve kneecapping unwilling
debtors. As long as your answers are _literally_ truthful, you should
be OK.
Seth
>Well, keep in mind that in most contract situations, you are not
>required to disclose everything you know to the other party.
>
>E.g., you go to an open house and see a painting on the wall. It's
>not signed, but you recognize the style as that of a famous artist.
>
>You: That's an interesting painting.
>
>Homeowner: Yes, I inherited it from my aunt, I was her only living
>relative. She had a lot of junk art that I threw out, but I liked this
>one.
>
>You: (Wincing at the thought of other valuable artwork that may have
>been destroyed) Well, I like it too.
>
>Homeowner: You're the first person besides me who liked it. I'm
>moving to a smaller place, and I'm not sure where I'll have room to
>hang it.
>
>You: I'll give you $200 for it.
>
>Homeowner: Done. (Takes the painting down, gives it to you for $200
>cash)
>
>That's a perfectly legal transaction.
I'm told that in MN, if you're a professional in the field (art
dealer), it isn't. Apparently, the legislature didn't like the habits
of some dealers taking advantages of unknowledgeable inheritors.
Seth
Seth
grendal <im_g...@hotmail.com> wrote:
>On Dec 13, 11:12�pm, se...@panix.com (Seth) wrote:
>> In article <f4a543f0-2051-4517-be52-4a668ba5e...@u36g2000prn.googlegroups.com>,
>> Mike Jacobs �<mjacobs...@gmail.com> wrote:
>Sorry to interject but the case is in IL . Insurance laws are governed
>state by state and NY has some strange laws on the books.
What state doesn't?
>The insurance company does pay their claims. According to industry
>trackers, XXXXXXXXX has been the #1 insurance carrier of their type
>for the past 7+ years. I raise this because this isn't a case where
>the company is known to act in bad faith.
Does that matter? (Perhaps "they often act in bad faith as shown by
the following list of lawsuits, and they're doing it again" will lead
to punitive damages, while "they very seldom act in bad faith, but
this time they did" won't; but either way, whether or not they acted
in bad faith in _this_ case doesn't depend on their history.)
>This lawsuit is a bad example of trying to show an insurance company
>making excuses not to pay. I mean heck, lets face it, their legal fees
>are going to probably be more than the amount of the policy.
So why do it in the first place? (Perhaps becoming known to have a
policy of fighting will reduce future claims somehow. But while that
sort of reputation might discourage bogus injury claims in automobile
accidents, I don't see how it's likely to discourage claims for life
insurance when the insured is really and provably deceased.)
>Here, you have a person getting a policy and before the 'ink is dry',
>they get killed (murder) and the insurance company won't pay out to
>the beneficiary because the police won't exonerate her in writing?
The police *never* exonerate people in writing; what would they have
to gain by doing so? Besides, it's not up to them; the DA can
prosecute without the police doing anything (provided evidence is
available for the prosecution).
>You can take that to a jury and I don't think they'll side with the
>mother of the deceased.
What's that bit about "presumed innocent until proven guilty" again?
>Suppose the woman who was killed was a drug dealer and she knew that
>there was a 'hit' out on her. So she took out this life insurance
>policy to give her mother a little something extra because she knows
>she can't hide forever...
>This is just a hypothetical story, and we may have seen something like
>this on one of the police drama's over the years.
So? If the victim _lied_ on the application, that's fraud and a valid
reason to deny payment. If the insurance company didn't ask, and the
victim didn't lie, then the policy is valid.
>She gets the policy and her past catches up to her within the week. Do
>you then think that the Insurance company should honor the policy?
I think it must. What excuse would it have for not? There was a
meeting of the minds; both sides agreed "Purchaser will pay $X, and if
purchaser dies within 1 year, insurance company will pay $Y;
everything purchaser wrote on the application is true."
>There are a couple of things we don't know. 1) What is actually said
>in the policy.
That certainly matters.
> 2) All of the details that the police have and that the
>insurance company has.
The former doesn't matter; the latter might.
Seth
Seth
Robert Bonomi <bon...@host122.r-bonomi.com> wrote:
>Can we put an end to this?
In this newsgroup? Not likely, the various tangents will keep going
so long as anybody is interested.
>Seen in another forum -- a representative for the insurer stated (a) the
>claim is still open, (b) they have 'non death-related' questions that the
>policyholder has failed to address, (c) that they are still awaiting said
>answers. That _that_ is what is holding up the settlement.
That could dispose of the reality-based branch of the thread (though
the sorts of non death-related questions they might have would be
interesting to know).
Seth