Claim Denial Results
Representative Cases Involving Insurers Who Deny Claims
Following are examples of actual verdicts and settlements obtained by Pillsbury & Coleman in cases involving insurance company claim denials. Additional results can be reviewed when you speak with an attorney at our firm. If plaintiff or insurance company names do not appear it is because confidentiality agreements are in place restricting that information.
Gordon Vann V. Travelers Insurance Co.
|Case Issue||Refusal to defend insured|
|Result||Won at trial $25 million in punitive damages; upheld on appeal|
|Summary||Gordon Vann was the former owner of an auto repair shop in Oakland, California. He had operated his repair shop in the same location for approximately 30 years. Following the death of his landlord, Mr. Vann was asked to vacate the premises. He was then sued for allegedly causing environmental damage to the premises.
Mr. Vann asked his insurance company to defend him. Rather than doing so, Travelers first denied that he had a policy. Then after admitting that he had a policy, it inundated him with burdensome and harassing requests for information. Mr. Vann was nearly 70 years old at the time and unable to respond to these inquiries. Travelers again improperly claimed that Mr. Vann didn’t have any insurance coverage and refused to hire an attorney to defend him. Mr. Vann was left to defend the case on his own. An attorney agreed to help Mr. Vann defend himself but he was unable to afford an adequate defense.
Mr. Pillsbury proved at trial that Travelers had adopted a manner of handling environmental claims that was intended to deprive individuals such as Mr. Vann of insurance protection. The jury found that Travelers had acted in bad faith and that it had treated Mr. Vann with malice, fraud and oppression. It awarded Mr. Vann $26.5 million. Travelers unsuccessfully appealed all the way to the United States Supreme Court.
National Company Headquartered in Bay Area v. Insurance Company
|Case Issue||Property damage claim denied by insurance company|
|Summary||After a hurricane decimated our client’s offices in Florida, the insurance company investigated the claim for over a year and then refused to pay for hurricane damages on the grounds that the client had not disclosed the address of that office location.
We sued for breach of contract and bad faith handling of the claim. After depositions of key claims examiners, the case settled. The client was able to rebuild its damaged facilities.
Property Owner v. Insurance Company
|Case Issues||Insurance bad faith claim, improperly refused to pay claim for building fire|
|Summary||Our client suffered the loss of her small ski cabin to a fire. After making a claim for the damage under her homeowner’s policy, her insurer performed a biased and highly intrusive investigation and, using patently incompetent science, accused her of burning down her own property to fraudulently collect on her insurance policy.
Pillsbury & Coleman hired experts who quickly determined the fire was electrical and accidental, and debunked the insurance company’s theories through evidence and depositions. The matter settled two months before trial.
Homeowner v. Insurance Company
|Case Issue||After a fire destroyed her modest home, our client, a diabetic woman who was partially blind and poor, was forced to move her family into Section 8, low-income rental housing when Allstate, her property insurance company, refused to pay her claim. In their claim denial, they falsely accused the homeowner of arson.
We filed an insurance bad faith lawsuit and settled for an amount that far exceeded the limits of her insurance policy.
Zembsch Family v. Health Net of California, Inc.
|Case Issue||Insurance bad faith, claim denial for life-saving surgery|
|Summary||Jack suffers from Metatropic Dysplasia (MD), an extremely rare form of dwarfism. Jack’s MD condition is characterized by shortened limbs and a badly deformed spine, which worsens as he grows. His vertebrae are extremely soft, resulting in many complications, which can lead to permanent pain, paralysis or death and substantially complicates corrective procedures. He suffers from severe kyphoscoliosis, which is a condition involving severe hunchback curving of the upper spine and scoliosis, a twisting throughout the spine. Jack suffered from, and as his disease progresses, he will continue to suffer from osteoarthritis, ligament, cartilage, and connective tissue damage. Those conditions combined with his bone deformity will lead to restrictive lung disease if he does not receive proper treatment.
As a result, his internal organs are threatened. His lungs and heart may not have room to function properly and are in danger of serious damage of being literally crushed by the severe abnormal curvature of the spine. The twisting and bending of his spinal column may result in damages to the spinal cord, paralysis or death. His potential height is quite short and his life expectancy, without proper care, is severely shortened.
Jack is in urgent need of care from a specialist in MD and can be expected to undergo numerous surgeries during his lifetime. Of immediate concern is the necessity for appropriate surgery to prevent damage to his spinal cord and internal organs, such as his heart and lungs. Such surgeries are extremely complex and the risk of injury, paralysis or death is very significant. Further, both the manner and rate of Jack’s growth is unpredictable, thereby requiring constant medical management by a physician skilled in the treatment of MD. Jack was in immediate need of care from a specialist with actual experience in the treatment of and surgical needs of MD children.
Widow v. Insurance Company
|Case Issue||Insurance bad faith, claim denial for life insurance policy|
|Result||Multi-million dollar settlement|
|Summary||Our client was a widow with no income whose husband of 30 years had died suddenly while overseas. Her husband had obtained a life insurance policy through an insurance broker who was also a family friend. The broker, who completed the application for insurance, knew of the husband’s intent to travel overseas but failed to disclose it on the form.
After the widow sought payment on the policy, the life insurance company performed a biased investigation and then denied the claim on the grounds that the deceased had made a misrepresentation on the application regarding intended travel. This was done despite the fact that the insurer was fully aware that the application was completed by the broker.
The case settled after Pillsbury & Coleman filed a motion for summary judgment.
Dr. Randall Chapman v. UnumProvident Corporation
|Case Issue||Insurance bad faith, claim denial for disability policy|
|Result||Won at trial; jury award of $1,551,301, plus emotional distress damages of $125,000 and punitive damages of $30 million. The judge reduced these amounts to disability insurance benefits of $1,112,405, emotional distress damages of $15,000, and punitive damages of $5 million.|
|Summary||Dr. Chapman was an eye surgeon who practiced in Novato, California, for 20 years. In 1983, he purchased a disability insurance policy from Provident Life & Accident Insurance Company. In 1987, he purchased another disability policy from The Paul Revere Life Insurance Company. In connection with this policy, the insurance company issued him a “specialty letter,” promising that he was insured in his particular specialty as an eye surgeon. He faithfully paid his premiums every month for 17 years.
In the late 1990s, Dr. Chapman started to experience extreme anxiety, including panic attacks, shaking hands, diarrhea, vomiting and sleepless nights. He voluntarily took himself off the surgery schedule. He was eventually diagnosed by a psychiatrist as having a “specific phobia,” a condition in which a person reacts with excess panic to a particular stimulus. No longer able to safely operate on patients, Dr. Chapman’s psychiatrist told him to retire from eye surgery and suggested that he submit a claim to his disability insurance company. By this time, Dr. Chapman’s insurance companies had merged and formed UnumProvident Corporation.
UnumProvident failed to have Dr. Chapman properly examined by an unbiased physician. The insurer falsely claimed that his condition could be treated successfully. It falsely claimed that he was not an eye surgeon and called him a fraud. Ultimately, his claim was denied in order to meet monthly and quarterly termination goals.
At trial, it was revealed that UnumProvident’s claims department intentionally attempted to read the medical records in a manner calculated to result in a denial of his claim. The company also held a secret meeting in which notes and documents were destroyed (following company policy).
Surgeon v. Insurance Company
|Case Issue||Insurance bad faith, claim denial for disability coverage|
|Result||Multi-million dollar settlement|
|Summary||Our client was a surgeon disabled by severe post-traumatic stress disorder after being shot in a murder attempt. After healing from his gunshot wounds, our client continued to suffer from severe depression, attempted suicide multiple times, and abused drugs and alcohol before he successfully entered rehabilitation. He ultimately lost his medical license.
Our client filed for disability insurance but his claim was rejected. His disability insurer contended that he was not disabled in that he was not precluded from being a surgeon because psychological testing indicated he was highly intelligent and had no demonstrable memory deficits.
The client then hired Pillsbury & Coleman. After we defeated the insurer’s attempt to dismiss the case and the claim for punitive damages in summary judgment, the case settled.
Disabled Obstetrician/Gynecologist v. Insurance Company
|Case Issues||Disabled doctor files claim though he is able to perform some work duties.|
|Summary||Our client, an obstetrician/gynecologist, was disabled by a severe orthopedic condition that precluded the performance of many of his most important and most lucrative occupational duties, including the delivery of babies and obstetrical surgery. As a result, he suffered a precipitous drop in income, but continued to work.
The insurer argued that because the doctor could still perform many of his former duties, he was not disabled under the policy. Pillsbury & Coleman obtained a favorable ruling on a motion for judgment rejecting the insurer’s claims. The case settled shortly thereafter.
Tough Negotiators, Passionate Litigators
To discuss your insurance-related concern, contact Pillsbury & Coleman, LLP. From our law offices in San Francisco, we represent clients throughout California and across the nation.