In Michael Schaeffer, D.P.M. v. Allianz Life Insurance Company of North of America, plaintiff initiated suit in the United States District Court for the Eastern District of Pennsylvania against the insurer for breach of contract and bad faith based on the insurer’s denial of disability benefits. Plaintiff asserted that he is disabled and was entitled to disability benefits under two separate insurance policies issued by the insurer. The insurer filed a counterclaim seeking recission of one of the policies based on alleged false misrepresentations made by the insured on his application for the policy. The insurer also filed a motion for summary judgment for both the breach of contract and bad faith claims. The court found that the issue of whether plaintiff made false representations on his policy application was an appropriate determination for a jury, and therefore denied the insurer’s motion for summary judgment on the breach of contract claim. For the bad faith claim, the court found that no rational jury could conclude that the insurer acted in bad faith in its investigation and denial of plaintiff’s claim. Since the insurer acted reasonably in its investigation and denial of the claim, the court granted the insurer’s motion for summary judgment.
Date of Decision: June 10,2008