JANUARY 2010 BAD FAITH CASES
INSURED’S ALLEGATIONS THAT HE DISCLOSED HIS ABILITY TO WORK PART-TIME SUFFICIENT TO SURVIVE MOTION FOR SUMMARY JUDGMENT (Philadelphia Federal)
January 4, 2010
In Hayes v. American International Group, a physician made a claim against his disability insurance after suffering disabling cervical and lumbar injuries at work. The insured alleged that, as part of the initial claim evaluation, he disclosed the fact that he continued to work five hours a week after the accident. The insured received disability payments for approximately four years until his benefits were terminated. The insurer terminated the insured’s benefits because he had been observed through surveillance performing activities inconsistent with his claimed disability, including engaging in the practice of medicine. The insured sued his carrier for bad faith alleging that the insurer had no reasonable basis for denying his claim because the insurer knew, at the time that it found him to be totally disabled, that he was able to work part-time, and therefore, acted unreasonably when it terminated his benefits because he was observed practicing medicine.
The court denied the insurer’s motion to dismiss the bad faith claim finding that the insured’s factual allegations were sufficient to state a plausible claim at that stage of the proceedings that the insurer acted unreasonably and in bad faith in denying his claim.
Date of Decision: December 1, 2009
Hayes v. Am. Int’l Group
, Civil Action No. 09-2874, United States District Court for the Eastern District of Pennsylvania, 2009 U.S. Dist. LEXIS 111397 (E.D. Pa December 1, 2009) (McLaughlin, J.).
Posted in PA - General Bad Faith and Litigation Issues