Source: https://insuranceclaimsbadfaith.typepad.com/insurance_claims_badfaith/disability_insurance/
Timestamp: 2019-04-25 12:43:15+00:00

Document:
.... TWO MORE: ELECTRONIC FILING, AUTHENTICATION, AND GENUINE ISSUES OF MATERIAL FACT.
In a change-of-pace, Insurance Claims and Bad Faith Law Blog and Insurance Claims and Issues Weblog will carry consecutive posts addressing a single common theme: Court rulings on Expert Witness Testimony and Reports in recent Insurance Cases. For the previously developed rules of law and judicial decisions on these issues, see generally as to Liability Insurance Cases, volume 1 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 8:17 (West Publishing 3d ed. 2011; 2012 Supplement in process), and see generally as to all types of First-Party Insurance Cases, volume 2 id. § 12:18.
Expert Witness Testimony: Where Electronic Filing is Required, File Electronically; Authentication is Required in All Courts for All Exhibits.
Where Exhibits to an Expert's Affidavit or Report are required to be electronically filed by Local Rule, but are not, the Exhibits may be stricken especially where they have not been authenticated. References in reliance on those Exhibits in the Expert's Report and in pleadings are subject to being stricken as well upon the same grounds. Such rulings came in an Insurance Case in which two Counts were alleged against the Defendant Insurance Company: Breach of the "individual disability income" Insurance Policy, and alleged breach of Good Faith and Fair Dealing, in Bonenfant v. Standard Insurance Co., 2011 WL 3904300 *3 (E.D. Cal. September 6, 2011), Download Bonenfant v. Standard Ins. Co. (E.D. Cal. Case No. CIV S.10.0361, Order Filed September 6, 2011) PUBLIC ACCESS. In this Order, the District Court granted the Defendant Insurance Company's Motion for Partial Summary Judgment on the Plaintiff's Bad Faith Claim. This Order, as noted, was entered on September 6, 2011. The next day, the Plaintiff filed a Notice of Settlement, according to PACER, the Online Docket for this Federal Court case. At the end of that same month, on September 29, 2011, the Court entered a 'minute order' dismissing the entire case with prejudice, each side to bear its own attorney's fees and costs.
Expert Witness Testimony May Provide a Jury Question on Bad Faith Denial of Insurance Coverage.
Expert Testimony on Hurricane Ike Wind Damage, or not, provided a Jury Question on Bad Faith Denial (or not) of all Insurance Coverage under a "wind and hail" Commercial Insurance Policy, precluding Summary Judgment, in Beaumont Preservation Partners, LLC v. International Catastrophe Insurance Managers, LLC, 2011 WL 6707287 *12 (E.D. Tex. October 6, 2011)(Hawthorn, USMJ), Download Beaumont Preservation Ptrs., LLC v. International Cat. Ins. Mgrs., LLC (E.D. Tex. Case No. 1.10CV548, Report and Recco of USMJ Filed Oct. 6, 2011) PUBLIC ACCESS, report and recommendation adopted, 2011 WL 6709920 (E.D. Tex. December 21, 2011), Download Beaumont Pres. Ptrs., LLC v. International Cat. Ins. Mgrs., LLC (E.D. Tex. Case No. 1.10CV548, Order of USDJ, Filed Dec. 21, 2011) PUBLIC ACCESS.
The Expert who filed the Report in question is a lawyer "who is experienced in cases involving insurance disputes." 2011 WL 6702787 at *12.
... LIABILITY, DAMAGES, AND CIVIL REMEDY NOTICES.
1. The statutory provision, including the specific language of the statute, which the authorized insurer allegedly violated.
2. The facts and circumstances giving rise to the violation.
3. The name of any individual involved in the violation.
4. Reference to specific policy language that is relevant to the violation, if any. If the person bringing the civil action is a third party claimant, she or he shall not be required to reference the specific policy language if the authorized insurer has not provided a copy of the policy to the third party claimant pursuant to written request.
5. A statement that the notice is given in order to perfect the right to pursue the civil remedy authorized by this section.
Fla. Stat. § 624.155(3)(b). “[S]trict compliance with the statute is required” in providing a proper CRN.
Kafie v. Northwestern Mut. Life Ins. Co., 2011 WL 4499051 *7 (S.D. Fla. September 27, 2011), Download Kafie v. Northwestern Mutual Life Insurance Co. (S.D. Fla. Case No. 11.21251, Order Filed September 27, 2011) PUBLIC ACCESS.
There is also a Common Law requirement which has been added to Florida Statutory Bad Faith Claims. This requirement is not found in the Florida Statute. It is found only in judicial holdings in the Florida case law interpreting the Statute. The requirement imposed by Courts applying Florida law is that first there must be a determination of both (1) the Insurance Company's liability on the Policy and (2) the Policyholder's Damages, before the Policyholder can sue for Bad Faith under Section 624.155.
These two requirements, one found in a Statute and the other found only in case law, sometimes come together in the same case, as in Kafie v. Northwestern Mut. Life Ins. Co., 2011 WL 4499051 (S.D. Fla. September 27, 2011). The ruling addressed here, which disposed of one of many First-Party Bad-Faith Claims alleged in that case, was that a Civil Remedy Notice can never act as a condition precedent for a First-Party Bad Faith Claim based on conduct taking place after the Civil Remedy Notice was filed.
In Kafie, the Policyholder, Dr. Kafie, filed two Civil Remedy Notices alleging Bad Faith conduct by his Disability Insurance Company. He sued for Bad Faith in an Amended Complaint in which he alleged several Statutory Bad Faith Claims. One of them was dismissed. That was Dr. Kafie's Claim that Northwestern Mutual violated one of the provisions of Florida's Unfair Claim Settlement Practices Act, Fla. Stat. § 626.9541(1)(i)(2), because the Insurance Company allegedly made material misrepresentations to him in order to reduce the amount of the settlement he would accept on his Claim for disability benefits.
Dr. Kafie satisfied his burden to prove that (1) the Insurer's liability on the Policy and (2) the amount of his Damages were determined in his favor, said the Federal Court. "These determinations occurred at the trial following which a verdict was entered for Kafie on all counts, finding him disabled and entitled to benefits ...." Id. at *7.
Further, this particular claim was in the nature of alleged "fraud," since it was based on alleged "misrepresentations". The Federal Judge also held that the Amended Complaint satisfied the obligations imposed under Federal Rule of Civil Procedure 9(b) to allege fraud with specificity. Id. at *11.
When a Civil Remedy Notice is filed before the alleged conduct complained of takes place, or the CRN otherwise just does not provide adequate Notice of the conduct now claimed to be actionable as Bad Faith, this case arguably stands for the rule of law that in such cases no Bad Faith cause of action or claim is ever available under Florida's Bad-Faith Statute.
Disability Discovery Broadly Allowed in Breach of Contract Action.
In D'Aprile v. Unum Life Insurance Co. of Am., Download D'Aprile v. Unum Life Ins. Co. of Am. (M.D. Fla. Case No. 2.09cv270, Order of U.S.M.J. filed September 24, 2010) PUBLIC ACCESS also published as 2010 WL 3788271 (M.D. Fla. September 24, 2010)(Westlaw subscription required to access Westlaw), a United States Magistrate Judge confronted Discovery requests in a Breach of Contract Action. The Defendant is a Disability Insurance Company. The Plaintiff is an Attorney seeking Disability Income Insurance Coverage under a Policy issued by the Defendant to her former Law Firm.
In this case, the Magistrate Judge ordered the Plaintiff to produce what can accurately be described only as volumes of discovery. The Magistrate Judge largely overruled objections and granted the Insurance Company's Motion to Compel paragraphs of Requests for Production and Interrogatories. Production was denied where the Plaintiff previously produced Discovery. Reading this decision for the voluminous Discovery rulings is instructive.
Request Number 7: All trust records, ledgers and bank statements for the period of January 2002 through the present.
D'Aprile v. Unum Life Insurance Co. of Am., 2010 WL 3788271 at *4. [Boldfaced italics in original.] After granting much Discovery which overlapped with the subject of this Request for Production, the Magistrate Judge pointed out that the Defendant itself "points out in its Brief that the party seeking discovery of confidential information must make a showing of necessity which outweighs the countervailing interest in maintaining the confidentiality of such information." Id. at *4. The Magistrate Judge recognized that the Florida Bar requires protection of trust information "such as the identity of a client and fees paid by that client." Florida Lawyers are required by the Florida Bar to exert themselves to keep such trust information confidential.
The Magistrate Judge ruled in this Case that since so much Discovery on the same subject had already been requested and ordered, the Defendant had not shown the requisite "necessity" to outweigh the Florida Bar's requirement that the Plaintiff Lawyer maintain the confidentiality of such trust information in particular. Id.
The Parties are reminded that they must act in good faith and provide documents and responses to the other side in a timely manner. The Court is particularly troubled that Plaintiff's counsel has failed to provide the Defendant with tax documents that the Court ordered be produced in its July 21, 2010 Order.... If the Court sees that this type of behavior continues, the Parties are warned that sanctions could be imposed.
Discretionary Disability Determination, No ERISA Claim.
Without Bad Faith or Harassment.
Ms. Brenda Motes was once a Human Resource Generalist employed by Arthur Andersen LLP. She was enrolled in the Arthur Andersen LLP Group Long Term Disability Insurance Plan, which was underwritten by Aetna. She worked until she could no longer perform her job on account of "back pain and physical complications, including fibromyalgia," at which time she began receiving long-term disability benefits under the Plan because she was totally disabled, reports the Federal Court in Download Brenda_Mote_v. Aetna Life Ins. Co. (N.D. Ill. Case No. 05C6212, Opinion Filed November 3, 2006).pdf. Ms. Mote received disability benefits for five years and eight months.
The Federal Judge in this new case could not say that on the record, Aetna's determination regarding Brenda Mote's conditions was completely unreasonable or arbitrary and capricious. Accordingly, the Federal Court granted Aetna's Motion for Summary Judgment on Ms. Mote's ERISA Claim. However, there is a postscript of sorts.
Aetna claimed that its Attorney's Fees should be paid once Aetna defeated the ERISA Claim. This is the legal standard applied by the Federal Court to Aetna's Attorney Fees Claim: "'Was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent?'" Even though the ERISA Claim "has proved unsuccessful," it is supported here by "reasonable bona fides". Aetna did not claim either Bad Faith or harassment by Brenda Motes. Aetna's Attorney Fees Claim was concisely denied: "In sum, this Court denies the request for an award of attorneys' fees to the Plan."

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