Opinion ID: 1460197
Heading Depth: 2
Heading Rank: 2

Heading: Hartford's 2000 Petition

Text: As an initial matter, Hammonds has been unclear as to the gravamen of his bad faith allegations based on Hartford's petitions to the South Dakota Department of Labor for either termination or a new determination of Hammonds' attendant care benefits. To some extent, the parties argue over whether Hartford's initial filing was actually a petition to terminate all benefits, forever, or a petition to terminate current benefits with revised benefits to follow. This, however, cannot present a material issue of fact because the interpretation of a pleading is a function that rests with a court as a determination of law, rather than with a jury. Lilly v. Grand Trunk W.R.R. Co., 317 U.S. 481, 489-90, 63 S.Ct. 347, 87 L.Ed. 411 (1943). Assuming, however, that Hammonds means to allege that the filing of a petition  whatever its meaning  was an act of bad faith, we must again look to Champion. We will also assume that the filing of a petition to terminate is close enough to a failure to process or pay a claim to be considered a denial of benefits, though we are doubtful that it can. We then ask whether there was a reasonable basis for the denial and whether Hartford knew of or recklessly disregarded the lack of a reasonable basis. The October 2000 petition sought an Order terminating Insurer's obligation to pay the attendant care benefit currently paid to Hammonds. This was based on the fact that Angela Hammonds no longer provided the care, that no one provided full-time care, and that full-time care was not medically necessary. Addressing only the strongest of reasonable bases upon which Hartford could have relied, we note first that the 1993 Agreement specifically allowed Hartford to take this action when there was a change in circumstances. The 1993 Agreement also specifically conditioned the continuation of payments for so long as Angela Hammonds continues to provide full-time attendant care to Jack Hammonds. Angela's cessation of attendant care was clearly a change of circumstances that gave Hartford a reasonable basis for filing the petition. In addition to Angela's departure, Hartford also conducted an investigation of Hammonds' situation to support its belief of a change in circumstances. As mentioned, Nurse Frances Nichols outlined her view of the attendant care needs of Hammonds, which included an admission by Hammonds' doctor that he needed no attendant care at all. An additional investigation confirmed that Hammonds might not have been using full-time attendant care. In conclusion, Hartford had multiple reasonable bases for moving to terminate the current benefits paid to Hammonds. We need not find that Hartford's conclusion about Hammonds' situation was correct. We need only to find that the issue was fairly debatable. Case, 7 F.3d at 773 (citing Savio, 706 P.2d at 1275). In light of all of the undisputed facts, we conclude that Hartford did not act in bad faith under South Dakota law.