Opinion ID: 2567250
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: ¶ 2 The underlying dispute in the case before the federal district court involves claims for both breach of the express terms of a disability income insurance policy and breach of the implied covenant of good faith and fair dealing. Gary Machan, employed as a corporate executive in the construction and property development industry, had purchased the policy in 1988 directly from UNUM Life Insurance Company of America (UNUM) to insure against loss of income in the event he became unable to perform the duties of his occupation. ¶ 3 Machan filed a claim for benefits under this policy in March 1999, following complications from cardiac bypass surgery. He filed an additional claim in April 2000, in which he asserted mental impairment resulting from the surgery. [1] When UNUM failed to pay his claims beyond an initial two-week period, Machan filed suit in state court. In addition to general damages, Machan sought consequential damages for, among other things, the worsening of his psychological condition, resulting in his inability to procure any gainful employment; the deprivation of, due to his inability to pay for, psychological treatment for himself and his mentally ill son; and the depletion of his assets and savings in order to meet basic living expenses. The case was removed to federal court on diversity grounds in November 2000. ¶ 4 In September 2002, before the trial date, UNUM agreed to pay Machan the monthly benefits he had requested under the policy, retroactive to March 1999. UNUM then filed a motion for summary judgment, seeking final judgment in its favor on Machan's claims for consequential damages. Having taken that motion under advisement, the federal district court certified to this court the above-mentioned two questions of state insurance law. We have jurisdiction pursuant to Utah Code section 78-2-2(1) (2002).