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Bilezikjian v. Unum Life Ins. Co. of America, __ F. Supp. 2d __ (C.D. Cal. Jan. 25, 2010).

Without a sudden event, an insured’s injury does not constitute an “accidental bodily injury” within the meaning of a disability insurance policy that distinguishes between accident versus sickness. Where it was undisputed that the insured’s disabling condition -- carpal tunnel syndrome (or “CTS”) -- was caused by repetitive and forceful activities in which the insured had engaged for years in connection with his occupation as an orthopedic surgeon, the insured’s disability was not due to an “accidental bodily injury” as a matter of law. This was the common-sense approach taken by the U.S. District Court for the Central District of California in Bilezikjian v. Unum Life Insurance Co. of America.

Bilezikjian was insured under several disability income policies issued to him by Unum Life. The insurance policies provided that benefits were payable up to age 65 for disability due to “sickness.” The policies also provided that lifetime benefits were payable for disabilities due to “accidental bodily injury,” terms that were not further defined.

Bilezikjian collected total disability benefits for his CTS under the sickness provision of his policies for years until he reached age 65. However, as Bilezikjian neared age 65, he sought ongoing benefits under the policies’ “accidental bodily injury” provision, asserting that his CTS should be considered accidental because he never intended to render himself totally disabled. Unum Life determined that Bilezikjian’s CTS was not due to an accidental bodily injury. Bilezikjian then filed suit for breach of contract, bad faith and punitive damages.

Unum Life moved for summary judgment on all claims, primarily on the basis that in accordance with Gin v. Pennsylvania Life Insurance Co., 134 Cal. App. 4th 939 (2005), “the culmination of repetitive stresses caused by normal, everyday activities is not the result of an accidental bodily injury.” Bilezikjian pursued a cross motion for partial summary judgment on his contract claim.

In granting Unum Life’s motion and denying Bilezikjian’s cross motion, the District Court held that the terms “accidental bodily injury” were unambiguous and that Unum Life did not breach its insurance contracts with Bilezikjian when it concluded that his CTS was not covered under the policies’ “accidental bodily injury” provision.

Ed Oster and Jenny Wang are counsel for Unum Life in this matter.
 

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Coast Plaza Doctors Hospital v. Blue Cross of Calif., 2009 WL 1272631 (Cal. App. 2nd Dist. May 11, 2009)

The California Court of Appeal has held that a claim against a health care insurer that is violated California Health and Safety Code Section 1371.4 (“Section 1371.4”) is not preempted by ERISA. In Coast Plaza Doctors Hospital v. Blue Cross of Calif., 2009 WL 1272631 (Cal. App. 2nd Dist. May 11, 2009), Coast Plaza Doctors Hospital (“Coast Plaza”) provided emergency care to a patient who was enrolled in a group health plan insured by Blue Cross of California (“Blue Cross”).  Coast Plaza was an “out-of-network” provider because it did not contract with Blue Cross to provide services to Blue Cross plan participants or beneficiaries. Coast Plaza billed Blue Cross over $580,000 in costs incurred to provide emergency care to the patient. Blue Cross refused to pay the bill, contending that Coast Plaza did not submit sufficient information to demonstrate that the services were rendered in connection with a medical emergency. 

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Major v. Western Home Ins. Co., 169 Cal. App. 4th 1197 (2009).

Emotional distress damages in an insurance bad faith action must be “tied” to economic loss in order to be recoverable. Specifically, emotional distress damages are not recoverable without economic loss, and emotional distress damages must relate to the amount of economic loss suffered.

The Majors sued their home insurer, Western, for losses arising out of a fire that destroyed their home and all personal belongings. The Majors obtained a jury verdict in their favor consisting of, among other things, approximately $31,000 in economic damages and $450,000 in noneconomic damages. The factual findings included a determination that Western unreasonably handled the Majors’ claim and that the Majors were financially vulnerable. Western asserted on appeal that the noneconomic, or emotional distress, damages awarded were excessive as a matter of law.

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