- by Ayden
Comparative Clause Violation – An Insurance Company’s Bad Faith Insurance Litigation Mistake
Al B. states in his MetLife lawsuit that at the time he became severely disabled because of a case of spinal cord spondylosis, which is a type of disability associated with aging. At the time, Al says that he was an authorized beneficiary of an employers-sponsored employee benefit plan operated by MetLife Insurance Company. He further states that he made a single, lump-sum claim for disability income through MetLife Insurance. The disability insurance premium was paid on or before the last day of his employment with MetLife, and it was not until the insurance carrier advised him of the potentiality of a pending litigation that he made the subsequent claim for payment of damages.
This case is one among hundreds of suits and claims filed by former MetLife employees and retirees for breach of contract, fraud, and negligence. Several of the lawsuits seek damages for those who have suffered physical injuries as a result of being improperly placed on disability retirement plans. Some of the other cases focus on fraud allegations.
Al B. filed suit against Metlife Insurance Company and its then-chief executive officer, Robert S. Pritzker, claiming wrongful death and personal injury.
Al B. also is owed 15.6 million in pension and retirement savings that are under the terms of a prior employment agreement with Metlife. The suit further charges Metlife with failing to properly maintain proper bookkeeping records that would have shown Al B. ‘s death benefit being paid, and failing to make disability retirement age available to its former employees and retirees. Al B. is seeking compensatory and punitive damages on behalf of his son, Richard Jr., who was killed while playing a game at a professional golf resort. The golfer was playing with several other former employees and retirees of Metlife who were on disability retirement benefits.
One of the claims at issue in the lawsuit is that Metlife acted in bad faith when it failed to make certain disability retirement age was available to Bieth in its retirement plan.
According to the complaint, the insurance giant “acted in bad faith” by refusing to make the appropriate changes to benefit Bieth based on the fact that Bieth’s expected retirement age was greater than the current federal definition of life expectancy, which is 66 years old. The complaint further claims that Metlife repeatedly violated the statute and court orders by ignoring requests for rectification from Bieth’s employer, his relatives, and other individuals with direct access to Bieth. The complaint further claims that because of this conduct, Bieth’s death benefits were improperly paid to him, which further injured his family financially. Finally, the complaint contends that the defendant failed to make a timely claim in the state courts to stop the wrongful death actions in violation of the statute of limitations.
As detailed in the complaint, most of the claims in the complaint deal with conduct by Metlife itself rather than conduct by members of the class it was attempting to retain.
Moreover, most of the claims are based on statutes that are preempted by state law and can be easily defeated on direct grounds. This is one reason why class action lawsuits are generally unsuccessful.
In addition to the complaint, there are also motions to dismiss filed by various lawyers working on behalf of the plaintiffs.
For example, one motion asserts that because the state laws authorizing the use of the mandatory payment of disability benefits for survivors are preempted by the United States government, the suit should be dismissed. The second motion similarly states that the claim should be dismissed for lack of subject matter jurisdiction. Another contention is that the suit should be allowed to proceed based on the complaint’s factual statements but, if those statements are proven inaccurate, the case should be dismissed as well. Likewise, the third argument asserts that the lawsuit cannot survive dismissal due to the lack of a valid claim or evidence that will support any damages or losses.
It was not until the Eleventh Circuit Court of Appeals that an insurance company was successful in defending a Metlife lawsuit on a comparative fault basis.
In that case, a jury decided that the company failed to provide appropriate protection for its employees when they were injured while at work. After reviewing the relevant statutes under the Fair Labor Standards Act (FLSA) and determining that the negligent act of which the plaintiffs had been a victim, as part of its duty of care, proximately caused their injury, the court found that the insurance company was not negligent for excluding the plaintiff’s disability benefits in its insurance policy as a result of the comparative clause violation.
This was bad faith insurance lawsuit where the defendant’s insurance policy provided a long term disability benefits package to an injured employee but arbitrarily denied the same to another employee who was similarly injured. On appeal, however, the Eleventh Circuit Court of Appeals reversed the decision and the case was allowed to move forward. The court found that because the disability benefits provided to the second plaintiff through the same long-term disability benefits plan that the insurance company had declined to provide to the first employee, there was a long term relationship between the two employees, and therefore, both were entitled to the same long-term disability benefits. Thus, this case is another example of the disparate impact of bad faith insurance lawsuits on employees who have been injured on the job.
Comparative Clause Violation – An Insurance Company’s Bad Faith Insurance Litigation Mistake Al B. states in his MetLife lawsuit that at the time he became severely disabled because of a case of spinal cord spondylosis, which is a type of disability associated with aging. At the time, Al says that he was an authorized beneficiary…
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