The plaintiff was a 39-year-old mother of two, who was suffering from severe melanoma. Her doctor ordered a PET/CT scan. But her insurer, Cigna Health and Life Insurance Company, denied the scan as "not medically necessary." After five rounds of denials, she finally paid for the scan herself, and it revealed that the cancer had begun to spread. With earlier detection, the metastases could have been prevented, her doctor testified, but such denials of covered benefits occurred with a frequency that impeded his ability to provide quality care. Engelbrecht v. CIGNA, CV1501547 (C.D. Cal., filed Nov. 20, 2015).
These are the types of cases Shernoff lives to fight. "That's what I like about the field of law I'm in - I love going up against big insurance companies that are cheating people on claims."
It's not just individuals who get mistreated by insurance companies, but often also businesses that may have a mishap such as a fire or flood that leads to a business interruption. "Sometimes they don't get treated too good either," Shernoff said. "So it's not just the little guy - it cuts across the whole society."
His work on insurance bad faith cases is akin to criminal prosecutions, Shernoff said, but big corporations are hardly ever brought into the criminal realm, even if they're serial cheaters. It's civil litigation that has been at the forefront of enforcement, he said, and bad faith suits are "one of the only deterrents we've got going."
"The insurance commissioner doesn't do much, so it's through these kinds of suits that we try to keep the insurance companies as honest as possible," Shernoff said.
Some insurance companies try to avoid bad faith suits by cleaning up their act and doing better training, but some just see the suits as a cost of doing business, he explained. "And I think going to get worse under Trumpcare, because more insurance companies are going to look for ways to cut costs," Shernoff worried.
He said he's seen insurance companies hire big law firms who help them come up with all kinds of creative excuses.
"Sometimes they blame the claimant - it's all their fault for not providing correct information on the claim," he said, "or in a fire they say the person that owned the house may have set the fire." In some cases, disagreements are more subtle matters of interpreting the language of a policy. But in his 40 years of practice, Shernoff said, "I've seen every kind of excuse from A to Z - it's just a matter of whether they have intentionally tried to save money by cheating someone."
If he can wade through the stacks of motions the insurance companies throw in his path and get a case before a jury, he can often get a sympathetic hearing - particularly if his investigation yields a particularly damaging email thread or document. "The internal documents are the key to prosecution of these cases - like in criminal, when you find a smoking gun, that really makes the case."
Shernoff's hope is that more attorneys decide to pursue the same practice area. "We need more lawyers in this field, because insurance companies are so big and so powerful. Right, now, it's kind of out of balance. We want an honest marketplace and the only way to have that is to have a deterrent."
Bad faith law could hardly ask for a better salesman. In addition to his arm's-length list of awards, including one from the Beverly Hills Bar Association handed to him by Ralph Nader, Shernoff still finds after four decades his role of David to the insurance companies' Goliath "a lot of fun."
"I love it," he said. "It's more exciting when you can take an ordinary person that's got a righteous claim and go against a big insurance company and get a bad faith award. It's a very satisfying way to practice law."
— L.J. Williamson
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