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Insurance
Restitution
Bad Faith

Maxine R. Richter v. Aetna Life, Mutual of Omaha

Published: Jan. 27, 2004 | Result Date: Apr. 23, 2003 | Filing Date: Jan. 1, 1900 |

Case number: BC221760 –  $775,000

Court

L.A. Superior Central


Attorneys

Plaintiff

Sherril Nell Babcock

Robert S. Gianelli
(Gianelli & Morris ALC)


Defendant

Bruce A. Berman

Martin E. Rosen
(Hinshaw & Culbertson LLP)


Facts

The plaintiff was insured under a health insurance policy originally issued by Aetna Life and Annuity Insurance Company in 1991. Mutual of Omaha assumed Aetna's obligations under the policy. Thereafter, the plaintiff suffered cancer and other serious ailments. Mutual of Omaha began increasing the plaintiff's and other insured's premiums. The plaintiff alleged that she was unable to secure affordable health insurance elsewhere because of various medical conditions diagnosed after her purchase of the policy. The plaintiff brought common law causes of action against Aetna and Mutual of Omaha for bad faith breach of the policy. She also brought a cause of action under Business and Professions Code Section 17200 seeking restitution for premium increases levied against her and others insured under the policy.

Result

The court sustained the defendants' demurrers to many of the plaintiff's claims based on the statutory limitations. The court also granted a summary judgment motion in favor of the defendants as to the remainder of the plaintiff's common law causes of action. The case then went to trial on whether the defendants violated section 17200. At trial, the court found that Mutual of Omaha had committed unlawful acts by increasing the premiums without proper notice. By stipulation of the parties, it then ordered restitution to the plaintiff and others in the amount of $500,000. The court subsequently granted the defendants' motion to vacate the judgment and entered judgment for the defendants. The plaintiff appealed. The Court of Appeal upheld the granting of the summary judgment on the common law claims, but reversed the court's vacating of its original ruling in favor of the plaintiff and other affected insureds. Following remittitur, the plaintiff was awarded interest and further restitution.


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