Confidential
Settlement – $291,250Judge
Court
Orange Superior
Attorneys
Plaintiff
Defendant
Facts
On January 1, 1991, Defendant insurance carrier issued to Plaintiff a disability-income insurance policy ($1,250 monthly benefit to age 65 years), following completion of an application on December 31, 1990. Plaintiff allegedly advised Defendant's agent of recent medical treatment for arm and elbow pain; that she had a "needle test" had treated with a health care provider. The agent did not include this information on the application. Plaintiff became disabled in February 1991 and submitted a claim in April of 1991. On the claim form, Plaintiff included previous medical history. Defendant paid the claim through June 1991 and raised no questions about any omitted history. Plaintiff kept the policy in force and became disabled again in July of 1992. Defendant paid the claim through October 1992 and then changed to paying under "reservation of rights" in November 1991, claiming it discovered material medical information which was omitted from the application. In April 1992 Defendant terminated benefits and rescinded the policy for information contained in the health care provider's records from August to November 1990.
Settlement Discussions
Offers and demands prior to this result were not disclosed.
Damages
Past contract benefits of $30,000; present value of future benefits of $173,000; interest on past benefits; attorney fees under Brandt v. Superior Court; and emotional distress damages.
Result
Plaintiff is to receive $291,250 and surrender the policy to Defendant.
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