Confidential
Settlement – $600,000Judge
Arbitrator
Court
USDC Southern District of California
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Barbara J. Paull
(technical)
Robert Warren
(medical)
Steven Renzoni
(medical)
Rosalie Kramm
(technical)
Roger A. Thrush Ph.D.
(technical)
Defendant
Richard M. Braun
(medical)
Facts
In January 1990, plaintiff, a 36-year-old court reporter, purchased from defendant insurance company a total disability income insurance policy, and she purchased a subsequent policy in January 1992. The policies are known in the industry as "own occupation" policies. Per defendant, the policies provided that in order to be entitled to benefits, plaintiff must be unable to perform the substantial and material duties of her regular occupation. "Regular occupation" is defined as the occupation, or if more than one, occupations that you are regularly engaged in at the time of injury. Between the two policies, if the plaintiff ever became totally disabled, she would be entitled to benefits of $3,200 per month. At the time she purchased the policies, she was a court reporter with the San Diego Superior Court. In late 1994, the plaintiff developed carpal tunnel syndrome while still working as a court reporter for the court. She subsequently had surgery on both hands and never fully recovered from the condition. She made a claim to defendant, who began paying her for her disability. Per the defendant, on her claim form, plaintiff informed the insurance company that she spent 40 hours per week working as an in-court court reporter, and 35 hours per week at home preparing transcipts. The plaintiff also had a concurrent worker's compensation claim. Because of her ongoing medical restrictions as a court reporter, her employer elected to retire her, which was completed in late 1995. She also underwent vocational rehabilitation training to try to retain some of the skills she learned as a court reporter. She was to be retrained to perform "scoping" (editing text on a computer to produce a transcript) utilizing voice activated software. Per defendant, the plaintiff reported to the insurance company that she had been rehabitilized and was in fact in the business of scoping. Defendant insurance company terminated the plaintiff's benefits after it found out that she would be doing a part of her prior job. The defendant's position was that the plaintiff was only partially disabled. (Per defendant, the plaintiff's treating doctor agreed that she could type up to three hours per day,) and because she did not have partial disability coverage, she was no longer entitled to benefits. However, all of the doctors agreed that the plaintiff could never return to the courtroom as a court reporter. The plaintiff and her husband filed an action against both the insurance company and its claims adjuster, alleging a total of seven claims for relief. The Court granted partial summary judgment and thereafter, the parties entered into a settlement agreement, agreeing to submit the issue of liability to an independent fact-finder. The parties stipulated to certain settlement amounts, defending upon the findings of the fact-finder. The plaintiff contended the defendant did not attempt to determine the differences between court reporting and scoping; it did not obtain medical records, worker's compensation records, or retirement records that would have substantiated her claim; and it further did not determine that the voice activated software never worked properly. The plaintiff contended that she was totally disabled, and the defendant's termination of the policy was unreasonable. The defendant contended that it did obtain medical records and that the remaining records confirmed that the plaintiff was again working in her occupation. The defendant further contended that the plaintiff was only partially disabled, and the policy only provided benefits if she was totally disabled.
Settlement Discussions
The plaintiff made a C.C.P. º998 settlement demand for $_________. The defendant made a C.C.P. º998 offer of compromise for $_____________.
Damages
The plaintiff claimed $__________ in damages.
Injuries
The plaintiff claimed she suffered carpal tunnel syndrome and tendonitis.
Other Information
The settlement was reached approximately one year and nine months after the case was filed. ARBITRATION: A three-day binding arbitration was held before retired Justice Gerald Lewis, who found the defendant breached its insurance contracts and acted in bad faith in the termination of the plaintiff's claim. Per the parties' agreement, settlement followed.
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