Facts

In 2004 Dr. Norman Carter, an orthodontist, decided to purchase a lower-priced health insurance plan for his family. He dropped his Blue Cross policy and selected a basic hospital-surgical expense policy from Mid-West National Life Insurance Company of Tennessee ("Mid-West"). The premium for the policy was approximately $300 per month. The policy was purchased through a Mid-West agent, Joseph Bertino.

Dr. Carter had claims in 2008 that were denied by Mid-West since they were not in-patient hospital charges. In 2011 Dr. Carter's wife, Kathleen, received certain medical services resulting in a hospital bill of about $300,000. As a result of discounts applied because of the Mid-West policy and payments by Mid-West of about $30,000, the remaining hospital charges were approximately $144,000. These charges were not paid by Mid-West because they exceeded the coverage limits selected by Dr. Carter when he purchased the coverage. The Carters sued Mid-West and Mr. Bertino for breach of the implied covenant of good faith and fair dealing, fraud by concealment and false promise.

PLAINTIFFS' CONTENTIONS:
The Carters asserted that the policy sold by Mid-West was "junk insurance" because the policy did not cover $144,000 of the hospital bills they incurred. They asserted that Dr. Carter requested comprehensive coverage for all expenses exceeding his deductible. Plaintiffs also alleged that certain provisions in the policy were ambiguous and that they would not have purchased the policy if they knew its limitations.

DEFENDANTS' CONTENTIONS:
Mid-West and Mr. Bertino asserted that Dr. Carter was offered Mid-West's PPO plan which provided higher benefit levels, but Dr. Carter decided to purchase a less expensive, basic plan at the lowest benefit levels available. The plan selected by Dr. Carter was the least expensive plan offered by Mid-West.

Mid- West asserted that all benefits owed under the selected plan were paid in full up to the maximum limits selected by Dr. Carter. Mid-West also asserted that Dr. Carter was put on notice on several occasions regarding the limits of the health insurance policy he chose, and he could have purchased coverage that would have provided higher benefit levels if he wished to do so. The defendants denied acting in bad faith or defrauding Dr. Carter, and asserted that the fraud claim was barred by the statute of limitations.

Damages

Plaintiffs sought economic damages of $144,000, emotional distress damages, attorney's fees and punitive damages.

Result

Defense verdict on all claims.