Charles Baker v. USAA Life Insurance Company
Published: Feb. 1, 2001 | Result Date: Nov. 21, 2000 | Filing Date: Jan. 1, 1900 |Case number: CV9911946ER Bench Decision – $0
Judge
Court
USDC Central
Attorneys
Plaintiff
Defendant
Ann C. Schneider
(Law Office of Ann C. Schneider)
Facts
According to the defendant: The plaintiff, a physician formerly employed by the County of Los Angeles, was
insured under an individual income replacement policy issued by the defendant. The policy provides benefits if
the insured incurs a loss of "income" of at least 20 percent because of disability. The monthly benefit for loss of
income is determined by comparing the insuredÆs income to his "pre-loss income." The policy defines income
as including "pension, retirement and profit-sharing benefits." The policy excludes from the definition of
income disability benefits provided by other insurers.
The plaintiff filed a claim of benefits under the policy, claiming loss of income due to depression commencing
on March 26, 1997. Upon approval of the plaintiffÆs claim for policy benefits, the defendant paid the plaintiff
the maximum monthly benefit through Nov. 23, 1998.
The defendant later learned that the plaintiffÆs retirement from the County had been approved effective Sept.
30, 1997, and that he had begun receiving monthly "disability retirement benefits" from the Los Angeles
County Employees Retirement Association . The defendant later learned that in October 1998, the plaintiff had
received a retroactive lump sum payment of Association benefits. Upon learning of the plaintiffÆs receipt of
monthly Association benefits, the defendant thereafter treated his Association disability retirement benefits as
income as defined by the policy. This reduced the plaintiffÆs monthly income replacement benefits under the
policy, in that the difference between the plaintiffÆs current income (from Association benefits) and his "pre-
loss" income was significantly less.
Further, the defendant determined that it had overpaid benefits for the period covered by the lump sum payment
by paying the plaintiff the maximum benefit available under the policy. Thereafter, the defendant advised the
plaintiff that no further benefits would be paid until the defendant had recouped its overpayment.
Settlement Discussions
The plaintiff demanded $650,000 at mediation, reduced to $300,000 at trial. The defendant offered $230,000 at mediation, reduced to $60,185 at trial.
Other Information
After mediation, the court granted summary judgment in favor of the defendant on the plaintiffÆs claims for breach of contract, breach of the covenant of good faith and fair dealing and punitive damages, leaving only the section 17200 cause of action for trial.
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