Confidential
Settlement – $425,000Mediator
Court
American Arbitration Association
Attorneys
Plaintiff
Defendant
Facts
In 1990, the plaintiff, a dentist, purchased a disability insurance policy paying lifetime benefits of $7,500 per month in the event of total disability. When the plaintiff made a claim in 1995 for total disability based on cervical osteoarthritis and radiculitis, resulting in weakness in his right hand, the defendant insurance carrier proceeded to pay benefits under a reservation of rights. After 1+ years, the defendant insurance carrier ceased payments. The plaintiff brought this action against the defendant based on bad faith and breach of contract.
Damages
The plaintiff sought $150,000 in past due disability benefits and $1,135,000 as the defendant insurance carrier's buy-out of the balance of his policy. The defendant had not countered prior to the mediation. The defendant initially offered $100,000 at the mediation.
Other Information
The settlement was reached approximately one year and three months after the case was filed. The plaintiff's claim for punitive damages for bad faith had been dismissed on motion for summary judgment. At the time of the mediation, only the breach of contract claimed remained. A mediation was held on Dec. 22, 1998, before Deborah Rothman of American Arbitration Association resulting in settlement.
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