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Disabled employee of University Of California Davis diagnosed with fibromyalgia sues Liberty Mutual for denial of disability benefits and seeks punitive damages

Recently a disability attorney filed a lawsuit against the Liberty Life Assurance Company of Boston (Liberty Life) at the Superior Court of the state of California. In the case of Cassie Ray v Liberty Life Assurance Company of Boston, the plaintiff alleged that by denying the plaintiff’s claim for disability benefits, Liberty Life, among other things, had caused the plaintiff to suffer damages. This disability policy is not governed by ERISA as the claimant is a government employee.

Liberty Mutual Claim Denial History

The plaintiff was an employee for the University of California Davis. While employed with the university, the plaintiff purchased an employer and employee paid disability insurance from Liberty Life. Under the policy, the insured is regarded as “Totally Disabled” if:

From the first 12 months of Supplemental Disability Benefits –

Due to a medically determinable physical or mental impairment resulting from a bodily Injury or disease, you are completely unable to perform any and every duty pertaining to your own occupation;

You are not working at any occupation for wage or profit; and

You are under the direct and continuous care of a Physician.

“Total Disability” or “TotaIly Disabled” with respect to Supplemental Disability Coverage, long term period, means you will be considered Totally Disabled when Liberty determines that all of these conditions are met:

For the 13 months of Supplemental Disability Benefits Onward

Due to a medically determinable physical or mental impairment resulting from a bodily Injury or disease, you are completely unable to perform the material and substantial duties of any occupation for which you are reasonably fitted by your education, training, or experience;

You are not working at any occupation for wage or profit; and

You are under the direct and continuous care of a Physician.

The plaintiff, on April 2009, was diagnosed with Fibromyalgia. Consequently, she filed a claim for disability benefits with Liberty Life under the disability policy. Her claim for disability benefits was denied by Liberty Life. As a result of the denial, the plaintiff appealed the Liberty Life decision to deny her claim for long term disability benefits. The appeal was acknowledged by Liberty Life on August 31st 2009.

The plaintiff was informed by Liberty Life on February 11th 201o that her appeal was unsuccessful. Subsequently, the plaintiff requested Liberty Life to reconsider its decision again. The plaintiff alleged that during the entire claims and appeal process, the plaintiff had fully cooperated and provided Liberty Life with all necessary authorizations and medical documentations to support her claim. In spite of the cooperation rendered by the plaintiff, Liberty Life issued a final denial of the plaintiff’s claim for long term disability benefits on June 10th 2010.

The Allegations

In the lawsuit, the plaintiff alleged that Liberty Life had breached and acted in bad faith with regards to the insurance contract between the plaintiff and Liberty Life due to the following reasons:

  • Failed to promptly and thoroughly investigate the express and implied components of the claim that the plaintiff made;
  • Failed to promptly and reasonably informed the plaintiff about her potential exposure to financial loss in connection with the claim;
  • Failed to promptly advised the plaintiff of the reasons upon which Liberty Life expected or intended to deny coverage.
  • Failed to settle the claim pursuant to the terms of the contract.
  • Failed to pay the plaintiff for the amounts expended for said claim.
  • Placed Liberty Life’s own interests above and beyond the interests of the plaintiff.
  • Failed to give the plaintiff’s interests at least as much consideration as Liberty Life’s interest.
  • Failed and refused to timely respond to correspondence from the plaintiff or her agents.
  • Failed and refused to promptly and timely advise the plaintiff of her coverage position.
  • Compelled the plaintiff to institute litigation to recover amounts due under the contract.
  • Misrepresented the terms of the contract to the plaintiff with the intent to deceive, vex, injure and annoy the plaintiff.
  • Made promises to the plaintiff that Liberty Life had no intention of performing and intentionally withholding their true intention not to perform their obligations to the plaintiff.
  • Asserting frivolous positions for the purpose of evading Liberty Life’s obligations to the plaintiffs and for the purpose of oppressing the plaintiff.

Relief sought in the Lawsuit

In the lawsuit, as a result of Liberty Life’s actions, the plaintiff is seeking the following relief from the Court:

  • An award of reasonable attorney fees incurred by the Plaintiff.
  • Costs of suit
  • exemplary and punitive damages from Liberty Life.
  • incidental and consequential damages.
  • general and special damages.
  • Prejudgment interest on general and special damages.

In response, Liberty Life through their disability attorney filed a motion for the case to be removed and heard in the Federal District Court for the Eastern District of California.

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