William M. never suspected that should he need to make use of his disability insurance policy (which he had faithfully paid premiums on for years) that the promised disability benefits would be denied him when he needed them most.
A sales representative for Long Forms, Inc., President and part owner of Advanced Transportation Systems, Inc. and The Institute of Logistical Management as well as an hourly employee of Temple University as a Criminal Justice instructor, William was diagnosed with Hodgkin’s’ Lymphoma in 1997. Between January 1997 and February 1998, William underwent surgeries, biopsies, chemotherapy, and radiation to combat the progression of the disease.
Side effects from the chemotherapy and radiation, forced William to cease working for Long Forms, Inc. and Temple University, and William filed a claim with New York Life Insurance and received disability benefits for two months, after which he received residual disability benefits for another six months, total disability benefits for the next sixteen months, and finally 50 percent benefits for another nine months before the insurer closed the claim. William was not made aware that he was eligible for and entitled to ongoing residual disability benefits after December 31, 1998, when his claim had been closed.
Claimant’s History with NY Life, UNUM, and Paul Revere Life
William’s salary suffered great losses and decreases following the initial episode of his disability and even though William had a history of Type II diabetes, Gout, torn rotator cuff, hypertension, high cholesterol, sleep apnea and obesity, he was not aware that from 1998 until 2003 he was entitled to residual disability benefits. In February 2004, William began suffering from a variety of symptoms, including dizziness, difficulty swallowing, difficulty speaking, and chills, and was unable to acquire a proper diagnosis even after several emergency room visits and numerous diagnostic tests. In June 2004, William was diagnosed with myasthenia gravis, an autoimmune neuromuscular disorder with symptoms of “fluctuating muscle weakness and fatigue.” Taking a barrage of medications, William was unable to “perform the material and substantial duties of his regular occupation,” and his condition worsened. Noting that William’s symptoms got worse during times of stress, William’s doctor also noted that William was “getting significant side effects from the prednisone [he was taking] including weight gain an profuse edema which is pitting in nature.”
In February 2006, William filed a disability claim with UNUM through his Paul Revere Life Insurance policy, a subsidiary of NY Life, for his disabling condition of “debilitating effects of myasterhenia gravis and cerebrovascular disease.” William’s attending physicians indicated that William shouldn’t be working as extensively as he was. With a maximum benefit of $5,800.00 per month disability payment, William was misled into believing that this disability benefit amount was only available to him until age 65, when in fact, the amount was available to him for life. Due to a miscalculation of William’s disability benefits, UNUM did not provide William with the correct amount of his entitled disability benefits. And, not only did the insurer miscalculate the amount of William’s disability payments, but it also used a date of 2004 to calculate disability benefits when William’s disabling date should have been 1997.
While William continues to receive disability benefits from UNUM, the amounts are incorrect and the insurer has failed to investigate the miscalculation of his disability benefits payments. Alleging that the disability insurers, NY Life, UNUM, and Paul Revere Life falsely denied William some of his disability benefits proceeds, was deceptive, fraudulent and have a company-wide policy to withhold claimants’ residual disability benefits, William and his disability attorney filed a complaint against the insurers in the United States District Court of New Jersey to resolve the issue. In addition, the pair allege that the insurers “have acted and continue to act with ill will and evil intent to frivolously refuse payment of valid Total and/or Residual Disability benefits,” which “constitutes bad faith” under N.J. Stat § 17:29B-4 (2005).
Details of Claim against the Three New Jersey Insurers
William and his lawyer also claim that the insurers intentionally misrepresented the terms and conditions of disability policies by accepting premiums without intention of honoring those terms and conditions and pay entitled disability insurance benefits as in William’s case and the neglect of complying with their obligations of a fiduciary duty towards William and other disabled policyholders.
Consequently William and his disability attorney have asked the District Court to find in William’s favor against the three insurers NY Life, UNUM, and Paul Revere Life, “jointly and severally, for compensatory and punitive damages in an amount in excess of $150,000.00, plus attorney’s fees, expenses, costs, interest and other damages allowable by law.”