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Podiatrist sues Northwestern Mutual seeking disability insurance benefits and bad faith damages

This case began in the United States District Court of the Southern District of Florida on April 8, 2011 when Northwestern Mutual refused to pay the plaintiff’s disability benefits as specified in a Northwestern Mutual Life (NML) disability insurance policy.

Plaintiff’s Two Northwestern Mutual Policies

The plaintiff was issued a NML disability income insurance policy in November 3, 2006, with an expiration maximum benefit period date of November 3, 2036. Shortly after that, Northwestern Mutual provided the plaintiff with a whole life insurance policy in December 2008 worth $2,000.000.00 that stated that the plaintiff’s premiums would be waived “during any period that the plaintiff was totally disabled from performing the duties of his regular occupation, and, after 24 months, an occupation for which he was qualified by education, training or experience.” In essence, the policies used the same language when describing their terms of use with the differences in specifics being insignificant.

Court Rules Podiatrist is Eligible for Disability Benefits

The plaintiff, after experiencing vision problems that began in November 2007, was diagnosed with central serous chorioretinopathy (CSCR). This condition prevented the plaintiff from continuing work as a podiatrist, and filed a claim for disability benefits with NML. Northwestern Mutual found the plaintiff to be disabled from his occupation on January 4, 2008. On February 2, 2009, NML abruptly terminated the plaintiff’s claim as well as his disability benefit payments, claiming that the plaintiff was “lying about his condition and had never been disabled in the first place.” Consequently, NML demanded that the plaintiff reimburse the insurance provider $34,368.72 (an amount equal to his already-received benefits) as well as an additional $912.90 in order to keep the plaintiff’s disability policy current. And in addition, the insurance provider demanded that the plaintiff pay $35,127.28 in waived Whole Life Policy premiums.

Additionally, NML sent the plaintiff an invoice for these amounts on February 4, 2009, that stated the due date as December 12, 2008 with a 31-day-grace period, which had obviously expired, leaving the plaintiff without insurance no matter what he did. In their complaint, the plaintiff and his disability attorney allege that these actions by NML are “unmistakably hostile and rude”.

As a result of the plaintiff’s experience with NML, he filed suit against NML, claiming that NML breached its contract under the plaintiff’s two insurance policies. NML’s response was to file a counterclaim against the plaintiff for “breach of contract for money had and received” and asked for damages in the amount of the benefits they had previously paid to the plaintiff.

After failure to resolve the issue in mediation, the plaintiff and NML appeared at a bench trial, where NML continued to insist that the plaintiff’s disability condition was fraudulent and that the plaintiff fabricated his condition to avoid losing his license over a Medicaid fraud criminal charge that they claimed was pending. And even though NML was unaware of any investigation into the plaintiff’s practice at the time of their termination of his disability benefits, NML used this information at trial to try to prove that pending charges were the reason behind the plaintiff’s alleged deceit.

At trial the Judge ruled in the plaintiff’s favor on all counts, verifying that the plaintiff was totally disabled and entitled to benefits under the disability policy and qualified for the premium wavier under his NML whole life policy. NML did not appeal this verdict, but the battle didn’t stop here.

The plaintiff Is Bombarded with Paperwork by Northwestern Mutual as a Requirement for Receiving His Disability Benefits

Since the plaintiff’s verdict was rendered NML has continued to be “petulant and unregenerate” by requiring the plaintiff and his physicians to constantly prove the plaintiff’s disability with lots of paperwork. They also filed a motion post-verdict to amend the Court’s findings. Although NML’s Motion was denied, NML allegedly continues to harass him and attempted to buyout his disability insurance policies.

Due to NML’s allegedly unreasonable claims handling techniques, the plaintiff and his disability lawyers filed suit against NML on two counts. Count I is brought against the insurer provided for a bad faith cause of action and requests that the plaintiff receive the full value of his disability benefits under both his disability policy and his whole life policy. Count II accuses NML of a bad faith claim in its dealings with fulfilling its obligations and requests that the Court impose punitive damages against the insurance company in addition to awarding the plaintiff his disability benefits.

The plaintiff relies on a jury of his peers to determine his fate.



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