Disability claimant challenges Standard Insurance Company’s attempt to limit disability benefits to 24 months under the “Other Limited Conditions” provision.
Very often, disability insurance companies are being sued due to wrongful denial of claims or wrongful termination of disability benefits. There are occasions where a court will dismiss a disability claimant’s lawsuit if it is premature or not ripe. Insurance companies will routinely file motions to dismiss in an effort to either delay a decision on the merits or to win the case without the court considering the merits. Motions to dismiss are rarely granted. For motions to dismiss, the courts have to view the complaint in a manner that is most favorable to the plaintiff. The federal rules governing civil proceedings don’t require a detailed plea from the plaintiff to base his or her claim on. Only a short statement as to the plea is needed to give the opposing party a fair notice of what the claim is and the ground upon which it rests. Nevertheless, the plaintiff is still required to allege “more than labels and conclusions”¦” and raises “”¦ [the plaintiff’s] right to relief above the speculative level.” The case of Brain S. Hayse vs. Standard Insurance Company is a good example of how the Courts implement the above mentioned rule.
The Background Of The Case Against Standard Insurance Filed by Disability Attorney
The plaintiff in this case enrolled in a long term disability policy that was issued by the Standard Insurance Company (Standard Co). On November 2008, after suffering a disabling injury, the plaintiff was awarded long term disability benefits by Standard Co. On October 27th 2010, Standard Insurance informed the plaintiff that his disability benefits would end on September 27th 2011 as they were limited to 24 months. The plaintiff then, filed a lawsuit against Standard Co claiming an anticipatory breach of contract and Declaratory Relief. In response, Standard Insurance filed a motion to dismiss both claims made by the plaintiff.
The District Court Rulings
The District Court in its ruling granted Standard Insurance the motion to dismiss the anticipatory breach of contract claim and denied the motion to dismiss Declaratory Relief for the following reasons below:
Claim of Anticipatory Breach of Contract is Dismissed by Court as it is not Ripe
The District Court ruled that the plaintiff is still receiving disability benefits from Standard Co until September 27th 2011 if the plaintiff remains disabled. Standard Co did not indicate that it wanted to repudiate the plaintiff’s policy but rather recognized that the plaintiff could become disabled due to a different condition in the plaintiff’s policy. In other words, the plaintiff has not shown that he had suffered damages due to Standard’s notification of the expiry of his benefits. Hence, the plaintiff’s claim for the anticipatory breach of contract must be dismissed.
Claim for Declaratory Relief Is not Dismissed and the Case will Continue Against Standard Insurance Company
The plaintiff’s other claim revolves around the issue as to whether he is subjected to the “Other Limited Conditions” classification contained in the Plan. Standard Co asserted that there is no actual present need for a declaration of the plaintiff’s future rights to benefits. The court recognized that Declaratory Judgments are “a valuable procedure for the resolution of insurance coverage dispute to the benefits of insurers, insured and claimants.”
The District Court ruled that before any claim for Declaratory Relief be entertained; it must be clearly shown that there is an actual need for the Declaratory Relief. In this case, the Plaintiff alleged that he is not subject to the “Other Limited Conditions” classification within the policy. And because Standard Co has already classified Plaintiff’s disability under the policy and the plaintiff disputed this classification, there is an actual, present controversy between the parties. The court ruled that resolving this dispute will determine the rights of both parties under the policy. As such, the Plaintiff is entitled to a declaratory judgment regarding his long term disability rights.
This case will continue and the court will eventually make a ruling on the declaratory judgment. Standard insurance company is represented by an experienced and well skilled defense attorney that our law firm has faced on numerous occasions.