Case Result, Private Disability Insurance Claims, Verdicts and Settlements

In the aftermath of a tragic mass shooting, an ultrasound technologist was left with severe physical and psychological injuries preventing her from returning to work. Despite her treating physicians and the Social Security Administration agreeing she could not work, her insurance company improperly denied her claim, prompting her to seek the help of the team at Donahue & Horrow LLP.

Our client, an ultrasound technologist, worked at a large hospital in Orange County, California. Unfortunately, she was one of the many victims who were injured in the largest mass shooting in U.S. history. Following the shooting, the insurance company initially agreed that our client was disabled and unable to return to work as a result of her injuries, which were both physical and psychological. However, two years later, the insurance company improperly denied her claim. They asserted that she was able to return to work, despite the fact that her treating physicians and the Social Security Administration agreed that she could not work in any “substantial gainful activity.”

This led the ultrasound technologist to contact our team at Donahue & Horrow LLP for help with her disability claim. Our office filed a lawsuit at the Orange County Federal Courthouse, located in Santa Ana, California. The lawsuit alleged not only that the insurance company’s decision constituted a breach of the insurance contract, but also that the decision was made in bad faith. If these allegations were found to be true, it would entitle our client to the benefits promised by the contract, as well as extra-contractual and punitive damages.

After the lawsuit was filed, the insurance company asserted that the contract was governed by ERISA, not California state law, because it was a group disability insurance plan issued by our client’s employer. If the insurance company was correct, and the policy was governed by ERISA, that would mean our client would not be entitled to extra-contractual or punitive damages. Instead, our client would be limited to collecting past-due benefits and attorneys’ fees should she prevail.

However, Donahue & Horrow LLP disagreed with the insurance company’s position, noting that there was no evidence that our client’s employer was properly opted-in to ERISA and that the company failed to inform our client of her rights under ERISA as required when they denied her claim. Motions were filed by the parties and the insurance company, and the Court twice denied the insurance company’s attempts to “ERISA-fy” the insurance policy.

With the possibility of extra-contractual and punitive damages still on the table, the parties proceeded to mediation, during which the disability insurer agreed to pay our client a large sum in exchange for dismissing the lawsuit. Our client was very pleased because she was able to recover all of the money that the insurance company would owe her until she turned 67—but in an upfront, lump-sum so she no longer had to complete claim forms every month.

If you believe that you are being treated unfairly by your disability insurance company, call our team today at (877) 664-5407 for a free consultation.