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Pittas v. Hartford Life Insurance Co.

May 17, 2007

GEORGE PITTAS, PLAINTIFF,
v.
HARTFORD LIFE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Ambrose, Chief District Judge

OPINION and ORDER OF COURT

SYNOPSIS

Pending are Cross-Motions for Summary Judgment. (Docket Nos. 30 and 32). The parties have responded thereto. Based on my opinion set forth below, Plaintiff's Motion for Summary Judgment (Docket No. 30) is denied and Defendant's Motion for Summary Judgment (Docket No. 32) is granted in part and denied in part.

I. BACKGROUND

Defendant, Hartford Life Insurance Company, issued a group policy of accident insurance to AAA West Penn/West VA/South Central OH ("AAA") for AAA members ("the Policy"). The Princeton Corporation ("Princeton") serves as the administrator of the Policy. The Policy provides accidental hospital indemnity benefits and recuperation benefits. An insured may receive recuperation and accident hospital indemnity benefits when he or she is "Confined during one or more periods of Hospital Confinement if the Confinement is due to Injury received in a Covered Accident as defined." (Docket No. 34-2, p. 14, Ex. HLI 00013). A claimant or beneficiary under the Policy must give Defendant written notice of a claim within 30 days after a covered loss begins or as soon as reasonably possible. The Policy provides that "Daily Benefit Amounts for this benefit are shown in the Schedule." (Docket No. 34-2, p. 14, Ex. HLI000013). Defendant "will pay any daily, weekly or monthly benefit due: a) on a monthly basis, after we receive the proof of loss, while the loss and our liability continue; or b) immediately after we receive the proof of loss following the end of our liability. We will pay any other benefit due immediately, but not later than 60 days, after we receive the proof of loss." Id. at p. 18. Proof of loss is considered "[a]ll of the information or documentation that the examiner would need in order to make a determination on the claim." Docket No. 34-7, p. 7.

Plaintiff, George Pittas, has been a member of AAA since 1971. In 2002, AAA advised Plaintiff and others who had been AAA members for six or more years that they were eligible to enroll in the Policy ("Enrollment Offer Letter"). The Enrollment Offer Letter describes the two plans provided by the Policy, the Basic Plan and the Best Plan, and noted that Plaintiff could "pick the plan that fit[] [his] family's needs and budget." Docket No. 34-8, p. 7. The Enrollment Offer Letter explains that the Basic Plan provides "$300 a day in hospital benefits, $300 in outpatient benefits and $300 a day in recuperation benefits. All of this for the specially-arranged premium of just $34.00 semi-annually - or just $20 more to protect the whole family." Id. (emphasis in original). The Enrollment Offer Letter further explained that Plaintiff could obtain "double the security" through the Best Plan which would increase each benefit described above to $600.00 per day "for the specially arranged premium of just $67.00 semi-annually...." Id. On June 14, 2002, Plaintiff completed the Enrollment Form, elected coverage under the Basic Plan, and remitted a premium payment of $34.00 to the Policy administrator. The policy period commenced on July 1, 2002, with annual renewals.

At some point, Princeton sent to Plaintiff a "Schedule of Benefits." (Docket No. 31-22, Ex. 21). Said "Schedule of Benefits" states that the coverage benefits are $300.00 a day, which is reflective of the Basic Plain. Id. At the bottom of the page, however, it indicates that members of AAA for 6 years or more are entitled to $600.00 a day. Id. In April of 2004, it came to the attention of Princeton that the form was incorrect and Princeton sent out a correct form that reflected a daily benefit amount of $300.00 in both places. (Docket No. 42-2, ¶16). Princeton then sent Plaintiff a letter indicating that under the Basic Plain the daily benefit is $300.00 a day. (Docket No. 34-4, p. 2, Ex. HLI 00174).

On March 16, 2003, Plaintiff was involved in a single motor vehicle accident on Interstate 79 in Braxton County, West Virginia. Plaintiff sustained serious injuries including but not limited to traumatic brain injury, right shoulder and arm fractures, leg fractures, spinal fractures, multiple rib fractures, renal failure, and was in a coma for several months. He was a patient at the following facilities: Braxton County Memorial Hospital, Charleston Area Medical, UPMC Presbyterian, Greenery Specialty Care Center ("Greenery"), Canonsburg General Hospital, Kindred Hospital, HCR Manor Care, and Healthsouth Harmarville Rehabilitation Hospital ("Healthsouth Harmarville") where Plaintiff remained until he was released on October 29, 2003.

On March 13, 2004, Ms. Mino submitted a Statement of Claim on behalf of Plaintiff to Princeton for benefits under the policy. Princeton forwarded the Statement of Claim to Defendant on March 16, 2004. On April 5, 2004, Ms. Mino forwarded a required Attending Physician Statement to Princeton which forwarded it to Defendant.

Plaintiff's claim was assigned to Joyce Desorcey, a claims examiner for Defendant. On June 16, 2004, Ms. Desorcey wrote to Braxton County memorial Hospital requesting a copy of Plaintiff's toxicology report. Because Plaintiff was involved in a single motor vehicle accident under good weather conditions with no explanation as to what might have caused the accident, Defendant needed to determine whether other factors contributed to the accident. Accordingly, Hartford requested a copy of the toxicology report to ensure that his claim was not subject to the intoxication exclusion under the Policy.

Subsequently, Braxton County Memorial Hospital requested that an authorization form be completed by Plaintiff before the hospital would release any of Plaintiff's medical records to Defendant. Defendant forwarded that form to Plaintiff on July 21, 2004, which he signed on July 28, 2004, and returned to Defendant. On October 5, 2004, Defendant finally received Plaintiff's toxicology report. The toxicology report stated that Plaintiff's ethanol level was "10 mg/dL." Because the toxicology report completed Plaintiff's proof of loss, Hartford had sixty days, or until December 4, 2004, to make a determination as to whether Plaintiff was entitled to benefits.

Ms. Desorcey reviewed the toxicology report and, when calculating his blood alcohol level, erroneously concluded that Plaintiff had a .1, instead of a .01, blood alcohol count. She noted that "VA limit/level =.1 or more is considered legally intoxicated." Accordingly, Ms. Desorcey prepared a denial letter, which she submitted to Lillian Cremin. Before approving the letter, Ms. Cremin reviewed both the denial letter and the toxicology report. Ms. Cremin incorrectly interpreted the 10 value - "instead of 10mg, I read it as a 10g." Consequently, Ms. Cremin made a mistake in reading the toxicology report. Based on the same, Plaintiff's claim was denied on November 22, 20004, due to intoxication.

On December 15, 2004, Stanley Greenfield, Esquire, counsel for Plaintiff sent an authorization signed by Plaintiff allowing Defendant to release information regarding Plaintiff's claim. On December 21, 2004, Defendant forwarded the requested information to Mr. Greenfield.

On January 3, 2005, Plaintiff appealed Defendant's decision. The appeal letter explained that an error had been made with respect to a conversion of Plaintiff's toxicology results and that Plaintiff's blood alcohol content was .01, not .1, which is within the legal limit in West Virginia. Joyce Palmisano, who was assigned to handle the appeal, forwarded the toxicology report to Kathleen Bell, a consulting nurse, because Ms. Palmisano was not certain how to read the report. In an e-mail dated January 20, 2005, Ms. Bell confirmed that Plaintiff was not legally intoxicated. As a result, benefits were payable to Plaintiff under the Policy.

After receiving this information from Ms. Bell, Ms. Palmisano contacted Mr. Greenfield to inform him that the denial would be reversed and benefits would be paid. Defendant confirmed this conversation in a letter dated January 25, 2005. In that letter, Defendant confirmed that Plaintiff was entitled to $300.00 per day per benefit. On January 31, 2005, Defendant paid Plaintiff $60,000.00 representing payment of 100 days of accident hospital indemnity benefits at $300.00 per day and 100 days of recuperation benefits at the same rate. On February 4, 2005, in response to a February 2, 2005, request from Mr. Greenfield, Defendant explained in writing the basis for the $60,000.00 payment. Defendant paid Plaintiff for his stays at all of the various facilities, except Greenery, HCR Manor Care, and Healthsouth Harmarville. On May 5, 2005, Mr. Greenfield submitted a second claim for benefits to Defendant on Plaintiff's behalf and provided the final paperwork for that claim on May 27, 2005. Four days later, Defendant paid Plaintiff $2,400.00 for his second confinement, which represented $300.00 per day for four days for each benefit.

Plaintiff initiated this action on December 8, 2005, in the Court of Common Pleas of Allegheny County, asserting claims for breach of contract and bad faith. With respect to the breach of contract claim, Plaintiff asserted that Defendant breached its contract by: 1) failing to pay claims within 60 days of proof of loss; 2) failing to pay claims for Plaintiff's stays at HCR Manor Care, Greenery, and Healthsouth Harmarville; and 3) failing to pay Plaintiff a benefit of $600.00 per day per benefit as of July 1, 2003. Plaintiff made the same assertions with respect to the bad faith claim and also asserted that the initial denial on the basis of intoxication was made in bad faith.

This case was removed here on January 13, 2006. (Docket No. 1). On March 1, 2006, Plaintiff filed an Amended Complaint removing all claims related to Greenery. (Docket No. 7). In addition, Plaintiff also asserted in the Amended Complaint that he was ...


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