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Settlement
Amount:
$11,900,000 |
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Case
Name:
SAN DIEGO PADRES v. LLOYD'S OF LONDON |
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Case
Number:
San Diego County Superior Court Case No. 758640 |
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Plaintiff:
San Diego Padres professional baseball team |
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Defendants:
Certain Underwriters at Lloyd's, London |
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Facts
and Background:
Plaintiff purchased an Employer's Purchased Individual Disability
Insurance policy for one of its pitchers, Randy Myers, who was
acquired from the Toronto Blue Jays during the 1998 season.
Myers pitched through the end of the season, including in the
1998 World Series against the New York Yankees. The policy ran
from August 10, 1998 through February 15, 1999, or the start
of spring training, whichever was sooner.
Upon returning for spring training on February 28, 1999, Myers
was examined by the Padres' team physician who determined
he had significant weakness of his rotator cuff. Myers nonetheless
pitched during spring training. Near the start of the regular
season, Myers complained that he had "tweaked" his
throwing arm and when called upon to pitch on opening day, stated
he could no longer pitch.
The
policy provided $4,000,000 of coverage per season for the 1999
and 2000 seasons if Myers became disabled as a result of an
"accidental bodily injury" which occurred during the
policy period, or a "sickness or disease" which was
first "reasonably
capable of diagnosis by a physician" during the policy
period.
The Padres submitted a claim to Lloyd's in December 1999, contending
that Myers had become disabled as a result of rotator cuff disease
which was first reasonably capable of diagnosis by a physician
during the off-season while the policy was in force. Lloyd's
delayed a decision on the claim for 16 months, finally issuing
a denial in April 2001. |
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Plaintiff's
Contentions:
Plaintiff alleged the evidence established that Myers was disabled
as a result of a massive tear of his rotator cuff caused by
"disease" and that said diseased condition was first
"reasonably capable of diagnosis by a physician" in
late December
1998 or early January 1999, within the policy period. Plaintiff
further alleged that defendant failed to properly and impartially
investigate its claim, failed to have or use any procedures
manuals, failed to document the claims file, conducted an improper
"independent medical examination," wrote portions
of the "IME" report for the doctor to sign, disregarded
evidence supporting payment of the claim and instead anufactured
evidence to support the denial. Plaintiff also alleged defendant
unreasonably delayed a decision on the claim for 16 months,
during which time it was concocting the basis for its denial. |
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Defendants'
Contentions:
Defendant contended that Myers was disabled either as a result
of an "accidental bodily injury" when Myers "tweaked"
his shoulder after the policy expired, or, if the disability
was caused by a "sickness or disease," that said "sickness
or disease" was first "reasonably capable of diagnosis
by a physician" in 1993 based upon MRI films which revealed
the presence of the "disease" at that time. Defendant
alleged that Myers had pitched in 6 exhibition games after the
policy expired and only reported an inability to pitch on opening
day, almost 2 months after the policy expired. Defendant contended
its investigation was reasonable, that any delay in denying
the claim was to permit a proper and thorough investigation,
including the obtaining of medical records, and that the claim
was denied within 30 days after the final IME report being issued. |
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Damages:
Contract damages of $4,000,000 per season for the 1999 and 2000
major league seasons, plus interest, attorneys' fees and punitive
damages for bad faith. |
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