On Aug. 28, Gordon & Rees San Francisco partners Jordan Altura and Margie Lariviere won a summary judgment in the U.S. District Court of Arizona on behalf of clients Ameriprise Financial and RiverSource Life Insurance Co. (RiverSource Life).
The plaintiff had sued under an individual disability income policy claiming she was totally disabled from her occupation as a self-employed computer software trainer and entitled to monthly benefits. She initially filed a claim in 1991 and RiverSource Life had been paying her monthly benefits through 2011. The plaintiff worked in other occupations during her period of disability.
In 2012, RiverSource Life requested more detailed information about the plaintiff’s current occupation as a tenured professor at a junior college, whose duties included teaching computer software classes. RiverSource Life concluded that the plaintiff was able to perform her occupational duties within her claimed medical restrictions and limitations and denied the claim.
The plaintiff filed suit in Maricopa Superior Court in Arizona, alleging causes of action for breach of contract and bad faith, as well as seeking punitive damages. The clients removed the case to federal court. After a year of extensive fact discovery, expert discovery (vocational and bad faith) and motion practice (where Altura and Lariviere successfully opposed the plaintiff’s discovery motion and prevailed on a motion to exclude the plaintiff’s insurance expert), the clients filed a motion for summary judgment. The policy contained a provision for total and partial summary judgment.
Gordon & Rees argued that even if the court found that RiverSource Life was incorrect in its total disability decision, at a minimum the plaintiff qualified for partial disability since she was performing several of her occupational duties. However, the plaintiff had no loss of income, which was a requirement of receiving partial benefit payments. The court agreed that the plaintiff was, if anything, partially disabled and not entitled to benefits under the policy based on her current income. The court also agreed that RiverSource Life's decision was not objectively or subjectively unreasonable, thus defeating the plaintiff’s bad-faith claim. Finally, the court agreed that the plaintiff could not prove the “evil motive” requirement necessary for an award of punitive damages.
The court granted the clients’ motion in its entirety and the clerk entered judgment the same day. The plaintiff had filed a cross-motion for summary judgment arguing that RiverSource Life had waived or was estopped from denying the claim based on their payment of the claim for 10 years while the plaintiff worked at the junior college. The court denied the motion based on the policy language requiring ongoing proof of loss and RiverSource Life's requirement that the plaintiff submit claim statements and attending physician certifications, at a minimum, on an annual basis.
At an earlier mediation, the plaintiff would not deviate from a six-figure demand that included compensation for extra-contractual exposure. The clients faced a seven-figure total potential exposure at trial.