Court Upholds Claim for Damages Due to Deceptive Business Practices
In an unusual decision, the Court denied defendants’ Massachusetts Casualty Insurance Company (“Mass Casualty”) and Disability Management Services, Inc. (“DMS”) motion to dismiss a plaintiff’s claim for damages against them for deceptive business practices under New York’s General Business Law Section 349. This decision allowed the case against Mass Casualty and DMS to move forward.
The Court often dismisses claims such as this when an insurance policy is the subject of the lawsuit finding the carrier’s actions are not aimed at the general public. However, in this case, the Court found that proof of these allegations would be enough to establish that the actions of Mass Casualty and DMS were targeting consumers, or the general public.
General Business Law Section 349 allows a plaintiff to recover compensatory damages, up to $1,000 in punitive damages, and attorneys’ fees if he or she is successful in a lawsuit.
“Unfortunately, we see this kind of behavior by insurance carriers all the time,” says John W. DeHaan, lead counsel on the case. “Very often,these cases are classified as simple contract disputes between two parties – which means the claimant cannot even pursue a claim under General Business Law Section 349. As a result, even if the disabled person does ‘win’ at trial, all she recovers is her past due benefits. She is never ‘made whole’ in that situation because she had to live without her benefits (often her only source of income) for months or years before the lawsuit is resolved.” Without that income, the claimant and her family often suffer financial ruination, lose their home, and have their credit ratings destroyed. “So, every time a judge allows a General Business Law Section 349 to go forward, the playing field is leveled . . . a little bit, at least.”
Disability Can Happen To Anyone
Our firm focuses on disability law. On a daily basis, we see the effects of unexpected injuries and illnesses on our clients. Rarely is anyone prepared to face the prospect of being unable to work at his or her chosen profession or occupation. For those who rely on Social Security Disability Insurance and/or Employer-Sponsored Plans alone, the results can sometimes be financially and emotionally catastrophic.
A former client of ours was diagnosed with Parkinson’s Disease. She worked as a computer programmer for the same company for over 20 years, and had planned to retire from that company.
As a wife and mother of two, her life revolved around her family and his home. Everything she had been able to save was allocated towards her children’s education and her retirement years with her husband. The diagnosis of Parkinson’s Disease devastated her. However, like many of our other clients who are professionals and business owners, she thought she could rely on her Long-Term Disability (ERISA/Employer-Sponsored) policy to at least carry her through.
Then, after applying for Social Security Disability at the insistence of her insurer, our client’s Long-Term disability monthly benefits were cut based upon what she had received from the Social Security Administration. That is because many Long-Term Disability policies provided by employers reduce benefits based upon other income received by the claimant. Our client was informed that she had to pay back the insurance company thousands of dollars at a time in her life when she didn’t have thousands of dollars to spare.
This woman’s burden could have been significantly lighter had she read her benefits manual more carefully, and perhaps had she purchased a private disability policy without a Social Security Disability off-set on her own.
Although it is difficult for anyone to imagine becoming permanently disabled, recent U.S. Census Bureau statistics bear out that one out of every five American workers will experience a disability that impairs their ability to work for more than six months. And, in the 35 to 65 range, one-fifth of that age group will be disabled for five years or more.
What You Can Do To Prepare . . .
1. Assess your finances including all of your savings to determine whether you could live without a
steady income (most of us cannot).
2. If the answer is no, assess the plan provided by your employer to ascertain its restrictions, i.e., is there a cap on monthly benefits? Are the reduced benefits due to Other Income, including Social Security
Disability, your spouse’s earnings, your bonuses, your child’s earnings?
3. If like most people, your current disability coverage sponsored by your employer is inadequate, look into purchasing a private policy. But make certain you purchase the right insurance and enough of it to carry you through.
4. When purchasing a private policy, keep your professional as well as your personal needs in mind.
5. Review your disability policy thoroughly and regularly; as your earnings increase, so should your
insurance.
6. Finally, consult with an attorney who specializes in disability insurance to help you make the right
decisions for you and your family.
Legislative News . . .
Federal Retirement Reform: Making Further Progress in Ending Military Families Tax – Source: www.speaker.gov
On April 1st, the House passed Federal Retirement Reform/Making Further Progress in Ending Military Families Tax, H.R. 1804. This bill contains a key provision that fulfills an objective of military family advocates by making further progress in ending the Military Families Tax, which unfairly penalizes the 55,000 survivors, most of them widows, of those who died as a result of their service-connected injuries. This bill also includes important retirement reforms for federal employees and members of the armed forces.
For example, it modernizes the Thrift Savings Plan (TSP) for federal employees, by providing for automatic enrollment for those eligible to participate. In the case of uniformed members of the armed services, the decision is left to the military departments. It also creates within the TSP a Roth-style investment retirement account option that allows workers to invest after-tax dollars, which is particularly beneficial for new enlistees in the armed services.
The bill’s provisions generate net savings for the federal government. The rule for consideration of H.R. 1256, Family Smoking Prevention and Tobacco Control Act, provides that, upon the bill’s passage, the text of H.R. 1804 will be added – ensuring that the tobacco control bill meets PAYGO.
Historical Trivia: Who is this great American?
He was born in Kinsman, Ohio, April 18, 1857.
He attended the University of Michigan Law School.
He fought for the American Railway Labor Union.
He defended two notorious murderers.
In 1925, he defended a teacher accused of teaching evolution in a classroom
down south.
Answer: Clarence Darrow