Disability Policies And Lawsuits

Attorneys who litigate disability claims need to read this case from the Southern District of Texas, Houston Division. It is styled, Larry Frederick v. American Heritage Life Insurance Company. This case will help an attorney understand some of the burdens put on the insurance company.
In October 2012, Frederick was severely injured in a vehicular accident. One month later, he submitted a claim for benefits under an accident insurance policy he purchased from AHLIC several months earlier. AHLIC initially denied payment under the policy, but later paid the claim after reversal on administrative appeal. Frederick now sues claiming that AHLIC violated the Texas Insurance Code by unreasonably delaying payment of the benefits.
In its answer to Frederick’s first amended complaint, AHLIC raises several affirmative defenses, including a pre-existing condition exclusion in the policy, ratification by Frederick, nonpayment of the policy premium, and failure to prove loss.
Federal Rule of Civil Procedure 8(c) requires defendants to “affirmatively state any avoidance or affirmative defense” when responding to a pleading. A defendant must plead an affirmative defense with enough specificity to or factual particularity to give the plaintiff fair notice of the defense that is being advanced.
Frederick moves to strike nearly all of AHLIC’s affirmative defenses, claiming that they “are mere boilerplate statements lacking a factual or legal context.”
The “fair notice” standard is met if the defense is sufficiently articulated such that the plaintiff is not unfairly surprised. In some cases, merely pleading the name of the affirmative defense…may be sufficient. In others, however, “baldly naming” the affirmative defense”falls well short of the minimum particulars needed to identify the affirmative defense in question.”
AHLIC’s pleadings provide Frederick with “fair notice”of AHLIC’s affirmative defenses. The majority of the defenses arise out of the terms of the insurance policy. These ordinary contract-based defenses are not surprising–Frederick executed the policy involved and should have its terms available to him. Other defenses, such as comparative fault and intervening or superseding causes of Frederick’s alleged damages, raise factual issues to be determined on the merits and are not appropriately disposed of at this early stage of the case. Frederick’s argument that AHLIC’s pleadings lack sufficient context is based upon AHLIC’s alleged failure “to convey facts that would make the affirmative defenses plausible on their face.”
Frederick’s attack on the adequacy of the affirmative defenses is better suited for summary judgment after discovery has been conducted in this matter. The answer provides fair notice of the affirmative defenses raised–no further factual allegations are required. The affirmative defenses pleaded in AHLIC’s answer satisfythe “fair notice” standard. Therefore, The Court denied Frederick’s motion to strike.