Insurance Bad Faith in Disguise Fails
Post 4839
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Health Care Services Corp. (HCSC) moved to dismiss a suit by an insured because Montana law precludes King’s breach of the implied covenant of good faith and fair dealing claim. HCSC also argued that Montana statutory law prohibited King’s request for punitive damages and that the request should be stricken.
In Justin King v. Health Care Services Corp., No. CV-24-32-GF-BMM, United States District Court, D. Montana, Great Falls Division (July 15, 2024) the USDC resolved the various disputes.
FACTUAL BACKGROUND
King, a resident of Montana, sued HCSC, a business incorporated in Illinois, for HCSC’s alleged breach of contract with its insured King when HCSC denied King’s claim for coverage of a back surgery. HCSC insured King under an individual health insurance policy (“the Policy”). King requested pre-approval from HCSC for a two-level lumbar disc arthroplasty (“the surgery”). HCSC denied King’s pre-approval request on December 14, 2022, citing to a policy exclusion contained in the Policy. King nevertheless underwent the back surgery on October 12, 2023, at a clinic in Germany. King alleged that the Policy provided coverage for the surgery.
DISCUSSION
Count I: Breach of Contract
HCSC argued that King failed to allege facts sufficient to state a claim for breach of contract for Count I. HCSC contends that King failed to identify the contractual provision that would have required HCSC to cover his requested back surgery.
HCSC denied pre-approval for the surgery that King sought on the basis that the surgery was not appropriate, not medically necessary, and experimental.
The Food and Drug Administration (FDA) approved the use of a medical device known as the prodisc L for 2-level lumbar disc arthroplasties on April 10, 2020. The FDA concluded that the 2-level lumbar disc arthroplasty was safe and effective for King’s condition. Therefore, the complaint provides sufficient language for the Court to draw a reasonable inference that HCSC had breached the Policy.
Count II: Breach of Implied Covenant of Good Faith and Fair Dealing
HCSC argues that King’s claim of breach of the implied covenant of good faith and fair dealing should be dismissed because Montana law precludes the claim. King contended that HCSC misdescribes the cause of action of Count II.
The USDC concluded that King’s complaint presents an insurance bad faith claim in disguise. King failed to prove the distinction between the breach of the implied covenant claim and a common law bad faith claim..
Punitive Damages
HCSC argued that Montana law bars King from including a request for an award of punitive damages in the complaint. King concedes that Montana law bars the inclusion of punitive damages in an initial pleading. The USDC concluded it must dismiss the punitive damages claim in accordance with Mont. Code Ann. § 27-1-221(5).
However, King may file to amend the pleading for punitive damages after discovery begins.
Accordingly, IT WAS ORDERED that:
Defendant’s Rule 12(b)(6) Motion to Dismiss is GRANTED in part and DENIED in part.
Count II of Plaintiff’s complaint (Doc. 1) is DISMISSED.
Plaintiff’s punitive damages claim is DISMISSED.
ZALMA OPINION
The State of Montana does not like bad faith and claims seeking punitive damages. The plaintiff – to avoid the requirements of the state – composed its complaint to disguise its bad faith claim as a different type of tort. The attempt failed and the USDC limited the case to the simple breach of contract action and allowed that the plaintiff could amend his complaint to allege bad faith after discovery. When a plaintiff has a winnable breach of contract claim it should do so and give up the attempt to get rich with a bad faith suit.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Arsonist Tried To Represent Himself, Failed, and Sought Habeas Relief
Post number 5357
Read the full article at https://www.linkedin.com/pulse/he-who-acts-his-own-lawyer-has-idiot-client-barry-zalma-esq-cfe-d4bwc, See the full video at and at and at https://zalma.com/blog.
Karacson’s Arson for Profit Attempt Required Skill & Experience to Succeed
In Steve Ellis Karacson v. David Shaver, Warden, No. 25-1089, United States Court of Appeals, Sixth Circuit (May 20, 2026) Steve Karacson was convicted in Michigan state court of arson and insurance fraud after evidence showed he burned his own insured home. Investigators found multiple points of origin, gasoline odor, and evidence tying him to the scene, including cell-phone location data and a receipt showing he had purchased a gas can and gloves shortly before the fire.
FACTS
Karacson initially had appointed counsel, but his relationships with both appointed attorneys ...
Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
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In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
Read the full article at https://www.linkedin.com/pulse/ambiguous-contract-repair-assignment-barry-zalma-esq-cfe-2xppc, see the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at and at https://zalma.com/blog plus more than 5300 posts.
Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
It is a Crime to Lie to Your Insurer That Accident Happened After Policy Inception
Post number 5386
Posted on July 3, 2026 by Barry Zalma
Conviction for Fraud Affirmed Because Evidence Overwhelming
In State Of Washington v. Saleem Mumin Robinson, No. 87244-3-I, Court of Appeals of Washington, Division 1 (June 29, 2026) Saleem Robinson was involved in an automobile collision on May 18, 2021. The other driver, Mohamed Waggeh, photographed Robinson’s documents and later reported the collision to GEICO, identifying the time as approximately 12:40 p.m.
That same day, at 6:06 p.m., more than five hours after the accident, Robinson purchased Progressive insurance for the vehicle involved in the collision.
The next morning, Robinson called Progressive to report the claim and stated that the accident occurred around 6:15 p.m. Progressive recorded that call without advising Robinson that it was being recorded. Progressive later conducted a special investigative unit investigation the claim because it was submitted shortly ...
Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
Posted on July 2, 2026 by Barry Zalma
Post number 5385
No Contract Claim No Bad Faith Claim
In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.
After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
LAW:
Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...
Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
Posted on July 2, 2026 by Barry Zalma
Post number 5385
No Contract Claim No Bad Faith Claim
In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.
After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
LAW:
Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...
