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Long-Term Care and Elder Abuse: Do They Intersect?

By Paul P. Bolus, Ann Phelps Hill & Darrell C. Tucker II
June 25, 2018
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Long-Term Care and Elder Abuse: Do They Intersect?In at least one state, California, the answer to the question of “Do issues related to long-term care and elder abuse intersect?” is yes. The California Welfare and Institutions Code defines “financial abuse” of an elder adult to include an “entity” depriving an elder adult “of any property, including by means of an agreement, donative transfer, or testamentary bequest, regardless of whether the property is held directly or by a representative of an elder or dependent adult.”

In Crawford v. Continental Casualty Co., the district court found that the plaintiff had stated a claim for financial elder abuse under California law and denied the insurer’s motion to dismiss.  The insured made a claim for benefits under a long-term care policy for benefits related to a hip injury. When the benefits were denied, the insured alleged that Continental Casualty denied his claim in bad faith and in breach of the policy. Continental moved to dismiss the insured’s claim for financial abuse of an elder, brought pursuant to Cal. Welfare & Inst. Code § 15610.30, stating that the statute “simply [did] not apply to standard breach of contract claims.”  In reaching its decision that the insured had stated a claim, the court found that the California Elder Abuse Act was broad enough in scope to encompass breach of contract and bad faith claims.  In reaching its decision, the court also noted that if the breach of contract was in bad faith, then the insured “could [also] show that [he] had an entitlement to policy benefits which Continental unlawfully withheld—or in the language of the statute, improperly ‘retained’” (noting that “the statute is not limited to just the wrongful ‘taking’ of property, but also includes the wrongful retention of such property”).

Not all California courts are in agreement with the Crawford court’s interpretation of California law on the issue, and the court itself recognized that not all courts analyzing the California statute agreed with this interpretation (citing cases going both ways). For example, the district court in O’Brien v. Continental Casualty Co., concluded that the insured plaintiff had not stated a claim for financial elder abuse under the California statute. The point though is that until this issue is settled by the California Supreme Court there is a risk that an insurer could be found to be in violation of California’s elder abuse statutes when there is a denial of long-term care benefits.

For long-term care insurers, there are certain factors that should be considered in the claims handling process:

  • What is the basis for the interpretation leading to the denial of benefits?
  • Has the interpretation changed over time and, if so, why?
  • Is the interpretation of the policy provision leading to the denial of benefits more favorable to the policyholder or to the company?
  • If there is something the policyholder could do to remedy the basis for the denial, such as changing facilities, and has that possible solution been brought to the policyholder’s attention? If not, then why not?

We will continue to update the blog as this area of the law continues to evolve.

Photo of Paul P. Bolus Paul P. Bolus

Paul Bolus has been representing insurance company clients for more than 29 years, litigating and managing over 200 cases in federal and state venues across the country. Paul has taken on multimillion-dollar cases, including class action lawsuits, regularly representing insurance companies in litigation…

Paul Bolus has been representing insurance company clients for more than 29 years, litigating and managing over 200 cases in federal and state venues across the country. Paul has taken on multimillion-dollar cases, including class action lawsuits, regularly representing insurance companies in litigation dealing with health and life issues in just about every context, including major medical, specified disease, cancer, heart, stroke, disability, life insurance, long-term care insurance, securities, annuities, STOLI, department of insurance complaints and litigation, unfair consumer trade practices, deceptive trade practices and agent accounting litigation.

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Photo of Ann Phelps Hill Ann Phelps Hill

Ann Hill focuses her practice in business litigation and complex litigation. Ann primarily represents insurance companies, litigating cases in federal and state venues. She has handled matters in trial and appellate courts throughout Alabama and across the country. She has been successful in…

Ann Hill focuses her practice in business litigation and complex litigation. Ann primarily represents insurance companies, litigating cases in federal and state venues. She has handled matters in trial and appellate courts throughout Alabama and across the country. She has been successful in representing her clients in all phases of high-stakes and complex litigation. Ann is a member of the firm’s E-Discovery team and co-chair of the American Bar Association’s pretrial practice and discovery programming committee.

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Photo of Darrell C. Tucker II Darrell C. Tucker II

Darrell Tucker is focused on representing construction, insurance, and pharmaceutical and medical device companies in commercial disputes, class actions and mass tort litigation. Darrell is known for his ability to understand the industry-specific details inherent in the often multi-faceted process of complex litigation.

Darrell Tucker is focused on representing construction, insurance, and pharmaceutical and medical device companies in commercial disputes, class actions and mass tort litigation. Darrell is known for his ability to understand the industry-specific details inherent in the often multi-faceted process of complex litigation. He represents his clients in numerous states, counseling them on risk management, litigation-related due diligence, and preparing and defending witnesses for depositions. He represents life, health, and disability insurers in disputes concerning denials of benefits (including life, disability, long term care, and cancer benefits), rescission and termination issues, ERISA claims, insurance fraud, interpleader actions, insurance agent/agency termination and compensation claims, and class actions involving insurance policy terms and determination of claims.

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  • Posted in:
    Insurance
  • Blog:
    Underwritten
  • Organization:
    Bradley Arant Boult Cummings LLP
  • Article: View Original Source

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