Court Holds An Insured May Assert A Cause of Action for Elder Abuse Against An Insurance Company Based On Denial Of Policy Benefits
Rosove v. Continental Casualty Co ., 2014 U.S. Dist. LEXIS 84998 (C.D. Cal. June 2, 2014)
In Rosove, the Central District of California found that an insured may maintain a cause of action for elder abuse under California Welfare & Institutions Code section 15600 (“Section 15600”) against an insurer that allegedly wrongfully withheld policy benefits.
The insurer in Rosove denied certain payments to an insured under a long term care policy. The insured, an elderly woman, filed suit alleging breach of contract, breach of the duty of good faith and fair dealing and elder abuse under Section 15600. The insurer moved to dismiss the elder abuse cause of action on the basis that the terms of Section 15600 cannot properly apply to a suit for unpaid policy benefits.
The district court denied the motion and found that the insurer’s alleged refusal to pay amounts owed under the policy could be the basis for an elder abuse claim. Specifically, the court found that withheld benefits constituted the retention of personal property of an elderly person, and that the insurer knew or should have known that withholding benefits would be harmful to an elderly person (the insured). The district court also rejected the general argument that the legislature never intended the elder abuse laws to apply to insurance coverage issues. While the court stated that it was sympathetic to the argument, it explained that nothing in the statute limited the scope of the law so as to not include insurance issues.
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