Insurer refuses to pay injured cardiologist under disability policy: Breach of contract: Verdict: Punitive damages

Law Reporter, Jun 2003

Ceimo v. General Am. Life, U.S. Dist. Ct., D. Ariz., No. 00-CV-1386, Apr. 4, 2003.

Ceimo, an invasive cardiologist, purchased a disability insurance policy from General American Life Insurance (GenAmerica). The policy was marketed to high earners. GenAmerica contracted with two subsidiaries of UnumProvident Corporation (UnumProvident) to manage claims under the type of insurance Ceimo had purchased.

When she had held the policy for eight years, Ceimo suffered nerve damage to her neck due to wearing a heavy lead smock while working. The nerve damage made Ceimo unable to perform delicate procedures.

Ceimo made a claim under her policy and UnumProvident denied it. Ceimo sued GenAmerica and the UnumProvident subsidiaries, alleging breach of contract and breach of the covenant of good faith and fair dealing. Defendants contended that plaintiff was not disabled.

A jury awarded $84.47 million, including $79 million in punitive damages. Liability is joint and several. Defendants have stated their intention to file posttrial motions for judgment notwithstanding the verdict and a new trial.

Plaintiff's expert in insurance practices was Stephen Prater, San Jose, Cal.

Plaintiff's Counsel

*Richard H. Friedman, Bremerton, Wash.

*Steven C. Dawson, Sedona, Ariz.

*Anita Rosenthal, Sedona, Ariz.

Comment: For a similar case, see Diamond v. General Am. Life Ins. Co., 42 ATLA L. Rep. 59 (Mar. 1999). In that case, plaintiffs alleged breach of contract and bad faith after the insurer terminated a dentist's disability insurance. The jury awarded about $58.77 million, including $58 million in punitive damages. *Charles J. Surrano III and *John N. Wilborn, of Phoenix, Ariz., and Krista L. Duncan, of Mesa, Ariz., represented plaintiffs. Documents in Diamond are available through the Court Documents Sets section in the back of this issue, courtesy of Mr. Surrano.