Insurer's denial of benefits after investigation isn't improper
White v. State of Montana, No. DA 12-0216 (Mont. 07/12/13).
The Montana Supreme Court dismissed a worker's suit alleging that his employer's insurer engaged in bath faith in terminating his benefits.
What it means: In Montana, an insurer will not be liable for terminating a worker's benefits in bad faith if it had a reasonable basis to believe that the worker was violating the law by receiving wages and disability benefits at the same time.
A worker injured his shoulder when he fell through a deck while working at a construction site. He sought workers' compensation benefits. His employer's insurer accepted liability for his claim and paid for two surgeries and temporary total disability benefits. The insurer notified him that he had to keep the insurer informed with his plans for returning to work. The claims examiner received an anonymous tip that the worker was building and selling furniture out of his home. A private investigator purchased a cedar chest from the worker. The insurer terminated the worker's benefits. The worker was criminally charged but was found not guilty of theft. The worker sued the insurer, alleging bad faith. The Montana Supreme Court dismissed the suit.
The insurer terminated the worker's benefits when he sold a cedar chest to an investigator and learned that he also sold a bench and received a vacuum cleaner in exchange for working at a vacuum cleaner store. The insurer's decision to terminate the worker's benefits was based on its conclusion that he was violating state law by receiving wages and disability benefits at the same time. The court found that the insurer's decision was reasonable. The fact that the worker was found not guilty of theft was irrelevant.
A dissenting judge concluded that the question of whether the insurer's program of surveillance and "entrapment" was reasonable should have been left to the jury.
Read more at the WorkersComp Forum homepage.
October 7, 2013
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