Hull et al v. Ability Insurance Company

Filing 4

Defendants ANSWER to 3 Amended Complaint ANSWER, AFFIRMATIVE DEFENSES AND DEMAND FOR JURY TRIAL by Ability Insurance, Ability Reinsurance, Ability Reinsurance Holdings, Ability Resources, Medico Insurance. (Gratton, Scott)

Scott G. Gratton
BROWN LAW FIRM, P.C.
315 North 24th Street
P.O. Drawer 849
Billings, MT 59103-0849
Tel. [phone]
Fax [phone]
Attorneys for Defendants

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
)
)
)
)
Plaintiffs,
)
)
v.
)
)
ABILITY INSURANCE COMPANY, )
)
f/k/a MEDICO LIFE INSURANCE
)
COMPANY, ABILITY RESOURCES, )
)
INC., ABILITY REINSURANCE
)
HOLDINGS LIMITED, a Bermuda
)
Limited Company, ABILITY
)
REINSURANCE LIMITED, a Bermuda)
)
Limited Company, and MEDICO
)
INSURANCE COMPANY,
)
)
Defendants.
ARLENE HULL and DIANA HULL
SENNE,

Cause No.: CV-10-116-BLG-RFC
__________
ANSWER, AFFIRMATIVE
DEFENSES AND DEMAND FOR
JURY TRIAL

COMES NOW Defendant above named Ability Insurance Company,
Ability Resources Inc., Ability Reinsurance Holdings Limited and Ability
Reinsurance Limited and Medico Insurance Company (Hereinafter “Ability”), by

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and through its attorney of record, and sets forth the following Answer and
Affirmative Defenses to Plaintiff=s Complaint:
1.

With respect to the allegations set forth in Paragraphs 1 through 4, Ability
admits the allegations and do not contest, jurisdiction, venue or amount in
controversy.

2.

Ability lacks sufficient information to admit or deny the allegations of
Paragraphs 5 through 9 of Plaintiff‟s complaint and therefore deny the same
and leave Plaintiff to proof at time of trial.

3.

In regard to the allegations set forth in Paragraph 10, Ability admits that
Plaintiff has attached an undated letter that apparently was written to
“Policyholder” by Farmer-Stockman Insurance Service.

4.

Ability lacks sufficient information to admit or deny the allegations of
Paragraphs 11 through 24 of Plaintiff‟s complaint and therefore deny the
same and leave Plaintiff to proof at time of trial.

5.

Ability admits the allegations of Paragraph 25 to the extent that it conducted
independent nurse assessments and did evaluate Arlene‟s status, medical
condition and whether she was “Chronically Ill” as defined by the policy and
whether she suffered “Severe Cognitive Impairment” under the express
terms of the contract of insurance.

6.

Ability denies the allegations of Paragraphs 26 and 27 and asserts that at the

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time and place of the assessments that Arlene could walk independently with
a walker, and further that her dementia was not at a level that could be
considered a “Severe Cognitive Impairment” under the express terms of the
contract of insurance. As such, Ability admits that based upon the above
assessments Arlene no longer met the Benefit Qualifiers outlined in the
Long-Term Care Insurance Policy and deny the remaining allegations set
forth in Paragraphs 26 and 27.
7.

Ability admits the allegations of Paragraph 28 that Dianna Hull Senne of
2122 E. Carbon Ave., Joliet, MT, 59041, was informed by letter that Arlene
Hull no longer met the Benefit Qualifiers outlined in the Long-Term Care
Insurance Policy and that the certification period ended on February 1, 2010.

8.

Ability admits that due to her failure to meet the Benefit Qualifiers outlined
in the Long-Term Care Insurance Policy, after February 1, 2010, Arlene had
was to be responsible for her own assisted living costs at St. John‟s facility.

9.

Ability lacks sufficient information to admit or deny the allegations of
Paragraphs 30 through 33 of Plaintiff‟s complaint and therefore deny the
same and leave Plaintiff to proof at time of trial. However, in answering
Paragraph 32, Ability admits only that it was aware that Dianna Hull Senne
did contact the Montana Insurance Commissioner‟s Office. To the extent
that the „mental evaluation‟ of Arlene referred to in Paragraph 34 relates to

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the 2/15/10 neuropsychological evaluation provided by Dr. David Gumm,
Ph.D., Ability admits that it reviewed this report, considered it, and
determined that Arlene still did not meet the Benefit Qualifiers outlined in
the Long-Term Care Insurance Policy as she was not suffering “Severe
Cognitive Impairment” and therefore denies that it made a “mistake”.
10.

Ability lacks sufficient information to admit or deny the allegations of
Paragraph 35 other than to admit that Ability has not found a contractual
basis upon which it can act positively upon requests for further claim
consideration.

11.

Ability denies the allegations set forth in Paragraphs 36 through 38 of
Plaintiff‟s complaint.

12.

Ability lacks sufficient information to admit or deny the allegations of
Paragraph 39 of Plaintiff‟s complaint and therefore deny the same and leave
Plaintiff to proof at time of trial.

13.

Ability denies that the policy was acquired as alleged in Paragraph 40.

14.

Ability denies the allegations of Paragraphs 41, 42, 43, 44, 45, 46, 47, 48 49
and 50.

15.

Ability admits that this matter is appropriate to be decided under Montana‟s
Declaratory Judgment Act and affirmatively asserts that it is entitled to
judgment as a matter of law in that it appropriately denied benefits to Arlene

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under the express terms of the contract of insurance. This is so as to be
eligible for benefits, the claimant must satisfy one of three benefit qualifiers:
(1)

Medical Necessity: You must require covered care due to sickness or
injury. The care prescribed must be consistent with accepted medical
standards for treating the diagnosed condition and could not have been
omitted without adversely affecting your condition.

(2)

Loss of Functional Capacity: You need active personal assistance to
perform at least two of the six defined Activities of Daily Living.

(3)

Cognitive Impairment: You require supervision and direction
because of cognitive impairment.
None of the qualifiers was met by Arlene in this case and Ability

appropriately terminated benefits under the express terms of the policy.
Further, and as such, Ability specifically denies all of the allegations of
Paragraph 48 and asserts that its conduct does not meet the requirements
under Montana Statutory and/or Common Law that it acted with malice nor
that Plaintiff is entitled to recover punitive damages against Ability pursuant
to Sections 27-1-220 and 221. Ability affirmatively asserts that it cannot be
held liable for punitive damages as Plaintiff=s cannot meet the legal standard
required for an award of such damages under Montana law.

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FIRST AFFIRMATIVE DEFENSE
The Complaint fails to state a claim upon which relief may be granted and
should be dismissed with prejudice.
SECOND AFFIRMATIVE DEFENSE
Defendant had a reasonable basis in law and/or fact for its actions in this
case.
THIRD AFFIRMATIVE DEFENSE
Plaintiff has failed to satisfy, and cannot meet, the standard for punitive
damages.
FOURTH AFFIRMATIVE DEFENSE
Punitive and exemplary damages claimed are violative of the United States
Constitution and the Constitution of the State of Montana and violate the due
process clause, the equal protection clause, Article II, Section 25 of the Montana
Constitution and the Fifth Amendment of the United States Constitution relating to
double jeopardy and Article II, Section 22 of the Montana Constitution and the
Eighth Amendment to the United States Constitution prohibiting the imposition of
excessive fines.
WHEREFORE, having fully answered Plaintiff=s Complaint, Defendant
Ability prays for judgment against Plaintiffs, dismissing their Complaint with

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prejudice and awarding Defendant its costs of suit and such other and further relief
as may be deemed proper.
DEMAND FOR JURY TRIAL
Defendant Ability demands trial by jury in this matter.
DATED this 13th day of December, 2010.
BROWN LAW FIRM, P.C.
By: /s/ Scott G. Gratton
Scott G. Gratton
Attorney for Defendants

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CERTIFICATE OF SERVICE
I hereby certify that on the 13th day of December, 2010, a true and correct
copy of the foregoing was served on the following persons by the following means:

1,2

CM/ECF

____ Fax

Hand Delivery

____ E-Mail

Mail

____ Overnight Delivery Services

1. U.S District Court, Billings Division
2. Daniel B. Bidegaray
Anna M. Bidegaray
Bidegaray Law Firm, LLP
2042 Stadium Drive, Ste 1
Bozeman, MT 59715
Attorneys for Plaintiffs

By:

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/s/ Scott G. Gratton
Scott G. Gratton