This letter of notification was sent to the credit union rather than to McCormick.īetween February 9 and March 2, 1978, McCormick sent a revised claim form to the credit union rather than to Sentinel. The only reason for nonpayment, according to the February 3d letter, was the doctor's failure to include treatment dates. On February 3, 1978, a month after the credit union forwarded McCormick's claim form to Sentinel, the insurer notified McCormick the form had been received but benefits could not be paid until McCormick's doctor filled in the dates of medical treatment. It appears some of the letters from Sentinel were addressed to McCormick in care of the credit union. Prior to Sentinel's receipt of the claim form, McCormick received various letters from either Sentinel or the credit union which advised him the insurance claim had been closed, his credit union loan was in arrears, the insurance claim had been reopened, he should complete another insurance claim form, and the insurance claim had once again been closed. Sentinel's records indicate, however, it was aware a disability claim had been filed on McCormick's behalf on June 28, 1977, less than two months after the accident. Thus, by the time Sentinel received the claim form, nine months had elapsed from the day of McCormick's industrial accident. It also appears both that McCormick returned the form to the credit union rather than to Sentinel, and that the credit union forwarded the form to Sentinel on January 2, 1978. The employer also indicated McCormick's accident consisted of his being pulled into a lathe. McCormick's employer completed its portion of the form on December 28, 1977, and indicated McCormick was still not working. ![]() The portions of the form not completed by the doctor consisted of (1) the dates of medical treatment (2) whether McCormick had similar symptoms earlier and (3) the name of the referring doctor. The doctor attested to a total disability from April 6, 1977, through November 25, 1977. 2 He forwarded the form to his doctor, who completed it on October 25, 1977. About one month later, when the credit union did not receive McCormick's loan payment in the form of a payroll deduction, the credit union's agent assumed McCormick was disabled and claim forms were sent to him two months later on July 7, 1977.Īpparently McCormick did not fill out the claim form until October 24, 1977, over three months after it was mailed. On April 6, 1977, McCormick, then employed as a machinist, was injured. The credit union also administered the premium payments. This insurance was purchased through the credit union. The policy provided in the event McCormick was totally disabled Sentinel would make the payments on the credit union loan up to a maximum period of 30 months. In connection with the loan McCormick purchased a credit disability insurance policy from respondent, Sentinel Life Insurance Company (Sentinel), as security for payment of the loan. Loan payments were to be made by payroll deductions. In July of 1976 appellant, Leroy McCormick, borrowed money from Enesco Federal Credit Union (the credit union) to buy a pickup truck and camper. Statement of Facts and Proceedings Below fn. Finally, we reject the contention a finding of bad faith is precluded simply because the insurer unduly delays paying benefits rather than denying them outright. We also hold where there is such an omission the insurer's duty may, in some circumstances, include a responsibility to conduct an independent investigation of the insured's claim for benefits. In this connection we hold an insurer's duty is not necessarily excused where an item of information is omitted from a claim form. The order granting summary judgment raises a significant question about the scope of an insurer's duty of good faith. We affirm the first order and reverse the latter. He challenges both an order denying postarbitration discovery and an order granting the insurer's motion for summary judgment. After an adverse compulsory arbitration hearing, appellant requested a trial de novo. ![]() Īppellant filed an action for declaratory relief and damages for insurance bad faith. (Opinion by Johnson, J., with Schauer, P. ![]() SENTINEL LIFE INSURANCE COMPANY, Defendant and Respondent. LEROY McCORMICK, Plaintiff and Appellant, v.
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