Insurance Company Denies Coverage To Sacramento Couple, Part 1 of 11

(Please note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this automobile accident/insurance coverage case and its proceedings.)

Plaintiffs’ Opposition to Defendant’s Motion for Summary Judgment or, in the Alternative, Summary Adjudication of Issues.


Blue Shield offered health care coverage to plaintiffs based on an on-line application which Blue Shield’s insurance agent, Kenny Shulman, prepared and forwarded to Blue Shield after plaintiff Sally Lawrence delivered her paper application for individual family coverage to Mr. Shulman. Sally Lawrence understood that the application asked for only her health history, and she provided it. Had Blue Shield’s paper application been clearer and less ambiguous, or had Mr. Shulman asked plaintiffs each question on the paper application as the application’s certification section required, the on-line application which Mr. Shulman prepared and sent to Blue Shield would have been amended to include the health histories of Bob Lawrence and their son, Sammy Lawrence, and to accurately reflect the history and status of Sally Lawrence’s irritable bowel disclosure.

Significantly, Blue Shield issued coverage (effective December 15, 2000) based on Mr. Shulman’s incomplete and inaccurate on-line application. Had Mr. Shulman performed his duty, Blue Shield would likely have denied coverage, in which case plaintiffs would have obtained other coverage which would have been in effect on the date of Mr. Lawrence’s March 19, 2001, automobile accident.

Bob Lawrence was hospitalized for a brief time shortly after coverage issued for a small bowel obstruction. On February 8, 2001, after receiving those hospitalization claims, Blue Shield began an investigation into the completeness and accuracy of plaintiffs’ application. On March 19, 2001, Bob Lawrence was seriously injured in an automobile accident. Blue Shield began to pay the substantial medical and other claims arising from the accident, but on June 5, 2001, it notified plaintiffs it had cancelled their plan retroactively to the date of issuance because the application’s failure to disclose Bob Lawrence’s health history. The Lawrences were eventually able to acquire replacement coverage, but the preexisting conditions provision of that replacement policy prevented Bob Lawrence from receiving the physical therapy, surgery, care and treatment he needed, when he needed it, and the resulting delay caused him to sustain further injuries. (See Part 2 of 11.)

For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.

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