Bad Faith Blog

Summary: Ibsen, Inc., the owner and operator of an urgent care medical clinic filed a four count complaint against a health insurance company, Caring For Montanans, and others, alleging violations of Montana’s Unfair Trade Practices Act (UTPA) and alleged common law counts for breach of fiduciary duty, breach of contract, and unjust enrichment. The Montana District Court held that all four counts were essentially for alleged violations of the UTPA and found that Montana did not allow a private right of action for such violations. Accordingly, it dismissed the individual and class action claims Ibsen sought to pursue. A unanimous Montana Supreme Court affirmed.

Summary: A Nevada mother applied for health insurance coverage on behalf of her four-year-old daughter. About two weeks later, the daughter was seen by a doctor who diagnosed sexual precocity, made a referral to a specialist, and ordered tests and x-rays. A week thereafter, an underwriting interview was conducted and the mother failed to reveal facts which would have resulted in the carrier refusing to write the health insurance coverage, including the diagnosis, referral to a specialist, and ordering tests. The health insurer discovered the misrepresentations, rescinded the policy, and thereafter the parents filed suit. The U. S. District Judge entered summary judgment in favor of the health insurance carrier on all grounds, including the bad faith claim.