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Page 1 of 12 Joan Hangarter: The Precedent Setting $7Million plus Own-Occupation Disability Insurance Case
The precedent-setting Hangarter v. Paul Revere, Unum verdict was unanimously upheld by the Ninth Circuit Court of Appeals and stands as the landmark disability bad faith case in the United States. Due to arm and shoulder injuries Joan became unable to continue her work as a chiropractor and was forced to sell her practice. Paul Revere/Unum terminated her benefits claiming that its “independent” medical examination raised questions about the severity of her injuries and found that in any event she should have been able to continue her work by modifying her duties and taking breaks. The insurer also argued that Joan was, in fact, continuing to perform some chiropractic work, post disability, and that therefore she was not “totally” disabled.
* Case study contents have been modified to conform with confidentiality provisions in settlement agreements with insurers and clients.
As a result of the termination of her benefits, Joan, a single mother of young children, lost her home to foreclosure and was forced into bankruptcy.
Federal Judge James Larson and a unanimous jury found that (1) Joan was totally disabled and could not perform her substantial and material duties in the usual and customary manner; (2) that Joan’s failed attempt to return to work did not preclude her from receiving benefits; and (3) that Paul Revere/Unum had acted unreasonably and with “malice, fraud and oppression” in the termination of her benefits, thus justifying the imposition of punitive damages.
Before having contacted our firm, Joan, believing her insurers’ assertion that she had no right to sue for bad faith because her claim was governed by a law known as ERISA, had simply given up and moved to Los Angeles to live with her sister.
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