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									1    WILLIAM M. SHERNOFF #38856
     SAMUEL L. BRUCHEY #271995
     600 South Indian Hill Boulevard
4    Claremont, CA 91711
     Telephone:    (909) 621-4935
5    Facsimile:    (909) 625-6915
7    Attorneys for Plaintiff

10                                    COUNTY OF MONTEREY
12   JANICE O’BRIEN, an individual
                                                    Case No.:
13                  Plaintiff,
14                                                  COMPLAINT AND DEMAND FOR
            vs.                                     JURY TRIAL
16   and Does 1 though 100, inclusive                   GOOD FAITH AND FAIR DEALING
                    Defendants                      (2) BREACH OF CONTRACT
19                                                  (3) VIOLATION OF FINANCIAL
                                                        ELDER ABUSE UNDER WELFARE
                                                        AND INSTITUTIONS CODE
21                                                      SECTION 15610.30, ET SEQ.



                               COMPLAINT AND DEMAND FOR JURY TRIAL
1                                            I. INTRODUCTION
2           1.        This case arises from an unfair and unlawful scheme perpetrated by Continental
3    Casualty Company (more commonly known as, and therefore, hereinafter referred to as “CNA”)
4    to delay and deny valid claims for coverage submitted by California long-term care
5    policyholders.
6           2.        At the center of the scheme is CNA’s abusive claims process – a protocol
7    designed to frustrate and confuse policyholders with needless demands for irrelevant information
8    in violation of CNA’s own policy and California law.
9           3.        The victims of this scheme are among society’s most vulnerable. Long-term care
10   policyholders are often elderly and infirm. Their reliance on long-term care is itself evidence of
11   their vulnerability, as these products purport to defray the cost of caregivers when such care
12   becomes an unfortunate necessity.
13          4.        CNA likes to say it protects the interests of its policyholders. Its website boasts of
14   “providing outstanding service and an ongoing commitment to building long-term relationships,
15   earning us a reputation for being a carrier that inspires trust.” The long-term care insurance
16   similarly assures that “[t]his dedication to our customers, business partners and local
17   communities differentiates us from other carriers and enables us to attract and retain a team of
18   outstanding insurance professionals who keep the customer at the heart of everything we do.
19   When you’re looking for a strong insurance carrier, dedicated to your success … we can show
20   you more.”
21          5.        These assurances could not be farther from the truth. In fact, CNA deliberately
22   places demands upon policyholders that are so steeped in obfuscation that their purpose could
23   only be to cook up grounds to deny claims. Examples of CNA’s unreasonable demands include:
24                a. Unlawfully requiring that caregivers obtain certification and/or licensure as a
25                    prerequisite to approving claims;
26                b. Demanding burdensome and confusing daily visit notes;
27                c. Failing to recognize statutorily-required Activities of Daily Living;
28                d. Dispatching company nurses to conduct biased examinations;


                              COMPLAINT AND DEMAND FOR JURY TRIAL
1                 e. Rejecting the medical opinions of treating physicians;
2                 f. Manipulating supposedly independent medical examinations to justify improper
3                    claim denials;
4                 g. Delaying policy benefits for months without cause;
5           6.       Plaintiff Janice O’Brien is a victim of this scheme. Janice is a 91-year old widow
6    and mother of seven children.
7           7.       In 1996, Janice purchased long-term care insurance from CNA. In 2011, she
8    submitted a claim for personal care benefits.
9           8.       For the past 19 months, CNA has repeatedly denied payment on this claim despite
10   overwhelming evidence justifying Janice’s medical need for benefits under her policy.
11          9.       CNA’s unlawful conduct has forced Janice to spend thousands of dollars paying
12   for personal care services. It has also caused her and her family to suffer immeasurable
13   frustration, anxiety, distress, anger, worry, and depression.
14                                           II. THE PARTIES
15          10.      Plaintiff Janice O’Brien is, and at all relevant times was, a resident of Pebble
16   Beach, California, which is located in the county of Monterey.
17          11.      Defendant Continental Casualty Company is a corporation duly organized under
18   the laws of the State of Illinois with its headquarters in Chicago, and is licensed to sell insurance
     in the State of California.
            12.      The true names or capacities, whether individual, corporate, associate, or
     otherwise, of Does 1 through 100, inclusive, are unknown to the plaintiff, who therefore sues
     said defendants by such fictitious names. Plaintiff is informed and believes and thereon alleges
     that each of the defendants sued herein as a Doe is legally responsible in some manner for the
     events and happenings referred to herein, and will ask leave of this court to amend his Complaint
     to insert their true names and capacities in place and instead of the fictional names when the
     same becomes known to the plaintiff.


                              COMPLAINT AND DEMAND FOR JURY TRIAL
1            13.     At all relevant times, defendants, and each of them, were the agents and
2    employees of each of the remaining defendants, and were at all times acting within the purpose
3    and scope of said agency and employment, and each defendant has ratified and approved said
4    agency and employment, and each defendant has ratified and approved the acts of its agent.
5                                             III. JURISDICTION
6            14.     The amount of damages sought by plaintiff exceeds the minimum jurisdictional
7    limit of this Court.
8                                      IV. FACTUAL BACKGROUND
9            15.     Janice O’Brien, a 91-year old widow and homemaker, lives in Pebble Beach,
10   where she raised seven children. She lost her husband in 1986 and has lived alone ever since.
11           16.     In 1996, Janice purchased a long-term care insurance policy from CNA (Policy

12   No. 076582018.) so that her children would not be burdened financially by her need for care

13   during her twilight years.
             17.     Janice has paid all of her premiums on time, despite significant increases in her
     rates. She currently pays $4,998.00 in premiums annually.
             18.     Janice’s policy provides long term care benefits, which include benefits for
     Personal Care services. As of February 2012, Janice was eligible for a daily benefit of up to $175
     for such services . Janice is eligible to receive this benefit for life.
18           Janice’s CNA Policy
19           19.     Janice’s policy defines Long-Term Care as follows:
20                   Care of services, including home and community based care or
                     services, which are:
21                   1.      Medically Necessary; or
22                   2.      Due to the Inability to Perform Two or More Activities of Daily
                             Living; or
23                   3.      Due to Cognitive Impairment.

24           20.     Janice’s policy defines Medically Necessary as follows:

25                   Care or services which are:
                     1.      Provided for Acute or Chronic Conditions; and
26                   2.      Consistent with accepted medical standards for Your condition; and
                     3.      Not designed primarily for the convenience of You and Your family;
27                           and


                              COMPLAINT AND DEMAND FOR JURY TRIAL
1                   4.      Recommended by a physician who has no ownership in the Long-
                            Term Care Facility or Alternate Care Facility in which You are
2                           receiving care.
3           21.     Janice’s policy defines Activities of Daily Living as follows:
4                   The Activities of Daily Living are:
                    1.      Eating. Eating or consuming nourishment.
5                   2.      Dressing. Putting on and taking off all necessary items of clothing,
                            including Medically Necessary braces or artificial limbs.
6                   3.      Bathing. Washing oneself on a routine basis in the bathtub or shower
7                           or by sponge bath.
                    4.      Toileting. Getting to and from the toilet, getting on and off the toilet,
8                           and maintaining a reasonable level of associated personal hygiene.
                    5.      Transferring. Moving in and out of bed or chair and changing
9                           positions, such as from bed or chair to standing.

10          22.     Janice’s policy contains the following definition of Inability to Perform Two or
11   More Activities of Daily Living:
12                  Your dependence on someone else because of the need, due to injury,
                    sickness, or frailty of age, for regular human assistance or supervision
13                  in performing two or more Activities of Daily Living.
            23.     California’s Insurance Code section 10232.7 obligates long-term care insurance
15   carriers to include seven Activities of Daily Living in all long-term care policies issued in
16   California. They include the five mentioned above, and two others that are NOT included in the
17   policy CNA issued to Janice. Those are:
18                  Continence, which shall mean the ability to control bowel and bladder
                    as well as use ostomy or catheter receptacles, and apply diapers and
19                  disposable barrier pads.
20                  Ambulating, which shall mean walking or moving around inside or
                    outside the home regardless of the use of a cane, crutches, or braces.
22          24.     Janice’s policy contains the following definition of Cognitive Impairment:

23                  Deterioration of Your intellectual capacity which:
                    1. Requires continual supervision to protect Yourself and others; and
24                  2. Must be determined by clinical diagnosis or tests; and
                    3. May be the result of Alzheimer’s Disease, senile dementia, or
25                  nervous or mental disorders of organic origin.
            Janice’s Declining Health and Her Claim for CNA Policy Benefits


                             COMPLAINT AND DEMAND FOR JURY TRIAL
1           25.     Several years ago, Janice began experiencing dizziness and signs of dementia.
2    She became fearful of living alone, and mindful that she was experiencing the early stages of

3    dementia.
            26.     On July 15, 2011, Janice was admitted to the hospital for extreme weakness and
     hyponatremia, a metabolic condition characterized by a lack of sodium in the body fluids.
     Symptoms of hyponatremia include an abnormal mental state, confusion, decreased
     consciousness, hallucinations and even coma.
            27.     Janice’s children and her primary care physician Dr. David Straface determined
     that she should no longer be permitted to live alone. Janice’s family hired three personal
9    caregivers to assist Janice at her home:, Ms. Veronica Nuno, Ms. Rose Gonzales and Community
10   Caregivers. The caregivers assisted Janice on a daily basis with activities including feeding,
11   bathing, dressing, toileting/ continence, walking/ mobility/ ambulating, administering
12   medication, preparing meals, cleaning, and laundry.

13          28.     The service providers met all of the CNA policy requirements as Home Care
     providers. Janice paid each approximately $20-$24 per hour.
            29.     Mindful of CNA's supposed licensure requirement, Janice’s family made sure
     each caregiver was licensed, certified, and able to complete a weekly timesheet for daily notes to
     ensure the approval of benefits under Janice’s long-term care policy.
            30.     On or about July 15, 2011, Janice submitted a claim to CNA to obtain benefits
     under her long-term care policy. She completed all necessary forms, and provided the insurer
19   with daily visit notes completed by her caregivers, and copies of checks evidencing payment by
20   Janice to her caregivers for their services.
21          31.     Dr. Straface also provided information in support of Janice’s claim. He provided
22   CNA with a Plan of Care that explained Janice’s inability to eat and administer medicine without

23   supervision. Dr. Straface indicated that he anticipated these impairments would continue

24   indefinitely. He informed CNA that Janice would need “ongoing assistance” with these services.
     He also diagnosed Janice with hypertension, hyponatremia, and cognitive impairment.
            32.     Community Caregivers supported Janice’s claim as well. Sandra McGowan, an
     assistant manager for the personal care service provider indicated on CNA’s Individual Long
     Term Care Claim form that Janice required supervision with bathing, dressing, toileting,


                             COMPLAINT AND DEMAND FOR JURY TRIAL
1    transferring, ambulating, and managing medication. McGowan noted, too, that Janice needed
2    physical assistance with housekeeping and meal preparation.

3            33.      Even though Janice, her treating physician and he caregivers had provided
     overwhelming evidence of Janice’s need for long-term care benefits, CNA insisted that Janice
     submit to an on-site nursing assessment. The assessment took place on October 19, 2011.
             34.      CNA rejected the information provided by Dr. Straface and denied Janice’s claim
     on the basis of its own nursing assessment. CNA contended that its nurse practitioner concluded
     that Janice did not need assistance with any Activities of Daily Living and that she had normal
     cognitive functioning. The denial letter stated that Janice’s condition did not qualify under the
9    policy’s definition for “Long-Term Care.”
10           35.      On January 17, 2012, Janice appealed CNA’s denial. Dr. Straface also sent a letter
11   to CNA appealing the denial.
12           36.      On January 30, 2012, Community Caregivers sent CNA a letter to appeal the

13   denial. Its letter states:
                 Community Caregivers was hired to assist Mrs. O’Brien with her ADL
                 [activities of daily living] due to her functional impairment. She needs
15               assistance with ambulation, feeding and personal care. The services
                 provided to Mrs. O’Brien were: meal preparation, toileting and person
16               care assistance, helped in all ambulation activities- walking, getting up and
17               down from the bed and chairs, etc.
             37.     On February 17, 2012, Janice returned to Dr. Straface’s office due to increased
     bouts of dizziness. He confirmed her diagnosis of chronic cognitive impairment. Janice also
19   tested positive for memory impairment.
20           38.      Meanwhile, on March 14, 2012, neurologist Dr. Alejandro Centurion treated
21   Janice’s worsening dizziness. Dr. Centurion diagnosed Janice with mild dementia and noted that
22   she “probably has early Alzheimer’s.” Dr. Centurion conducted Janice’s second MMSE clinical

23   test, revealing that Janice’s score was 22 out of 30.

24           39.      Nevertheless, on March 26, 2012, CNA upheld its denial of Janice’s claim.
             40.      On April 1, 2012, Dr. Straface wrote another letter to CNA in support of Janice’s
     ongoing efforts to receive benefits under her policy. The letter stated:
             As Janice O’Brien’s primary physician I write this letter in support of her need for
27           long term care. I most recently examined Janice on 3/21/12. As detailed in
             previous documentation 8/9/11 and 1/29/12, Janice lives alone and suffers from
             dementia. She has significant short term memory problems as well as labile HTN

                                  COMPLAINT AND DEMAND FOR JURY TRIAL
1           which requires medication. She is in need of care in order to ensure proper
            administration of her medication as well as some needs with ADL’s as previously
2           outlined. She was also recently evaluated by her Neurologist on 3/14/12, where
3           her MMSE score was 22/30.
            41.    On April 4, 2012, Janice once again appealed CNA’s decision to deny her
     benefits due under the policy.
5           42.     On or about this time, Dr. Straface filled out a second Plan of Care form. On it, he
6    clearly indicated that in May 2011 he diagnosed Janice with dementia and memory loss. He also
7    indicated that Janice suffered from hypertension dating back to approximately 2002, and from
8    hyponatremia dating back to 2010, both of which necessitated Janice’s ongoing long-term care
9    services. Finally, he noted the significant drop in Janice’s cognitive capabilities, as evidenced by

10   her MMSE score.
            43.     Dr. Straface also marked that Janice lacked full functional capacity to perform the
     following Activities of Daily Living: eating, administration of medicine and ambulating. He
     stated: “Mrs. O’Brien requires care and assistance in the areas noted above including supervision
     of medication administration, ensuring adequate nutrition and assisting with ambulating at times.
     This could likely be done with home health personnel on a daily basis for 8-12 hours each day in
15   the setting of Mrs. O’Brien’s home.”
16          44.     Dr. Centurion also filled out a Plan of Care form for CNA in which he indicated
17   that Janice’s dementia stretched back to the summer of 2011, and that such a diagnosis results in
18   the need for long-term care services. He stated that Janice: “Cannot prepare meals. Requires
19   supervision while eating to make sure meals are eaten. Requires assistance getting in and out of

20   tub. Needs assistance while dressing for balance stability. Completely dependent on
     administration of all medications. Needs assistance transferring to and from. Does not use
     mobility device. Occasionally requires assistance when dizzy … Patient requires assistance by a
     qualified caregiver 10-12 hours a day, seven days a week.” Dr. Centurion further noted that all of
     these functional impairments were “permanent and progressive.”
            45.     On April 25, CNA sent a third denial letter. In it, CNA claimed the Plan of Care
25   form dated August 9, 2011 from Dr. Straface stated Ms. O’Brien had “no deficiency” in
26   performing any of the Activities of Daily Living defined by the policy. Although it
27   acknowledged receipt of the additional claim information Janice sent, CNA indicated that it
28   could not make a determination until it received all of Dr. Straface’s medical records.


                             COMPLAINT AND DEMAND FOR JURY TRIAL
1           46.      In reaching this decision, CAN ignored California statutory law that requires
2    long-term care insurers to recognize “ambulating” as an Activity of Daily Living.

3           47.      On May 7, 2012, CNA’s Vice President of Health Operations Christine Michals
     wrote a letter to Janice’s daughter, Tarin, stating that Janice was not cognitively impaired. She
     referred to Janice’s medical records, which indicate that Janice only suffers from mild dementia.
     CNA selectively ignored Janice’s chart notes that indicate she has senile dementia. In addition, in
     her letter, Ms. Michals justifies her position by referring to provisions that do not exist anywhere
     in Janice’s policy.
            48.      On July 6, 2012, Dr. Straface wrote the following office visit note regarding
9    Janice’s condition and need for long term care:
10                Still trying to get long term care insurance. Continues to need supervision
                  of medication administration. Has increased need in terms of meal
                  preparation, some reminders about eating and obtained food for meal
12                preparation. There are also increased concerns re her stability and need for
                  security psychologically. She now has required nearly constant
13                supervision some of which is done by visiting family including 8-10 hours
                  per day 5 days a week in which the family has hired caregivers to assist
                  and supervise her … Positive for confusion/ disorientation, dizziness,
15                memory impairment … Assessment/ plan: Dementia. … Clearly she is not
                  able to supervise her medication administration and oversee her ADL’s as
16                she would be at risk of neglect with respect to her nutrition and potentially
17                her safety with respect to judgment as to physical activity. They will
                  recontact their long term care insurance administrator. I also recommend
18                that they have f/u with Dr. Centurion to reassess.
19      49. Dr. Centurion’s July 19, 2012 follow-up letter stated:
20                It was my impression she had mild dementia. She continues to have 24
                  hour care, either by caregivers or children. She is still very forgetful …
21                Mild dementia: Patient scored 20/30 MOCA test today compared to 22/30
22                four months ago. Subjectively family and patient feel she is about the
                  same. She probably has early Alzheimer’s … For unclear reasons her long
23                term insurance carrier has denied coverage. She clearly meets criteria for a
                  mild dementia and is unable to manage two out of the seven ADL’s
24                independently.
25          50.      CNA next obligated Janice to undergo an examination by an independent medical
26   examiner of its choosing. On November 5, 2012, that examination was conducted by clinical
27   psychologist Dr. Patricia McKeon. CNA paid Dr. McKeon to perform the service.


                              COMPLAINT AND DEMAND FOR JURY TRIAL
1            51.     Dr. McKeon noted that Janice could not list her medications or her medical
2    conditions. Dr. McKeon also noted: “I highly doubt that the history that she gave me was

3    accurate given discrepancies in time frames and her own self-corrections at times.” During the
     examination, for instance, Janice indicated that she had five children, and could not name her
     grandchildren or great grandchildren.
             52.     Dr. McKeon tested Janice’s mental status, orientation, attention/ concentration,
     functional cognitive skills, learning and memory functions, long term memory, visual spatial
     perception and reasoning skills, abstract reasoning, judgment, executive functions and cognitive
     flexibility and personality and emotional factors. With all of these tests, Dr. McKeon noted mild
9    to moderate deficits. For instance, Janice scored “Well Below Average” in her functional
10   cognitive skills test.
11           53.     In terms of memory functions, Dr. McKeon stated that “her memory function
12   deficits lie in the realm of initial storage, not retrieval. This is very much consistent with a

13   diagnosis of Alzheimer’s disease, rather than any functional issue.”
             54.     After her examination, Dr. McKeon made the following recommendations:
                 1) Medication Management: Must be ordered, arranged, and dispensed by
15                  someone else. She can no longer track her medications, nor name them
16                  or what they are used for.
                 2) Driving Safety: Not an issue, has given up driving.
17               3) Financial Management: Has turned this over to her daughter Tarin as
                    her executor. Could no longer make informed decisions; lacks
                    testamentary capacity.
19               4) Health Care Decision Making: Should continue to participate in
                    discussions of health issues and proposed treatments, but cannot make
20                  informed decisions regarding care due to severe short term memory
                 5) Need for Supervision: I believe at this point she does require 24-hour
22                  supervision. She is slowed in her responses on cognitive tasks. She has
                    word finding problems that likely would interfere with her being able
23                  in an emergency to explain her problem over the phone. She cannot
24                  explain her medical conditions nor her medications. She has periods of
                    dizziness that are unpredictable or at times more chronic, and may be
25                  related to medication changes.
             55.    Dr. McKeon stated that Janice’s prior diagnosis of Mild Cognitive Impairment
     progressed to a diagnosis of Probable Alzheimer’s Disease, and that Janice’s cognitive abilities
     would continue to deteriorate.


                              COMPLAINT AND DEMAND FOR JURY TRIAL
1            56.      Significantly, Dr. McKeon also questioned CNA's instruction that she refrain
2    from interviewing Janice’s children about her capacity. Dr. McKeon stated: “This is NOT my

3    usual practice and I believe [this] is problematic vis a vis determining the issues in this case.”
     Given Janice’s memory and cognitive problems, she is not accurate her appraisal of her own
     limitations. “Especially in the early stages of dementia when an individual’s expressive language
     and cognition appear to be superficially well-preserved, I find that their actual behaviors (versus
     what they SAY they can do) often are very discrepant.”
             57.      Despite Dr. McKeon’s findings, CNA has yet to approve benefits for Janice or
     even make a decision on her claims.
9            58.      In the months since, Janice and her children have continued to submit claims for
10   benefits under her policy. CNA has refused to make a single payment.
11           59.      CNA’s delay and denial of Janice’s claims, have caused her considerable worry,
12   anxiety, stress, fear, anger, and frustration. CNA’s refusal to pay benefits has forced Janice to

13   deplete savings and burn through her fixed income. This too has caused considerable emotional
                                           V. FIRST CAUSE OF ACTION
16                                (Breach of the Duty of Good Faith and Fair Dealing)
             60.      Plaintiff incorporates by reference each of the preceding paragraphs as though
     fully set forth herein.
             61.      Defendants, and each of them, have breached the duty of good faith and fair
     dealing owed to plaintiff in the following respects:
                   a. Unreasonably and in bad faith placing its financial interests ahead of its
                      policyholders in violation of California’s statutory, regulatory and common law;
                   b. Unreasonably and in bad faith failing and refusing to give at least as much
                      consideration to the interests of its policyholders as it gave to its own interests;
                   c. Unreasonably and in bad faith delaying and denying benefits for long-term care
27                    under the terms of the policy, by employing the following tactics:

28                         i. Requiring that plaintiff’s caregivers satisfy certification/licensure


                               COMPLAINT AND DEMAND FOR JURY TRIAL
1                             requirements in violation of both its own policy and California law;
2                         ii. Ignoring Activities of Daily Living mandated by California statutory law;
3                         iii. Second-guessing the medical judgment of treating physicians.
4                  d. Failing to consider the insured’s interests at least as much as its own in handling
5                     plaintiff’s claims;
6                  e. Failing to diligently search for reasons to support providing benefits for plaintiff’s
7                     personal care benefit claims, and instead creating tenuous reasons for denying
8                     coverage;
9                  f. Unreasonably and in bad faith compelling plaintiff to litigate to recover benefits
10                    due to her.
11           62.      Plaintiff is informed and believes and thereon alleges that defendants, and each of
12   them, have breached their duty of good faith and fair dealing owed to plaintiff by other acts or
13   omissions of which plaintiff is presently unaware and which will be shown according to proof at
14   the time of trial.
15           63.      Defendants furthermore have committed institutional bad faith. Defendants’
16   institutional bad faith amounts to reprehensible conduct because the conduct is part of a repeated
17   pattern of unfair practices and not an isolated occurrence. The pattern of unfair practices
18   constitutes a conscious course of wrongful conduct that is firmly grounded in the established
19   company policy of defendants. Plaintiff is informed and believes and thereon alleges that
20   defendants have engaged in similar wrongful conduct as to other individuals and that defendants
21   have substantially increased their profits as a result of causing similar harm to others.
22           64.      As a proximate result of the aforementioned unreasonable and bad faith conduct
23   of defendants, plaintiff has suffered, and will continue to suffer in the future, damages, plus
24   interest, and other economic and consequential damages including emotional distress damages,
25   in an amount to be proven at trial.
26           65.      As a further proximate result of the unreasonable and bad faith conduct of
27   defendants, plaintiff was compelled to retain legal counsel and to institute litigation to obtain the
28   benefits due under the contract. Therefore, defendants are liable for those attorney’s fees, witness


                               COMPLAINT AND DEMAND FOR JURY TRIAL
1    fees and litigation costs reasonably incurred in order to obtain plaintiff’s benefits owed.
2            66.     Defendants’ conduct described herein was intended by the defendants to cause
3    injury to plaintiff and/or was despicable conduct carried on by the defendants with a willful and
4    conscious disregard of the rights of plaintiff, subjected plaintiff to cruel and unjust hardship in
5    conscious disregard of his rights, and was an intentional misrepresentation, deceit, or
6    concealment of material facts known to the defendants with the intention to deprive plaintiff of
7    property, legal rights, or to otherwise cause injury, such as to constitute malice, oppression or
8    fraud under California Civil Code section 3294, thereby entitling plaintiff to punitive damages in
9    an amount appropriate to punish or set an example of defendants.
10           67.     Defendants’ conduct described herein was undertaken by defendants’ officers or
11   managing agents who were responsible for claims supervision and operations decisions. The
12   previously described conduct of said managing agents and individuals was therefore undertaken
13   on behalf of the corporate defendant. Furthermore, said corporate defendant had advance
14   knowledge of the actions and conduct of said individuals whose actions and conduct were
15   ratified, authorized, and approved.
17                                      VI. SECOND CAUSE OF ACTION
18                                               (Breach of Contract)
             68.     Plaintiff incorporates by reference each of the preceding paragraphs as though
     fully set forth herein.
             69.     In 1996, Plaintiff entered into a written contract with CNA. In accordance with
     the terms of this insurance contract, plaintiff paid all monthly premiums and performed all terms
     and conditions required under the policy.
             70.     Defendants owed contractual duties and obligations to Plaintiff under the policy,
25   including the duty to pay Plaintiff’s claim for long-term care services. By delaying and denying

26   benefits under the contract, defendants have breached the terms and provisions of the insurance

27   contract.



                               COMPLAINT AND DEMAND FOR JURY TRIAL
1            71.     As a direct and proximate result of defendants’ breach of contractual obligations,
2    plaintiff has suffered damages under the insurance contract in an amount to be determined
3    according to proof at the time of trial.
5                                       VII. THIRD CAUSE OF ACTION
      (Violation of Financial Elder Abuse under Welfare and Institutions Code Sections 15610.30 et
6                                                   seq.)
            72.     Plaintiff incorporates by reference each of the preceding paragraphs as though
     fully set forth herein.
             73.     Plaintiff is informed and believes and thereon alleges that defendants failure to
10   pay benefits due under the policy constitutes financial abuse as defined by Welfare and

11   Institutions Code section 15610.30.

12           74.     Plaintiff is, and at all relevant times was, an elder as defined by Welfare and

13   Institutions Code.

14           75.     Defendants retained and assisted in retaining property from plaintiff in the form of
15   the benefits due to plaintiff under the policy that plaintiff had the right to have transferred to her.
16           76.     Defendants have known that plaintiff had this right on the basis of information
17   received by plaintiff, and it would have been obvious to a reasonable person that plaintiff had,
18   and has, the right to have the benefits due under the policy transferred to plaintiff.
19           77.     Defendants’ appropriation and retention of the premiums paid by plaintiff, and
     withholding of benefits due under the policy, is in bad faith and with an intent to defraud.
             78.     As a proximate result of the aforementioned withholding of benefits which
     constitutes financial elder abuse under Welfare and Institutions Code section 15610.30, plaintiff
     has suffered, and will continue to suffer in the future, damages under the policy, plus interest,
     and other economic and consequential damages, in an amount to be proven at trial.
             79.     As a further proximate result of the withholding of benefits which constitutes
     financial elder abuse under Welfare and Institutions Code section 15610.30, plaintiff was
     compelled to retain legal counsel and to institute litigation to obtain the benefits due under the


                               COMPLAINT AND DEMAND FOR JURY TRIAL
1    contracts. Therefore, defendants are liable for those attorneys’ fees, witness fees and litigation
2    costs reasonably incurred in order to obtain benefits under the Policy.
3           80.     Defendants’ conduct described herein was intended by the defendants to cause
4    injury to its policyholder and/or was despicable conduct carried on by the defendants with a
5    willful and conscious disregard of the rights of plaintiff, subjected plaintiff to cruel and unjust
     hardship in conscious disregard of plaintiff’s rights, and was an intentional misrepresentation,
     deceit, or concealment of material facts known to defendants with the intention to deprive
     plaintiff property, legal rights or to otherwise cause injury, such as to constitute malice,
     oppression or fraud under California Civil Code section 3294, thereby entitling plaintiff to
     punitive damages in an amount appropriate to punish or set an example of defendants.
12                                          IX. PRAYER FOR RELIEF
            Plaintiff prays for judgment as follows:
            1.      For damages, according to proof, including damages for benefits under the
            contract, pain and suffering, mental and emotional distress plus prejudgment interest;
            2.      For punitive and exemplary damages in an amount to be determined at trial;
            3.      For treble damages available under California Civil Code section 3345;
            4.      For attorney fees and costs of suit incurred herein;
            4.      For such other and further relief as the court deems just and proper.
     DATED: February 8, 2013                        SHERNOFF BIDART
22                                                  ECHEVERRIA BENTLEY LLP
23                                          By:__________________________________
24                                                WILLIAM M. SHERNOFF
                                                  SAMUEL BRUCHEY
25                                                Attorneys for Plaintiff


                             COMPLAINT AND DEMAND FOR JURY TRIAL

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