Pa. widow who won motorcycle death insurance case is denied bid for attorney's fees, costs

A federal judge in Philadelphia who last summer ordered an insurer to pay out nearly a

half-million dollars to the widow of a Pennsylvania man killed in a 2008 Colorado motorcycle accident has denied the plaintiff’s bid for lawyer’s fees and costs arising from the litigation.

In a June 25 order, U.S. District Judge Eduardo Robreno, sitting in the Eastern District of Pennsylvania, denied Hetty Viera’s motion to recoup more than $212,000 in attorney’s fees and costs in her case against the Life Insurance Company of North America, although the jurist granted the plaintiff’s motion for leave to file a reply to the judgment.

As previously reported by the Pennsylvania Record, Viera filed suit at the Philadelphia Court of Common Pleas in July 2009 asserting claims of breach of contract, bad faith and intentional infliction of emotional distress.

The litigation was later removed by the defendant to the U.S. District Court because it contained a federal claim involving violations of the Employee Retirement Income and Security Act.

The widow had sued on behalf of her late husband, Frederick A. Viera, who died from injuries sustained in a motorcycle accident in Grand Junction, Colo. On Oct. 14, 2008.

According to the complaint, the insurance company initially denied benefits to the widow, who lives in Northeastern Pennsylvania, under an accidental death and dismemberment policy.

The lawsuit alleged that Frederick Viera had been approved for two accidental and dismemberment insurance policies in July 2007, which would provide coverage of up to $400,000 in the event of an accident.

The court initially granted summary judgment to the defendant, records show, but that decision was overturned by the U.S. Third Circuit Court of Appeals, which held that the trial court erroneously reviewed the defense ruling under the abuse-of-discretion standard.

The appeals body then remanded the case to District Court, where, following a bench trial, Robreno found in the widow’s favor, awarding the woman the $400,000 she sought from the insurer.

The plaintiff subsequently filed her motion for attorney’s fees and costs.

In denying the woman’s bid, Robreno wrote that the ERISA statute does not mandate the awarding of attorney’s fees to a prevailing party, but rather provides for judicial discretion in such cases.

In this particular case, Robreno determined that the awarding of attorney’s fees would be improper for a number of reasons, including the mere fact that “there does not appear to have been any showing of bad faith by Defendant.”

The plaintiff had argued that the insurer had denied her claim for death benefits because a medication her husband was taking at the time was considered a contributing factor in bringing about his death, despite the fact that the husband had disclosed his coronary condition on his insurance policy application.

The widow argued that this fact alone showed the defendant’s “culpability and/or bad faith,” as the company would have sold Viera an “essentially worthless policy.”

The defendant, however, argued that the court didn’t conclude or suggest that it acted in bad faith by denying the insurance claim.

The court ended up finding that the insurance policy was not “essentially worthless” because simply having a preexisting medical condition doesn’t necessarily exclude an individual from recovery under the policy.

“Instead, the material issue here is whether the pre-existing condition, and the medication taken to treat it, in fact contributed to Viera’s death,” Robreno wrote. “This issue, which was litigated extensively–including testimony from two medical experts – was complex, warranting a full trial on the merits. Given the disputed issues of fact, there does not appear to have been any showing of bad faith by Defendant.