Lady Justice
NEW ORLEANS – A New Orleans law firm is suing its life insurance company, claiming the insurer failed to send timely premium notices and is now requesting the firm’s employees submit to medical testing before reinstating their policies.
Carver Darden Koretzky Tessier Finn Blossman & Areaux LLC filed its eight-page complaint August 19 in the U.S. District Court for the Eastern District of Louisiana.
The named defendants are Brighthouse Financial Inc. and Brighthouse Life Insurance Company. Both are located in Delaware, according to the filing.
Carver Darden, which has offices in Louisiana and Florida, takes issue with the Brighthouse defendants’ “improper cancellation” of the insurance policies issued to the firm. The law firm contends it “timely paid” all premiums.
“Defendants’ cancellation was wrongful and constitutes a material breach of the insurance contracts,” its attorneys wrote in the complaint.
“As a direct and proximate result of defendants’ breach, plaintiff has suffered damages, including the loss of coverage, out-of-pocket expenses, and other consequential damages.”
Carver Darden purchased its Key Man Life Insurance Policies from First MetLife Investors Insurance Company in 2012. Since 2012, Brighthouse has established a practice of notifying the firm when premiums came due, and Carver Darden claims it always made timely payments based on the notices.
A premium payment of $17,860.01 came due on Nov. 1, 2024. Unlike Brighthouse’s previous practices, Carver Darden claims the insurer did not notify it of the premium due date.
“The first notice Carver Darden received that any premium payment was due was Notice of Overdue Payment for each policy, dated December 2, 2024, but not received by Carver Darden until on or after December 26, 2024, which notice stated that if the premium payment was not received by January 2, 2025 the policy would lapse,” the complaint states, adding that each of the notices instructed it to “please pay by January 2, 2025.”
The firm claims it received another letter, dated Dec. 17, 2024 but not received until Dec. 30, 2024, stating that premium payments were due.
Carver Darden remitted the premium payments via check to the address in the letter on Dec. 30, 2024. Brighthouse deposited the check into its Wells Fargo account, according to the filing.
“Despite the Brighthouse defendants accepting Carver Darden’s premium payment, Carver Darden has since received notice from the Brighthouse defendants that the Key Man Insurance Policies have lapsed and can only be reinstated via application with medical testing,” the complaint states.
The firm contends that because Brighthouse will not issue invoices for the 2025 payments, it is unable to make its usual quarterly payments to the insurer.
In its filing, Carver Darden claims each of the insurance policies provides for a grace period of 31 days in which to pay each premium after the first, without interest after its due date, and that the insurance will be in force during the grace period.
Brighthouse’s Dec. 2, 2024 letter stated that Carver Darden had through Jan. 2, 2025 to pay the outstanding premiums.
“Because Carver Darden paid the outstanding premium of each policy on December 30, 2024, Carver Darden paid within the grace period provided for by the Key Man Insurance Policies,” the complaint states.
Each of the policies also provides for reinstatement, the firm argues. Meaning, even if Carver Darden is found not to have paid during the grace period, its policies should be reinstated according to the policies’ language.
The firm alleges the insurer breached its contract, acted in bad faith, acted negligently, and engaged in unfair trade practices.
“Defendants owed plaintiff a duty of good faith and fair dealing in handling plaintiff’s policies and benefits,” the complaint states. “Defendants breached this duty by arbitrarily, capriciously, and without probable cause cancelling plaintiff’s policies despite timely receipt of premiums.”
Carver Darden seeks to be “fully compensated” for all damages caused by Brighthouse, including attorneys’ fees.
Its attorneys, Russell L. Foster and Emily Lippold Gummer, are representing the firm in the action.
