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Liberty Mutual gets spanked

If you judged only by their commercials, one would think that Liberty Mutual is an ethical company, practiced at doing "the right thing".  Our experience has been just the opposite, and the recent decision in Blaszcyk v. Liberty Mutual confirms that our experience is not atypical.

     In Blaszcyk, the plaintiff suffered severe brain injury in a 1999 motor vehicle accident.  Under the no fault act, he was entitled to payment of all of his related medical expenses, for life, from his insurer, Liberty Mutual.  (Actually, after the catastrophic claim limit was reached, Liberty Mutual merely "processed" Blaszcyk's medical.)  Liberty Mutual initally disputed whether Plaintiff needed attendant care.  Later it also disputed the number of hours of care needed and the proper rate of payment.  On appeal after a jury verdict against it, Liberty Mutual disputed only the "reasonableness" of its decision to dispute attendant care and the reasonableness of the attorney fees awarded against it.  (These fees are awarded to the injury victim only if the Court determines that the no fault insurer has unreasonably denied benefits.)

       The jury in this case found that attendant care benefits were overdue as of June 6, 2004, which created a rebuttable presumption that Defendant's refusal to pay any benefits as of that date was unreasonable.  In response to Liberty Mutual's shotgun explanation for not paying, the Court held that: 

1.  there was no reasonable basis to argue Plaintiff's medical needs did not arise out of the motor vehicle injuries, as Liberty Mutual alleged.

2.  while Liberty Mutual was not obliged to pay overdue benefits, it also did not pay attendant care that was not "one year old", and there was no reasonable dispute over these benefits.

3.  while Liberty Mutual was not obligated to pay attendant care at the rate the plaintiff's attorney requested, it had no excuse for failing to pay for care at some reasonable rate--which it declined to do.

4.  Liberty Mutual had no reasonable basis for disputing the medical necessity for attendant care, since its "claim specialist" admitted that she did not review the 10 page attendant care evaluation or the copious medical records supporting the attendant care claim.  Instead she solicited the opinion of a Case Manager hired by Liberty Mutual, who recommended payment of attendant care benefits and an Independent Medical Exam.

In short, both the trial court and the appellate panel agreed that Liberty Mutual had no bona fide factual uncertainty concerning the reasonable need for some degree of attendant care services, yet it refused to pay for any.  As a result, it was obligated to pay the family's (six-figure) attorneys fees.  Maybe next time Liberty Mutual will "do the right thing" as it claims in its expensive ad campaign.  We doubt it.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262