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Advice for prostate problem dooms insured's claim

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The U.S. Court of Appeals for the Ninth Circuit has ruled that an insured who had received medical advice for a prostate problem several months before the effective date of his cancer insurance policy was not entitled to recover under the policy when he was diagnosed with prostate cancer two months after the policy’s effective date.

The Case

Michael Loza sued American Heritage Life Insurance Company following its denial of benefits under a cancer insurance policy. The district court ruled in favor of American Heritage, and he appealed.

The Circuit Court’s Decision

The circuit court affirmed.

In its decision, it rejected Mr. Loza’s argument that the pre-existing condition exclusion in his cancer insurance policy was ambiguous and should be construed against American Heritage to require some awareness, during the 12 months before the policy’s effective date, that he was being treated for prostate cancer.

The circuit court found that the “plain language” of the exclusion required only that he receive medical advice or treatment for prostate cancer in the year prior to the effective date of the policy. The Ninth Circuit pointed out that Mr. Loza had received medical advice for prostate cancer three months prior to the effective date of the policy when he reported to his doctor that his father had died of prostate cancer, that he exhibited several symptoms consistent with prostate cancer, and that his treating physician had referred him to a urologist. Those symptoms, the circuit court declared, “led to the prostate cancer diagnosis two months after the effective date of the policy.”

The circuit court added that the fact that a high level of prostate specific antigens in the blood could be caused by other prostate conditions was “beside the point.” In this case, it found, Mr. Loza had cancer and he had presented symptoms and had received medical advice in the year before the effective date of the policy.

Accordingly, the circuit court held that the district court correctly had determined that Mr. Loza had failed to come forward with sufficient evidence to establish that the insurance company had acted unreasonably or with the “evil mind” necessary for Mr. Loza to prevail on a bad faith claim or to obtain punitive damages. Similarly, it concluded, summary judgment had been proper on Mr. Loza’s intentional infliction of emotional distress claim because he had failed to establish that the insurance company’s conduct was “extreme” and “outrageous.”

The case is Loza v. American Heritage Life Ins. Co., No. 12–15946 (9th Cir. April 14, 2014). Attorneys involved include: Patrick Yancey Howell, Esquire, Doyle Law Group, Scottsdale, AZ, Melinda Sloma, Jonathan Sullivan, Sloma Law Group, Phoenix, AZ, for Plaintiff–Appellant; Stephen M. Bressler, Esquire, Partner, Alexandra Grace Gormley, Esquire, Lewis and Roca LLP, Phoenix, AZ, for Defendant–Appellee.

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