Hall v. Continental Casualty Company

Valerie K. Hall (plaintiff) had a long-term disability insurance policy with Continental Casualty Company (Continental) (defendant). The insurance policy had an exclusion provision that determined that preexisting conditions were not covered by the insurance policy. Under the insurance policy, a preexisting condition was defined as a condition for which medical treatment or advice was rendered, prescribed, or recommended within three months prior to the effective date of the insurance policy. Before the effective date of the insurance policy, Hall, a longtime smoker, went to the emergency room for nonspecific complaints of chest pain, shortness of breath, and left-arm numbness. Hall was initially diagnosed with pneumonia, tachycardia, and asthma. Chest x-rays showed a spot on Hall’s lung. At that time, the doctors suspected lung cancer due to Hall’s smoking history, but the spot could have also resulted from pneumonia. Further testing was ordered to determine the cause of the lung spot. Hall was later diagnosed with lung cancer after the insurance policy became effective. Hall submitted a claim for long-term disability benefits under the insurance policy. Continental denied Hall’s claim on the grounds that Hall’s lung cancer constituted a preexisting condition that was excluded from coverage. Hall sued Continental, alleging that Continental breached the contract and denied the claim in bad faith. Continental moved for summary judgment, seeking dismissal of the breach of contract and bad-faith denial claims.