Paulino v. Chartis Claims, Inc., No. 13-3732 (8th Cir. 2014)
Annotate this CasePaulino suffered a spinal-cord injury in a work-related accident that left him permanently paraplegic. Employer's workers’ compensation insurer was Chartis. After medical treatment and intensive rehabilitation, Paulino moved to CCS for post-acute rehabilitation. When Paulino was capable of basic self-care, CCS set a discharge date of April 30. Paulino had workers’ compensation income of less than $400 per week and was ineligible for other assistance as an undocumented Mexican national. He required wheelchair-accessible housing, an electric hospital bed, and access to public transportation. His case manager was unable to locate suitable, affordable housing acceptable to Paulino. CCS refused to discharge Paulino to a residence not adequately adapted to Paulino’s needs. Chartis continued to pay medical bills and was prepared to pay for modifications to a permanent home, but notified Paulino that it would not pay his CCS living expenses (rent, utilities, groceries, cable television) after April 30. On May 6, Chartis withdrew those payments. Paulino continued to reside at CCS. A court affirmed the Iowa Workers’ Compensation Commissioner's conclusion (Ia Code 85.27) that special circumstances case made Paulino's continued stay at CCS appropriate and compensable. Paulino sued, alleging bad-faith denial of benefits as of May 6, seeking consequential and punitive damages. The Eighth Circuit affirmed the district court’s grant of summary judgment for Chartis.
Court Description: Civil case - Insurance. In action alleging bad-faith denial of benefits, the text of the statute in question and the relevant case law rendered the claim fairly debatable and accordingly there was a reasonable basis for the insurer's decision to deny plaintiff's claim.
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