No Bad faith for failure to provide benefits not provided for under the policy
In Mansur v. PFL Life Insurance Co., the issue was whether PFL was properly granted summary judgment on Mansur’s claims of breach of contract and bad faith. PFL issued Mansur a long term care policy which was to pay $80 a day while Mansur was in a nursing home. If the parties agreed on an Alternate Plan of Care (APC) then it could provide benefits while the insured was at home. This appeal concerns the meaning of the Policy’s APC provision. Mansur claims that because PFL agreed that the home care provided was appropriate, the requirements for APC coverage were satisfied and PFL should have paid $80 per day for Mansur’s home care after she left the nursing home. Mansur also claims that PFL acted in bad faith (1) by offering to pay under that provision only $32 per day for one period and $48 per day for a later period, (2) by refusing to pay even those amounts when Mansur demanded the full $80, and (3) by refusing to waive payment of Policy premiums while Mansur was receiving home care. The trial court’s grant of summary judgment to PFL was affirmed.
Mansur did not dispute that that benefits under the APC provision were dependent on the parties’ agreement to an alternate plan. Mansur claimed, however that an agreement was reached on the type of care to be given and it was not necessary to agree to the amount of benefit in order for there to be a valid agreement. PFL claimed that the payment level was an essential part of the plan, and failure to agree on that level meant that no agreement was reached. The court agreed with PFL. The examples of APC benefits in the policy included building a ramp or making bathroom modifications. The court reasoned that if PFL agreed to make those modifications, it would not be paying the contractors $80/day. It further found that PFL did not act in bad faith by failing to pay even the amounts it initially offered. There was no duty under the policy to offer any APC benefits because Mansur was not in a nursing home when she sought additional benefits, as required by the policy. An insurer does not act in bad faith by refusing to provide benefits that it has no obligation to provide.
