Insurance — Disability – RICO Claim – Civil Practice – Statute of Limitations – Standing

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Williams v. National Union Fire Insurance Co. of Pittsburgh, PA (Lawyers Weekly No. 002-071-15, 15 pp.) (Bruce Howe Hendricks, J.) 6:14-cv-00870; D.S.C.

Holding: A 2004 letter – informing plaintiff that the holder of his disability insurance policy was “AIG Group Insurance Trust, for the Account of Health Extras” – was insufficient to put plaintiff on notice of the scheme he now alleges: that defendants sold consumers illusory disability insurance and skirted state insurance regulations by creating a sham “group.”

Defendants’ motion to dismiss is denied.

The court also rejects defendants’ argument that plaintiff lacks standing because he never filed an insurance claim. The harm alleged by plaintiff is not simply that the policies are unenforceable. Assuming that they are enforceable, they are still essentially worthless because they are, by their terms, so restrictive that virtually no one will ever suffer an injury covered by the policy.

The allegation is not simply that defendants convinced plaintiff and others to make a bad deal, but that they also fraudulently circumvented a provision of state law intended to protect consumers like plaintiff. At this stage, the court is uncomfortable concluding as a matter of law that plaintiff suffered no harm.