A judge from the District of Colorado recently issued an opinion that might leave the door open for long-term care insurers to void policies after the contestability period expires if an insured commits fraud. See Meyer v. Mass. Mut. Life Ins. Co., No. 22-cv-2933, 2024 WL 2106452 (D. Colo. Apr. 26, 2024).
Though MassMutual initially approved Mr. Meyer’s claim in April 2018 after a psychologist determined that he had a severe cognitive impairment, MassMutual uncovered evidence in March 2020 during the benefits recertification process that suggested he was not severely cognitively impaired. MassMutual surveilled Mr. Meyer and recorded Mr. Meyer driving, shopping, carrying groceries, and walking unassisted. MassMutual ultimately terminated Mr. Meyer’s benefits in October 2020. Mr. Meyer then sued MassMutual for breach of contract and bad faith. MassMutual filed a counterclaim for fraud and, as part of the requested remedy, sought to invalidate Mr. Meyer’s policy for fraud in the claim process.
In the opinion, the judge granted MassMutual’s motion for summary judgment on Mr. Meyer’s breach of contract and bad faith claims. The judge relied on a variety of evidence in the record to draw these conclusions. For example, the judge noted that MassMutual was not liable for terminating Mr. Meyer’s benefits because it produced objective video surveillance evidence that showed Mr. Meyer was not severely cognitively impaired given that he could drive and shop independently.
The judge also denied Mr. Meyer’s motion for summary judgment on MassMutual’s counterclaim for fraud. Mr. Meyer specifically asked the judge to hold that MassMutual cannot void his policy even if the jury finds that he committed fraud. Notably, the judge declined to decide the issue until after the jury determines whether Mr. Meyer committed fraud. The opinion is thus significant because it suggests the District of Colorado might ultimately join the jurisdictions that permit insurers to void long-term care insurance policies for fraud after the contestability period expires.
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