Kantor & Kantor: Beverly Hills Hotel Health Plan Denies Responsibility and Attempts to Escape Contractual Obligation to Pay for the Medical Care of Policyholder in Persistent Vegetative State

NORTHRIDGE, Calif., Aug. 21, 2013 /PRNewswire/ -- Kantor & Kantor today announced the U.S. Court of Appeals 9^th Circuit decision in the case of Ana Martinez v. The Beverly Hills Hotel and Bungalows Employee Benefit Trust Employee Welfare Plan. Ana Martinez is employed and insured by The Beverly Hills Hotel and Bungalows Employee Benefit Trust Employee Welfare Plan.  Under the Plan, both Ana and her son Steve are eligible for health benefits. However, the Plan has refused to pay for any benefits relating to Steve's persistent vegetative state since January 1, 2008.

In 2005, Steve experienced a seizure at school which resulted in permanent neurological damage. He requires a ventilator, tracheotomy, breathing tube, and gastrostomy tube to stay alive. Following Steve's seizure, Ms. Martinez sued LAUSD for negligence. She was successful and the jury awarded Steve over seven million dollars. Following the verdict, a settlement was reached and a Special Needs Trust was established to provide for Steve's ongoing special needs. A Special Needs Trust is an irrevocable trust that provides for the needs of a disabled person and preserves eligibility for government assistance. Special Needs Trusts are not a type of insurance, and are not designed to pay for medical expenses.

In June 2008, the Beverly Hills Hotel abruptly decided that they would no longer comply with the terms of the Plan. After covering medical expenses for years, The Beverly Hills Hotel decided that they were no longer under obligation to pay for Steve's care, further adding that the Special Needs Trust or the government should be responsible for this expense. Subsequently, rather than the Plan paying, an already underfunded Medi-Cal was left to pay for Steve's care. Medi-Cal paid in excess of one million dollars. Important to note, Federal and State Law explicitly state that Medi-Cal is a "payer of last resort."

"This decision highlights the importance of holding insurers accountable for providing benefits to policyholders. It is unfortunate, but it is often true that insurers need to be ordered by the court to follow their own contractual obligations," said founding partner Lisa Kantor, Esq. "Not only is this a victory for Ana Martinez and her son, but it is also a victory for Medi-Cal and therefore California taxpayers, who are not responsible for paying for medical treatment that Beverly Hills Hotel is responsible for."

Ms. Martinez appealed this decision, and her appeal was denied in July 2008. Kantor & Kantor filed a lawsuit on behalf of Ms. Martinez, and successfully proved that the Plan engaged in numerous procedural irregularities. The Plan's constantly shifting justifications for denying Ms. Martinez's claim was described by the Court as "something of a moving target." On August 19, 2013 the United States Court of Appeals for the Ninth Circuit decided that the California district court abused its discretion when remanding the matter to the Plan Administrator, after ruling that the Plan's reasons for denying benefits were invalid. The Plan Administrator erred in denying benefits. Furthermore, the court stated that they should have ordered the payment of benefits at the time of Martinez's appeal. The court reversed and remanded the decision, with directions to order the payment of benefits.

For more information on Ana Martinez v. The Beverly Hills Hotel and Bungalows Employee Benefit Trust Employee Welfare Plan, follow this link.

About Kantor & Kantor, LLP

Kantor & Kantor is the largest law firm in the country exclusively representing plaintiffs who have been denied insurance benefits from life, health, disability and long-term care policies. The firm has extensive experience with the complex appeals process and federal court litigation of ERISA matters and files more ERISA cases than any other law firm in California. For more information, log on to www.kantorlaw.net, call (800) 446-7529, or follow the firm at www.californiainsurancelawyerblog.com.

SOURCE Kantor & Kantor