Louisiana Record

Thursday, October 17, 2019

Disability insurer sued for allegedly wrongfully invalidating customer’s policy

By Gloria Parker | Jun 22, 2015

NEW ORLEANS – A woman is suing her insurance company claiming it wrongfully stopped payment on her disability benefits after she began receiving Social Security disability payments.

Tara Washington filed suit against Prudential Insurance Company of America on April 14 in Orleans Parish Civil District Court.

The plaintiff claims that on May 26, 2010 she suffered a disability and was no longer able to work due to a disabling medical condition. Washington alleges she applied for and began receiving short term monthly disability benefits from the defendant in an amount of less than 60 percent of her salary in the amount of $3,318.64. However, the plaintiff asserts that sometimes the monthly long term benefit amount fluctuated and totaled less than $3,318.64 a month. Washington contends that after receiving long-term benefits she applied for disability benefits at the defendant’s instructions.

On March 15, 2013 the plaintiff was awarded disability benefits to May 26, 2010. She received a lump sum award of $53,572.15. The plaintiff allege that $32,573.00 were benefits due to her disability and the remainder of the award minus the attorney’s fees were in the amount of $20,999.15. The plaintiff claims she informed the defendant that she received the Social Security disability benefits and that the defendant demanded the entire lump sum award alleging that she had been overpaid and would assert a right of offset if the plaintiff failed to tender the lump sum award of benefits.

The defendant is accused of not informing the petitioner about the possible consequences of receiving a lump sum settlement for herself and dependents and how the receipt of the lump sum award and disability benefits would affect her long term monthly benefits, including the possibility of not receiving 60 percent of her salary or not receiving the benefits at all.

The plaintiff claims that after she informed the defendant she would not be able to immediately pay back because she had started using the funds to meet her daily needs The plaintiff contends that the defendant has failed to comply with the terms and conditions of its policy.

An unspecified amount in damages is sought for mental anguish, inconvenience, financial hardship, and for all general and equitable relief as this court and law allows.

The plaintiff is represented by attorney Hollis Shepherd of New Orleans.

The case has been assigned to Division F Judge Christopher J. Bruno.

Case no. 2015-3477.

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