Bates v. Bankers Life and Casualty Co.

The benefits to which an insured is entitled under an insurance policy do not constitute “money or property” within the meaning of Oregon’s financial elder abuse statute, ORS 124.110(1)(b).

Plaintiffs’ case came before the Court upon the Court’s acceptance of a certification order by the Ninth Circuit Court of Appeals for the question “does a plaintiff state a claim under Oregon’s elder financial abuse statute (ORS 124.110(1)(b)) for wrongful withholding of money or property where it is alleged that an insurance company has in bad faith delayed the processing of claims and refused to pay benefits owed under an insurance contract?” Plaintiffs are elderly persons who purchased long-term care insurance from defendant Insurance Company.  On certification review, Plaintiffs argued that the benefits to which they were contractually entitled under their insurance policies was “money or property” that belonged to them, and therefore, the Insurance Company’s failure to payout the benefits in a timely manner constituted financial elder abuse under ORS 124.110(1)(b).  The Insurance Company responded that it did not engage in financial elder abuse because insurance policy benefits were not the plaintiffs’ “money or property,” therefore, no wrongful withholding occurred.  To state a claim for financial elder abuse under ORS 124.110(1)(b), a plaintiff must first establish that the defendant held money or property from the plaintiff that the defendant acquired from the plaintiff.  After assessing the contractual workings of insurance policies and the plain language and legislative intent underlying ORS 124.110(1)(b), the Court concluded the benefits to which an insured is entitled under an insurance policy are contractual benefits that are factually and legally different from the insured’s money paid for insurance premiums, and therefore do not constitute “money or property” within the meaning of ORS 124.110(1)(b). Because the Insurance Company did not hold plaintiffs’ premium payments from them, but rather failed to payout insurance benefits in a timely manner, the Supreme Court held plaintiffs did not establish the first element of a claim for financial elder financial abuse, causing the claim to fail.  Thus, the Court ultimately concluded that a plaintiff does not state a financial elder abuse claim for wrongful withholding of money or property where it is alleged that an insurance company has in bad faith delayed the processing of claims and refused to pay benefits owed under an insurance contract.  Certified question is answered in the negative.