INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Can’t award damages that haven’t been determined
Malcolm Wiener (Wiener) faced an insurability problem due to a company’s error after his life insurance coverage lapsed. Via several policies, he was covered for a limit of $16 million. Unfortunately, after years of continuous coverage provided by AXA Equitable Life Insurance Company (AXA), he failed to pay his premiums on time. The trouble began with his effort to resume coverage.
Wiener permitted AXA to access and review his medical records at the time he requested the insurer to reinstate his life insurance. An AXA underwriter rejected his application after making determination that Wiener’s medical history included four serious conditions. That information was incorrect. However, the same underwriter then created a bigger issue by entering diagnosis codes for the nonexistent conditions to the Medical Information Bureau (MIB).
Wiener again asked his insurance agent to seek replacement coverage (again for $16 million). His agent was unsuccessful. His application was rejected by every insurer it was sent to except for two. However, those offers were for only $10 million and at rates far higher than what he paid for his old coverage.
Specifically, he would have to pay an additional $400,000 annually for much lower benefits. The problem was that every insurer considering Wiener had access to the MIB records that included the errant medical history.
Wiener’s response was to sue AXA alleging that, due to AXA’s negligence, he became uninsurable. Wiener asked for $16 million in damages. He won in the initial trial with the jury awarding damages of $16 million but then reducing them to $8 million. However, the jury did not provide any rationale in determining either amount.
AXA immediately filed a post-trial motion asking for dismissal of the damages. It argued that the jury did not have enough evidence to find AXA guilty of negligence or in calculating the award.
In response to AXA’s request, the district court ruled to dismiss the case, stating that it did not have jurisdiction to continue. Upon Wiener’s appeal of the dismissal, the appellate court reversed the jurisdiction decision, found that the jury was justified in finding AXA negligent, and remanded the matter.
Upon remand, the lower court addressed the matter of damages. It found that evidence did not exist that could justify establishing damages. The court ruled for nominal damages in the amount of a single dollar. Wiener appealed.
Again, the higher court examined the issues presented by AXA and Wiener. While it agreed with the jury determining that AXA’s action resulted in Wiener’s insurability, it turned its attention to damages. The court explained that rules regarding damages were left up to individual states to establish.
Given that, the court applied the rules of the applicable state (North Carolina). In North Carolina, damages must be capable of being determined with reasonable certainty. The higher court reasoned that, in this case, damages would require a minimum of two data points to do so. One would be the added annual premium costs borne by Wiener to secure $16 million worth of life insurance. The second would be Wiener’s expected remaining life expectancy from 2014 (the year AXA rendered him uninsurable).
While the court found that the use of available premium information could allow reasonable calculation of added premium costs by the jury, the second data point was elusive. In its opinion, the jury did not have the expertise nor the access to sufficient information about Wiener to reasonably determine a figure for his remaining years.
In light of this, the court reasoned that the only appropriate action was that which was taken by the lower court, awarding the nominal damage of $1. The lower court award decision was affirmed.
Malcom Wiener v. AXA Equitable Life Ins. Co.—United States Court of Appeals for the 4th Circuit—No. 24-1316—September 3, 2025.
