Connecticut General Insurance Co. — the lead insurer on the Stros’ disability insurance policy on the best player in the history of the Houston Astros Baseball Club, Jeff Bagwell — has fired the first salvo in the Stros’ lawsuit against the insurer for its failure to pay the Stros’ claim under the policy resulting from Bagwell’s injured right shoulder. Previous posts on the issues relating to the disability insurance policy on Bagwell are here.
In this motion, Connecticut General requests that U.S. District Judge Keith Ellison sever the two extra-contractual claims from the Stros’ contractual claim that the Stros have asserted against the insurer in the lawsuit and abate the extra-contractual claims pending the disposition of the lawsuit over the contractual claim. The insurer points out that Bagwell’s play late last season during the Stros’ playoff drive and in the post-season raises a legitimate question as to whether Bagwell is totally disabled. Accordingly, Connecticut General argues that the Stros’ extra-contractual claims (which are a basis for greater damages against the insurer than breach of contract damages, which are fixed by the insurance policy) likely have no merit and that, even if those claims survive the breach of contract lawsuit, the insurer should not have to defend against those claims until after the dispassionate breach of contract claim is sorted out.
As one would expect, the Stros’ response (download link here) suggests that the circumstances surrounding Connecticut General’s denial of the club’s claim under the Bagwell disability insurance policy indicate a reasonable basis for the extra-contractual claims and, thus, that Judge Ellison should exercise his discretion to have a jury consider all of the claims in one efficient trial. Even if the Stros are successful in opposing Connecticut General’s motion to sever and abate the extra-contractual claims, this is likely not the last that the club will hear on this issue before trial. The insurer will probably request a summary judgment dismissing the entire lawsuit before trial, but almost certainly will request a partial summary judgment attempting to knock out the extra-contractual claims before trial. If Connecticut General is successful on that move, then the insurer would limit its risk of taking the case to trial to the contractual damages, which is a flyer that Connecticut General might just be willing to take.