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Greenbank v. Great American Assurance Co.

United States District Court, S.D. Indiana, Evansville Division

September 19, 2019




         On December 20, 2018, Plaintiff Julie Greenbank sued Great American Assurance Company (“Great American”) [Dkt. 1-3]. That same day, Ms. Greenbank filed her first Amended Complaint, alleging breach of contract (Count I); bad faith (Count II); theft (Count III); statutory conversion (Count IV); criminal mischief (Count V); statutory, common law, and constructive fraud (Count VI); and common law conversion (Count VII) [Dkt. 10]. Now before the Court is Great American’s Motion for Partial Judgment on the pleadings for Counts III through VII [Dkt. 14]. Great American requests the opportunity to orally argue this motion [Dkt. 21 and Dkt. 25].

         For the reasons detailed below, we DENY Great American’s Motion for Partial Judgment on the Pleadings. We conclude that oral argument is not necessary in resolving the motion; therefore, Great American’s request is DENIED.

         Factual Background

         In September 2017, Ms. Greenbank purchased an American Saddlebred gelding horse, Thomas, for $500,000 [Am. Compl. ¶ 5]. Per representations from Great American that it was a leading provider of equine insurance and that it was staffed with equine experts, Ms. Greenbank executed a mortality insurance policy (the “Policy”) with Great American for Thomas, effective September 28, 2017. [Id. at ¶¶ 7-9, 11]. The Policy’s mortality coverage was for Thomas’s full purchase price of $500,000 [Id. at ¶ 17]. The initial one-year term would have Policy expired on September 29, 2018, but Ms. Greenbank also purchased a guaranteed renewal endorsement, which provided that the Policy would be renewed year-to-year. [Id. at ¶¶ 19-20].

         Thomas began exhibiting signs of a medical problem in February 2018. Chuck Herbert, Thomas’s trainer and veterinary technologist who had over 40 years of horse-training experience, sought an assessment from Dr. Raymond Stone, also an experienced licensed veterinarian with an equine practice [Id. at ¶¶ 21-34]. Within a “reasonable period of time” and within the Policy period and its terms, Ms. Greenbank advised Great American of Thomas’s deteriorating health status, but as a result of Dr. Stone’s and Mr. Herbert’s medical treatment and care, Thomas’s condition initially showed improvement [Id. at ¶¶ 25, 27].

         Thomas’s health declined again in May and June 2018, including a significant weight loss and muscle atrophy [Id. at ¶ 28]. On June 7, 2018, Mr. Herbert advised Ms. Greenbank that he believed Thomas’s deteriorating condition necessitated humane euthanization [Id. at ¶ 29]. The following day, Dr. Stone contacted Great American to inform the company of Thomas’s worsening status and his belief that Thomas should be humanely euthanized [Id. at ¶¶ 29-31]. Great American advised Ms. Greenbank that it would seek a second opinion as to Thomas’s health condition and would therefore take possession of Thomas pursuant to a Policy provision that permitted it to assume control over Thomas’s medical treatment at its expense,[1] and allowing Thomas to be immediately removed from his barn [Id. at ¶ 32].

         Great American contacted Mr. Herbert, informing him that it was taking possession and control of Thomas and demanding that Thomas be relocated to Hagyard Equine Medical Institute (“Hagyard”) in Lexington, Kentucky [Id. at ¶ 33]. Even though Mr. Herbert and Dr. Stone, who were most knowledgeable of Thomas’s health, recommended humane destruction, Great American “began a course of radical, controversial and enduring medical treatment which subjected Thomas to excessive suffering so as to avoid payment of a covered loss under the Policy” [Id. at ¶ 42]. Once transported to Hagyard, Thomas’s health continued to decline. He contracted Staph Aureu, which is indicative of hospital-acquired Methicillin-Resistant Staph Aureus,[2] and received numerous lavages[3] for a chest abscess [Id. at ¶ 43].

         On June 11, 2018, Great American authorized a Hagyard veterinarian to perform a tenectomy, a controversial and show-career ending procedure, on Thomas’s right rear leg without Ms. Greenbank’s consent or authorization [Id. at ¶¶ 46-47]. Dr. Stone called Dr. Nathan Slovis, Great American’s chosen veterinarian at Hagyard, to request alternative treatment options to the tenectomy, but Dr. Slovis never returned Dr. Stone’s call [Id. at ¶¶ 49-50]. Mr. Herbert voiced a similar request, but Great American responded that it would not consider other options and that Ms. Greenbank was obligated to accept such treatment under the Policy [Id. at ¶¶ 51-52]. Hagyard performed the procedure and, consequently, ended Thomas’s career as a show horse and reduced the value of his investment to $0 [Id. at ¶ 55]. Ms. Greenbank asserts that these medical actions were contrary to what she had consented to and what was required under the Policy [Id. at ¶ 54].

         On September 20, 2018, Great American informed Ms. Greenbank that it would not renew the Policy per the guaranteed renewal endorsement, claiming that she had failed to provide immediate notice of Thomas’s health problems [Id. at ¶ 58]. Great American provided a short-term renewal of sixty days, allowing Ms. Greenbank until November 27, 2018 to secure new insurance. [Id. at ¶ 61]. Although it terminated the Policy, Great American continued to assert exclusive oversight, control, possession, and decision-making related to Thomas’ treatment at Hagyard without Ms. Greenbank’s consent [Id. at ¶ 65].

         As of the date of the Operative Complaint, Great American had spent as much as $100,000 on Thomas’s medical treatment “for the sole purpose of avoiding payment of a covered mortality loss under the Policy” [Id. at ¶ 56]. This treatment has consistently occurred without Ms. Greenbank’s consent [Id. at ¶ 57]. Instead, Ms. Greenbank asserts, Great American has approved a course of inhumane and unreasonable treatment for Thomas to continue his life, without regard for Thomas’s medical status or Ms. Greenbank’s investment or authorization, to avoid paying out on the Policy [Id. at ¶ 68]. Ms. Greenbank further asserts that Great American took all of these actions in bad faith and contrary to the Policy, Ms. Greenbank’s interests, and Indiana law [Id. at ¶¶ 79-81].

         From the time of the Policy’s termination date to the filing of Ms. Greenbank’s Amended Complaint on December 20, 2018, Great American has maintained exclusive possession and control of Thomas without Ms. Greenbank’s authorization [Id. at ¶ 79].

         Legal Analysis

         I. ...

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