PARKERSBURG - A Wood County couple allege their insurance company wrongfully denied a claim for benefits based on truthful information they gave to a misleading question.

Deric and Erin Butterfield filed a breach of contract suit in Wood Circuit Court on Dec.. 11 against Erie Insurance Exchange, and its parent company, Erie Family Life Insurance Company. In their complaint, the Butterfields allege, based on instructions given by their agent, Robin Alawat-Strauss, they answered truthfully to a question on the initial application only to have the Erie, Pa..-based company deny a death-benefit claim they submitted in 2008 for their son, Landon.

Alawat-Strauss, her business, Alawat Insurance Agency, LLC, and Kevin Marti, Erie's executive vice president, are named as co-defendants in the suit.

Ambiguous question

According to court records, the Butterfields applied for a $25,000 policy for Landon through the Alawat Insurance Agency in Vienna on Aug. 22, 2007. At the time, Landon was 7 months old.

One of the questions on the application asked "Has any person proposed for insurance consulted or been seen by a physician, psychiatrist or medically licensed practitioner in the last 5 years, or has any such person ever been declined for life insurance or offered a policy with an extra premium?" Deric asked Alawat-Strauss how he should answer since Landon had, since his birth, only undergone routine check-ups, and he, until that time, never applied for insurance.

Alawat-Strauss, the suit alleges, recommended he answer "no" to the question. After remitting a check to Alawat-Strauss for $246, the Butterfield's application was submitted to Erie's corporate office the next day.

At a time not specified in court records, Landon was later diagnosed with spinal muscular atrophy, an inherited, neuromuscular disease that causes progressive muscular degeneration, and weakness that leads to death. The SMA, records show, caused Landon to go into respiratory, and cardiac arrest, and die on Dec. 7, 2007, six weeks shy of his 1st birthday.

Shortly after Landon's death, the Butterfields submitted a death-benefit claim to Erie. However, on Feb. 12, 2008, Marti informed them via letter their claim was denied.

In his letter, Marti stated the reason for the denial was due to Deric answering untruthfully to the question concerning any person seeking coverage who consulted with a physician or was denied coverage in the last five years. Marti informed the Butterfields an Erie investigation discovered they visited Dr. Neil Friedman, a pediatric neurologist on Aug. 16, 2007, who informed them his diagnosis of Landon revealed "developmental delay and hypotonia...slight micrographic, tongue fasciculations, significant hypotonia with diffuse weakness, and reflexia."

Facts, info distorted

In their suit, the Butterfields aver that Landon "had not been diagnosed with spinal muscular atrophy (SMA) at the time the insurance application was completed." Also, they maintain "whether hypotonia, developmental delay, and tongue fasciculations constitute sufficient afore-knowledge to trigger misrepresentations are a matter of fact for a jury to decide."

Any alleged misrepresentation was unintentional, the Butterfields say, since Deric answered the question based on advice provided him by Alawat-Strauss. Furthermore, Erie's investigation was conducted in bad faith not only based on the misrepresented medical facts, but also because Marti, in his denial letter, misspelled Landon as Brandon "on no less than one occasion," and "subsequently joked callously and repeatedly with Plaintiff Mrs. Butterfield regarding this error, suggesting that he often commits similar mistakes."

As a result of the defendants' alleged intentional malfeasance, negligence and bad faith, the Butterfields are seeking $1 million in damages. They are represented by Parkersburg attorney Brenten M. Morehead.

The case is assigned to Judge Jeffrey B. Reed.

Wood Circuit Court, case number 09-C-619

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