Fees Possible for Doctor Who Won Insurance Suit

     (CN) – Lloyd’s of London must pay attorneys’ fees to a cardiologist who won a $6.9 million award after he was denied disability insurance, the 9th Circuit ruled Monday.
     Dr. Zev Lagstein, a nuclear cardiologist in Las Vegas, developed heart disease and neurological issues in 2001. Unable to work, Lagstein filed a disability claim with Lloyd’s of London for $15,000 per month for up to 60 months. The insurer neglected to answer for years, forcing Lagstein back to work against his doctors’ orders, and it eventually denied the claim.
     Lagstein filed a federal complaint, and Lloyd’s successfully moved for arbitration.
     The arbitration proceedings went well for the doctor. He won $6.9 million in damages, some $4 million of which was punitive. Lloyd’s later convinced a federal judge to vacate the award, but lost again on appeal in the 9th Circuit.
     The District Court eventually confirmed the award, but denied Lagstein’s request for interest and attorneys’ fees, finding that federal law rather than Nevada law held sway over the issue. A three-judge appellate panel logged the second reversal in the case Monday.
     “State law governs whether a party is entitled to attorney’s fees in diversity cases such as this one,” according to the 9th Circuit decision written by U.S. District Judge Kevin Duffy, sitting by designation from the Southern District of New York.
     The panel likewise found that Nevada law allows Lagstein to collect post-award, pre-judgment and post-judgment interest.
     Lloyd’s was also unsuccessful on its cross-appeal alleging that it had overpaid in the amount of $372,025.
     “The District Court did not impermissibly overpay Dr. Lagstein when it released the funds from the escrow account and included interest on the contract damages through the date of payment,” Duffy wrote. The arbitration award of August 31, 2006 provided for interest on the contract damages through the date of payment, and the subsequent award of December 14, 2006 did not alter that. Moreover, Lloyd’s actually stipulated to the very method of interest calculation used by the District Court when it released the funds. For Lloyd’s to now challenge that calculation as an impermissible overpayment is disingenuous at best.”

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