The Hawaii Intermediate Court of Appeals overruled the trial court's award of summary judgment to Hawaii Medical Service Association ("HMSA") on bad faith and emotional distress claims, and remanded the case for further proceedings. Adams v. Hawaii Medical Serv. Ass'n., No. 30314, Summary Disposition Order (Haw. Ct. App. Sept. 30, 2013) [here].
The ICA noted that under Enoka v. AIG Hawaii Ins. Co., Inc., 109 Hawaii 537, 128 P.3d 850 (2006), the Supreme Court found there was no bad faith for the insurer's failure to investigate where the insured could not establish coverage. But a bad faith claim could arise from the insurer's bad faith mishandling of a claim, including unreasonable delay in deciding whether a claim was covered.
The insureds alleged that HMSA had delayed in denying their request for an "auto-allo tandem transplant" procedure. In response to HMSA's motion for summary judgment, the insureds presented a declaration depicting the insureds' numerous conversations with HMSA without adequate response being given and suddenly being notified that HMSA was denying the procedure. HMSA presented no evidence to the trial court that the insureds' request for the procedure was handled in a timely manner. Accordingly, the ICA could not say that, as a matter of law, the time HMSA it took to issue its denial was reasonable.
Further, the ICA could not say that, as a matter of law, the insureds did not present a prima facie case for the negligent and intentional emotional distress claims in opposition to HMSA's motion for summary judgment.
Therefore, these portions of the judgment in favor of HMSA were vacated and remanded to the trial court.
