The verdict was reached Wednesday afternoon at West Valley Superior Court in Rancho Cucamonga after three court days of deliberations, according to online court records.
"We are delighted that the company and the product and its agent's conduct has been vindicated here," said Andre Cronthall, defense attorney with Sheppard Mullin Richter and Hampton, which represented Mid-West National Life Insurance Co. of Tennessee, a subsidiary of HealthMarkets. "It was a clear and quick decision by the jury."
Norman and Kathleen Carter of Yucaipa claimed Mid-West failed to disclose information, leading to coverage confusion, and only paid for about 25 percent of bills accumulated last year when Kathleen Carter was treated for cancer at Loma Linda University Medical Center.
But, based on the verdict, the couple will not be compensated for the cost of the remaining medical bills, compensation for emotional stress caused or punitive damages that would have fined the company for their alleged behavior.
The plaintiffs never specified a dollar amount in the lawsuit, leaving it up to the jury to decide how much they could have been compensated.
"Unfortunately, the jury sided with the defense in Norman and Kathleen Carter v. Mid-West National Life Insurance Company of Tennessee. In talking with the jurors, they felt the Carters should have known that they were buying junk insurance. We are disappointed by this outcome, but will continue to challenge unfair business practices by health insurers acting in bad faith," said William Shernoff, attorney with Shernoff Bidart Echeverria and Bentley, the Claremont law firm that represented the family.
In March 2004, the Carters purchased a $1 million policy with a high deductible and a low premium from Midwest. Seven years later Kathleen Carter was diagnosed with cancer and was treated at the hospital from Jan. 23 to Feb. 15, 2011.
During that time she racked up more than $174,000 in charges - a discounted insurance price.
In processing the claims, Mid-West identified $134,000 was identified as miscellaneous and denied the remaining costs, which was 77 percent of the bill.
If Norman had selected a different policy, it would have covered them for about 90 percent of that bill, Cronthall said.
The Carters claimed that the policy did not explain or identify the kind of charges that Mid-West considers miscellaneous and in August filed three claims against the company - two fraud claims and a claim that there was a breech of the implied covenant of good faith and fair dealing, officials said.
But the jury disagreed and rejected all of the claims.
Cronthall said one of the jury members who spoke with attorneys following the verdict explained the panel's reasoning.
"She said to us that Dr. Carter was provided with sufficient information in the brochure and the policy holders," Cronthall said. "If he just read through it he could have figured out what was covered and what was was not covered."
The jurors did not believe the Carters were "deceived or defrauded" and said the plaintiffs did not meet their burden of proving the element of fraud, Cronthall added.
The Carters can appeal the verdict.
"It is something we are investigating," said Joe Marchelewski, public relations manager for Shernoff, Bidart, Echeverria and Bentley.
Contact Lori via email, by phone at 909-483-9378, or on Twitter @IEcourtsNow.