7th Cir. / Equine Insurance

Failure to Authorize Euthanasia Not Breach of Mortality Coverage

The United States Court of Appeals for the Seventh Circuit, applying Indiana law, affirmed the District Court’s grant of summary judgment in the insurer’s favor, holding that Great American Assurance Company (“Great American”) did not breach the insurance agreement under either mortality coverage or Major Medical Endorsement (“MME”), and did not breach its duty of good faith and fair dealing, due to its failure to authorize euthanasia because there was no breach of contract.

Julie Greenbank, the owner of a competitive show horse, Thomas, alleged that Great American breached its insurance agreement by not authorizing Thomas’s euthanasia after he became severely ill. Greenbank’s insurance policy with Great American included mortality coverage specifying that the insurer would provide coverage only if euthanasia was authorized by a veterinarian and Great American consented to the procedure. Additionally, the policy required Greenbank to provide immediate notice if her horse became injured or ill as a condition precedent for both renewal of the insurance policy and mortality coverage under the MME.

After Thomas became ill with pneumonia and developed a serious tendon injury, multiple veterinarians evaluated his condition and determined that euthanasia could be an option due to the severity of his illness but recommended that his illness and injuries be treated first. After successful treatment and Thomas’s full recovery, the veterinarians declined to authorize euthanasia.

Greenbank alleged that Great American breached its insurance agreement by failing to provide mortality coverage and failing to provide coverage for two medications unrelated to Thomas’s pneumonia. She also alleged that Great American breached its duty of good faith and fair dealing by not consenting to euthanasia, as well as declining to renew her policy after she failed to provide immediate notice of Thomas’s medical condition.

The District Court granted summary judgment in favor of Great American, which the Seventh Circuit affirmed. The Court held that the non-authorization of euthanasia was not a breach of the policy agreement, since the mortality coverage provision did not require Great American to provide its consent for euthanasia if veterinarians did not recommend the procedure. Further, the Court reasoned that the policy’s MME did not extend to medication unrelated to Thomas’s illness and injury, and as such its denial of coverage for certain medications did not constitute a breach of the agreement. Finally, neither action constituted a breach of Great American’s duty of good faith, because there was no breach of the insurance agreement. The Court also briefly addressed claims of conversion, theft, criminal mischief, fraud, and negligence, but concluded all allegations were unsupported by evidence. Greenbank v. Great Am. Assurance Co., No. 21-2622, 2022 WL 3754722 (7th Cir. Aug. 30, 2022).