A worker who waited over two years for shoulder surgery and three months for an indemnity check may proceed with breach of good faith claims against his insurer and their adjuster, said an Arizona district court.

In the case “Gastelo v. Wesco Insurance Co.”, the U.S. District Court for the District of Arizona denied the insurer’s motion to dismiss his claims for breach of duty of good faith and fair dealing.

Raymond Gastelo sustained serious injuries when he fell from a ladder 22 feet high on a worksite. He was treated for injuries to his head, back, left side and left leg. His employer carried a workers’ compensation policy from Wesco Insurance Co., and AmTrust North America Inc. served as the administrator on the claim, appointing Pam Greer as the adjuster.

Two months after his surgery, he reported suffering left shoulder pain while he recovered from the fall in the hospital and believes was related to his workplace accident. He sent several emails to the adjuster with no response. He was ultimately diagnosed with a left rotator cuff tear and was denied compensation. After sending multiple emails and filing a complaint with the Industrial Commission of Arizona he underwent surgery. This was more than two years after the initial accident.

After his surgery he was placed on work restriction that entitled him to indemnity, but didn’t receive payment for more than three months, during which time he and his attorney reached out several times and filed another complaint with the commission.

He filed a complaint alleging that Wesco and AmTrust wrongfully denied or unreasonably delayed his workers’ comp benefits and breached their duty of good faith and fair dealing. The insurers and Ms. Greer moved for dismissal, but the court denied the motion.

The court noted that Mr. Gastelo had to wait 95 days before receiving benefits, and that the insurer failed to “immediately conduct an adequate investigation” into his delays in treatment and payment. The court also found that a reasonable jury could identify the insurers “nonactionable negligence as the source of the claims processing misunderstandings and delays”.

The court also denied Ms. Greer’s motion for dismissal, holding that “her actions and inaction” provided “substantial assistance or encouragement for Wesco’s alleged breach” and that as the third-party adjuster, she took a step that furthered Wesco’s failure to pay.

Finally, the court held that Mr. Gastelo could pursue punitive damages in the case.

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