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Valparaiso Univ. Law School

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Friday, August 11, 2006

I'm Not Dead Yet . . . .

A trial judge has set a May 2007 trial date for a potentially interesting breach of contract action between the Houston Astros and Connecticut General Life Insurance, which provided a disability policy for star first baseman Jeff Bagwell, who has $17 million in guaranteed compensation still due under his contract with the Astros.  Under the policy, if Bagwell (who last year was the 7th highest-paid player in baseball) is just kind of hurt and can't play well, the Astros have to eat the money.  If he becomes totally disabled, the insurer picks up about $15.6 million of the tab.

Back in January rumors were circulating that the Astros were said to be pressuring Bagwell to declare himself totally disabled.  In 2003 he played in 160 games and was in the top ten in home runs, but he tailed off in 2004, and in 2005 injuries limited him to 24 games.  He showed up for spring training this year and played several games, but hit only .219 when the Astros decided to make the insurance claim.  Connecticut General turned down the claim, apparently believing that Bagwell was capable of playing, even if he was no longer an all-star.

An interesting look at how this kind of insurance works is here.

[Frank Snyder]

http://lawprofessors.typepad.com/contractsprof_blog/2006/08/im_not_dead_yet.html

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