Legal Question in Insurance Law in California

My 55 year old wife, paid an Insurance Co. $34.90 per month for disability insurance. She began paying premiums in June 1991 and began collecting disability of $1000.00 per month in 2001 for multiple nerve related issues. These payments continued for 5 years (until 2006), at which time the payments ceased. She states that she should be paid disability until age 65 because she purchased a rider (ARDI) that provided disability payments of $1000.00 per month beyond the initial 5 year term.

She questioned the local agent and an inquiry at the insurance company was started. They responded by saying that my wife didn't accept ARDI at the start of the policy back in 1991. Her only copy of the Policy did indicate that she had purchased the ARDI. But, the paperwork accompanying the Policy included an unsigned form. This unsigned form does not indicate the election of the ARDI,and other than that, it is blank. The insurance company is using that form to support their position that my wife did not elect ARDI.

My wife says that at her initial meeting with the Life Insurance agent, she elected the ARDI rider, she never changed her mind. The premium of $34.90 was presented at that time as to include the rider as well as the initial 5 year period and it never changed. She believes that the incomplete form was related to a follow-up meeting with the Life Insurance agent at which time he asked her questions regarding the actual number of hours she worked so as to justify the purchase of a full disabilty policy. She remembers the conversation well and that it was regarding her new accounting/bookkeeping business and had nothing to do with changing the policy she had just purchased.

Now, she finds herself scheduled to go to Federal Court, going up against a very big law firm. She went to a local attorney who after hearing her story said, "you should sue them." So, this attorney takes her case and files on her behalf. Unfortunately, the attorney was U.S. Army Reserve and is now in Iraq. His partner took over the case and after reviewing the case file tells my wife that he "believes the case is on resusitation" and that he doen't think Linda can now afford to pursue the case. Linda did her best to convince this new attorney that he could handle the suits from the big city (she thinks he is intimidated by the fact that they are paid 10's of thousands of dollars and all he has is her $2500 retainer fee plus $50.00 a month payments. I am not sure why he hesitated.

So, that's the story from my perspective as the husband. Here are my questions:

1. If my wife loses this case, is she responsible for court costs on both sides?

2. Just how much can this attorney charge my wife for continuing this case?

Finally, what should we be aware of going forward and how can she protect herself from an attorney who is as shaky as Barney from Mayberry RFD?

Thank you,

John

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