Bennett v. Ohio Nat'l Life Assurance Corp.
| Citation | 92 Cal.App.5th 723,309 Cal.Rptr.3d 780 |
| Docket Number | A166049 |
| Decision Date | 20 June 2023 |
| Parties | Mark BENNETT, Plaintiff and Appellant, v. OHIO NATIONAL LIFE ASSURANCE CORPORATION, Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Pillsbury & Coleman, Terrence Joseph Coleman and Ryan H. Opgenorth, San Francisco, for Plaintiff and Appellant.
Kantor & Kantor, Glenn R. Kantor and Peter S. Sessions, Northridge, for United Policyholders, as Amicus Curiae on behalf of Plaintiff and Appellant.
Maynard Nexsen LLP, Misty Ann Murray and Ophir Johna, Los Angeles, for Defendant and Respondent.
This appeal arises out of plaintiff Mark Bennett's action against respondent Ohio National Life Assurance Corporation (Ohio National). Under Bennett's disability insurance policies, monthly benefits were payable for life if he was totally disabled due to injury; if due to sickness, benefits would only be paid until the age of 65. Ohio National initially approved Bennett's January 2014 claim that he was totally disabled due to an injury sustained when thrown from his horse. But on June 8, 2015, Ohio National notified him of its determination that his disability was due to a sickness, not an injury. Ohio National continued to pay disability benefits until September 3, 2018, the policy year Bennett turned 65 years old.
On August 13, 2019, Bennett sued for breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court granted summary judgment to Ohio National after concluding the claims were barred by the statutes of limitation — four years for breach of contract and two years for breach of the implied covenant of good faith and fair dealing. Both causes of action, the court concluded, accrued when Ohio National issued an unconditional denial of liability on June 8, 2015, not when benefits ceased on September 3, 2018.
On appeal, Bennett argues the trial court erred because his causes of action did not accrue until all elements — including actual damages — were complete. Bennett contends he suffered no harm as of June 8, 2015, because Ohio National continued to pay disability benefits. Only on September 3, 2018 — when Ohio National began withholding benefits, and Bennett thereby incurred damages — did his causes of action accrue. We agree and reverse.
Bennett, an oral and maxillofacial surgeon, purchased three disability income insurance policies from Ohio National in 1984, 1991, and 1995. The policies provided coverage if he became totally disabled or had a total disability — the inability "to do the substantial and material tasks" of his job due to injury or sickness. Injury is defined as an "[a]ccidental injury sustained while this policy is in force," and sickness is defined as a "[s]ickness diagnosed or treated while this policy is in force." Income, defined as the monthly benefit amount to be paid under the contract, "is paid at the end of each month of Disability for which it is due."
The policies each articulated a maximum benefit period, the "longest period of time that Income will be paid for one Disability or for a combined period of Residual and Total Disability from the same or related cause." Bennett would receive lifetime benefit payments if the total disability either "(a) starts before Age 55 due to Sickness; or (b) starts before Age 65 due to Injury." Total disability due to sickness starting on or after age 55, however, would result in payments ending at age 65.
In 2006, when Bennett was 53 years old, he was thrown from a horse. He sustained injuries to his left shoulder and collarbone. He underwent surgery to repair a tear in his shoulder but had ongoing numbness and tingling in his left hand. Initially, he was able to continue working by changing certain operating techniques and using different tools. Despite accommodations, medication, and physical therapy, he later developed pain in his left hand. By 2012, he had chronic pain and later reduced the number of surgeries he performed and decreased his patient load. He stopped working entirely in 2014.
Bennett filed a claim with Ohio National reporting he was totally disabled; that is, he was unable to work as an oral surgeon because of a physical condition he developed from his 2006 accident. In a letter dated April 2014, Ohio National approved the claim for total disability, effective January 2, 2014, and provided him benefits beginning on that date. The letter noted Ohio National would continue to evaluate the cause of the claimed disabling condition to determine whether it was due to sickness or injury.
On June 8, 2015, Ohio National sent Bennett another letter. This one stated it had determined his condition was due to sickness — a degenerative disc disease
, causing compression of nerve roots and thus tingling and numbness in the left hand — rather than injury. Because his total disability started after the age of 55, Bennett's benefit would not be paid for life, but would instead terminate on the first day of the policy year upon reaching age 65 — September 3, 2018.
On several occasions between June 2015 and September 2018, Ohio National requested Bennett complete a "Continuance of Disability Statement," documenting his current work status, and provide a physician's progress statement certifying his restrictions, limitations, and treatments. Bennett complied with the requests and received monthly benefits until September 2018. Bennett also asked Ohio National to reconsider its decision, disputing its conclusion that his disability was due to sickness. In April 2019, after reviewing previously available information as well as new information submitted by Bennett, Ohio National informed him its determination remained unchanged.
In August 2019, Bennett sued for breach of contract and breach of the implied covenant of good faith and fair dealing. Ohio National moved for summary judgment arguing the statutes of limitation barred the claims. In opposition, Bennett argued the time to sue did not begin to run until September 3, 2018, when he suffered actual damages in the form of losing replacement income and assets essential to his health and welfare.
The trial court granted summary judgment. Relying on Neff v. New York Life Insurance Co. (1947) 30 Cal.2d 165, 180 P.2d 900 ( Neff ), the court explained a "suit may be commenced upon an insured's claim after the insurance company's unconditional denial of liability thereon, when all facts essential to the statement of a cause of action are within the knowledge of the aggrieved party." ( Id . at p. 175, 180 P.2d 900.) The court also noted an unreported federal decision, Flynn v. Paul Revere Ins. Group (9th Cir. 2001) 2 Fed.Appx. 885 ( Flynn ), in which the court determined the plaintiff's causes of action related to lifetime disability benefits accrued when the insurance company denied the right to benefits, not when the insurance company stopped making monthly payments. ( Id . at p. 886.) Because there was nothing ambiguous or tentative in Ohio National's June 2015 letter indicating it had determined Bennett's total disability was due to sickness nor any indication it was reserving final judgment, the court determined Bennett's claims accrued in June 2015 and were time-barred.
The parties dispute the date the claims accrued. A breach of contract claim is subject to a four-year statute of limitations. ( Code Civ. Proc. § 337, subd. (a), undesignated statutory references are to this code.) A claim for the breach of the implied covenant of good faith and fair dealing is subject to a two-year statute of limitations. (§ 339(1).) Ohio National contends the claims accrued on June 8, 2015 — the date it denied his disability was due to injury. Bennett contends his claims accrued on September 3, 2018 — the date Ohio National stopped paying benefits. Who is correct resolves whether the August 13, 2019 complaint was filed too late. Bennett has the better argument.
Summary judgment is proper when there is "no triable issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." (§ 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, 107 Cal.Rptr.2d 841, 24 P.3d 493.) A defendant may demonstrate the plaintiff's cause of action has no merit by showing one or more elements cannot be established or there is a complete defense to the cause of action. (§ 437c, subd. (p)(2); Aguilar , at p. 849, 107 Cal.Rptr.2d 841, 24 P.3d 493.) For example, a defendant moving for summary judgment based on statute of limitation grounds must demonstrate the limitation period has expired. ( County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 316, 40 Cal.Rptr.3d 313.) Summary judgment is proper where the undisputed material facts demonstrate a claim is time-barred. ( Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1142, 271 Cal.Rptr. 246 ( Love ).) We independently review a trial court's order granting summary judgment. ( County of Santa Clara , at p. 316, 40 Cal.Rptr.3d 313.)
The statutes of limitation "dictate the time period within which a cause of action may be commenced." ( Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604, 129 Cal.Rptr.3d 525 ; § 312.) But the statutes of limitation "do not begin to run until a cause of action accrues."
( Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806, 27 Cal.Rptr.3d 661, 110 P.3d 914.) Generally, a cause of action accrues when it is "complete with all of its elements." ( Ibid . ) Where damages are an element of a cause of action, the claim " ‘does not accrue until the damages have been sustained.’ " ( Thomson , at p. 604, 129 Cal.Rptr.3d 525.) Both breach of contract and breach of the implied covenant of good faith and fair dealing, i.e., bad faith, include a damages element. ( CDF Firefighters v. Maldonado (2008) 158 Cal.App.4th 1226, 1239, 70 Cal.Rptr.3d 667 [...
To continue reading
Request your trial