Berkshire Life Ins. Co. of Am. v. Dorsky
| Decision Date | 31 March 2016 |
| Docket Number | CASE NO. 1:13CV2266 |
| Parties | Berkshire Life Insurance Company of America, Plaintiff and Counterclaim Defendant v. John D. Dorsky, M.D., Defendant and Counterclaimant |
| Court | U.S. District Court — Northern District of Ohio |
Craig M. Bargher, Donald A. Murday, Elizabeth G. Doolin, Chittenden, Murday & Novotony, Chicago, IL, for Plaintiff and Counterclaim Defendant.
Patrick O'Keefe Peters, Jackson Lewis, Richard E. Hepp, Benesch, Friedlander, Coplan & Aronoff, Cleveland, OH, for Defendant and Counterclaimant.
This matter is before the Court on Plaintiff and Counterclaim Defendant Berkshire Life Insurance Company of America's (“Berkshire Life”) Motion for Summary Judgment (ECF DKT 38). For the following reasons, Berkshire Life's Motion is granted in part and denied in part. The Motion is granted as to the Breach of the Covenant of Good Faith and Fair Dealing counterclaim. The Motion is denied as to Berkshire Life's claims for Rescission of Policy No. Z2228950 in accordance with Ohio Revised Code (“O.R.C.”) § 3923.14 and Declaratory Judgment declaring the policy and void, as well as the Breach of Contract counterclaim.
Also before the Court is Defendant and Counter-Claimant Dr. John D. Dorsky's (“Dorsky”) Motion for Summary Judgment. (ECF DKT 46). Dorsky's Motion is denied on all claims.
Berkshire Life issued a disability income insurance policy, Policy No. Z2228950 (the “Policy”), to Dorsky in Ohio with a Policy Date of October 15, 2011 and an Expiration Date of October 15, 2022. (Compl. ¶ 6). The Policy included a Monthly Indemnity of $1,000, several riders and an annual premium of $3,730.89 to be paid quarterly. (Compl. ¶ 6; ECF DKT 1, 4). The Policy was issued pursuant to an Individual Disability Income Insurance Application (the “Application”). (Compl. ¶ 6). In the Application, signed by Dorsky on September 28, 2011, Dorsky answered “yes” to Question 6(b):
Have you been continuously at work full time (at least 30 hours per week) performing the duties of your occupation for the past 90 days without limitation due to injury or sickness? (Disregard vacation days, normal non-working days, and any absences that total less than seven days.) .
Berkshire Life alleges that the answer Dorsky provided to Question 6(b) was false. (Compl. ¶ 12). Berkshire Life also alleges that Question 6(b) is an important question because Berkshire Life's guidelines require that an underwriter review any response to Question 6(b) other than “yes” when determining whether to approve an application. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 3). Berkshire Life alleges that it issued the Policy in response to Dorsky's “yes” answer to Question 6(b). (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 3).
Dorsky was the Chief of the Division of General Surgery at Cleveland Clinic from 2004 to approximately July 2012. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 3). As Chief of General Surgery, Dorsky performed the duties of a general surgeon, including evaluating patients who potentially had surgical problems and performing surgeries such as gall bladder removals, hernia repairs, gastric surgery and breast surgery. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 3-4; Def.'s Mot. Summ. J. 3). Dorsky also performed numerous administrative duties such as evaluating surgeons, investigating staff complaints, evaluating equipment for use in the operating room, acting as site director for the hospital's residency program, drafting the on-call schedule for the emergency room and overseeing Morbidity and Mortality Reviews (“M & M Review”). (Def.'s Mot. Summ. J. 3-4). Dorsky did not list these administrative duties on the statement for disability benefits to Berkshire Life. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 3).
In the 90 days prior to signing the Application, Dorsky performed less surgeries than in prior months due to pain in his shoulder. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 4). Specifically, Dorsky testified that during the month of August 2011 he made a “self-imposed decision” to complete less elective cases in order to give his shoulder time to recover. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 7; Def.'s Mot. Summ. J. 4). Throughout the months of August and September 2011, Dorsky saw many physicians and alternative health professionals regarding his shoulder, including: orthopedic surgeon Dr. Peter Evans; primary care physician Dr. Baljit Bal; anesthesiologist and pain management specialist Dr. Teresa Dews; licensed acupuncturist Edward Dea RA; neurosurgeon Dr. Teresa Ruch and spine surgeon Dr. Thomas Mroz. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 4-6).
Dorsky discussed his intense shoulder pain with these health professionals and how it affected his work. Dorsky testified that he was trying “to limit heavy activities that put a strain on his arm” and testified that he told Dr. Evans on August 8, 2011, he “was going to try and back off from his workload.” (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 4). Dorsky informed Dr. Bal that it was difficult to perform his job because it “caused pain.” (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 5). Dorsky visited Dr. Dews on three occasions during August and September 2011 to receive steroid injections in his shoulder for pain. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 6). On those three occasions, Dorsky received sedation and on two of the occasions he could not return to work. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 6). Dorsky reported to Dr. Dea that he was not working a full schedule and that work was difficult due to his shoulder pain. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 6). On September 12, 2011, Dorsky told Dr. Ruch that he had recently received a C5 nerve block to relieve the pain, but prior to receiving the block he was unable to work. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 7). Finally, Dorsky testified that he told Dr. Mroz that the pain was exacerbated by his work, particularly on long operating days. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 7). Of these physicians, only Dr. Ruch testified that she knew whether Dorsky had been working full time without limitation due to injury or sickness, and she testified that he was working full time without limitation due to his shoulder pain. (Def.'s Mot. Summ. J. 10).
Although Dorsky sought pain management for his shoulder during August and September 2011, he testified that “unquestionably, yes, [he] could have performed any surgery [he] needed to perform in August of 2011.” (Def.'s Mot. Summ. J. 4). Dorsky remained “on-call” for his scheduled days in August 2011. (Def.'s Mot. Summ. J. 5). On these “on-call” days he would handle all patient encounters for the day. (Def.'s Mot. Summ. J. 5). During August 2011, Dorsky also performed multiple M & M Reviews, which consisted of reviewing records of surgeries performed by peers that involve complications, after receiving pressure from hospital administrators. (Def.'s Mot. Summ. J. 5). During September 2011, Dorsky chose to perform elective surgeries even though he felt shoulder pain and never declined to perform a surgery due to pain. (Def.'s Mot. Summ. J. 8).
On August 16, 2011, Dorsky signed a Cleveland Clinic form entitled “Application for Absences” at the request of Cleveland Clinic main campus. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 8; Def.'s Mot. Summ. J. 7). The main campus directed Dorsky's office manager, Laura Ardire, to code August 8-August 31, 2011 as medical leave. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 8; Def.'s Mot. Summ. J. 6-7). This time period coded as medical leave is when Dorsky was limiting his elective surgeries, focusing on administrative tasks and also taking nine days vacation. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 8; Def.'s Mot. Summ. J. 6-7). Ms. Ardire and Dorsky did not understand or agree with the decision to code the time as medical leave because it included “a period of time [he] had already worked” and Ms. Ardire testified that Dorsky was able to perform clinical work during the period. (Def.'s Mot. Summ. J. 7-8).
Berkshire Life offers a disability income insurance policy to Cleveland Clinic physicians and staff who earn in excess of $400,000. (Def.'s Mot. Summ. J. 10). Dorsky learned about the program through David Dickenson (“Dickenson”), an insurance agent with Berkshire Life, whom Dorsky had purchased other insurance products through in the past. (Def.'s Mot. Summ. J. 10). Dorsky informed Dickenson of his ongoing medical issues and work schedule and in response Dickenson told Dorsky to apply for the Policy. (Def.'s Mot. Summ. J. 10-12). Dickenson completed the Application on Dorsky's behalf and Dorsky signed the Application on September 28, 2011. (Def.'s Mot. Summ. J. 12) Dorsky did not review the Application prior to signing it. (Def.'s Mot. Summ. J. 12). Berkshire Life issued the Policy based on the Application on October 15, 2011. (Def.'s Mot. Summ. J. 12).
On July 24, 2012, Dorsky submitted a claim for disability benefits. (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J. 9; Def.'s Mot. Summ. J. 12). The Policy includes an incontestability period in which the Policy “will be incontestable as to the statements, except fraudulent statements, contained in the application after it has been in force for a period of two years during [the applicant's] lifetime, excluding any period during which [the applicant is] disabled.” (ECF DKT 1, 19). In a letter dated October 11, 2013, Berkshire Life denied Dorsky's claim for benefits and rescinded the Policy, based on Dorsky's alleged material false statement in response to Question 6(b). (Pl.'s Memo. in Supp. of Pl. Mot. Summ. J.9; Def.'s Mot. Summ. J. 12). October 11, 2013, was two days short of the two-year incontestability period of the Policy. (Def. Opp. Pl. Mot. Summ. J. 13)
On or about October 11, 2013, Berkshire Life commenced an action against Dorsky in the United States...
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