Bosetti v. United States Life Ins. Co. in City of New York
| Decision Date | 17 July 2009 |
| Docket Number | No. B208835.,No. B206896.,B206896.,B208835. |
| Citation | 175 Cal.App.4th 1208,96 Cal. Rptr. 3d 744 |
| Court | California Court of Appeals Court of Appeals |
| Parties | LINDA L. BOSETTI, Plaintiff and Appellant, v. THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK et al., Defendants and Respondents. LINDA L. BOSETTI, Plaintiff and Appellant, v. PALOS VERDES PENINSULA UNIFIED SCHOOL DISTRICT, Defendant and Respondent. |
Tyron J. Sheppard for Plaintiff and Appellant.
Wilson, Elser, Moskowitz, Edelman & Dicker, Adrienne Publicover, Michael K. Brisbin and Charan M. Higbee for Defendants and Respondents The United States Life Insurance Company in the City of New York and Keenan & Associates.
Atkinson, Andelson, Loya, Ruud & Romo and Marlon C. Wadlington for Defendant and Respondent Palos Verdes Peninsula Unified School District.
Plaintiff and appellant Linda L. Bosetti was employed by defendant and respondent Palos Verdes Peninsula Unified School District (PVSD). As part of her employment benefits, she was covered under a group long-term disability insurance policy (the policy) issued by The United States Life Insurance Company in the City of New York (U.S. Life). The third party claims administrator for the policy was Keenan & Associates (Keenan).
Bosetti's job was eliminated for economic reasons. Shortly after she learned that her employment would be terminated, she saw a doctor for depression and was placed on temporary disability. Her disability would ultimately extend for two years, and had a physical component as well as an emotional one. Under the policy, Bosetti could obtain disability benefits for two years if she was disabled from her own occupation. After that time, she could only obtain disability benefits if she was disabled from any occupation. Keenan directed Bosetti to perform a Functional Capacity Evaluation (FCE); the results of the FCE indicated that Bosetti could perform sedentary or light physical work. Therefore, U.S. Life concluded that Bosetti was not disabled from any occupation and terminated her disability benefits at the end of two years.
Bosetti brought suit against U.S. Life, Keenan, and PVSD, seeking additional disability benefits. Keenan successfully demurred on the basis that, as a third party claims administrator, it could not be liable on the policy. PVSD sought summary judgment on the basis that it had fulfilled every duty it owed Bosetti as her employer, and that any coverage disputes were exclusively between Bosetti and U.S. Life. PVSD was granted summary judgment, and was also awarded its costs and attorney fees under Code of Civil Procedure section 1038.
During the course of the litigation, U.S. Life concluded that, regardless of whether Bosetti was still disabled after two years of payments, another defense was available to it. The policy limited benefits for disabilities due to "mental, nervous or emotional disorder[s]" to only two years. U.S. Life took the position that, although Bosetti ultimately suffered some level of physical disability, she did not suffer a physical disability prior to the termination of her employment. As coverage under its policy ceased at the time of the termination of Bosetti's employment, U.S. Life argued there could be no coverage for any physical disability which may have arisen thereafter. U.S. Life sought, and obtained, summary judgment on this basis.
Bosetti filed two notices of appeal, one with respect to judgment in favor of U.S. Life (No. B206896) and the other challenging the judgment and order entered in favor of PVSD (No. B208835).1 Bosetti, however, did not file a notice of appeal from the judgment of dismissal in favor of Keenan, and we will therefore dismiss her appeal in No. B206896 to the extent it challenges that dismissal. Bosetti's complaint against PVSD alleged no legitimate cause of action against PVSD, and we will therefore affirm the summary judgment and order awarding attorney fees in favor of PVSD. In addition, we will remand for a determination of any attorney fees on appeal to which PVSD might be entitled under Code of Civil Procedure section 1038. Finally, as to U.S. Life, we conclude that the mental disability exclusion does not apply when the insured suffered related mental and physical symptoms, and that a triable issue of fact exists as to whether Bosetti suffered from a disability which was not wholly mental while the policy was still in force. We will therefore reverse the summary judgment in favor of U.S. Life. We also conclude, however, that (1) U.S. Life had an objectively reasonable factual and legal basis for its denial of further benefits after two years; and (2) there was no evidence presented showing that U.S. Life had made any intentional misrepresentations or had intentionally inflicted any emotional distress upon Bosetti. For the reasons we explain below, we will therefore direct the trial court to grant summary adjudication in favor of U.S. Life on Bosetti's bad faith and intentional tort causes of action.
Bosetti worked for PVSD as an assistant director of adult education. She was entitled to disability insurance benefits under the policy. In January 2003, PVSD eliminated Bosetti's position for budgetary reasons. The position was eliminated effective March 3, 2003.
After learning in January that her position would be terminated, Bosetti saw her physician, Dr. Barbara Lebron-Caine. She had first seen Dr. Lebron-Caine earlier in that month. At her initial appointment, Bosetti had filled out a medical history questionnaire indicating that she was then being treated for allergies, gastric reflux, and fibromyalgia.2 Nonetheless, Bosetti indicated in the medical history that she was "reasonably healthy" and not experiencing any "major health problems."
Bosetti returned to Dr. Lebron-Caine on January 22, 2003, after having been notified that her job would be eliminated.3 Bosetti testified that she went to see Dr. Lebron-Caine for insomnia; she wanted sleeping pills. Bosetti said that, during the examination, Dr. Lebron-Caine told her that she was suffering from depression and anxiety disorder. Dr. Lebron-Caine would later characterize Bosetti's state at the time as a "nervous breakdown." Although Dr. Lebron-Caine noted that Bosetti was then suffering from generalized aches and pains, her primary concerns were Bosetti's depression and anxiety. Bosetti was referred to a behavioral health and psychotherapy specialist, as well as a psychiatrist. Dr. Lebron-Caine put Bosetti on temporary disability based on depression and anxiety.
Bosetti submitted a claim for disability benefits. On January 30, 2003, Bosetti filled out U.S. Life's application for long-term disability benefits. In the space on the form asking for the "first symptoms of [Bosetti's] illness," Bosetti wrote:
Bosetti's attending physicians were required to complete U.S. Life's attending physician's statement forms documenting her condition, disability, and prognosis. The form has a section entitled "Physical Impairment" and another entitled "Mental/Nervous Impairment." In each section, the physician can check a box between "Class 1" and "Class 5," indicating the level of the patient's impairment. On February 4, 2003, Dr. Lebron-Caine completed an attending physician's statement. In the "Physical Impairment" section, Dr. Lebron-Caine wrote "N.A." She indicated a Class 5 Mental/Nervous impairment. At her deposition, Dr. Lebron-Caine testified that she thought, at the time she completed this form, that Bosetti's problems were emotional and not physical.
Dr. Lebron-Caine completed one further attending physician's statement prior to the termination of Bosetti's employment. On February 24, 2003, Dr. Lebron-Caine's attending physician's statement reflects both a physical and a mental/nervous impairment. Under "Physical Impairment," Dr. Lebron-Caine checked the box for a Class 5 impairment, which is defined on the form as "Severe limitation of functional capacity, incapable of minimal (Sedentary) activity." In the "Remarks" section for the physical impairment, Dr. Lebron-Caine wrote, "Mental Impairment affects her ability to work. 2ary physical impairment." Under "Mental/Nervous Impairment," Dr. Lebron-Caine also indicated a Class 5 ("severe limitations") impairment. At her deposition, Dr. Lebron-Caine explained that she did not diagnose a physical disability independent of Bosetti's emotional disability; instead, the physical disability was secondary to the emotional one. Dr. Lebron-Caine believed Bosetti's physical impairment was her body's reaction to her severe depression and anxiety, rendering her unable to function. According to Bosetti, however, it was "the other way around." Bosetti testified that her depression was secondary to her physical pain, although she conceded that stress exacerbated her physical pain.
As stated above, Bosetti initially applied for disability benefits after Dr. Lebron-Caine placed her on temporary disability on January 23, 2003. Keenan comanaged Bosetti's claim along with an entity referred to as DRMS. Based on Bosetti's reference to pain in the claim form and Dr. Lebron-Caine's identification of a physical impairment, DRMS and Keenan decided to telephone Bosetti and determine whether her disability was purely mental, or whether she was then obtaining medical treatment for a physical condition as well. According to Keenan, Bosetti indicated in a telephone conversation that her disability was purely mental. There is no writing signed by...
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