Clarke v. Unum Life Ins. Co. of America

• Decision Date: 03 March 1998
• Docket Number: No. Civ.A. CV197-72.,Civ.A. CV197-72.
• Citation: 14 F.Supp.2d 1351
• Parties: Lisa L. CLARKE, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.
• Court: U.S. District Court — Southern District of Georgia

Page 1351

14 F.Supp.2d 1351

Lisa L. CLARKE, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.

No. Civ.A. CV197-72.

United States District Court, S.D. Georgia, Augusta Division.

March 3, 1998.

Calvin E. Chance, Jr., Augusta, GA, for plaintiff.

Michael J. Hannan, III, Love & Willingham, LLP, Atlanta, GA, for defendant.

ORDER

ALAIMO, District Judge.

Plaintiff, Lisa L. Clarke ("Clarke"), brings this action to recover benefits allegedly owed under a disability insurance policy administered by Defendant, Unum Life Insurance Company of America ("Unum"). Presently, Unum has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons set forth below, Defendant's Motion for Summary Judgment will be DENIED IN PART and GRANTED IN PART.

FACTS

Clarke, a thirty-six year old attorney, began exhibiting bizarre behavior in June 1994. She vacillated between periods of severe depression, in which she was unable to leave her home, and periods of mania, where she was unable to stop moving and would go for days without sleeping. This condition, diagnosed as bipolar affective disorder,¹ affected her judgment and ability to manage her affairs. She was forced to stop practicing law. Clarke was hospitalized for her condition from June until August 1994. Since that time, Clarke has been seeing Dr. Jeffery Rausch ("Rausch"), who monitors her disorder on an out-patient basis. Clarke now is able to function normally, controlling her condition with various drugs.

On October 29, 1996, Clarke filed a claim under the disability insurance policy purchased from Unum by her former law firm. The insurance policy was an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Clarke was covered by the policy as a former partner in the law firm.

Unum rejected Clarke's claim as untimely. The insurance policy contains the following language regarding notice and proof of loss:

Notice

a. Written notice of claim must be given to the Company within 30 days of the date the disability starts, if that is possible. If that is not possible, the Company must be notified as soon as it is reasonably possible to do so.

b. When the Company has the written notice of claim, the Company will send the insured its claim forms. If the forms are not received within 15 days after written notice of claim is sent, the insured can send the Company written proof of claim without waiting for the form.

2. Proof

a. Proof of claim must be given to the Company. This must be done no later than 90 days after the end of the elimination period.

b. If it is not possible to give proof within these time limits, it must be given as soon as reasonably possible. But proof of claim may not be given later than one year after the time proof is otherwise required.

The elimination period is defined as a period of consecutive days of disability for which no benefit is payable. Under this policy, the elimination period begins on the first date of disability and runs for ninety days thereafter.

DISCUSSION

I. Summary Judgment

Unum has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Summary judgment requires the movant to establish the absence of genuine issues of material fact, such that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Lordmann Enter., Inc. v. Equicor, Inc., 32 F.3d 1529, 1532 (11th Cir.1994), cert. denied, 516 U.S. 930, 116 S.Ct. 335, 133 L.Ed.2d 234 (1995). After the movant meets this burden, "the non-moving party must make a sufficient showing to establish the existence of each essential element to that party's case, and on which that party will bear the burden of proof at trial." Howard v. BP Oil Co., 32 F.3d 520, 524 (11th Cir.1994) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). The non-moving party to a summary judgment motion need make this showing only after the moving party has satisfied its burden. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991).

The Court should consider the pleadings, depositions, and affidavits in the case before reaching its decision, Fed.R.Civ.P. 56(c), and all reasonable inferences will be made in favor of the non-movant. Griesel v. Hamlin, 963 F.2d 338, 341 (11th Cir.1992). Additionally, a "court need not permit a case to go to a jury ... when the inferences that are drawn from the evidence, and upon which the nonmovant relies, are `implausible'." Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 743 (11th Cir.1996).

II. Timely Notice of the Claim

Defendant contends that Plaintiff failed to provide notice of her condition in accordance with the terms of the insurance policy and in a timely manner. Defendant argues that the policy requires that notice and proof of claim be submitted no later than one year and 180 days after the date the disability began.² (Def.'s Mem.Supp. Summ.J. at 3). Under these facts, Defendant contends that Clarke should have made her claim by December 28, 1995. (Id. at 4). Plaintiff, however, did not file her claim until October 29, 1996. She contends that her mental illness prevented her both from comprehending that she was disabled and from making a timely claim.

Under Georgia law, insurance is a matter of contract and all parties are bound by the terms of the insurance policy. Richmond v. Farm Bureau Mut. Ins. Co., 140 Ga.App. 215, 221, 231 S.E.2d 245, 249-50 (1976). When a dispute arises between the insurer and the insured, the policy should be construed liberally in favor of the insured.³ North Am. Ins. Co. v. Watson, 6 Ga.App. 193, 195, 64 S.E. 693 (1909). Nearly every insurance policy contains a notice provision, which "is to enable the insurer to inform itself promptly concerning the accident, so that it may investigate the circumstances, prepare for a defense, if necessary, or be advised whether it is prudent to settle any claim arising therefrom." Southeastern Express Sys. Inc. v. Southern Guar. Ins. Co., 224 Ga.App. 697, 701, 482 S.E.2d 433, 436 (1997) (quoting Public Nat'l Ins. Co. v. Wheat, 100 Ga.App. 695, 698, 112 S.E.2d 194 (1959)).

Timely notice is considered a "condition precedent to the insurer's duty to defend or pay." Equitable Life Assurance Soc'y of the United States v. Studenic, 77 F.3d 412, 415 (11th Cir.1996) (quoting Insurance Co. of N. Am. v. Waldroup, 462 F.Supp. 161, 162 (M.D.Ga.1978)). See also Wolverine Ins. Co. v. Sorrough, 122 Ga.App. 556, 560, 177 S.E.2d 819, 822 (1970); Cisneros v. UNUM Life Ins. Co. of America, 134 F.3d 939, 943 (9th Cir.1998) (holding that the language of the Unum insurance policy imposed notice as a condition precedent to the insured's recovery). The insured must comply with the notice requirements contained in the policy, absent a sufficient legal justification for the delay.⁴ Richmond, 140 Ga.App. at 222, 231 S.E.2d at 250; Sorrough, 122 Ga. App. at 561, 177 S.E.2d at 822. The excuse must have "rendered it impossible for the condition to be complied with." Sorrough, 122 Ga.App. at 561, 177 S.E.2d at 822 (citing United Benevolent Soc'y v. Freeman, 111 Ga. 355, 356, 36 S.E. 764 (1900)). See also Metropolitan Life Ins. Co. v. Jackson, 79 Ga. App. 263, 53 S.E.2d 378 (1949); Watson, 6 Ga.App. at 195, 64 S.E. 693. If the insured gives the required notice within a reasonable time after the impossibility ceased, then sufficient notice is given. Dillard v. Allstate Ins. Co., 145 Ga.App. 755, 756, 245 S.E.2d 30, 31 (1978); Erber v. Insurance Co. of N. Am., 134 Ga.App. 632, 633, 215 S.E.2d 528, 530 (1975); Sorrough, 122 Ga.App. at 561, 177 S.E.2d at 822 (citing 8 Appleman, Insurance § 4741); Watson, 6 Ga.App. at 196, 64 S.E. 693; Annotation, Disability Insurance or Provision: Clause Requiring Notice of Claim within Specified Time or as Soon as Reasonably Possible, or the Like, 17 A.L.R.3d 530, 554 (1968).

The delay of the insured to provide notice is evaluated under the circumstances to determine if it was justified and reasonable. Studenic, 77 F.3d at 415; Lumbermens Mut. Cas. Co. v. Plantation Pipeline Co., 214 Ga.App. 23, 25, 447 S.E.2d 89, 91 (1994). Generally, it is a question of fact reserved for the trier of fact. Studenic, 77 F.3d at 415; Canadyne-Georgia Corp. v. Continental Ins. Co., 999 F.2d 1547, 1557 (11th Cir.1993); Erber, 134 Ga.App. at 633, 215 S.E.2d at 530 (citing Norfolk & Dedham Mutual Fire Ins. Co. v. Cumbaa, 128 Ga. App. 196(2), 196 S.E.2d 167 (1973)). However, in certain circumstances, the Court may conclude that a delay is unreasonable as a matter of law.⁵ Studenic, 77 F.3d at 416; Canadyne-Georgia Corp., 999 F.2d at 1557.

Several courts, including those in Georgia, have recognized that the "mental or physical incapacity of the insured to give notice is a valid excuse for not giving notice of claim within the period specified or required in a disability insurance policy or clause." 17 A.L.R.3d at 550-51. Courts have concluded that "[t]he insured is not bound to give notice of his disability when he is unable to do so by reason of the very disability insured against." Seabra v. Puritan Life Ins. Co., 117 R.I. 488, 369 A.2d 652, 656 (R.I.1977). See also Watson, 6 Ga.App. at 196, 64 S.E. 693. Both the sufficiency of the excuse and the insured's subsequent diligence in giving notice are questions of fact. Smith v. Southeastern Fidelity Ins. Co., 258 Ga. 15, 16, 365 S.E.2d 105, 107 (1988); Watson, 6 Ga.App. at 196, 64 S.E. 693; Seabra, 369 A.2d at 657 (R.I.1977).

The Georgia Court of Appeals addressed this issue in North Am. Ins. Co. v. Watson, 6 Ga.App. 193, 64 S.E. 693 (1909). The court found that:

[w]here the insured is suddenly stricken with some disease of the brain which renders him unconscious and makes it impossible for him to give to the company, within the time stipulated, written notice of his sickness, this fact is legally sufficient to excuse him from compliance with this condition of the...