Educators Mut. Ins. Ass'n v. Evans

• Decision Date: 03 June 2011
• Docket Number: No. 20090527–CA.,20090527–CA.
• Parties: EDUCATORS MUTUAL INSURANCE ASSOCIATION, Plaintiff and Appellee,v.Joel EVANS, Defendant, Third-party Plaintiff, and Appellant,v.Salt Lake City Corporation, Third-party Defendant and Appellee.
• Court: Utah Court of Appeals

258 P.3d 598

683 Utah Adv. Rep. 24

2011 UT App 171

EDUCATORS MUTUAL INSURANCE ASSOCIATION, Plaintiff and Appellee,

v.Joel EVANS, Defendant, Third-party Plaintiff, and Appellant,

v.Salt Lake City Corporation, Third-party Defendant and Appellee.

No. 20090527–CA.

Court of Appeals of Utah.

June 3, 2011.

Brian S. King, Salt Lake City, for Appellant.Curtis J. Drake and Troy L. Booher, Salt Lake City, for Appellee Educators Mutual Insurance Association.J. Wesley Robinson, Salt Lake City, for Appellee Salt Lake City Corporation.Before Judges ORME, VOROS, and ROTH.

OPINION

VOROS, Judge:

¶ 1 Joel Evans is a military veteran and a Salt Lake City police officer. After being injured as a police officer, Evans applied for disability benefits from Salt Lake City Corporation (the City). The City administered its disability benefits through Educators Mutual Insurance Association (Educators). Various disputes arose concerning the amount and duration of these benefits and whether they should be offset by federal benefits Evans was receiving. The trial court granted summary judgment against Evans, who appeals. We affirm in part and reverse in part.

BACKGROUND

¶ 2 Evans is a peacetime and Gulf War era veteran. He served in the Army from May 25, 1981, to August 28, 1981, and in the first Gulf War from November 21, 1990, to May 30, 1991. He began receiving disability benefits from the Department of Veterans Affairs (VA benefits) in June 1999. These benefits were based on multiple service-related health problems.

¶ 3 Upon returning from the Gulf War, Evans resumed his duties as a Salt Lake City police officer until he became further disabled in 2001. In October 2001, Evans applied for disability benefits under the City's disability program, which was administered by Educators. When he applied for disability benefits from Educators, he listed multiple disabling conditions, including some that overlapped with those for which he was receiving VA benefits.

¶ 4 Educators awarded Evans disability benefits, but with several limitations. First, Evans was awarded a monthly disability benefit of two-thirds of his regular base monthly income, rather than 100%. The Group Long–Term Disability Plan (the Plan) allowed a benefit of 100% of a person's salary only if the person was disabled from injuries occurring on the job. Educators determined that at least some of Evans's injuries stemmed from his service in the Gulf War, rather than his service as a Salt Lake City police officer. Second, Evans was awarded disability benefits for only twenty-four months. The Plan allowed benefits up to twenty-four months “[i]f a covered employee is disabled from performing the duties of the occupation he performed before disability.” It allowed benefits for a longer period only “[i]f a covered employee is disabled from performing any and all occupations.” Educators determined that Evans, though disabled from his regular occupation, was not disabled from “any and all occupations.” Educators did, however, state that after twenty-four months Evans could request that benefits be extended if he was at that time totally disabled from “any and all occupations.” Third, Evans was required to participate in a vocational rehabilitation program. Fourth, Evans's monthly benefit was to be offset by any amount he might receive in VA benefits. Educators informed Evans that “[a]cceptance of the benefit indicates acceptance of the diagnosis” and that if he disagreed with any of the decisions made on his claim, he must write to Educators within thirty days.

¶ 5 Evans's then-counsel timely wrote to Educators, challenging some of the decisions made on his claim. His letter outlined three objections: (1) he asserted that Evans's disability benefit should not be limited to two-thirds of his salary; (2) he asserted that Evans's disability benefit should not be offset by the VA benefits; and (3) he asserted that negotiating the benefit checks should not be deemed acceptance of the limited benefit. This letter said nothing about the twenty-four-month time limit.

¶ 6 Educators' counsel responded, stating that he had reviewed Evans's concerns and had obtained an independent medical opinion from a physician with expertise in disability issues. Educators maintained its position, first, that it was entitled to offset Evans's award by his VA benefits, and second, that Evans was not entitled to 100% of his salary because his “current disability is not caused by on-duty injuries, either individually or in total.” This letter stated that if Evans wished to appeal the decision to Educators' Claims Review Committee, he should “kindly notify [Educators' counsel] within sixty days of the date of this letter.”

¶ 7 Shortly thereafter, Educators sent Evans a second letter indicating that it had received information from the Department of Veterans Affairs that Evans was currently receiving disability benefits. Educators asserted that Evans had therefore received an overpayment from Educators because his benefits were supposed to have been offset by his VA benefits. Educators requested that Evans repay Educators the amount of the overpayment, which it stated was $11,568.40.

¶ 8 Evans timely requested review of “the entire decision of Educators denying Evans's claims,” as outlined in his previous letter. Educators' Claims Review Committee rejected Evans's appeal. It affirmed that his disability payments would be offset by his VA benefits. And it concluded that his disability benefits would be paid at two-thirds of his salary because his disability was “a combination of many things,” including injuries incurred prior to his police service, injuries secondary to his police service, and conditions unrelated to his police service. The letter also informed Evans that he had the right to appeal to Educators' Board of Directors (the Board) and that any such appeal must be made in writing within thirty days.

¶ 9 Fifty-eight days later, Evans's then-counsel wrote a letter requesting an appeal to the Board. The Board denied his appeal as untimely. Counsel then wrote a letter to Educators accepting responsibility for missing the deadline and stating that he had miscalculated the due date. Counsel asked Educators to waive the deadline and allow Evans to proceed with his appeal. Educators denied this request.

¶ 10 Some months later, Educators notified Evans that his disability benefits were about to expire because the twenty-four months had passed. Evans, through new counsel, requested an extension of benefits on the ground that his physical condition rendered him permanently “incapable of engaging in any occupation or employment for wage or profit.” Educators agreed to review the file and stated that its review would take approximately thirty days. In addition, Educators directed that “[d]uring this time Mr. Evans will need to request all new current medical information from all doctors that are treating him for his disability at this time and who can substantiate that he is totally disabled from any and all occupations.”

¶ 11 Evans responded by submitting two one-page documents. First, he submitted a one-page report from his treating physician indicating that Evans could not work at his regular work, nor could he work eight hours per day. Evans also submitted a one-page letter from himself, stating “I remain totally disabled and remain eligible for [benefits].” Both submissions were made within thirty days of Educators' letter. Evans submitted no other information at this time.

¶ 12 Many months later, Educators sued Evans, alleging breach of contract and seeking $8,510.78 in overpayments.¹ Evans counterclaimed against Educators and filed a third-party complaint against the City. He alleged that the City and its agent, Educators, had breached the contract and violated Utah law by awarding him disability payments of only two-thirds of his salary, by offsetting his disability benefits by his VA benefits, and by terminating his benefits after twenty-four months. Shortly thereafter, Evans sent Educators another letter from his doctor indicating that Evans was disabled from all occupations.

¶ 13 A year passed filled with pleadings and discovery. At a hearing on the parties' cross-motions for partial summary judgment, the trial court noted that Educators had yet to determine whether Evans was entitled to permanent disability benefits. Shortly after the hearing, Educators sent Evans a letter denying permanent disability benefits on the ground that he had not provided the required medical documents, but giving him sixty days to appeal the decision to the Claims Review Committee.

¶ 14 The trial court ruled on the parties' cross-motions for partial summary judgment on April 6, 2006. First, it addressed the issue of whether Evans was entitled to receive benefits equivalent to 100% of his salary, rather than two-thirds of his salary. It granted summary judgment in favor of Educators on the ground that Evans had not complied with the contractual requirements setting forth the deadlines for appeal. Second, the trial court addressed the question of Educators' denial of disability benefits beyond the twenty-four-month limit. It denied Educators summary judgment on the ground that Educators had not yet informed Evans of its decision.² Third, the trial court addressed the question of whether Educators could offset Evans's disability benefits by his VA benefits. It denied summary judgment to Evans on the ground that an issue of material fact existed. Fourth, the trial court addressed the question of whether Evans was disabled in January 2002 as a result of injuries sustained in the line of duty and whether Evans was totally and completely disabled from “any and all occupations.” The trial court denied Evans summary judgment on the ground that issues of material fact existed.

¶ 15 Weeks after this order was issued—but within sixty days of Educators' letter denying Evans permanent disability benefits—Evans submitted a...