Gross v. Unumprovident Life Ins. Co., CV 03-4335-SVW (PJWx).

• Decision Date: 18 May 2004
• Docket Number: No. CV 03-4335-SVW (PJWx).,CV 03-4335-SVW (PJWx).
• Citation: 319 F.Supp.2d 1129
• Court: U.S. District Court — Central District of California
• Parties: Alan M. GROSS, M.D., Plaintiff, v. UNUMPROVIDENT LIFE INSURANCE COMPANY, The Paul Revere Life Insurance Company, and Does 1 through 100, Inclusive, Defendants.

319 F.Supp.2d 1129

Alan M. GROSS, M.D., Plaintiff, v. UNUMPROVIDENT LIFE INSURANCE COMPANY, The Paul Revere Life Insurance Company, and Does 1 through 100, Inclusive, Defendants.

No. CV 03-4335-SVW (PJWx).

United States District Court, C.D. California.

May 18, 2004.

COPYRIGHT MATERIAL OMITTED

Alice J. Wolfson, Alan M. Gross, Ray F. Bourhis, David M. Lilienstein, Bourhis & Wolfson, San Francisco, CA, Allen R. Ball, Ball & Yorke, Ventura, CA, for plaintiff.

Thomas B. Ackland, Andrew S. Williams, Barger & Wolen, Los Angeles, CA, for defendants.

AMENDED ORDER DENYING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING TOTAL DISABILITY ISSUE IN PLAINTIFF'S BREACH OF CONTRACT CLAIM AND TOTAL AND RESIDUAL DISABILITY ISSUES IN DEFENDANTS' COUNTERCLAIM.

WILSON, District Judge.

I. INTRODUCTION/FACTUAL & PROCEDURAL BACKGROUND

Dr. Gross is an orthopedic surgeon. He became permanently disabled when, as a result of diabetes, he developed numbness in his hands and feet as well as problems with his eyes, all of which led to his ceasing to perform surgery on December 17, 2001. On February 7, 2002, Dr. Gross filed a request for total disability benefits under two policies with Paul Revere, a disability income policy and a business overhead expense policy. After being asked to provide a great deal of evidence, he was denied benefits under his policies on January 16, 2003 because Defendants determined that he did not fit within the definitions of "totally disabled" in his two policies. The primary question in this action is whether Dr. Gross is entitled to coverage for total disability under the policies issued by Paul Revere Life Insurance Company ("Paul Revere"). A secondary question is whether Dr. Gross is entitled to residual disability benefits, which he was denied because he allegedly does not fit within the income loss requirements of the policy's residual disability clause.

On October 3, 2003, Defendants filed a Motion for Partial Summary Judgment. On November 12, 2003, the Court issued an order granting in part and denying in part Defendants' Motion ("November 12 Order"). Namely, the Court granted the Motion insofar as it sought a definition of total disability, which the Court defined for purposes of this case as Plaintiff's inability to perform all the important duties of his occupation. The Court denied the Motion insofar as it sought an adjudication that Plaintiff is not totally disabled. The parties were in disagreement as to Plaintiff's ability to perform the non-surgical important duties of his occupation post-disability; as to whether Plaintiff timely notified Defendants of his inability to perform these duties; and as to what duties ought to be included within the scope of "important duties." Thus, the Court at that time was unable to reach a determination regarding whether or not Dr. Gross met its definition of totally disabled. As a result, the Court postponed the trial date to give the parties an opportunity to further develop those factual issues.

On January 26, 2004, Defendants filed a second Motion for Partial Summary Judgment Regarding Total Disability Issue in Plaintiff's Breach of Contract Claim and Total and Residual Disability Issues in Defendants' Counterclaim. For the reasons set forth below, that Motion is now DENIED. Defendants have not met their summary judgment burden with respect to the total disability issue; furthermore, the Court declines to decide the residual disability issue until the total disability question has been resolved.

II. LEGAL STANDARD — SUMMARY JUDGMENT

Rule 56(c) requires summary judgment for the defendants, as the moving party, when the evidence, viewed in the light most favorable to the plaintiffs, shows that there is no genuine issue as to any material fact. See Fed.R.Civ.P. Rule 56(c); Tarin v. County of Los Angeles, 123 F.3d 1259, 1263 (9th Cir.1997). The defendants bear the initial burden of establishing the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). That burden may be met by "`showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2548.

Once the defendants have met their initial burden, Rule 56(e) requires the plaintiff to go beyond the pleadings and identify facts that show a genuine issue for trial. See id. at 323-34, 106 S.Ct. 2548; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. DISCUSSION — TOTAL DISABILITY

Paul Revere issued a disability income protection policy to Plaintiff on April 3, 1989. That policy defines total disability as follows:

"Total Disability" means that because of Injury or Sickness:

a. You are unable to perform the important duties of your occupation; and

b. You are under the regular and personal care of a Physician.

(Berube Decl., Exh. A, at 23.)

A. Definition of Total Disability

Plaintiff's disability policy is an "own occupation" policy, also known as an occupational policy. "Occupational policies indemnify the insured when he becomes disabled from performing the material acts necessary to his chosen profession, whereas, general disability policies indemnify the insured only when he becomes incapable of following any occupation for profit." Yahiro v. Northwestern Mut. Life Ins. Co., 168 F.Supp.2d 511, 515 (D.Md.2001).

Regarding the task of discerning the precise meaning of total disability in this insurance policy, the decades-old words of Justice Tobriner ring particularly true:

On countless occasions we have inveighed against the careless draftsmanship of documents of insurance and have decried the evil social consequences that flow from lack of clarity. We have emphasized that the uncertain clause leaves in its murky wake not only the disillusioned insured and the protesting insurer but also the anguished court.

Bareno v. Employers Life Ins. Co. of Wausau, 7 Cal.3d 875, 878, 103 Cal.Rptr. 865, 500 P.2d 889 (1972) (internal citations omitted).

Plaintiff urges the Court to adopt the definition of total disability set forth by the California Supreme Court in Erreca v. Western States Life Ins. Co., 19 Cal.2d 388, 121 P.2d 689 (1942): "such a disability as renders the insured unable to perform the substantial and material acts necessary to the prosecution of a business or occupation in the usual or customary way." Id. at 396, 121 P.2d 689. "[A]bsolute helplessness" is not required; thus, an insured's ability "to perform sporadic tasks, or give attention to simple or inconsequential details incident to the conduct of business" does not preclude recovery. Id. "Conversely, the insured is not totally disabled if he is physically and mentally capable of performing a substantial portion of the work connected with his employment. He is not entitled to benefits because he is rendered unable to transact one or more of the duties incidental to his business." Id.

The Erreca court held that the insured, a farmer, was totally disabled because he was unable to perform manual labor of any kind or to supervise and manage farm operations. Id. at 396-97, 121 P.2d 689. The insured did remain able to negotiate loans and leases, sign notes and mortgages, talk with grain buyers, participate in buying supplies, and talk with his son concerning farm operations, but the court found that "[a]lthough such activities are neither trivial nor inconsequential, they are the type of duties that are infrequently and intermittently performed and cannot be said to constitute the substantial and material acts of the occupation of farming." Id. at 397, 121 P.2d 689.

It is true that Erreca involved an "any occupation" policy, not an "own occupation" policy. Erreca, 19 Cal.2d at 390, 121 P.2d 689. That factual difference does render some of the holdings in Erreca inapplicable to this case, or to any case involving an own occupation policy. For instance, the court defined total disability for purposes of an any occupation policy as "a disability which prevents [the insured's] working with reasonable continuity in his customary occupation or in any other occupation in which he might reasonably be expected to engage in view of his station and physical and mental capacity." Id. at 394-95, 121 P.2d 689 (quoting Hurwit v. Prudential Ins. Co. of America, 45 Cal.App.2d 74, 81, 113 P.2d 691); accord Moore v. American United Life Ins. Co., 150 Cal.App.3d 610, 618, 197 Cal.Rptr. 878 (1984). It should not, however, affect the applicability to a case involving an own occupation policy of Erreca's more general definition of total disability to perform a given occupation. See Austero v. Nat'l Casualty Co. of Detroit, Michigan, 84 Cal.App.3d 1, 20, 148 Cal.Rptr. 653 (1978) ("We see no reason for distinguishing between nonoccupational and occupational disability policies in terms of the definition of `total disability' ...."); id. at 22, 148 Cal.Rptr. 653 ("it is clear that the California courts oppose strict adherence to a highly limited definition of `total disability' in both nonoccupational and general occupational disability policies"). See also Bareno, 7 Cal.3d at 886-87, 103 Cal.Rptr. 865, 500 P.2d 889 (applying Erreca's definition of total disability without specifying whether the policy was an own occupation or an any occupation policy).

The policy at issue in Austero defined total disability as the insured's inability to perform "any and every duty pertaining to his profession or occupation." 84 Cal.App.3d at 5, 148 Cal.Rptr. 653. Notwithstanding the apparent strictness of this definition, the appellate court upheld a jury instruction that the plaintiff was totally disabled if he was "rendered unable to perform the substantial and material duties of his occupation in the usual and customary way." Id. at 19, 148 Cal.Rptr. 653. The court resisted a literal instruction based on the precise wording of the policy....