Joseph v. Nw. Mut. Life Ins. Co.
| Decision Date | 24 March 2015 |
| Docket Number | Civil Action No. 7:13-CV-96 (HL) |
| Court | U.S. District Court — Middle District of Georgia |
| Parties | GREGORY L. JOSEPH, Plaintiff, v. NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, Defendants. |
Before the Court is Defendant's Motion for Summary Judgment. (Doc. 23). After reviewing the pleadings, briefs, affidavits, and other evidentiary materials presented, and determining that there is no genuine dispute of the material facts, the Court finds that Defendant is entitled to judgment as a matter of law and grants Defendant's motion.
The undisputed material facts are these:1
A. Disability Insurance Policy
In June 1988, Plaintiff Gregory L. Joseph ("Joseph"), purchased an individual disability income insurance policy (the "Policy") from DefendantNorthwestern Mutual Life Insurance Company ("Northwestern Mutual") through Walker Sullivan ("Sullivan"), an independent contractor authorized to solicit applications for insurance on behalf of Northwestern Mutual. The Policy provides a Full Benefit for total disability, a Proportionate Benefit for partial disability, and a lifetime benefit for presumptive disability. The Policy defines each category based on the impact of the disability on the insured's ability to perform the principal duties of his occupation at the time he becomes disabled or, in the case of presumptive disability, on the nature of the disability, such as the total and irrevocable loss of hearing in both ears. The Policy was amended shortly after issuance to extend the Initial Period from 60 months to June 24, 2023, which falls several months after Joseph's 65th birthday.
The "Claims" section of the Policy contains several provisions pertinent to this case:
B. Plaintiff's Occupational History and Claim for Disability Benefits
At the time he purchased the Policy, Joseph, a certified public accountant, held the position of CEO of Joseph Foodservice, Inc., an international food service distribution business. Joseph sold that business to Institutional Jobbers, Inc. in 1997. Then, from 1997 through 1998, Joseph formed a joint venture with Institutional Jobbers and prepared and negotiated a request for proposal to provide food and non-food supplies to the United States Armed Forces in Northern Europe. The joint venture received the contract in 1998, and Joseph worked from 1998 through 2000 providing services related to the supply contract with the Department of Defense. The contract ended in 2002, which corresponds with Joseph's allegation of the onset of his disability due to bilateral hearing loss.2
In 2002, Joseph formed a new joint venture between another company he owned, International Initiatives, Inc., Sysco Foodservice, Inc., and Axiom Logistiks, Gmbh., a German company. As a part of this endeavor, Joseph composed a request for proposal to supply food and non-food supplies to the United States Armed Forces in Europe and the Middle East. The proposal ultimately was unsuccessful, and the Department of Defense awarded the contract to a competitor in 2003.
Joseph left the food distribution business in 2003. Since that time, he has been engaged in real estate construction and development. Throughout the relevant claim period, Joseph has continuously operated his entrepreneurial endeavors and managed his personal financial affairs.
In April 2011, Northwestern Mutual received notice by telephone from Sullivan's office that Joseph intended to submit a claim for disability benefits. By letter dated April 20, 2011, Northwestern Mutual provided Joseph with a disability claim kit.3 The kit included a Request for Disability Benefits form, an authorization for the release of medical records, and an attending physician statement form. The cover letter informed Joseph that the insurance company could not beginevaluating Joseph's claim until it received the completed forms, medical records, and Joseph's individual and corporate income tax returns for the last three consecutive years prior to the date his disability began.4
Northwestern notified Joseph in May 2011 and again in June 2011 that it had not yet received the required claim documents. The letter informed Joseph that if the documents were not received by June 15, 2011, his file would be closed. Upon hearing nothing further from Joseph, Northwestern subsequently closed Joseph's claim file.
On November 2, 2012, 18 months after Northwestern Mutual forwarded Joseph his claim kit, the insurance company received the completed claim form, which was dated October 31, 2012. Joseph indicated in the form that his claim was based on "consistent/permanent" loss of hearing, sleep apnea, which was diagnosed in 2007, and large disc herniation that began causing pain on August 6, 2012. (Doc. 23-6, p. 2). Joseph further stated that while his claimed hearing loss first appeared on April 4, 2002, he was not prevented from working the customary duties and hours of his occupation until September 1, 2012 as a result of his back pain. He identified his occupation as "real estatedevelopment/consulting" and checked the box notating that the nature of his business had not changed since the onset of his disability. (Doc. 23-6, p. 4).
In addition to the claim form, Joseph submitted his individual tax returns for 2009, 2010, and 2011. Northwestern Mutual acknowledged receipt of Joseph's claim form and tax returns by letter dated November 6, 2012, but reminded Joseph that in order for his claim to be processed he still needed to provide an executed medical release authorization, attending physician statement, and medical records. During a November 8, 2012 telephone conversation with a Northwestern Mutual representative, Joseph stated that he was claiming benefits back to April 2002. Northwestern Mutual thereafter wrote to Joseph again on November 9, 2012, requesting that Joseph provide evidence of his disability for the entire period being claimed, including individual income tax returns for 1997 through 2008 and corporate income tax returns for 1997 through 2011, and reiterating the necessity of returning an attending physician statement form.
C. Claim Evaluation Process
A Northwestern Mutual field representative met with Joseph at his home for over three hours on November 27, 2012. Joseph had just undergone back surgery two weeks prior, on November 16, 2012. The two discussed Joseph's restrictions and limitations, his occupations, and his financial circumstances. The field representative also inquired about the nine year delay in submitting a claimfor hearing loss. Joseph provided numerous reasons for the late-filed claim, including a lack of understanding of his policy. He believed that the insurance policy applied only to catastrophic circumstances. No physical or any other form of incapacitation prevented him from filing an earlier claim. During his deposition, Joseph explained that Sullivan, the agent through whom he purchased the Policy, was aware of Joseph's hearing loss and encouraged him to file a claim prior to 2006. But Joseph believed that his hearing would get better and generally did not want to initiate a dispute with the insurance company. Joseph also had high hopes that his "real estate business was going to be successful and that changing vocations wasn't going to be as difficult as it has been in reality." (Doc. 25, p. 29).
Northwestern Mutual wrote to Joseph again on December 5, 2012, thanking him for meeting with the field representative and identifying evidence the insurance company still had not received, including tax returns and the attending physician statement form, and requesting that Joseph provide a written employment history, a description of his occupational duties, and a copy of the sales agreement from his business in 1997. That same date, Joseph telephoned Northwestern Mutual to report that he returned to a modified work schedule as of December 3, 2012. He also articulated his difficulty in locating tax returns prior to 2002. Northwestern Mutual ultimately provided Joseph with a Social Securityconsent form that permitted the insurance company to obtain an earnings history report directly from the Social Security Administration.
By letter dated January 3, 2013, Northwestern Mutual informed Joseph that it still was awaiting receipt of requested information. The letter further stated that if the company did not receive the documentation by February 4, 2013, it would assume that Joseph was no longer interested in pursuing his claim. Joseph provided the following documents to Northwestern Mutual on January 9, 2013: (1) attending physician statement; (2) employment chronology for 1997 through 2012; (3) closing statement for the sale of Joseph Foodservice, Inc.; (5) schedule of payments received under the Department of Defense contract from 1998 through 2002; (6) profit and loss statements for International Initiatives from 1998 through 2002; (7) individual income tax returns for 2003 through 2008; and (8) Joseph Foodservice's income tax return for 1997.
After reviewing Joseph's medical records, Northwestern Mutual ultimately approved Joseph's claim based on his back condition and...
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