Massachusetts Mut. Life Ins. Co. v. Ouellette, 91-448

• Decision Date: 04 September 1992
• Docket Number: No. 91-448,91-448
• Citation: 159 Vt. 187,617 A.2d 132
• Parties: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, v. James E. OUELLETTE.
• Court: Vermont Supreme Court

Page 132

617 A.2d 132

159 Vt. 187

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, v. James E. OUELLETTE.

No. 91-448.

Supreme Court of Vermont.

Sept. 4, 1992.

Samuel Hoar, Jr., of Dinse, Erdmann & Clapp, Burlington, for plaintiff-appellee.

Gregory W. McNaughton, Barre, for defendant-appellant.

Before GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

DOOLEY, Justice.

Plaintiff, Massachusetts Mutual Life Insurance Company, issued disability and life insurance policies to defendant, James E. Ouellette, an optometrist. When defendant was found guilty of lewd and lascivious conduct with a minor and was imprisoned, he filed a claim with plaintiff seeking disability benefits and a waiver of his obligation to pay life insurance premiums. In response, plaintiff sought a declaratory judgment that it was not required to honor these claims. Plaintiff's motion for summary judgment was granted. Defendant appeals, claiming that the court erred in failing to find him disabled under the policies and in granting summary judgment. We affirm.

As part of the plea agreement that underlies defendant's conviction, he sold his optometry practice and surrendered his license to practice optometry, his usual occupation for the purposes of the policies at issue. Following the commencement of his sentence, defendant filed a claim with plaintiff for "total disability" benefits and requested a waiver of life insurance premiums, relying on the following policy provisions:

"[T]otal disability" means incapacity of the insured ... which requires the care of a legally qualified physician....

....

[T]he Company will deem the insured to be totally disabled if the incapacity prevents the insured from performing substantially all of the duties of his usual occupation, business, employment or profession....

"Total disability due to sickness" means only total disability (as defined above) resulting from or contributed to by illness, disease, bodily or mental infirmity of the insured.

In his claim, defendant stated that he suffered from atypical paraphilia, primarily pedophilia, and that this was a recognized mental disorder. He claimed that this illness had caused him to be totally disabled, within the meaning of the policy provisions, and thus entitled to disability benefits and a waiver of his premium obligation.

It is undisputed that defendant's mental disorder, pedophilia, first manifested itself in the mid to late 1970s, and that the resulting behavior continued until his arrest in 1987. Defendant did not seek medical attention for his mental disorder in the ten years prior to his conviction. He was placed under the care of a physician for the first time, for diagnosis and evaluation, in the course of this litigation and presently receives counseling in prison. He was physically and mentally able to perform all the duties of optometry until the time of his incarceration and loss of license.

Plaintiff denied defendant's insurance claim, asserting that the inability of defendant to perform the duties of his profession was caused by his conviction and the surrender of his optometry license, not by any illness or disease. The trial court agreed with this contention in its summary judgment decision. Defendant argues that this decision is wrong because it granted summary judgment when there were disputed issues of material fact and because it misinterpreted the insurance policy.

Summary judgment is appropriate if, after giving the opposing party the benefit of all reasonable doubts and inferences, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. V.R.C.P. 56(c); Howard Bank v. Estate of Pope, 156 Vt. 537, 539, 593 A.2d 471, 472 (1991). This standard applies in the present proceeding as well as at the trial level. See Garneau v. Curtis & Bedell, Inc., 158 Vt. 363, ----, 610 A.2d 132, 133 (1992).

We agree with the trial court that the material facts of this case are not in dispute, and the only issue for resolution is the application of the law to those facts. Defendant's theory is that he is incapacitated by an illness, pedophilia, and that the illness prevents him "from performing substantially all of the duties of his usual occupation," as those terms are used in the policies, because it has caused his incarceration. None of the factual predicates of this argument are disputed by the plaintiff. Therefore, summary judgment is proper if plaintiff is correct on the law.

The trial court ruled that because defendant could still be practicing optometry had he not surrendered his license and been incarcerated, his inability to practice optometry was caused by the legal consequences of his behavior and not by a disability. This holding follows the general rule that disability insurance policies provide coverage for factual disabilities, not legal disabilities. 15 G. Couch, Cyclopedia of Insurance Law § 53.41 (2d ed. 1983).

Although defendant's argument is novel in the context of a private disability insurance claim, it has been uniformly rejected in analogous federal cases involving determinations of "total disability" under the Social Security Act. The definition of disability in the Social Security Act requires that the disabled individual be unable "to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment." 42 U.S.C. § 423(d)(1)(A) (emphasis supplied). ¹ Focusing on the causation element in the definition, courts interpreting the Act have held that persons in prison because of acts alleged to result from mental impairments are not eligible for disability benefits. ² See, e.g., Pierce v. Gardner, 388 F.2d 846, 847-48 (7th Cir.1967); Bertram v. Secretary of H.E.W., 385 F.Supp. 755, 757 (E.D.Wis.1974); Waldron v. Secretary of H.E.W., 344 F.Supp. 1176, 1180 (D.Md.1972). In Pierce, the court reasoned:

[T]he plaintiff [a convicted pedophile] has wholly failed to meet the burden of showing that his "mental disorder" is what precludes him from engaging in substantial gainful activity. In fact, to the contrary, the record appears to indicate that the plaintiff's mental condition or disorder has not affected his ability to engage in his occupation ... albeit his propensities for the commission of sex offenses have repeatedly resulted in incarcerations which have interrupted his employment.

388 F.2d at 848. The distinction is explained further in Waldron:

There is an important difference between an impairment which results in an inability to perform the physical or mental functions necessary to engage in substantial gainful activity on the one hand and antisocial behavior which results in confinement on the other. In the latter case, it is confinement rather than the impairment which precludes the individual from engaging in substantial gainful activity.

344 F.Supp. at 1180.

The reasoning of the Social Security Act cases is equally applicable here. ³ After defendant's disorder manifested itself, he remained able to practice optometry for nearly ten years. He would not have stopped practicing except for the initiation of criminal proceedings, which resulted in incarceration and the surrender of his license. Prior to the criminal proceedings, defendant felt physically and mentally able to assume the duties of his occupation and never sought medical treatment. There is no evidence to contradict the trial court's conclusion...