Mossa v. Provident Life and Cas. Ins. Co.
| Decision Date | 11 February 1999 |
| Docket Number | No. CV96-5996 (RJD).,CV96-5996 (RJD). |
| Citation | 36 F.Supp.2d 524 |
| Parties | Patrick MOSSA, Plaintiff, v. PROVIDENT LIFE AND CASUALTY INSURANCE COMPANY, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Richard J. Quadrino, Eve-Lynn Gisonni, Quadrino & Schwartz, P.C., Garden City, NY, for plaintiff.
Edward C. Cerny III, Lane & Mittendorf LLP, New York City, for defendant.
Plaintiff Patrick Mossa ("plaintiff" or the "insured") brought this action against Provident Life and Casualty Insurance Company ("defendant" or the "insurer") to recover total disability benefits under a disability policy (the "Policy") purchased from defendant. Defendant moves for summary judgment, arguing that plaintiff is able to engage in any number of gainful occupations and is therefore not "totally disabled" within the meaning of the Policy. For the reasons set forth below, defendant's motion is denied.
In January 1973, plaintiff earned a degree in economics from Queens College. Deposition of Patrick Mossa ("Pl.Dep.") at 9, Exh. D, Cerny Aff. From 1976 to 1982, plaintiff co-owned and operated a retail store that sold fruits and vegetables. Id. Beginning in March, 1983, plaintiff was employed by MarBev Mechanical, Inc. ("MarBev"), a plumbing, heating and air conditioning contractor. Defendant's Rule 56.1 Statement ("Def.R.56") ¶ 12; Pl. Dep. at 17-18. MarBev is co-owned by plaintiff's wife, Beverly Petrosino, and Marilyn DeGasperis, the wife of another employee of MarBev. Pl. Dep. at 7-8.
On or about January 9, 1989, plaintiff applied to defendant for disability insurance. Amended Pre-Trial Order ("PTO") ¶ 3. On March 9, 1989, defendant issued to plaintiff Disability Income Policy No. 36-295-6002235, which provided for the payment of $5,000 in monthly benefits upon submission of proof that plaintiff is disabled within the meaning of the Policy. PTO ¶ 4.
The Policy initially provides benefits in the event that due to sickness or injury "you [the Insured] are not able to perform the substantial and material duties of your occupation (hereinafter "own occupation" provision)."1 See Policy, Exh. B, Affidavit of Edward Cerny III ("Cerny Aff."), counsel for defendant, dated June 5, 1997. After benefits have been paid for two years, the Policy provides that plaintiff is entitled to continued benefits of $5000 per month until age 65 if due to sickness or injury "you are not able to engage in any gainful occupation in which you might reasonably be expected to engage because of education, training or experience (hereinafter "other occupation" provision)." Id.
From March 1989 through July 1993, plaintiff paid premiums to defendant. PTO ¶ 11. On March 19, 1993, while working as a steamfitter on a construction site for MarBev, plaintiff fell from the height of one story and fractured both knee caps. Affidavit of Patrick Mossa ("Pl.Aff.") ¶ 2; Defendant's Reply Memorandum in Support of Summary Judgment ("Def.Reply") ¶ 6. On or about March 29, 1993, plaintiff properly submitted a claim for benefits under the Policy. PTO ¶ 12. On July 17, 1993, defendant commenced the payment of monthly disability benefits2 and continued to pay plaintiff a total of $125,000 in disability benefits for two years and one month, ending in September, 1995. PTO ¶ 15.
Because the Policy provides that premium payments are waived during the period of disability, the parties agree that plaintiff owed no premium payments between July 1993 and September 1995. PTO ¶ 11. The Policy further provides that coverage will lapse in the event that premiums are not paid before the end of the 31 day grace period after a premium due date. Exh B, Cerny Aff. In a November 6, 1995 letter to plaintiff, defendant informed plaintiff that based upon its records, plaintiff was able to return to "gainful occupation." Exh. N, Cerny Aff. The letter concluded that "since benefits are no longer payable you will be billed for the next premium due on your policy, [sic] in order to maintain this policy in force the premium must be paid." Exh. N, Cerny Aff.
Defendant claims that because plaintiff has paid no premium following defendant's November 1995 letter, the Policy has lapsed. Plaintiff, on the other hand, claims that he meets the requirements of "total disability" under the "other occupation" provision and that defendant's discontinuation of payments constitutes a breach of the insurance contract.
The parties agree that New York law governs this diversity action. See, e.g., Sphere Drake Ins. Co. v. P.B.L. Entertainment, Inc., 30 F.3d 21, 22 (2d Cir.1994). It is established in New York that "[r]ules for construction of contracts of insurance do not differ from those applied to the construction of other contracts," McGrail v. Equitable Life Assur. Soc., 292 N.Y. 419, 424, 55 N.E.2d 483 (1944), including the well-accepted maxim that any ambiguity must be resolved against the drafter. Greaves v. Public Serv. Mut. Ins. Co., 5 N.Y.2d 120, 181 N.Y.S.2d 489, 155 N.E.2d 390 (1959). Thus, New York decisions comport with the "horn-book rule that policies of insurance ... are to be liberally construed in favor of the insured," Miller v. Continental Ins. Co., 40 N.Y.2d 675, 678, 389 N.Y.S.2d 565, 358 N.E.2d 258 (1976), and recognize that "[a] construction favorable to the insurer will only be sustained where it is the sole construction which can fairly be placed upon the words employed." Board of Educ., Yonkers City School Dist. v. CNA Ins. Co., 647 F.Supp. 1495, 1502 (S.D.N.Y.1986), quoting Cantanucci v. Reliance Ins. Co., 43 A.D.2d 622, 349 N.Y.S.2d 187, 191 (3rd Dep't), aff'd mem., 35 N.Y.2d 890, 364 N.Y.S.2d 890, 324 N.E.2d 360 (Ct.App.1974).
First Investors Corp. v. Liberty Mut. Ins., 152 F.3d 162, 167 (2d Cir.1998), quoting Michaels v. Buffalo, 85 N.Y.2d 754, 757, 628 N.Y.S.2d 253, 651 N.E.2d 1272 (1995) (internal citations and quotation marks omitted).
As with most contracts, when an insurance policy's terms are clear and unambiguous, they must be read accordingly. The Court may not "disregard clear provisions which the insurers inserted in the policies and the insured accepted, and equitable considerations will not allow an extension of coverage beyond its fair intent and meaning." Caporino v. Travelers Ins. Co., 62 N.Y.2d 234, 239, 476 N.Y.S.2d 519, 465 N.E.2d 26 (1984) (per curiam) (citation omitted). The construction of unambiguous provisions in an insurance policy is solely a question of law for the court. Caporino, 62 N.Y.2d at 239, 476 N.Y.S.2d 519, 465 N.E.2d 26. The Court also is entrusted with the construction of ambiguous provisions unless "determination of the intent of the parties depends on the credibility of extrinsic evidence, or on a choice among reasonable inferences to be drawn from extrinsic evidence." Hartford Acc. & Ind. Co. v. Wesolowski, 33 N.Y.2d 169, 172, 350 N.Y.S.2d 895, 305 N.E.2d 907 (1973); Stainless, Inc. v. Employers' Fire Ins. Co., 69 A.D.2d 27, 418 N.Y.S.2d 76, 79 (1st Dept.), aff'd mem., 49 N.Y.2d 924, 428 N.Y.S.2d 675, 406 N.E.2d 490 (1980). See Proteus Books Ltd. v. Cherry Lane Music Co., 873 F.2d 502, 509 (2d Cir.1989).
Whether an insurance policy is clear or ambiguous is a threshold question of law for the court to decide. See Pantone, Inc. v. Esselte Letraset, Ltd., 878 F.2d 601, 605 (2d Cir.1989); Werbungs Und Commerz Union Austalt v. Collectors' Guild, Ltd., 930 F.2d 1021, 1026 (2d Cir.1991). Language in an insurance contract will be deemed ambiguous if reasonable minds could differ as to its meaning. Werbungs, 930 F.2d at 1026. See United States Fire Ins. Co. v. General Reins. Corp., 949 F.2d 569, 572 (2d Cir.1991) ().
The Policy provides, in pertinent part:
After benefits have been paid for two years for a period of disability, Total Disability or totally disabled means that due to Injuries3 or Sickness4:
1) you are not able to engage in any gainful occupation in which you might reasonably be expected to engage because of education, training, or experience (emphasis added); and
2) you are receiving care by a Physician which is appropriate for the condition causing the disability.
Defendant insists that the absence of an explicit "salary proviso" in the Policy precludes any fact-intensive inquiry into the question in what "gainful occupation" it would be reasonable to expect plaintiff to engage. Def.Mem. at 15. Defendant asserts that the word "reasonably" in the Policy does not modify "gainful" or any concept related to salary or compensation. Id. Indeed, according to defendant, the Policy does not insure plaintiff's ability to obtain a "reasonably comparable job" or even a "reasonably comparable wage." Rather, defendant asserts that "`reasonably' modifies `education, training or experience.'" Id. at 2, 15-20. However, defendant does not explain what, if any, import the word "reasonably" adds to the phrase "education, training or experience" that would give it any meaning different from a provision lacking the word "reasonably."
Plaintiff, for his part, insists that the "other disability" provision is ambiguous or, in the alternative, its plain and reasonable...
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