Pyun v. Paul Revere Life Ins. Co.

• Citation: 768 F.Supp.2d 1157
• Decision Date: 03 March 2011
• Docket Number: Case No. 7:09–CV–643–RDP.
• Parties: Sang K. PYUN, Plaintiff,v.PAUL REVERE LIFE INSURANCE COMPANY, et al., Defendants.
• Court: United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama

768 F.Supp.2d 1157

Sang K. PYUN, Plaintiff,

v.PAUL REVERE LIFE INSURANCE COMPANY, et al., Defendants.

Case No. 7:09–CV–643–RDP.

United States District Court, N.D. Alabama, Western Division.

March 3, 2011.

Brian D. Turner, James D. Turner, Turner & Turner PC, Tuscaloosa, AL, for Plaintiff.Henry T. Morrissette, Hand Arendall LLC, Mobile, AL, John S. Johnson, Hand Arendall LLC, Birmingham, AL, for Defendants.

MEMORANDUM OPINION

R. DAVID PROCTOR, District Judge.

This case is before the court on Defendant The Paul Revere Life Insurance Company's Motion for Summary Judgment (Doc. # 34), Defendant Metropolitan Life Insurance Company's Motion for Summary Judgment (Doc. # 36), Plaintiff's Motion for Summary Judgment on the Counterclaim Filed by Defendants (Doc. # 41), Defendants' Motion to Strike Testimony of Dr. C.E. Herrington (Doc. # 58), and Defendants' Motion to Strike Testimony and Report of Lynn Hare Phillips (Doc. # 73). All motions are properly under submission before the court.

Plaintiff's Amended Complaint contains a total of eight claims against Defendants. (Doc. # 18). The first three counts allege breach of contract, ordinary bad faith, and extraordinary bad faith against Defendant Metropolitan Life Insurance Company (“Met Life”). ( Id.). The remaining five counts allege breach of contract, ordinary bad faith, extraordinary bad faith, negligence, and breach of fiduciary duty as to Defendant The Paul Revere Life Insurance Company (“Paul Revere”). ( Id.). Defendants' Counterclaim (Doc. # 23) contains two claims against Plaintiff: restitution of benefits paid and money had and received. ( Id.). Plaintiff and both Defendants have moved for summary judgment as to all claims against them.

For the reasons below, Defendant Paul Revere's Motion for Summary Judgment (Doc. # 34) is due to be granted; Defendant Met Life's Motion for Summary Judgment (Doc. # 36) is due to be granted in part and denied in part; Plaintiff's Motion for Summary Judgment on the Counterclaim Filed by Defendants (Doc. # 41) is due to be denied; Defendants' Motion to Strike Testimony of Dr. C.E. Herrington (Doc. # 58) is due to be overruled as moot; and Defendants' Motion to Strike Testimony and Report of Lynn Hare Phillips (Doc. # 73) is also due to be overruled as moot.

I. STATEMENT OF FACTS

Plaintiff is at 61 year old anesthesiologist of Korean descent who has been practicing anesthesiology for approximately 30 years. (Doc. # 40 at 13–16). In the mid 1980's Plaintiff purchased two disability policies from New England Mutual Life Insurance Company.¹ (Doc. # 18 at ¶ 7; Doc. # 38–1). This case involves a dispute over those policies.

A. Plaintiff's Long Term Disability Claim1. Plaintiff's Policy with Met Life

Plaintiff has two disability policies with Met Life that provide a maximum monthly benefit of $5,000.00 each (Policy Nos. D098118 and D089651). (Doc. # 38–1). The policies provide that:

The Company will pay the Owner of the policy monthly income benefits:

• For Total Disability of the insured while the Policy is in force; and

• For Residual Disability which is related to a Total Disability that starts before the police anniversary on or next following the 65th birthday of the insured.

Monthly income benefits will be paid for the period:

• Which starts at the end of the Waiting Period; and

• Which ends when Total or Residual Disability end; whichever is later; but monthly income benefits will not be paid for any period after the end of the Maximum Period for Benefits.

All payments will be subject to receipt by the Company of timely proof of loss. (Doc. 38–1 at 6, 35). At issue in this case is the residual disability provision of the policies. The residual disability provision provides, in relevant part:

“Residual Disability” means a disability of the insured:

• Which directly follows a period of Total Disability that (a) started while the Policy was in force and before the policy anniversary on or next following the 65th birthday of the insured, and; (b) has continued for at least as long as the Residual Disability Qualification Period shown in Section 1; and

• Which results from the same sickness or injury that caused the Total Disability it follows; and

• Which causes a continuous Percentage Reduction of Earnings from all occupations of at least 20 percent.

(Doc. # 38–1 at 8, 37). The polices do not contain definitions for part-time or full-time work. ( See Doc. 38–1).2. Plaintiff's Disability Claim

In May 1999, Plaintiff fell from a ladder and injured his back. (Doc. # 40 at 26). His fall resulted in an herniated disk that required surgery with cervical fusion. (Doc. 38–2 at 4). In June 1999, Plaintiff filed a disability claim with Met Life stating that he was totally disabled beginning May 6, 1999. (Doc. # 38–2 at 4–9). Met Life paid Plaintiff total disability benefits until January 2000, when Plaintiff informed Met Life that he would be returning to work on a part-time basis.² (Doc. # 38–2 at 10–15). At that time, Met Life informed Plaintiff that he might qualify for Residual Disability Benefits under his policies. (Doc. # 38–2 at 13–15). Based on Plaintiff's claim that he was residually disabled, Met Life paid him the full monthly benefit for the remainder of the first year following the first day of his claimed disability (May 6, 1999), and thereafter, paid him a portion of the monthly benefit based on the percentage of Plaintiff's claimed income loss. (Doc. # 38–2 at 18). Plaintiff received benefits under the policies until his benefits were terminated by a letter dated June 1, 2008. (Doc. # 38–2 at 91–101).

When Plaintiff returned to work in January 2000, he did so under an agreement with his employer whereby he would work 26 weeks per year without any time for vacation.³ (Doc. # 54–5). It is undisputed that once Plaintiff returned to work he did so under an arrangement where he would work as a full-time anesthesiologist for one month and would be off work the following month. (Doc. # 40 at 32).⁴ During the months that he was working, Plaintiff's job requirements were identical to the other full-time anesthesiologists in his group. (Doc. # 40 at 32).

While Defendant Met Life was aware that Plaintiff was working part time, it was not until February 2008 that Met Life's claim file indicates any awareness as to the nature of Plaintiff's part-time schedule. (Doc. # 38–2 at 35). In other words, February 2008 is the first time Defendant Met Life's records indicate knowledge that Plaintiff was working on a full time basis for one month but not working at all the following month. Prior to that time, Defendant's records indicate that Plaintiff was working 20–35 hours per week. ( See Doc. # 38–2).

3. Met Life's Ongoing Investigation into Plaintiff's Claim

In November 2000, Met Life's file indicates that it had questions concerning Plaintiff's claims such as Plaintiff's level of vocational functioning, how many days a week he was working, and whether he was doing any on-call work. (Doc. # 38–2 at 19). In December 2000, Bob Rodecker, a vocational consultant, spoke with Plaintiff on the phone and reported that “Dr. Pyun continues to work part time, 20 hours per week” and that he “has remained at part-time hours since January 2000 and there are no plans to increase his hours.” (Doc. # 38–2 at 20); (Doc. # 61–1 at 2). Mr. Rodecker states that Plaintiff did not indicate that 20 hours per week was an average number of hours a week. (Doc. # 61–1 at 2). Throughout 2000 to 2003, Plaintiff continued to submit monthly progress reports stating that his present activities were “rest, exercise, and part-time working,” and Met Life continued to pay residual disability based on Plaintiff's claimed disability and reported monthly income. ( See Docs. # 40–1 at 34–53, 40–2 at 1–10).

Met Life's records reflect that in a March 2004 phone call with Met Life's disability benefits specialist, Cathy Bleau, Plaintiff represented that he “continue[d] to work an average of 20 hours a week” and that “[a] full time position in his occupation would require 70 hours a week.” (Doc. # 38–2 at 21) (Doc. # 61–2 at 1). In a later declaration, Ms. Bleau indicated that during her conversation with Plaintiff, they specifically discussed the amount he was working each week and that Plaintiff never gave any indication that he was working on a full time basis every other month. (Doc. # 61–2 at 2). On June 24, 2004, Gwynne Hupfer met with Plaintiff in his home. (Doc. # 38–2 at 22–26). Hupfer's report of that interview states that during the interview Plaintiff reported that he “is in constant pain in [his] neck and both of [his] shoulders” and that he “had very little energy and is constantly fatigued.” (Doc. # 38–2 at 23). The report further states that Plaintiff's constant fatigue limits the length of his workday—where Plaintiff previously worked 50–70 hours a week, he was currently only able to work “between 25–35 hours a week.” (Doc. # 38–2 at 23). Mr. Hupfer stated in a later declaration that Plaintiff clearly told him that he was working every week, but was working a reduced number of hours and that Plaintiff did not indicate that he was working a full time schedule every other month. (Doc. # 61–3 at 2).

In November 2007, Dr. Howard Taylor spoke to Plaintiff's attending physician Dr. Otero. At that time, Dr. Otero indicated that he thought Plaintiff should work less than 35 hours per week.⁵ The letter from Dr. Taylor to Dr. Otero led Met Life to understanding that Plaintiff was working 35 hours per week. (Doc. # 38–2 at 33) (stating that Dr. Taylor believes that if Plaintiff “is doing all his regular activities for 35 hours a week he could perform the same activities for 40 or 50 or more hours a week”).

In December 2007, Plaintiff was again interviewed by Mr. Hupfer. The report of that interview indicates that Plaintiff stated that he does work some 70 hour work weeks, but those weeks are usually followed by a greatly reduced work load the following week...