River v. Commercial Life Ins. Co.

• Decision Date: 02 February 1999
• Docket Number: No. 97-3581,97-3581
• Citation: 160 F.3d 1164
• Parties: Louis P. RIVER, III, Plaintiff-Appellant, v. COMMERCIAL LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1164

160 F.3d 1164

Louis P. RIVER, III, Plaintiff-Appellant, v. COMMERCIAL LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 97-3581.

United States Court of Appeals Seventh Circuit.

Argued April 15, 1998.

Decided Nov. 23, 1998.

Rehearing and Suggestion for Rehearing En Banc Denied Feb. 2, 1999.

Robert R. Tepper (argued), Chicago, IL, for Plaintiff-Appellant.

Mary P. Benz (argued), Catherine J. Casey, Quinlan & Crisham, Chicago, IL, for Defendant-Appellee.

Before COFFEY, KANNE and EVANS, Circuit Judges.

COFFEY, Circuit Judge.

In 1980, the plaintiff-appellant, Louis P. River ("River"), a surgeon licensed and practicing in the state of Illinois, was diagnosed with a manic depressive psychiatric problem. River continued to carry out his duties as a surgeon until 1985, when he was forced to terminate his surgical practice due to his psychiatric problem. In 1986, River's insurer, Commercial Life Insurance Company ("Commercial"), the defendant-appellee, began providing River with "sickness" disability benefits amounting to $1,800 per month.

After having exhausted his "sickness" benefits in late 1992, River filed suit against Commercial on July 2, 1996, seeking declaratory judgment alleging that his psychiatric illness, which allegedly stemmed from an accident that occurred in 1980, should be covered as an "injury" under the language of the policy, thereby obligating the defendant to pay disability benefits to the plaintiff for the remainder of his life. The defendant insurance company filed a motion for summary judgment on July 31, 1997, arguing that the plaintiff's manic depressive illness was not the result of the alleged accident of 1980, but was more properly classified as a "sickness," for which insurance benefits had previously been paid. The United States District Court for the Northern District of Illinois granted the defendant's (Commercial's) motion for summary judgment, ruling that the plaintiff had failed to satisfy conditions precedent to receiving "injury" benefits under the terms of the insurance policy. We affirm.

BACKGROUND

River alleges that on August 2, 1980, he bumped his head on a metal doorframe while demonstrating ballet maneuvers for his son in his home in Chicago, Illinois. Although the plaintiff allegedly lost consciousness for several minutes, the record reflects that it never was considered serious enough for him to seek medical attention for the alleged injury to his head, and that he instead ingested two Tylenol tablets and slept through the night. River returned to the operating room the following day and carried out his surgical duties at Oak Park Hospital in Oak Park, Illinois.

On September 15, 1980, the plaintiff began to exhibit severe manic psychiatric symptoms ¹ necessitating hospitalization in Mercyville Hospital's psychiatric ward in Aurora, Illinois. Shortly thereafter, on October 3, 1980, Dr. Lee Gladstone ("Gladstone"), a psychiatrist at Northwestern University Memorial Hospital, examined River and directed that he be transferred from Mercyville to the psychiatric ward at Northwestern. Gladstone noted in his history that River informed him that for the past fifteen years, River had consumed between ten and twenty-five ounces of alcohol each evening to help him sleep. River also told Gladstone that he had also ingested one or two Meprobamates, an oral sedative used for the relief of anxiety and tension, each evening for the past ten years. Gladstone also noted in River's medical record that in his opinion, River had abused alcohol for years prior to his hospitalization in order to self-medicate a pre-existing manic condition. Gladstone also noted that prior to October of 1980, River had no history of past physical injuries that one could identify as contributing to his illness. During this period of inpatient confinement, Gladstone officially diagnosed River as suffering from manic depression. River's condition subsequently improved and he returned to his surgical practice at Oak Park Hospital in February of 1981.

In June of 1985, River's psychiatric problems took a turn for the worse, severe enough to necessitate the termination of his surgical practice. Six months later, in January of 1986, he submitted a claim for disability benefits to one of his insurers, the Shortly after his benefits were exhausted, River had an accident while riding his bicycle in Florida. To avoid hitting a pedestrian, River was forced off a path, lost control of his bicycle, and was catapulted to the ground sustaining a head injury. His mental health deteriorated, necessitating hospitalization once again in 1993. According to River, at this time he and his wife began to speculate about a connection between the bicycle accident and the recurrence of River's psychiatric illness. River reviewed an old diary kept by his wife and realized that his initial hospitalization in 1980 came two months after the 1980 accident in his home in Chicago. River and Dr. Gladstone concluded in 1994 that there was a link between the 1980 head trauma and the onset of River's psychiatric episodes in 1980 and 1985.

                defendant Commercial.  Commercial's policy provided for the payment of monthly benefits totaling $1,800 if the insured became disabled while the policy was in force.  The policy distinguished between disability benefits for "sickness" and disability benefits for "injury."   Specifically, the "sickness" provision provided benefits for "loss or disability commencing during any term of this Policy, resulting from sickness or disease" for a maximum of seven years.  On the other hand, the "injury" provision of the policy provided lifelong benefits for "loss or disability, resulting directly and independently of all other causes from accidental bodily injury occurring during any term of this Policy."  (Emphasis added).  Written notice of a claim for benefits had to be filed within twenty days of a particular loss or disability, or as soon as reasonably possible.  Furthermore, the coverage provision for "injury" benefits provided that the insurer was obligated to make monthly benefit payments only "for total disability which results from 'injury' and occurs within one year from the date of the accident."  (Emphasis added).  The policy defined "total disability" as a condition in which the insured was "wholly and continuously unable to perform all of the substantial and material duties of [the insured's] occupation."   In order to qualify to receive either "sickness" or "injury " benefits, the insured needed to be totally disabled for a minimum of six months.  River did not claim any "sickness" benefits during his hospitalization in 1980 because he returned to his duties as a surgeon within five months after the original onset of his psychotic episode.  By contrast, River's 1985 episode caused him to stop working for a period of more than six months, and in January of 1986, River filed a claim for "sickness" benefits.  Commercial approved River's application or "sickness" benefits, and began making monthly benefit payments of $1,800, which River exhausted seven years later, as dictated under the terms of the policy.  During the seven-year span, commercial paid River total benefits in excess of $150,000
                

In September of 1994, River retained an attorney to contact each of his disability insurers to assert claims under the "injury" provisions of his various policies. But River failed to contact Commercial until October 17, 1995, ten years after the full manifestation of his disorder, when he sent a letter requesting that Commercial reinstate his disability benefits for life. River specifically contended that his manic depressive illness should not be classified as a "sickness," but rather as an "injury" resulting from his doorway accident in 1980. The letter to Commercial was mailed more than a year after River had contacted his other disability insurers and approximately three years after his sickness benefits from Commercial had been exhausted. River now contends that the reason he was delayed one year in contacting Commercial after he had contacted his other disability insurers was because he had forgotten about the Commercial policy.

Commercial reviewed River's newly filed "injury" claim. Commercial hired an independent entity, Managed Health Benefits, to conduct an investigation of River's claim. The investigation included an independent analysis of the medical records submitted by River, and an interview with River's treating psychiatrist, Gladstone. During the interview, Gladstone stated that River was probably self-medicating his manic episodes with alcohol for many years prior to his first appointment with Gladstone in October of 1980, two months after he had allegedly hit his head on the doorway. Richard Ellman, R.N., M.P.S., the Disability Case Manager based on the review of the medical record the claimant appears to have had the illness of alcoholism and probably manic-depressive illness prior to his alleged head injury, which occurred on August 2, 1980. It would appear that the manic-depressive illness the patient is suffering from is not a result of the head trauma. There is [sic] no conclusive medical records showing any form of medically accepted, diagnostic testing which normally would have occurred, i.e. M.R.I., CT Scan. Further, we recommend that the continued disability payments end as of the claimants [sic] 65th birthday, as the contract reads for an illness Vs. the claimants [sic] claim that the "cause" of his manic-depressive illness is from two related "accidents."

with Managed Health Benefits, concluded that

(Emphasis added). Based in part on Managed Health Benefits's investigation, Commercial denied River's "injury" claim on April 17, 1996, because he had failed to comply with the conditions precedent under the policy, in particular the clause that required that River report his "injury" claim within twenty days of the date of the onset of his disability.

River filed a...