Strama v. Union Fidelity Life Ins. Co.

• Citation: 793 So.2d 1129
• Decision Date: 11 September 2001
• Docket Number: No. 1D00-3468.,1D00-3468.
• Parties: Stanley E. STRAMA, III, Appellant, v. UNION FIDELITY LIFE INSURANCE COMPANY, Appellee.
• Court: Court of Appeal of Florida (US)

793 So.2d 1129

Stanley E. STRAMA, III, Appellant, v. UNION FIDELITY LIFE INSURANCE COMPANY, Appellee.

No. 1D00-3468.

District Court of Appeal of Florida, First District.

September 11, 2001.

Brandon S. Peters of Morgan, Colling & Gilbert, P.A., Orlando, for Appellant.

Kenneth H. Haney and A. Graham Allen of Allen, Brinton & McCarthy, P.A., Jacksonville, for Appellee.

KAHN, J.

The question in this case is whether the circuit court erred by applying the workers' compensation concept of "permanent total disability" to a claim brought by appellant under a credit disability insurance policy rather than recognizing an ambiguity in the policy. Finding that the trial court erred by failing to apply the correct law, we reverse the summary judgment and remand this case for further proceedings.

On December 19, 1995, Appellant Stanley Strama (Strama) bought a credit disability insurance policy from Appellee Union Fidelity Life Insurance Company (Union Fidelity) in connection with the credit purchase of an automobile. On August 2, 1996, Strama bought a second identical policy from Union Fidelity in connection with the credit purchase of a second automobile. The policies provided that Union Fidelity would pay Strama's monthly car payment if he became totally disabled while the insurance was in effect. Both policies define "totally disabled" as having a:

disability which (a) begins while your disability insurance is effective; (b) is the result of injury or sickness; (c) results in loss of time from your occupation or employment; (d) continues without interruption for the number of days stated in the Waiting Period in the schedule. It shall also mean during the first 12 months of covered disability, you are unable to perform the duties of the occupation in which you were engaged when your disability began; and after you have been disabled for 12 months, you are unable to engage in any occupation for which you are reasonably qualified. By reasonably qualified, we mean an occupation for which you have experience, education, or training.

On December 4, 1996, Strama injured himself while lifting a 50-pound package from an overhead shelf at the auto parts store where he worked. Strama underwent a cervical diskectomy and fusion on January 24, 1997, to relieve pressure from a damaged disk in his neck. Immediately following surgery, Strama experienced the sudden onset of pain in his right arm and he claims to have constant pain in his right arm and shoulder. According to Strama's primary treating physician, Dr. Mark C. Hofmann, Strama reached maximum medical improvement on or before July 16, 1997. Dr. Hofmann also assigned Strama permanent work restrictions including (1) no more than thirty hours work per week; (2) no lifting of greater than 20 pounds; (3) no repetitive push/pull activities or motions; and (4) the ability to change positions frequently. Dr. Hofmann has never found Strama's complaints of constant pain to be exaggerated or unbelievable.

Strama filed claims for credit disability benefits, which Union Fidelity received on January 7, 1997. Union Fidelity paid benefits from January 10, 1997, until November 12, 1998. Union Fidelity discontinued payments as of November 13, 1998, because their review of Strama's work restrictions indicated that Strama was no longer totally disabled pursuant to the terms of the insurance contract.

In July 1998, the Social Security Administration found that Strama was disabled under the terms of the Social Security Act and Strama began receiving benefits. Starting in the last quarter of 1999, Strama began working part-time for a title loan company. Strama claims this work is sporadic at best because his continuing pain limits the time he can work. Strama also claims that he is only able to work approximately six hours per week. Strama's boss at the title loan company stated that he usually pays Strama seven dollars per hour. Strama's canceled paychecks and paystubs indicate that, if he was paid seven dollars per hour, he worked an average of thirty hours per week between October 1999 and May 2000.

Strama sued Union Fidelity for breach of contract. Union Fidelity moved for summary judgment contending, as a matter of law, that Strama could not meet the policy definition of total disability. In the course of discovery, Union Fidelity provided responses bearing on the policy definition. Union Fidelity's corporate representative testified at a deposition that under the terms of this credit disability policy, part-time employment does not "automatically disqualify" an insured from receiving credit disability payments. The same corporate representative, reviewing Union Fidelity's claims manual, observed that under the terms of the manual, part-time employment does not necessarily disqualify an individual from receiving benefits. In interrogatory answers, Union Fidelity clarified the meaning of "part-time work" in the claims manual:

"Part-time" work is generally considered to be work at any occupation in excess of zero hours per week up to thirty hours per week.

Finally, Union Fidelity answered an interrogatory asking whether an insured would have a total disability within the meaning of the applicable policies if the insured worked less than thirty hours per week. In this answer, Union Fidelity stated, "as the number of hours per week an insured is working increases, the less likely it is that the insured has a `total disability' as that term is defined under the referenced certificate of insurance form."

Noting the testimony of Dr. Hofmann that Strama was capable of part-time employment, and further noting that Strama had in fact worked part-time and continued to work part-time, the circuit court found an absence of disputed issues of fact and construed the policy language at issue as follows:

"The court finds that the only reasonable construction of the language "totally disabled" in the contract means that the Plaintiff is unable to engage in any part-time or full-time occupation for which he is reasonably qualified. This is consistent with the law as it relates to the area of worker's compensation which, although not identical to the issues in the instant case, is sufficiently related that the Court should consider the cases decided thereunder. In United States Fidelity and Guaranty Association v. Kemp, 658 So.2d 1212 (Fla. 1st DCA 1995), the Court concluded that "... an ability to work part-time contradicts the conclusion that one is totally disabled." Comparing the definitions in the worker's compensation statute with that in the contracts in the instant case, this Court finds no reason to reach a different conclusion. Consequently, this court finds that because the Plaintiff was able to engage in part-time employment from at least the date that his benefits were terminated under the insurance contract to the present date, he is not entitled to receive the "total disability" benefits under the contract...."

The trial court implicitly rejected appellant's argument that the term "occupation," as used in the policy, was ambiguous. The interpretation of a contract is a matter of law to be determined by the court. See DEC Elec., Inc. v. Raphael Constr. Corp., 558 So.2d 427, 428 (Fla. 1990). Nevertheless, when the terms of the contract are ambiguous, susceptible to different interpretations, parol evidence is admissible to "explain, clarify or elucidate" the ambiguous term. Friedman v. Va. Metal Prods. Corp., 56 So.2d 515, 517 (Fla. 195...