Weaver v. New England Mut. Life Ins. Co., Civ. 99-4-P-C.

• Decision Date: 28 May 1999
• Docket Number: No. Civ. 99-4-P-C.,Civ. 99-4-P-C.
• Parties: Michael K. WEAVER, Plaintiff, v. NEW ENGLAND MUTUAL LIFE INSURANCE CO. and The New England, Defendants.
• Court: U.S. District Court — District of Maine

52 F.Supp.2d 127

Michael K. WEAVER, Plaintiff, v. NEW ENGLAND MUTUAL LIFE INSURANCE CO. and The New England, Defendants.

No. Civ. 99-4-P-C.

United States District Court, D. Maine.

May 28, 1999.

Jeffrey Rosenblatt, Berman & Simmons, P.A., Lewiston, ME, for plaintiff.

K. Douglas Erdmann, Pierce Atwood, Portland, ME, for defendants.

MEMORANDUM OF DECISION AND ORDER

GENE CARTER, District Judge.

This action arises out of a dispute related to Disability Income Policy No. D167305 issued by New England Mutual Life Insurance Company and The New England (collectively "New England") to Plaintiff Michael K. Weaver. Plaintiff seeks relief for breach of contract (Count I), declaratory judgment (Count II), unfair claims practices (Count III), fraud (Count IV), intentional infliction of emotional distress (Count V), negligent infliction of emotional distress (Count VI), bad faith (Count VII), malicious conduct (Count VIII), estoppel (Count IX), liability (Count X), and injunctive relief (Count XI). The Court now has before it New England's Motion to Dismiss (Docket No. 3) Plaintiff's tort, statutory, and equitable claims.

I. FACTS

The factual allegations taken from the Complaint are as follows. Michael K. Weaver worked for over 27 years in the refrigeration, air-conditioning, and heating business. From 1989 until early 1993, he was a sales engineer employed by Dumont Refrigeration in Monmouth, Maine. In 1990, Mr. Weaver purchased a disability insurance policy from Defendants. The policy provides, in part, that

"Total Disability" means a disability of the Insured: Which results from sickness or accidental bodily injury of the Insured; and Which prevents the Insured from engaging in the regular occupation of the Insured; even if the Insured is engaged in a different occupation. The regular occupation means the regular occupation of the Insured when Total Disability starts. Total disability may be the result of a sickness which began or an injury which occurred either before or after the Policy was issued; but the sickness or injury must be under treatment by or at the direction of a person, other than you or the Insured, who is licensed to treat the sickness or injury.

Disability Income Policy, attached as Ex. A to Plaintiff's Complaint at § 5.

Sometime in early 1993, Mr. Weaver took a sales position with Phoenix Refrigeration Systems, Inc. where he was expected to manage a branch office in Arkansas. In April 1993, Mr. Weaver terminated his employment as a refrigeration sales engineer with Phoenix Refrigeration Systems when Phoenix canceled its plans for an Arkansas office. Mr. Weaver sought but was unsuccessful in finding, immediate employment in the refrigeration, air-conditioning, and heating business.

When he lost his job in April of 1993, Mr. Weaver telephoned his insurance agent, an agent of the Defendants, and asked for advice on whether he should continue paying the premiums to keep the policy in force or whether, because be was not then earning an income and needed to economize, he should let the policy lapse. The Defendants' agent advised Mr. Weaver that the policy would still protect him in case he became disabled from his regular occupation and that it would be wise to continue the policy in force by making the premium payments. Mr. Weaver took this advice and continued to make premium payments to keep the policy in force. On August 23, 1993, while he was looking for employment, Mr. Weaver was diagnosed with a brain tumor. Mr. Weaver underwent surgery and subsequent treatment for his condition and has been under the care of physicians since August 23, 1993. Mr. Weaver's sickness has, since August 23, 1993, disabled him and prevented him from engaging in work as a sales engineer in the refrigeration and air-conditioning business.

Mr. Weaver applied for, and was paid by New England, monthly disability benefits under the policy for the period from November 23, 1993, (after the expiration of the 90-day "waiting period") through April 23, 1995, when New England terminated its payment of benefits. When his benefits were terminated, New England told Mr. Weaver that his "regular occupation" at the time his disability began was "unemployed person" and that, therefore, he was not "disabled" under the policy since his condition did not prevent him from being an unemployed person. Sometime, it is not clear whether it was before or after the payment of benefits was terminated, New England accused Mr. Weaver of malingering and of unethically trying to obtain benefits under the policy.

II. DISCUSSION

In a motion to dismiss brought under 12(b)(6), the Court takes all of Plaintiff's factual averments as true and indulges every reasonable inference in Plaintiff's favor. Talbott v. C.R. Bard, Inc., 63 F.3d 25, 27 (1st Cir.1995). The Court may grant Defendants' Motion to Dismiss "only if it clearly appears, according to the facts alleged, that the Plaintiff cannot recover on any viable theory." Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 52 (1st Cir.1990).

A. Count III — Unfair Claims Settlement Practices

Defendants move to dismiss Mr. Weaver's claim under Maine's Unfair Claims Practices Statute, 24-A M.R.S.A. § 2436-A,¹ arguing that the version of the statute in effect in 1995, when Plaintiff's benefits were terminated, did not apply to claims brought under disability insurance policies. Plaintiff responds that the current version of § 2436-A, which does apply to disability insurance policies, provides the basis for his claim. Two possible lines of reasoning underlie Plaintiff's argument: first, that the denial of benefits remains ongoing today; second, that the current version of the statute should be retroactively applied. The Court will consider each argument in turn.

The "Application" section of the repealed version of the statute, in effect in 1995 when New England terminated Mr. Weaver's disability benefits, provided that "[t]his section does not apply to health or life insurance or workers' compensation claims." 24-A M.R.S.A. § 2436-A(4) (1995). At that time, disability insurance fell within the statutory definition of health insurance. See 24-A M.R.S.A. § 704.² Hence, in 1995, § 2436-A did not apply to disability insurance policies. The 1997 amendment to § 2436-A(4), the version of the statute currently in effect, exempts only "workers' compensation claims" and is thus applicable to disability insurance.

Plaintiff argues that the denial of benefits remains ongoing today and, therefore, that the current version of 24-A M.R.S.A. § 2436-A, which applies to disability insurance policies, provides him with a cause of action. Plaintiff asserts that the current version of the statute applies because Defendants continue to refuse to pay his disability claim. Plaintiff's Complaint includes no allegation of acts committed subsequent to the 1995 decision to terminate disability benefits. Plaintiff's argument, however, suggests that there has never been a final decision made on his disability claim. The current status of the claim is an inevitable result of New England's denial of benefits decision in 1995. The Court concludes that the denial of disability benefits under the policy was finally made in 1995 and there is no ongoing denial today. Since there has not been any action taken by New England after 1995, the Court will not analyze this as an ongoing denial of benefits. The operative date for application of the unfair claims practices statute is 1995 and, at that time, the statute did not apply to disability insurance.

The second possible theory underlying Plaintiff's argument raises the issue of retroactive application of statutory amendments. "Generally, a statute will be construed to apply prospectively unless a legislative intent to make it retroactive is clearly stated." Salenius v. Salenius, 654 A.2d 426, 429 (Me.1995); see also Terry v. St. Regis Paper Co., 459 A.2d 1106, 1109 (Me.1983) (Absent a clear expression or necessary implication of legislative intent to the contrary, a statute will be presumed to have prospective effect only.); Coates v. Maine Employment Sec. Comm'n, 406 A.2d 94, 97 (Me.1979). The 1997 amendment to the unfair claims practices statute is unambiguous on its face and carries no necessary implication of retroactive application. Therefore, the Court will not look behind the statutory language to its legislative history. See Estate of Stone v. Hanson, 621 A.2d 852, 853 (Me.1993) (The key to the proper application of a statute is to determine the intent of the legislature from the language of the statute.); Commissioner of Dept. of Human Services v. Massey, 537 A.2d 1158, 1159 (Me.1988); Concord General Mut. Ins. Co. v. Patrons-Oxford Mut. Ins. Co., 411 A.2d 1017, 1020 (Me.1980); Barrett v. Herbert Engineering, Inc., 371 A.2d 633, 635 n. 1 (Me.1977). The 1997 amendment, making the statute applicable to disability claims, is not automatically retroactively applied. Therefore, under either theory fundamental to Plaintiff's argument, the current version of § 2436-A does not apply, and the Court will dismiss Count III of Plaintiff's Complaint.

B. Count V — Intentional Infliction of Emotional Distress

In order to state a claim for intentional infliction of emotional distress, Plaintiff must allege that:

(1) the defendant intentionally or recklessly inflicted severe emotional distress or was certain or substantially certain that such distress would result from his conduct; (2) the conduct was so "extreme and outrageous" as to exceed "all possible bounds of decency" and must be regarded as "atrocious, and utterly intolerable in a civilized community;" (3) the actions of the defendant caused the plaintiff's emotional distress; and (4) the emotional distress suffered by the plaintiff was "severe" so that "no reasonable man could be expected to endure it."

Colford v. Chubb Life Ins. Co. of America, 687 A.2d 609, 616 (Me.1996) (citing Vicnire v. Ford Motor Credit Co., 401 A.2d 148,...