Yumukoglu v. Provident Life & Acc. Ins. Co.

Decision Date02 February 2001
Docket NumberNo. CIV. 99-1245 BBWWD.,CIV. 99-1245 BBWWD.
Citation131 F.Supp.2d 1215
PartiesDr. Mina YUMUKOGLU, Plaintiff, v. PROVIDENT LIFE & ACCIDENT INSURANCE COMPANY, Defendant.
CourtU.S. District Court — District of New Mexico

L. Edward Glass, Albuquerque, NM, for Plaintiff.

Thomas L. Johnson, Albuquerque, NM, for Defendant.

MEMORANDUM OPINION AND ORDER

BLACK, District Judge.

THIS MATTER comes before the Court on Plaintiffs Motion for Partial Summary Judgment (Doc. 52), filed September 8, 2000, and Defendant's Motion for Partial Summary Judgment (Doc. 63), filed November 15, 2000. The Court has reviewed the parties' submissions and the relevant authorities, and, for the reasons set forth below, finds that both motions should be GRANTED in full.

I. BACKGROUND

The parties have filed this diversity action concerning the payment of benefits under a disability insurance policy. Plaintiff, Dr. Mina Yumukoglu, is a certified Gastroenterologist. In March of 1983, Dr. Yumukoglu purchased Disability Income Policy No. 6-334-558290 from Defendant Provident Life & Accident Insurance Company ("Provident"), which provided for a lifetime monthly benefit of $5000.00 in the event Plaintiff became totally disabled. The policy was purchased and issued in the state of Louisiana. In December, 1997, Dr. Yumukoglu suffered a vertebral basilar stroke which left him at least partially disabled. Following his stroke, Dr. Yumukoglu made a claim for total disability benefits, which was initially approved by Provident. Benefits were paid monthly from March 23, 1998, until terminated by Provident effective June 23, 1999.1

Part of the dispute at issue between the parties pertains to the policy's provisions regarding medical conditions that existed before the policy came into effect. The introduction to the policy states that Provident "will pay benefits for Total Disability or other covered loss resulting from Injuries or Sickness, subject to the definitions, exclusions, and other provisions of this policy." Policy at 1. "Sickness" is defined as "sickness or disease which is first manifested while [the] policy is in force." Id. at 4. The policy contains both an "Exclusions" and a "Pre-Existing Condition Limitation" clause, also set forth on page four, which provide, respectively:

I. EXCLUSIONS: This policy does not cover loss caused by...(3) pre-existing conditions (see next provision).

II. PRE-EXISTING CONDITION LIMITATION: We will not cover loss starting within two years of the Effective Date of this policy which is caused by a Pre-existing Condition unless the condition:

1. was disclosed and not misrepresented in answer to a question in the application for this policy; and

2. is not excluded by name or specific description.

After two years from the Effective Date of the policy, a Pre-existing Condition that is not excluded by name or specific description will be covered as set forth in paragraph 2 of the provision titled "Incontestable." A Pre-existing Condition means a sickness or physical condition:

1. for which symptoms existed prior to the Effective Date of this policy which would have caused an ordinarily prudent person to have sought diagnosis, care or treatment; or

2. for which medical advice or treatment was recommended by or received from a physician.

Id. at 4-5.

In 1979, Dr. Yumukoglu had been diagnosed with atrial fibrillation, a disorder of the heart and blood vessels for which he had been hospitalized and treated with medications on an annual basis. Although Provident's application for disability insurance policy requires information from applicants regarding their medical history, Dr. Yumukoglu failed to disclose his atrial fibrillation to Provident in his application for disability insurance. As completed, Dr. Yumukoglu's application contained the following representations:

1. a. Name and address of your personal physician? Dr. Samuel Greenberg.

b. Date and reason last consulted? Ins. Physical 10-79.

c. What treatment was given or medication prescribed? none.

2. Have you ever been treated for or ever had any known indication of:

d. Chest pain, palpitation, high blood pressure, rheumatic fever, heart murmur, heart attack or other disorder of the heart or blood vessels? no.

g. Diabetes, thyroid or other endocrine disorders? no.

5. Other than above, have you within the past 5 years:

a. Had any mental or physical disorder not listed above? no.

b. Had a checkup, consultation, illness, injury, surgery? no.

c. Been a patient in a hospital, clinic, sanatorium, or other medical facility? no. d. Had electrocardiogram, X-ray, other diagnostic test? no.

Based on the foregoing answers, Provident was unaware of Dr. Yumukoglu's diagnosed atrial fibrillation at the time it issued his disability insurance policy. Dr. Yumukoglu admits that the atrial fibrillation was the cause, in whole or in part, of the stroke that led to his disability.

However, Dr. Yumukoglu contends that Provident is precluded from denying his benefits on the basis of his pre-existing condition because of the policy's "Incontestability" clause. Louisiana, like most states, statutorily requires that insurance policies contain incontestability clauses that place time limits on certain defenses. The policy's incontestability clause states:

INCONTESTABLE:

1. After this policy has been in force for two years during your lifetime, we cannot contest the statements in the application.

2. No claim for loss incurred or disability that starts after two years from the Effective Date of this policy will be reduced or denied on the ground that a sickness or physical condition not excluded by name or specific description had existed before the Effective Date of this policy.

Policy at 13. Dr. Yumukoglu contends that, although the policy professes not to cover illnesses that manifest themselves prior to policy's issuance, Paragraph 2 of the incontestability clause mandates coverage after two years regardless of when the disease was first manifested. Provident responds that pre-manifesting illnesses are specifically excluded from the scope of the policy's coverage, and argues that the incontestability clause cannot be construed to create coverage where coverage never existed. Provident asks the Court to draw a distinction between pre-existing illnesses (those which existed prior to the issuance of the policy, but were not yet evident) and pre-manifesting illnesses (illnesses which have displayed themselves before the policy went into effect). In Provident's view, paragraph 2 of the incontestability clause requires it to cover disabilities resulting from pre-existing illnesses but does not require coverage for pre-manifesting illnesses.

The second half of the parties' dispute concerns the extent of Dr. Yumukoglu's disability and Provident's decision to terminate Dr. Yumukoglu's benefits after initially approving his claim. The policy defines "total disability" as follows:

TOTAL DISABILITY means that due to Injuries or Sickness:

1. you are unable to perform the duties of your occupation; and

2. you are under the care and attendance of a Physician.

Policy at 4. Following his stroke in December, 1997, Dr. Yumukoglu filed a Notice of Claim with Provident in which he claimed to be totally disabled due to his inability to perform any of the substantial and material duties of a Gastroenterologist. The stroke caused him to experience difficulty grasping objects with his left hand, slurred speech, lack of strength on his left side, inability to concentrate or analyze problems, difficulty with word problems, headaches, and inability to drive. Dr. Kenneth Mladinich, Plaintiff Yumukoglu's original attending physician, concluded that the disabilities caused by the stroke prevented Dr. Yumukoglu from returning to work as a Gastroenterologist. Dr. Maria Palmer, the physician who took over Dr. Yumukoglu's case, confirmed to Provident that Dr. Yumukoglu's stroke had left him unable to drive and required that he walk with the assistance of a cane. Surveillance conducted by Provident, however, showed Dr. Yumukoglu driving and walking at times without the use of his cane. Dr. Yumukoglu's medical tests, including an MRI and a CT scan, were reviewed by both his own physicians and Provident's medical experts: the evidence reveals that each party's doctors are in disagreement regarding Dr. Yumukoglu's precise level of neurological dysfunction. A report by Dr. Edwin Curtis, a doctor of occupational medicine who reviewed Plaintiff's medical file on Provident's behalf, concluded that "[Dr. Yumukoglu's] level of activity and functioning per surveillance, seem to be somewhat inconsistent with the alleged degree of incapacity. The apparent assumption (his own and his attending's) that he is occupationally unable to perform the duties of his profession is not well supported by the record." Similarly, a review of Dr. Yumukoglu's medical file and surveillance tapes by Ms. Rebecca Leger, a disability case manager with a degree in nursing, led Ms. Leger to conclude that Dr. Yumukoglu's activity level and his reported degree of incapacity were not consistent with either the medical records or the surveillance tapes. Dr. David Goldsmith, a psychologist retained by Provident, concluded in his psychological record review that Dr. Yumukoglu was "malingering" and had potentially exaggerated the extent of his brain injury. Dr. Yumukoglu responds by pointing to conflicting evidence in his medical reports, including neuropsychological testing performed at Provident's request by Dr. George Shute, Ph.D, a neuropsychologist retained by Provident. Dr. Shute was unable to make a firm conclusion regarding Dr. Yumukoglu's status but concluded that some degree of cognitive dysfunction might exist.

Upon its initial payment of benefits under a reservation of rights, Provident began an investigation of Dr. Yumukoglu's claim. In the course of its investigation, Provident learned that Dr. Yumukoglu had...

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