United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 01-1741

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Douglas McOsker, *

*

Appellant, *

*

v. * Appeal from the United States

* District Court for the Western

Paul Revere Life Insurance Company, * District of Missouri.

*

Appellee. *

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Submitted: December 10, 2001

Filed: February 1, 2002

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Before MORRIS SHEPPARD ARNOLD, BEAM, and RILEY, Circuit Judges.

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MORRIS SHEPPARD ARNOLD, Circuit Judge.

Douglas McOsker, who had been president of Total Copy Systems, claiming

that he was totally disabled due to severe depression, brought this action under

ERISA, see 29 U.S.C. § 1132(a)(1)(B), to recover under a policy that Paul Revere

Life Insurance Company issued as part of an employee benefit plan. The district

court, after a trial to the court, entered judgment in favor of Paul Revere, and

Mr. McOsker appealed. We reverse.
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I.

Under the Paul Revere policy at issue, as relevant, Mr. McOsker was totally

disabled if "because of Injury or Sickness" he was "unable to perform the important

duties of [his] Occupation." In 1995, Mr. McOsker produced evidence to Paul Revere

that it accepted as proof that he was totally disabled due to severe depression, and it

paid him corresponding benefits for about two years until it decided that he was no

longer eligible to receive them. The change of mind came after Dr. James

McLaughlin, a psychologist who had been treating Mr. McOsker's depression,

terminated his treatment, having determined that, though Mr. McOsker could not

manage or be responsible for people because of the stress involved, he could

"nevertheless return to work but not at pre-disability level of functioning." A few

months later, Dr. John L. Bean opined to Paul Revere that Mr. McOsker was still

suffering from severe depression and that it was unknown when he could return to

work, but Paul Revere refused to resume payments because the company's medical

staff determined that Dr. Bean's records did not contain any restrictions that would

prevent Mr. McOsker's return to work. 

In a de novo review of Paul Revere's decision, see Firestone Tire and Rubber

Co. v. Bruch, 489 U.S. 101, 115 (1989); Galman v. Prudential Ins. Co. of America,

254 F.3d 768, 770 (8th Cir. 2001), the district court held that in order to recover

benefits for total disability under the Paul Revere policy, Mr. McOsker must be

unable to perform any of the important duties of his position; that is, he was obligated

to show that his disability prevented him from performing all of those duties, not just

some of them. While the policy may not say so in ipsis verbis, we think that the

district court's construction of it is the only one that comports with both reason and

authority. 

The circumstance that in our minds most plainly supports this interpretation is

that the policy allows for benefits for "Residual Disability" when the insured is

"unable to perform one or more of the important duties" of his or her occupation. It
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is evident to us that a person who can perform some but not all of his or her important

duties has a "Residual Disability" within the meaning of the policy, and that therefore

in order to be eligible for total disability payments a person would be required to

show that he or she was unable to perform any of those important duties. We believe

that it is not otherwise possible to give effect to both parts of the contract. 

Such a construction, moreover, conforms with the result reached by other

courts that have been faced with interpreting identical or substantially identical

contract language. See, e.g., Yahiro v. Northwestern Mut. Life Ins. Co.,

168 F. Supp. 2d 511, 517-18 (D. Md. 2001); Dym v. Provident Life and Accident Ins.

Co., 19 F. Supp. 2d 1147, 1149-50 (S. D. Cal. 1998); see also Giampa v. Trustmark

Ins. Co., 73 F. Supp. 2d 22, 27-29 (D. Mass. 1999). We think that it is significant that

Mr. McOsker refers us to no cases holding the contrary.

II.

Having correctly construed the policy, the district court went on to hold that

Mr. McOsker was not totally disabled because he was in fact able to perform some

of the important duties of his position. We review this factual determination for clear

error. See Gander v. Livoti, 250 F.3d 606, 611 (8th Cir. 2001). 

We think it important to note in beginning our consideration of the evidence

in this case that Paul Revere's initial determination that Mr. McOsker was totally

disabled was based on Dr. Bean's opinion that, due to major depression, Mr. McOsker

was unable to perform any of a list of important duties that Mr. McOsker had

provided to the doctor. Mr. McOsker listed his duties as sales management, inventory

management, establishing policy, and making administrative decisions, each of which

categories he went on to describe in a detailed way. 

The district court, in deciding the matter in Paul Revere's favor, relied heavily

on the fact that when he terminated Mr. McOsker's treatment in 1997 Dr. McLaughlin
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opined that Mr. McOsker "could return to work but not at pre-disability level of

functioning." We note, first, the highly ambiguous character of this opinion:

Dr. McLaughlin might have been saying that Mr. McOsker could not work at his

previous "level" (i.e., in a management capacity), or that he could perform all of his

important duties but not with the same efficiency as before, or that he could perform

some of the important duties of his job. While it is not impossible that

Dr. McLaughlin was intending to say that Mr. McOsker could perform some of the

important duties of his job (which is evidently how the district court interpreted

Dr. McLaughlin's reports), we believe it much more probable that Dr. McLaughlin

meant instead that Mr. McOsker could work in some capacity but not in a managerial

position like the one he previously occupied. 

It is important to note that before he discharged Mr. McOsker, Dr. McLaughlin

had been saying at regular intervals for over a year that Mr. McOsker could not return

to the work "at [his] old employment level." When he terminated Mr. McOsker's

treatment, Dr. McLaughlin opined that his patient "cannot manage or be responsible

for people due to severe stress inherent in managerial responsibility." This opinion

does not vary significantly from the opinions that Dr. McLaughlin had already been

rendering and on the basis of which Paul Revere had been paying benefits for some

time, which suggests to us that Mr. McOsker was still totally disabled within the

meaning of the relevant policy at the time that Dr. McLaughlin terminated his

treatment. We are not suggesting that paying benefits operates forever as an estoppel

so that an insurer can never change its mind; but unless information available to an

insurer alters in some significant way, the previous payment of benefits is a

circumstance that must weigh against the propriety of an insurer's decision to

discontinue those payments.

Paul Revere argues that some of the detailed duties that Mr. McOsker had

listed as important to his job did not involve management, but only, for instance,

deciding what inventory to order and making corporate policy. But in our view,
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Dr. McLaughlin's assessment was not merely that his patient was unable to manage

people in a direct way; Dr. McLaughlin was also saying that his patient was unable

to make decisions that affected the future of employees in a significant way. Our

confidence in this interpretation of the doctor's opinion is bolstered by his observation

that Mr. McOsker had expressed regret that "he had run a company in the ground and

he knew that he was responsibile for the employees losing their jobs." It was, in other

words, duties that carried significant consequences for others that Mr. McOsker was

still unable to perform, even after Dr. McLaughlin discharged him; and all of

Mr. McOsker's duties were of that variety.

Paul Revere points to the fact that Dr. McLaughlin said that Mr. McOsker

"could be involved in sales," and it argues that since Mr. McOsker said that "sales"

was one of his job duties, the district court could have reasonably concluded that

Mr. McOsker was not totally disabled. In the first place, the district court did not rely

on this argument to support its conclusion. More important, we are unable to locate

anything in the record to indicate that Mr. McOsker ever said that sales was one of

his important job duties. The list that he provided in support of his initial application,

on the basis of which Dr. Bean had found him totally disabled and Paul Revere had

begun paying benefits, mentioned sales management, not merely sales, as an

important duty.

None of the other evidence relied on by the district court, moreover, it seems

to us, contributes significantly to a conclusion that Mr. McOsker was no longer

totally disabled within the meaning of Paul Revere's policy. While Mr. McOsker's

condition certainly improved, and Dr. McLaughlin concluded that he was no longer

"severely depressed," we think it important to note that, so far as we can discern from

the record, Paul Revere never showed Dr. McLaughlin a list of Mr. McOsker's

important job duties and asked him whether Mr. McOsker could perform any of them.

When one adds to the factual mix Dr. Bean's opinion that Mr. McOsker was still

totally disabled in 1997, after Dr. McLaughlin terminated his treatment, and it was
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Dr. Bean who had had the relevant list of duties before him for some time, we think

it highly probable that Mr. McOsker was still entitled to benefits.

We have recently had occasion to remark that in determining whether an

insurer has properly terminated benefits that it initially undertook to pay out, it is

important to focus on the events that occurred between the conclusion that benefits

were owing and the decision to terminate them. See Walke v. Group Long Term

Disability Ins., 256 F.3d 835, 840 (8th Cir. 2001). When we turn to the record in this

case with that principle in mind, we are left with "a definite and firm conviction that

a mistake [was] committed," United States v. United States Gypsum Co., 333 U.S.

364, 395 (1948), quoted in Lincoln Benefit Life Co. v. Edwards, 243 F.3d 457, 464

(8th Cir. 2001) (per curiam), when the district court found that Mr. McOsker was not

totally disabled and rendered judgment in Paul Revere's favor on that basis. 

III.

For the reasons indicated, we reverse the judgment of the district court and

remand for further proceedings not inconsistent with this opinion. 

 A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.