Source: http://lifehealthlaw.com/wp/?p=124
Timestamp: 2019-04-25 00:16:12+00:00

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Experienced disability litigators know the general rule that disability insurance provides coverage with respect to factual, rather than legal, disabilities. See generally, Couch on Insurance 3d § 146:9. The prototypical “legal disability” case involves a claimant who is physically able to perform the duties of his occupation, but is prevented from doing so by either incarceration or suspension/revocation of a professional license. Mass. Mutual Life Ins. Co. v. Millstein, 129 F.3d 688 (2d Cir. 1997); Wright v. Paul Revere Ins. Co., 291 F.Supp.2d 1104 (C.D. Cal. 2003). Conversely, where a sickness or injury disables a claimant, benefits may be payable notwithstanding the fact that the claimant subsequently becomes incarcerated, unlicensed, or otherwise precluded from performing his or her occupational duties. Weissman v. First UNUM Life Ins. Co., 44 F.Supp.2d 512 (S.D.N.Y. 1999) – benefits payable where the brain injury pre-dated the legal order barring claimant from working as a securities broker; P. Gary Stern M.D. v. Paul Revere Life Ins. Co. , 744 So.2d 1084 (FL 4th DCA 1999) – triable issue where onset of physical disability began before criminal proceedings.
An interesting issue that runs through these cases involves sicknesses or injuries which are allegedly disabling and which lead to legal incapacity. These cases generally involve one of two scenarios: either a progressive physical illness which precludes exposure to the public, or a mental disorder which results in criminal conduct. While the holdings in these cases tend to focus on the temporal relationship between the onset of the sickness or injury and the effective date of the legal disability, the better reasoned cases focus on whether the condition, aside from the legal disability, would in and of itself prevent the claimant from performing his or her occupational duties, and if so, at what point in time that occurred.
Let us consider the case of Dr. D, a practicing dentist. Dr. D has an “occupational” disability policy. In 2004, Dr. D was diagnosed as suffering from clinical depression, but with therapy and medication he is able to continue his dental practice. In 2008, a patient lodges a complaint with the State Dental Board regarding Dr. D, alleging that he engaged in improper conduct. In 2009, with charges pending, Dr. D discontinues his practice. Later in that year, the licensing board suspends Dr. D’s license to practice; the license is subsequently revoked. In 2010, after Dr. D’s license is revoked, he files a claim for disability benefits, alleging that his clinical depression advanced to the point where it became disabling as of 2009. Dr D also alleges that his depression was the cause of the conduct which led to the suspension of his license.
a. Zembko v. Northwestern Mutual Life Ins. Co., 2007 U.S. Dist. LEXIS 21677 (D. CT. 2007) – attorney held not entitled to benefits because inability to work caused by criminal conviction and suspended license; court dismissed argument that attorney’s depressive disorder (which allegedly led to her criminal conduct) was the cause of her disability, noting that she worked with the condition for many years and only stopped upon suspension (and later revocation) of her license.
b. Mass Mutual Life Ins. Co. v. Woodall, 304 F.Supp.2d 1364 (S.D. GA 2003) – disbarred attorney became depressed as a result of disbarment proceedings; benefits paid for a period under reservation of rights; held that no further benefits payable due to legal disability, but insurer could not recover benefits paid.
c. Cowan v. Paul Revere Life Ins. Co., 2002 U.S. App. LEXIS 2454 (6th Cir. 2002) (unpub.) – school bus driver claimed disability due to diabetes; claim denial upheld because claimant had physical ability to drive, but precluded from driving schoolchildren by state and federal regulations.
d. Massachusetts Mutual Life Ins. Co. v. Millstein, 129 F.3d 688 (2d Cir. 1997) – attorney held not entitled to benefits because inability to work caused by criminal conduct and suspended license; court dismissed argument that attorney’s drug addiction (which led to his criminal conduct) was the cause of his disability.
a. Colby v. Assurant Employee Benefits, 603 F.Supp.2d 223 (D.MA 2009) – physician tested positive for fentanyl in 2004, voluntarily relinquished license and entered drug rehab; license revoked 2005; held abuse of discretion to deny benefits where factual disability (opioid dependence) precluded return to work.
b. Doe v. Great West Life & Annuity Ins. Co., 2000 U.S. App. LEXIS 3673 (6th Cir. 2000) (unpub.) – dentist with hepatitis B and C held factually disabled in light of regulation mandating patient disclosure and consent; Court held that medical condition precluded him from practicing dentistry as a practical matter.
c. Weissman v. First UNUM Life Ins. Co., 44 F.Supp.2d 512 (S.D.N.Y. 1999) – securities broker suffers brain injury in 1993; in 1996, signs consent order acknowledging accusation of violation of securities law; barred from handling securities; court holds benefits payable where the brain injury pre-dated the legal order barring claimant from working as a securities broker.
a. Werbela v. Mass Mutual Life Ins. Co., 2005 U.S. Dist. LEXIS 25309 (W.D.N.Y. 2005) – triable issue of fact where factual disability (back injury) pre-dated legal disability (suspension of chiropractic license); insurer granted leave to prove at trial that claimant faked back injury with knowledge of pending license revocation.
b. Walker v. UnumProvident Corp., 2002 U.S. Dist. LEXIS 21647 (D. Minn.2002) – claimant diagnosed with sexual disorder in 1998; license revoked and incarcerated in March 2000, at which time submitted disability claim; triable issue whether factual disability preceded legal disability.
c. New York Life Ins. Co v. Daly, 2001 U.S. Dist. LEXIS 16691 (E.D. PA 2001) – triable issue of fact whether mental disability (paranoia, depression) pre-dated legal disability (suspension of license to practice law) where diagnosis comes after criminal charges brought but before suspension of license.
d. BLH v. The Northwestern Mutual Life Ins. Co., 92 F.Supp.2d 910 (D. Minn. 2000) – claimant had medical license revoked due to misconduct with patients; disability claim based on depression and paraphilic/sexual disorders; triable issue whether the mental disorders predated (and perhaps caused) the behavior that led to license revocation.
e. P. Gary Stern M.D. v. Paul Revere Life Ins. Co., 744 So.2d 1084 (FL 4th DCA 1999) – triable issue where onset of physical disability began before criminal proceedings.
The analysis in these cases often goes astray by focusing on the legal proceeding rather than the diagnosis, onset, progression of the sickness/injury, and the corroborating evidence thereof. In Dr. D’s case, the record as we have it establishes that Dr. D voluntarily stopped practicing in 2009. What is lacking is a contemporaneous certification to disability as of 2009; the attending physician’s statement accompanying the benefits claim in 2010 is afforded less weight because of the intervening legal disability. As such, the proper question is not whether Dr. D’s improper conduct was “caused by” his disability; that concept is misleading. For example, had the patient opted for a different response to Dr. D’s conduct (e.g., a punch in the nose), the legal disability might not have arisen when it did, notwithstanding Dr. D’s depressive disorder and its unfortunate side effects. It is equally likely that Dr. D may have engaged in improper conduct at a prior time during the course of his depression which simply went unreported. Instead, the correct question is whether there is competent, contemporaneous medical evidence supporting Dr. D’s claim that as of 2009 his depression had advanced to a point where he was no longer able to perform his occupational duties, without regard to the filing of the accusation. [For an excellent analysis of this issue, please see Massachusetts Mutual Life Ins. Co. v. Jefferson, 104 S.W.3d 13 (Tenn. Ct. App. 2002)] Since the burden of proof lies with the claimant, Dr. D should not be entitled to benefits unless he can make this showing. Otherwise, he is precluded from working by his legal disability, and he is not entitled to benefits.
The author acknowledges Joshua Bachrach, Esq., Wilson, Elser, Moskowitz, Edelman & Dicker LLP, Philadelphia, Pennsylvania, for his invaluable assistance with the preparation of this article.

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