Opinion ID: 77298
Heading Depth: 2
Heading Rank: 4

Heading: Total Disability From Real Estate Occupation

Text: 55 While there is a lot of discussion in the briefs about Giddens's duties, it is but a prelude to Equitable's main defense, which is based on the policy language. Equitable argues the Policies require that Giddens be unable to perform all of the substantial and material duties of his real estate occupation in order to be totally disabled. Equitable stresses that Giddens is unable to perform only most or a majority of his substantial, material duties. Equitable contends that if Giddens is able to perform even one of his substantial, material duties, he is not totally disabled, but only partially or residually disabled. Equitable thus contends the district court erred in granting summary judgment in favor of Giddens. 8 56 Because this defense is based on the policy language, we first review the Georgia law regarding construction of insurance contracts and then the Policies. 9
57 Under Georgia law, the rights of the parties to an insurance policy should not be expanded beyond the terms of the policy. Baldwin v. State Farm Fire & Cas. Co., 264 Ga.App. 229, 590 S.E.2d 206, 208 (2003). In applying the rules of construction to an insurance contract, the test is not what the insurer intended its words to mean, but rather what a reasonable person in the insured's position would understand them to mean. W. Pac. Mut. Ins. Co. v. Davies, 267 Ga.App. 675, 601 S.E.2d 363, 368-69 (2004) (quotation marks and citation omitted). 58 Where the language of the contract is unambiguous and only one reasonable interpretation is possible, the contract must be enforced as written. Sapp v. State Farm Fire & Cas. Co., 226 Ga.App. 200, 486 S.E.2d 71, 73 (1997). However, when a policy is ambiguous, or is capable of two reasonable interpretations, it is construed in the light most favorable to the insured and against the insurer. Davies, 601 S.E.2d at 369; Erie Indem. Co. v. Lascala, 206 Ga.App. 283, 424 S.E.2d 820, 821-22 (1992). Indeed, [p]olicies of insurance will be liberally construed in favor of the object to [be] accomplished, and conditions and provisions therein will be strictly construed against the insurer, as they are issued upon printed forms, prepared by experts at the insurer's instance, in the preparation of which the insured has no voice. Davis v. United Am. Life Ins. Co., 215 Ga. 521, 111 S.E.2d 488, 492 (1959) (quotation marks and citation omitted). Georgia courts instruct that disability provisions should be given a practical and reasonable construction and not a strict and literal one. John Hancock Mut. Life Ins. Co. v. Poss, 154 Ga.App. 272, 267 S.E.2d 877, 881 (1980) (citation omitted). 59 In addition, the interpretation of an insurance policy, including the determination and resolution of ambiguities, is a question of law for the court to decide. O.C.G.A. § 13-2-1; Claussen v. Aetna Cas. & Sur. Co., 888 F.2d 747, 749 (11th Cir.1989). We now turn to the Policies.
60 As noted earlier, the Policies define Total Disability as the inability to engage in the substantial and material duties of your regular occupation. Giddens's Policies protect him against disability from his own regular occupation and do not require that Giddens be disabled from any occupation or comparable occupations. Thus, we look to the duties of his real estate occupation. 61 Further, we agree with Equitable that Giddens did not prove that he could not perform all substantial, material duties but rather proved that he could not perform most or the majority of such duties. For example, Giddens testified that he cannot perform most of the duties of his real estate occupation and is unable to resume that occupation. Further, Drs. Spivey and Webster testified that he was unable to perform substantial portions of the duties of his real estate development. By substantial portions, Dr. Spivey meant most and Dr. Webster meant the vast majority. Among Giddens's substantial, material duties that he is unable to perform are his application of entrepreneurial vision and energy, higher-level planning of real estate development projects, financial management of development and construction projects, and determining the feasibility of projects. Although Giddens, according to the evidence, perhaps remains able to perform a few duties — including selecting house plans, materials, and contractors — the testimony of Giddens and Drs. Spivey and Webster indicates that he is unable to perform most or the vast majority of the substantial, material duties of real estate development, and thus is totally disabled from his real estate occupation. 62 Equitable's main argument on appeal is that Giddens must be unable to perform all substantial and material duties of his occupation in order to be totally disabled. The problem for Equitable is that the Total Disability clause in its Policies does not identify what percentage of the duties the insured must be unable to perform. The clause does not say all substantial and material duties or most or any percentage. 63 Further, the parties have not cited, and we cannot locate, any decision by a Georgia appellate court construing the same language in a disability policy. However, the Eighth Circuit has construed the same language in a disability policy and determined that it is ambiguous. Dowdle v. Nat'l Life Ins. Co., 407 F.3d 967, 970 (8th Cir.2005) (applying Minnesota law to policy defining total disability as inability to perform the material and substantial duties of an occupation and concluding that ambiguity existed because [t]he policies' definitions of `total disability' are susceptible to differing interpretations, because the policies do not speak in terms of `any,' `all,' `some,' or `the most important part' of [the insured's] duties). 10 We agree with the Eighth Circuit that the policy language here is ambiguous. We do not suggest that all is an unreasonable interpretation of the policy language, but we do say that most or the majority of the substantial and material duties is also a reasonable interpretation if an insured is unable to engage in his regular occupation as a result of his inability to perform most or the majority of those duties. 64 Construing the Policies in favor of Giddens and against Equitable, we conclude Giddens may establish total disability if he cannot engage in his real estate occupation because he is unable to perform most or the vast majority of the substantial and material duties of his occupation. As outlined above, Giddens's evidence established inability to perform most of his important duties and an inability to engage in his real estate occupation. 65 That Giddens may be able to perform one or more of the substantial and material duties associated with that occupation simply does not preclude a showing of total disability under the terms of the Policies, as Equitable claims. Even if Giddens can perform a few substantial and material duties — including, for example, selecting house plans, materials, and subcontractors — his ability to perform those tasks in isolation still would not allow Giddens to continue in his real estate development occupation because he is unable to perform his entrepreneurial, financial, planning, coordinating, and administrative duties, which were the heart of his real estate occupation. See Dowdle, 407 F.3d at 972 (concluding that surgeon who could no longer stand long enough to perform orthopedic surgery but could conduct office visits, see patients, read x-rays, perform IMEs, interpret data, and promote referrals was totally — not residually — disabled because he could not perform the most important substantial and material duty). 11
66 Equitable argues that Georgia law compels the interpretation that total disability exists only where the insured is unable to perform all of the substantial, material duties of his occupation. Equitable cites several Georgia cases that it claims compel this definition of total disability. See, e.g., Cloer v. Life & Cas. Ins. Co. of Tennessee, 222 Ga. 798, 152 S.E.2d 857 (1966); Mut. Life Ins. Co. of New York v. Barron, 198 Ga. 1, 30 S.E.2d 879 (1944); Metro. Life Ins. Co. v. Johnson, 194 Ga. 138, 20 S.E.2d 761, 762 (1942); Prudential Ins. Co. of Am. v. South, 179 Ga. 653, 177 S.E. 499, 502 (1934); Cato v. Aetna Life Ins. Co., 164 Ga. 392, 138 S.E. 787 (1927). 67 Those cases fail to support Equitable's position because the policy language interpreted in those cases was substantially different from the relevant language in this case. In those cases, the policies defined total disability as the inability to perform any occupation or any work. 12 Here, by contrast, the Policies define total disability as the inability to perform the substantial and material duties of your regular occupation,  without regard to whether the insured could do other kinds of work. 13 More importantly, none of the policies in these Georgia cases contained the language at issue here — the substantial and material duties. 68 If anything, Equitable's cases show how Georgia courts liberally construe disability policies in favor of insureds and strictly against insurers. In the cases Equitable cites, the Georgia courts rejected the insurers' claims that the requirement of inability to perform any occupation or any work meant any gainful employment. See Barron, 30 S.E.2d at 883; Johnson, 20 S.E.2d at 762; South, 177 S.E. at 501. Instead, the Georgia courts construed the language of inability to perform any work or any occupation, in favor of the insured, to mean inability to perform substantial portions of the insured's ordinary employment or any other employment approximating the insured's same livelihood as he might fairly be expected to follow given his personal circumstances, including his experience, education, physical and mental capacities. See Barron, 30 S.E.2d at 883; Johnson, 20 S.E.2d at 762; South, 177 S.E. at 501. In doing so, the Georgia courts stressed that the word occupation must be construed according to the facts and circumstances of the execution of the contract, including the objects to be effectuated thereby. South, 177 S.E. at 501; see also Cato, 138 S.E. at 791 (construing total disability language and stating that [p]olicies of insurance will be liberally construed in favor of the object to be accomplished, and provisions therein will be strictly construed against the insurer). Thus, in these cases the Georgia courts construed any occupation as occupations approximating the insured's livelihood. 14 The object to be accomplished in Giddens's Policies is total disability coverage if he is unable to perform so many substantial and material duties that his regular occupation is reasonably closed to him. That point is clearly reached in Giddens's case. 69 Equitable finally argues that total disability must mean the inability to perform all of the material and substantial duties because to interpret the term otherwise would nullify the Residual Disability clause. The Policies define residual disability as the inability to perform . . . one or more of the substantial and material duties of [the insured's] occupation. This argument is unpersuasive. Quite obviously, there is a continuum of disability. If the insured is unable to perform only one or more of many material occupational duties, then the insured would not be totally disabled. Where the insured, such as Giddens, is unable to perform most or the majority (but not all) of the material duties and thus cannot engage in his regular occupation, the insured nevertheless is totally disabled from his regular occupation, and this interpretation does not nullify the Residual Disability clause. 15 At some point, a line must be drawn where the disability becomes so severe, and affects such a large percentage of the insured's material and substantial duties, that the disability is total rather than residual. The language of the Residual Disability clause does not suggest where that line should be drawn and certainly does not require that it be drawn only where Equitable suggests. If Equitable means all in its Total Disability clause, then Equitable may make that simple change to its policy forms. 16