DOLLY M. GEE, District Judge.
This matter is before the Court on Plaintiffs Motion for Partial Summary Judgment on Breach of Contract and Equitable Estoppel [Doc. # 108]. The Court held a hearing on March 11, 2011. Having duly considered the respective positions of the parties, as presented in their briefs and at oral argument, the Court now renders its decision. For the reasons set forth below, Plaintiff's Motion is GRANTED.
Plaintiff filed his Complaint on March 23, 2009 and his First Amended Complaint on August 11, 2009. Plaintiff alleges two causes of action: (1) breach of contract and (2) breach of the covenant of good faith and fair dealing.
On January 28, 2011, Plaintiff filed the subject Motion for Partial Summary Judgment. On February 4, 2011, Defendants filed an Opposition. Plaintiff filed a Reply on February 11, 2011.
The facts material to the Court's decision are undisputed by the parties.
In 1980, Plaintiff applied for and purchased a disability insurance policy from Provident Life and Accident Insurance Company ("PL & A")
The Policy provides for Total Disability benefits as follows:
(Decl. of Henry G. Jones ("Jones Decl."), ¶ 2, Ex. A at 9.)
The Policy defines "Total Disability" as follows:
(Jones Decl., ¶ 2, Ex. A at 26.)
The Policy Schedule attached to the Policy provides that the "MONTHLY BENEFIT FOR TOTAL DISABILITY" is:
(Jones Decl. ¶ 2, Ex. A at 17) (emphasis in original).
The "MAXIMUM BENEFIT PERIODS WHILE TOTALLY DISABLED" are described as follows:
(Jones Decl. ¶ 2, Ex. A at 17) (emphasis in original).
Plaintiff was an ophthalmologic surgeon. (Pl.'s Facts ¶ 7; Defs.' Issues ¶ 7.) In Spring 1995, Plaintiff was involved in a skiing accident (the "1995 Accident") at Heavenly Valley ski resort in Lake Tahoe, Nevada. (Jones Decl., ¶¶ 45, Ex. C, Deposition of Stephen J. August ("August Depo.") at pp. 36-37; Ex. D, Deposition of Mary August at pp. 16-17.) While Plaintiff was skiing, he fell and "hyperflexed" his neck. (Jones Decl., ¶ 4, August Depo. at 36.) Plaintiff self-treated the resulting pain. (Id. at 37.)
Several months later, Plaintiff began to suffer neck pain and other symptoms, which were still present in Spring 1996. (Pl.'s Facts ¶¶ 9-10; Defs.' Issues ¶¶ 9-10.) In June 1996, Plaintiff sought treatment from Dr. Frederic Edelman, a neurosurgeon. (Pl.'s Facts ¶¶ 9-10; Defs.' Issues ¶¶ 9-10.) On June 19, 1996, Dr. Edelman performed surgery and Plaintiff was thereafter able to return to work as an ophthalmologist. (Pl.'s Facts ¶¶ 10, 11; Defs.' Issues ¶¶ 10, 11.) Plaintiffs symptoms, however, did not subside after the surgery. He subsequently filed a claim for total
On January 22, 1997, Plaintiff notified PL & A of his intent to file a disability claim. (Pl.'s Facts ¶ 12; Defs.' Issues ¶ 12.) On his Statement of Claim, which PL & A received on February 14, 1997, Plaintiff described his "current impairment" as follows:
(Jones Decl. ¶ 10, Ex. I.) Question 15 of the Statement of Claim states, "When did the accident occur (if applicable)?" In response, Plaintiff indicated "Spring 1995." Question 16 of the Statement of Claim states, "When did sickness commence (if applicable)?" In response, Plaintiff stated "N/A." (Id.) In response to Question 23, which asks, "Dates of total and complete inability to work ...," Plaintiff indicated 6/14/96 to Present. (Id.)
Plaintiff's Statement of Claim was accompanied by an Attending Physician's Statement, on which Dr. Frederic L. Edelman stated as follows:
(Jones Decl. ¶ 10, Ex. I.)
Plaintiff also submitted a Notice of Claim, on which Plaintiff indicated "spinal injury" in identifying the "Nature of Sickness or Injury." (Jones Decl. ¶ 10, Ex. I.)
The Accident Claim Department's "Initial Claim Data" printed on January 23, 1997 shows that PL & A coded Plaintiff's benefits to expire on April 13, 2008—Plaintiff's 65th birthday—although no coverage code was indicated at that time. (Pl.'s Facts ¶ 13; Defs.' Issues ¶ 13.) The Accident Claim Department's "Initial Claim Data" printed on November 7, 1997 also noted that Plaintiff's benefits were set to expire on April 13, 2008, and additionally indicated "32 TOTAL DISA SICKNESS" as a coverage code. (Decl. of Henry G. Jones in Sup. Of Pl.'s Reply ("Jones Reply Decl.") ¶ 2, Ex. 1.) Yet, according to Defendants, PL & A did not evaluate whether Plaintiff's loss was due to injury or sickness in 1997. (Jones Decl. ¶ 15, Ex. N; Deposition of Scott Joseph Shea ("Shea Depo.") at pp. 111-113; Decl. of Jenny Wang ("Wang Decl.") ¶ 2, Ex. A; Shea Depo. at pp. 32-33, 75.) Defendants have no explanation why Plaintiff's claim, although submitted as an accident claim, would have been initially coded as a sickness claim before any investigation had been conducted. (Jones Decl. ¶ 9, Ex. H; Deposition of Steven P. Carlson ("Carlson Depo.") at pp. 28-30.)
Defendants accepted Plaintiff's claim and paid it without explicitly disputing the cause of injury.
Plaintiff also filed a disability claim ("Paul Revere Claim") under his policy with Paul Revere Life Insurance Company ("Paul Revere"), which Paul Revere received on February 14, 1997. (Pl.'s Facts ¶ 18; Defs.' Issues ¶ 18.) On his Paul Revere Claim, in section 10, which contains prompts for "IF ACCIDENT" and "IF SICKNESS," Plaintiff stated under "IF ACCIDENT" as follows:
(Jones Decl. ¶ 11, Ex. J.) Under "IF SICKNESS," Plaintiff stated "N/A." (Id.)
Plaintiff executed a release dated February 27, 1997 that authorized the release of medical records and information to PL & A. (Jones Decl. ¶ 13, Ex. L.)
On February 27, 1997, Ms. Leigh Varnell, PL & A Claims Examiner, interviewed Plaintiff, during which she states:
(Jones Decl. ¶ 14, Ex. M.)
A PL & A Field Service Request dated February 28, 1997 checked the box denoting "Accident" as opposed to "Death" or "Sickness," and identified the "Date of Loss" as June 14, 1996, the date of the ski accident. (Jones Decl. ¶ 12, Ex. K.)
In March 1997, PL & A's parent company, Provident Companies, acquired Paul Revere and thereafter had effective control over both wholly owned subsidiaries, PL & A and Paul Revere. (Pl.'s Facts ¶ 23; Defs.' Issues ¶ 23.) On April 18 and April 21, 1997, Ms. Varnell discussed Plaintiff's disability claim with Paul Revere representatives. (Pl.'s Facts ¶ 24; Defs.' Issues ¶ 24.)
On Paul Revere's Index Inquiry form, dated April 21, 1997, the date of disability was "Spring/95," the location of the accident was "Lake Tahoe—Nevada," and the nature of the disability was "Neck/Back Injury." (Jones Decl. ¶ 18, Ex. Q.) Paul Revere's revised Index Inquiry form, dated June 16, 1997, reflected the same information. (Jones Decl. ¶ 19, Ex. R.)
Paul Revere's notes from a telephone call on June 16, 1997 with Gerry Smith, Ms. Varnell's supervisor at PL & A, indicate that Mr. Smith explained to Plaintiff the "relationship between Provident & P.R. & that handling will be similar." (Jones Decl. ¶ 20, Ex. S.)
A Field Representative Report dated July 17, 1997 and prepared by Hal Dannov states:
(Jones Decl. ¶ 3, Ex. B at 46.) The Field Representative Report recommended a "comprehensive Home Office medical review, including consideration for Independent Medical Exams, as they deem appropriate, pending the [FCE] report receipt." (Id. at 52.)
The UCLA Medical Center completed an independent Functional Capacity Evaluation ("FCE") on July 16, 1997, reflecting that Plaintiff's "Date of Injury" was "Spring '95" resulting from "falling while skiing which contributed to a progression in neck symptoms." (Jones Decl. ¶ 21, Ex.
Paul Revere's Roundtable Review Sheets dated July 28, 1997 and October 7, 1997 indicate "Provident $5,000 30EP Lifetime" and "Provident $5,000/Lifetime" under "OTHER COVERAGE." (Jones Decl. ¶¶ 22, 23, Exs. U, V.)
Plaintiff submitted at least 26 monthly progress reports to Defendants, each of which identified the cause of injury as "Accident" rather than "Sickness." (Jones Decl. ¶ 24, Ex. W.)
On July 14, 1999, Plaintiff's file was transferred to the Special Handling Unit ("SHU"). (Pl.'s Facts ¶ 37; Defs.' Issues ¶ 37.) The SHU referral reflected a diagnosis of "cervical myelopathy/secondary to ruptured cervical disk." (Jones Decl. ¶ 26, Ex. Y.)
In a letter dated October 13, 2006 (the "2006 Letter"), Defendants stated as follows:
(Jones Decl. ¶ 27, Ex. Z) (emphasis added).
In a May 31, 2007 Financial Services Committee Form, Defendants stated:
(Jones Decl. ¶ 29, Ex. BB.)
In a letter to Plaintiff dated May 31, 2007, Defendants informed Plaintiff that it would not offer a lump sum buy-out on his PL & A policy, but did not inform Plaintiff at that time that his claim was being paid under the sickness provision of the Policy. (Pl.'s Facts ¶ 46; Defs.' Issues ¶ 46.)
In a letter dated August 23, 2007, Scott Shea wrote as follows, on behalf of Defendants:
(Jones Decl. ¶ 36, Ex. II) (emphasis added).
A call log dated September 4, 2007 reflects the following:
(Jones Decl. ¶ 37, Ex. JJ.)
In a letter dated November 26, 2007 (the "November 2007 Determination Letter"),
(Jones Decl. ¶ 38, Ex. KK) (emphasis added).
On March 17, 2008, Plaintiff appealed what was in effect Defendants' denial of his accidental disability benefits in the November 2007 Determination Letter. On May 19, 2008, Defendants affirmed their denial of Plaintiff's claim for accident benefits. (Pl.'s Facts ¶¶ 59, 611; Defs.' Issues ¶¶ 59, 61.) Since June 18, 2008, Defendants have paid no further disability benefits to Plaintiff under the Policy. (Pl.'s Facts ¶ 62; Defs.' Issues ¶ 62.)
Summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); accord Munoz v. Mabus, 630 F.3d 856, 859-60 (9th Cir.2010). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its initial burden, Rule 56(c) requires the nonmoving party to "go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(c), (e) (1986)); see also Norse v. City Of Santa Cruz, 629 F.3d 966, 973 (9th Cir.2010) (en banc) ("Rule 56 requires the parties to set out facts they will be able to prove at trial."). "[T]he inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Plaintiff contends that Defendants should be estopped from asserting that Plaintiff's claim is for disability based on "sickness" rather than "injury."
The doctrine of equitable estoppel provides that a person may not deny the existence of a state of facts if he intentionally led another to believe a particular circumstance to be true and to rely upon such belief to his detriment. People v. Castillo, 49 Cal.4th 145, 156 n. 10, 109 Cal.Rptr.3d 346, 230 P.3d 1132 (2010). Accordingly, California courts have held that in order for equitable estoppel to apply, the following four elements must be met: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury. People v. Castillo, 49 Cal.4th 145, 156 n. 10, 109 Cal.Rptr.3d 346, 230 P.3d 1132 (2010).
In City of Hollister, the court clarified that equitable estoppel is not limited to situations amounting to fraud. City of Hollister v. Monterey Ins. Co., 165 Cal.App.4th 455, 488, 81 Cal.Rptr.3d 72 (2008). Indeed, "estoppel" refers to a conceptual pattern, which paradigmatically arises when a party's prior conduct is at odds with that party's litigation assertions. Id. at 486, 81 Cal.Rptr.3d 72. In the insurance context, for example, estoppel may arise where the insurer's conduct "threatens to unfairly impose a forfeiture of benefits upon the insured," even though the insurer has not engaged in affirmative conduct or acted with fraudulent intent. Id. at 488, 81 Cal.Rptr.3d 72. In such cases, the triggering conduct is itself blameworthy and "cast[s] a pall of unfairness over the position now asserted." Id. at 487, 81 Cal.Rptr.3d 72.
The City of Hollister court determined that "a more accurate description" of the elements of equitable estoppel is as follows:
165 Cal.App.4th at 488, 81 Cal.Rptr.3d 72. When invoked, the Court "in effect closes its ears to a point—a fact, argument, claim, or defense—on the ground that to permit its assertion would be intolerably unfair." Id. at 486, 81 Cal.Rptr.3d 72.
Equitable estoppel may also arise from silence where there is a duty to speak and that duty need not arise from any particular agreement or a legal obligation in the ordinary sense. Spray, Gould & Bowers v. Associated Int'l Ins. Co., 71 Cal.App.4th 1260, 1268-69, 84 Cal.Rptr.2d 552 (1999) ("Courts of equity apply in such cases the principles of natural justice, and whenever these require disclosure they raise the duty and bind the conscience and base upon the omission an equitable forfeiture to the extent necessary to the protection of the innocent party").
Plaintiff contends that Defendants' conduct is blameworthy or inequitable because they had a "duty to speak," i.e., to inform Plaintiff that his claim was being treated as a "sickness" claim rather than an "accident" claim, and failed to do so for over ten years. Defendants, on the other hand, argue that: (1) Defendants were not required to make an accident/sickness determination
According to Defendants, "[w]hile ideally it would have been preferable for Provident Life to have determined the accident versus sickness issue earlier than it did in this case, Provident Life did not have a legal duty to make that determination at the outset of August's claim." (Defs.' Opp'n at 14.) Defendants' argument is contrary to well-established law.
In California, Defendants bear a common law obligation to assist the insured to recover bargained-for policy benefits. City of Hollister, 165 Cal.App.4th at 490, 81 Cal.Rptr.3d 72. Extensive regulations also impose on insurers a broad "duty to speak" with regard to an insured's coverage. See, e.g., Cal.Code. Regs. tit. 10, § 2695.4(a) (requiring every insurer to disclose to insureds "all benefits, coverage, time limits or other provisions of any insurance policy issued by that insurer that may apply to the claim presented by the claimant"); Cal.Code. Regs. tit. 10, § 2695.4(b) (prohibiting insurers from "misrepresent[ing] or conceal[ing] benefits, coverages, time limits or other provisions of the bond which may apply to the claim presented under a surety bond"); Cal. Ins. Code § 790.03(h)(13) (providing that unfair competition in the business of insurance includes failing to "provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement").
An insurer must deny or reject claims in writing and provide the insured with the basis for such denial, as follows:
Cal.Code Regs. tit. 10 § 2695.7(b)(1). In fact, the insurer must accept or deny claims within 40 calendar days of receiving a proof of claim and the amounts accepted or denied must be clearly documented in the claim file unless the claim has been denied in its entirety. Cal.Code Regs. tit. 10 § 2695.7(b).
In this case, Defendants had a duty to disclose "all benefits, coverage, time limits or other provisions of any insurance policy issued by that insurer that may apply to the claim" pursuant to section 2695.4(a). Cal.Code. Regs. tit. 10, § 2695.4(a); see also Superior Dispatch, Inc. v. Ins. Corp. of New York, 181 Cal.App.4th 175, 190, 104 Cal.Rptr.3d 508 (2010) (section 2695.4(a) requires an insurer to disclose to its insured claimant any contractual limitations provision and other policy provisions that may apply to the claim). Plaintiff presents uncontroverted evidence that he submitted his disability claim as an accident claim and that his claim was accepted and paid by Defendants without any dispute as to the origin of the disability.
It also is undisputed that Defendants did not notify Plaintiff in writing of any denial or rejection of his claim until 2007. Instead, Defendants first informed Plaintiff in a letter dated October 13, 2006 that his benefits were scheduled to expire on his 65th birthday. In a letter dated August 23, 2007, Defendants acknowledged that they had not yet made the accident/sickness determination. Finally, in the November 2007 Determination Letter, Defendants
In fact, by emphasizing that no accident/sickness determination was made until 2007, Defendants effectively concede a violation of their duty to speak under section 2695.7(b) of the insurance regulations. As discussed supra, section 2695.7(b) requires that an insurer must accept or deny claims within 40 calendar days of receiving a proof of claim. Cal.Code Regs. tit. 10 § 2695.7(b). Here, Defendants admit that their November 2007 Determination Letter constituted a denial of Plaintiff's accident based claim. (Jones Decl. ¶ 9, Ex. H; Carlson Depo. at pp. 132-133.) Defendants also concede that PL & A did not promptly evaluate whether Plaintiff's loss was due to injury or sickness and offer no explanation why Plaintiff's claim, although submitted as an accident claim, was initially coded as a sickness claim prior to any investigation of the claim. (Jones Decl. ¶ 15, Ex. N; Shea Depo. at pp. 111-117; Jones Decl. ¶ 9, Ex. H; Carlson Depo. at pp. 28-30.)
Defendants' argument that they had no "knowledge of the facts" because no accident/sickness determination was or needed to be made is also an unconvincing tautology. As discussed supra, Defendants concede that although no accident/sickness determination was made in 1997, Plaintiff submitted an accident-based claim. Defendants cannot bury their heads ostrichlike in the sand and pretend that they had no access to the facts at or around the time Plaintiff submitted his claim or that no duty to investigate was triggered.
As recounted above, the uncontroverted evidence indicates that: (1) Defendants were apprised of the fact that Plaintiff submitted a disability claim based on accident, (2) Defendants accepted and paid Plaintiff's accident claim as submitted, and (3) Defendants failed to promptly inform Plaintiff of a sickness determination until more than 10 years later. The Court finds that, under the circumstances of this case, there is no triable issue of fact as to whether Defendants' conduct in this case is inequitable.
In order for equitable estoppel to apply, the Court also must determine that Defendants' prior conduct is at odds with its assertions in this litigation and that Defendants' conduct "somehow caused [Plaintiff] to suffer some harm or change of position without which the matter now asserted could or would have been deprived of its damaging potential." City of Hollister, 165 Cal.App.4th at 487, 81 Cal.Rptr.3d 72.
Plaintiff contends that Defendants' conduct induced him not to protect his rights in 1997 and that he is now disadvantaged. According to Plaintiff, because PL & A did not challenge, or inform Plaintiff of any challenge to, Plaintiff's accident claim, Plaintiff reasonably believed that PL & A accepted his claim for lifetime benefits due to accidental injury. Plaintiff therefore has been disadvantaged because he relied on the fact that he would have lifetime benefits when he terminated his medical practice and because evidence that may have been available or preserved in 1997 is no longer attainable now.
Defendants argue that Plaintiff did not "detrimentally rely" on the alleged blameworthy conduct.
It is undisputed in this case that Defendants failed to promptly provide information to Plaintiff necessary for him to protect his right to bargained-for benefits under the Policy. To allow Defendants now to defend against Plaintiff's breach of contract claim on the basis of their 2007 sickness determination would be "intolerably unfair" in light of their more than ten-year silence. For ten years, Plaintiff reasonably believed that Defendants accepted his claim, which he submitted on the basis of an accident, and was not notified by Defendants of any reason to believe otherwise. Had Defendants denied Plaintiff's accident-based claim in 1997, and provided him a written explanation as required by the regulations at that time, Plaintiff would have been in a better position to protect his rights to benefits under the Policy than he is now, a decade later.
Defendants cannot escape the fact that Plaintiff has suffered evidentiary disadvantage as a result of Defendants' ten-year silence. It is undisputed that certain medical records from at least three doctors are no longer available (Jones Decl. ¶¶ 45-47, Exs. SS-UU), Ms. Varnell, the PL & A disability specialist who decided Plaintiff's claim in 1997, is unavailable as a witness (Decl. of H. Dee Taylor ¶¶ 2-3), and Plaintiff's memory of the relevant details has faded (Jones Decl. ¶ 4, Ex. C; August Depo. at pp. 14-15, 32, 44-46, 54-55, 83-84.) While Defendants contend that it is mere speculation to assume that Plaintiff would have been able to obtain favorable evidence in 1997 that is not now available, Plaintiff presents cogent reasons why the evidentiary gaps identified above disadvantage his case. Certainly, Ms. Varnell, the initial adjuster whose various notations and correspondence in the claims file are a subject of dispute, would have been a material witness. In addition, the missing medical records of physicians who examined and/or treated Plaintiff prior to his ski accident would be relevant to a determination of whether a pre-existing condition, rather than the accident, was the genesis of Plaintiff's total disability claim.
Furthermore, although Defendants emphasize that no accident/sickness determination was made until 2007 after Plaintiff's 65th birthday, Defendants are unable to explain the "32 TOTAL DISA SICNESS" coding that appeared on the November 7, 1997 Initial Claim Data. (Jones Reply Decl. ¶ 3, Ex. 2; Carlson Depo. at pp. 24-25.) Defendants also were unable to locate documents setting reserve amounts for Plaintiff's claim for the years 1997 to 2000, which could have shed light on Defendants' claim determination at the time. In response to Plaintiff's request for "all documents that reflect any individual reserve or valuation on plaintiff's disability claim," Defendants stated:
(Jones Reply Decl. ¶ 5, Ex. 4.)
Thus, even when viewing the evidence in the light most favorable to Defendants, the Court finds incontrovertible evidence that Defendants' dilatory conduct caused Plaintiff to suffer a disadvantage and that Defendants should not be permitted to exploit the disadvantage they inflicted on Plaintiff. The Court therefore grants Plaintiff's Motion with regard to the application of equitable estoppel.
Plaintiff contends that in the event the Court finds that Defendants are estopped from raising their sickness defense, then the Court should also find that Defendants have breached the agreement to pay lifetime benefits under the Policy. Defendants do not argue to the contrary.
To recover on a cause of action for breach of contract, a plaintiff must establish: (1) the existence of a contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) resulting damages to plaintiff. Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes, 191 Cal.App.4th 435, 120 Cal.Rptr.3d 797 (2010). It is undisputed in this case that the Policy was a contract, under which Plaintiff performed, and that under the accidental injury provisions of the Policy, Plaintiff was entitled to lifetime disability benefits. Due to the Court's ruling on the application of equitable estoppel, there is no triable issue of material fact as to whether Defendants, in fact, breached the Policy when they terminated Plaintiff's benefits and whether Plaintiff has been damaged as a result.
Accordingly, in light of the Court's finding that Defendants are equitably estopped from asserting a "sickness" defense, as discussed supra, the Court finds that Defendants also are in breach of contract. The Court therefore grants Plaintiff's Motion as to his breach of contract claim.
In light of the foregoing, Plaintiff's Motion is GRANTED as follows:
IT IS SO ORDERED.
The July 1, 1997 letter stated:
(Supp. Decl. Jenny H. Wang ("Wang Supp. Decl.") ¶ 2, Ex. A.) A May 3, 1997 letter to Plaintiff also indicated that PL & A issued payments to Plaintiff "on the assumption that [he would] qualify for Residual benefits." (Wang Supp. Decl. ¶ 2, Ex. A.)
On Plaintiff's Statement of Claim, Plaintiff indicated that the date of "total and complete inability to work" was June 14, 1996. (Jones Decl. ¶ 10, Ex. I.) Plaintiff also presents evidence that it was Paul Revere, and not PL & A, that challenged whether Plaintiff was totally disabled. (Jones Decl. ¶ 17, Ex. P; Jones Reply Decl. ¶ 6, Ex. 5.) Defendants' letters are inconsistent with Plaintiff's claims documentation and Defendants' own affirmative conduct in paying total disability benefits to Plaintiff until 2008.
While Defendants' letters may create a disputed issue of fact as to whether Defendants had internally decided to treat Plaintiff's claim as a partial disability claim or a sickness claim, that dispute is material to whether Defendants' conduct was willful—an issue not presented in the current motion and therefore not decided by this Court. What remains uncontroverted for purposes of this motion is that Defendants had actual notice of Plaintiff's claim of total and complete inability to work as of June 14, 1996, Defendants ultimately paid Plaintiff total disability benefits, and Defendants failed to either notify Plaintiff of or resolve the accident/sickness dichotomy until, at the earliest, its 2006 Letter.
