PHILIP A. BRIMMER, United States District Judge.
This matter comes before the Court on Defendant Principal Life Insurance Company's Motion to Dismiss Plaintiff's Complaint in Its Entirety with Prejudice Pursuant to Rule 12(B)(6) [Docket No. 10] and Defendant Principal Life Insurance Company's Amended Memorandum of Law in Support of Its Motion to Dismiss [Docket No. 15]. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.
This case arises out of a dispute over long term disability benefits. Plaintiff is a neurosurgeon employed by the Denver Health and Hospital Authority. Docket No. 4 at 4-5, ¶ 2. On November 21, 2016, plaintiff became disabled when he was no longer able to perform the duties of his job. Id. at 5, ¶ 3. At the time plaintiff became disabled, the Denver Health and Hospital Authority had an insurance policy with Principal Life Insurance Company that provided plaintiff with short term and long term disability benefits. Id., ¶ 4. Plaintiff was approved for short term disability benefits through May 20, 2017. Id.
On March 24, 2017, plaintiff received a letter from defendant approving his application for long term disability benefits. Id., ¶ 5; see also id. at 9 (Exhibit A). The letter stated that "[s]ince [plaintiff was] over the age of 72 when [he] ceased work the Long Term Disability policy limit[ed] the maximum duration of benefits to 12 months." Id. at 9-10. In an email to the adjuster, plaintiff challenged the one-year limitation on the ground that the "own occupation" provisions of the insurance policy entitled plaintiff to long term disability benefits for two years. Id. at 5, ¶ 6. The policy defines "own occupation" as "[t]he occupation you are routinely performing when Disability begins" and "Own Occupation Period" as "[t]he first two year(s) of the Benefit Payment Period." Id. at 6, ¶¶ 8, 10. "Own Occupation Period" is further listed in the "Long Term Disability Insurance Summary"
On April 3, 2017, the adjuster sent plaintiff a letter rejecting his appeal. Id. at 5, ¶ 6; see also id. at 22. The letter did not address the "own occupation" language of the policy. Id. at 5, ¶ 6; see also id. at 22.
Plaintiff filed this lawsuit in the District Court for the City and County of Denver, Colorado on or about April 24, 2017. Docket No. 1 at 1; see also Docket No. 1-1 at 2-3. On May 17, 2017, defendant removed the case to this Court on the basis of diversity jurisdiction. Docket No. 1 at 2-3. In his complaint, plaintiff seeks a declaratory judgment that he is entitled to long term disability benefits for a period of two years under the terms of defendant's insurance policy. Docket No. 4 at 4.
To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege enough factual matter that, taken as true, makes the plaintiffs' "claim to relief ... plausible on its face." Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not shown — that the pleader is entitled to relief." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks and alteration marks omitted). Thus, even though modern rules of pleading are somewhat forgiving, "a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Bryson, 534 F.3d at 1286 (alteration marks omitted).
Defendant argues that plaintiff has failed to state a claim for which relief can be granted under Rule 12(b)(6) because the insurance policy unambiguously limits the duration of long term disability benefit payments to 12 months for a person of plaintiff's age. Docket No. 15 at 1. In response, plaintiff contends that his long term disability benefits were governed by
In Colorado, "[t]he interpretation of an insurance contract is a question of law" to which traditional principles of contract interpretation apply. USAA Cas. Ins. Co. v. Anglum, 119 P.3d 1058, 1059 (Colo. 2005); Chacon v. Am. Family Mut. Ins. Co., 788 P.2d 748, 750 (Colo. 1990).
The parties' dispute centers on the relationship between two sets of provisions in the insurance policy — the "Benefit Payment Period" provisions and the "Own Occupation" provisions.
Member's Age on the Date Disability Months of the Benefit Payment Period Begins (Beginning with the date the Benefit Payment Period begins) 65-67 24 68-69 18 70-71 15 72 and over 12
See id. at 14. The policy then lists a number
In addition to the "Benefit Payment Period" provisions, the policy contains a number of provisions including the phrase "own occupation." The policy defines "Own Occupation" as "[t]he occupation you are routinely performing when Disability begins. Own Occupation does not mean the specific tasks or job you are performing for the Policyholder or at a specific location." Docket No. 18-1 at 10. The policy further defines "Own Occupation Period" as "[t]he first two year(s) of the Benefit Payment Period." Id. at 11. The terms "Own Occupation" and "Own Occupation Period" appear in the policy's definition of disability, which provides:
Id. at 8-9. "Own Occupation Period" is also listed in the "Long Term Disability Insurance Summary" next to the phrase "two year(s)." Id. at 4.
Defendant argues that the policy language unambiguously limits the Benefit Payment Period to 12 months for individuals who are 72 years or older on the date their disability begins, regardless of the "Own Occupation" provisions. Docket No. 15 at 7-8. The Court agrees. Evaluating the policy as a whole, it is clear that the "Benefit Payment Period" and "Own Occupation" provisions serve two different functions. The "Benefit Payment Period" provisions govern the amount of time for which benefits are payable under the policy. In contrast, the "Own Occupation" provisions help to define a sliding scale for when an individual will be considered disabled. When read together, the provisions establish that an individual who is 72 years of age or older will be considered disabled and thus eligible to receive long term disability benefits if, during the initial period of the claimed disability, he "cannot perform the majority of the Substantial and Material Duties of [his] Own Occupation" or he is "performing the duties of [his] Own Occupation on a Modified Basis or any occupation and [is] unable to earn more than 80% of [his] Indexed Predisability
The "Benefit Payment Period" provisions exist separately from these requirements. Rather than defining the period of disability, the Benefit Payment Period caps the number of months an individual may receive long term disability benefits based on the individual's age at the time the disability began. The cap is not defined according to the period of disability, as indicated by the "Benefit Payment Period" provision, which states that, notwithstanding the age-based limits on the Benefit Payment Period, "in no event [] will benefits continue beyond ... the date Disability ends." Docket No. 4 at 14.
Plaintiff reads the policy as establishing a separate two-year Benefit Payment Period for those qualifying as disabled under the "Own Occupation" provisions. Plaintiff makes four principal arguments in support of this interpretation. First, he contends that the "Own Occupation" definition of disability is the only category of disability that has a separate heading in the "Long Term Disability Insurance Summary," which "contains limits on the time periods during which benefits will be paid." Docket No. 18 at 6. Because "two year(s)" is listed under the heading "Own Occupation Period," plaintiff interprets the summary as stating "that the benefit period for `Own Occupation' disabilities is two years." Id. There are two flaws in this argument. As an initial matter, the summary is meant to be an overview of all key terms in the insurance policy. The first column of the summary, which lists "Own Occupation Period," also includes terms such as "Minimum Hours Requirement," "Who Pays for Coverage," and "Elimination Period." Docket No. 18-1 at 4. Neither these terms nor the information provided in conjunction with these terms — e.g., "Employees must be working at least 20 hours a week"; "You are not required to pay a part of the premium for insurance under the Group Policy"; and "180 days" — relate to "limits on the time periods during which benefits will be paid." Id. Thus, the mere inclusion of "Own Occupation Period" in the policy summary does not support a conclusion that the "Own Occupation Period" defines the period in which benefits will be paid for those qualifying under the "Own Occupation" provisions. The second flaw in plaintiff's argument is that the summary does not state that the "benefit period for `Own Occupation' disabilities is two years." Docket No. 18 at 6. Plaintiff draws this inference based on the fact that "two year(s)" is listed under the heading "Own Occupation Period." See Docket No. 4 at 18. Yet the same could be said of the "180 days" listed under "Elimination Period," but plaintiff makes no contention that 180 days reflects a shorter benefits period for certain policyholders.
This conclusion is further bolstered by the definition of "Own Occupation Period." In his third argument, plaintiff cites the definitions of "Own Occupation" and "Own Occupation Period" as evidence that the one-year age-related limitation on benefits does not apply to disabilities based on the inability to perform one's "own occupation." Docket No. 18 at 7. To the contrary, by defining "Own Occupation Period" as "[t]he first two year(s) of the Benefit Payment Period," the policy not only establishes that the "Own Occupation Period" is distinct from the maximum period in which benefits are payable, but also incorporates the applicable "Benefit Payment Period" as a limitation on the "Own Occupation Period." Docket No. 18-1 at 11.
Plaintiff's final argument is that defendant's interpretation of the policy would render the two-year "Own Occupation Period" meaningless, thereby violating the general rule that contracts should be construed so as to give effect to every provision. See Pub. Utils. Comm'n v. City of Durango, 171 Colo. 553, 469 P.2d 131, 133 (1970) ("It is a familiar rule of contract construction that a contract is to be construed as a whole and effect given, if possible, to its every provision."). Again, however, plaintiff ignores the separate purposes served by the "Own Occupation" and "Benefit Payment Period" provisions: while the "Own Occupation" provisions help to define the varying requirements for when an individual will be considered disabled, the "Benefit Payment Period" provisions, including the "Maximum Benefit Payment Period," govern the amount of time for which benefits are payable under the policy regardless of whether an individual qualifies as disabled. There is thus no conflict between these provisions even if, in some circumstances, the "Maximum Benefit Payment Period" will limit the "Own Occupation Period" applicable to the policyholder.
Because the insurance policy, read as a whole, unambiguously limits plaintiff's entitlement to long term disability benefits to a period of one year, plaintiff has failed to present a plausible basis for relief.
For the foregoing reasons, it is
