UNUM Wrongly Interpreted Policy's Definition of Total Disability in Denying Benefits to California Surgeon

A California federal court held that the fact that UNUM Provident Life Insurance Company’s (“UNUM”) disability insurance policy had both total disability and residual disability clauses did not mandate interpretation of policy’s definition of “total disability” as meaning an inability to perform each and every duty of an orthopedic surgeon’s occupation.

Dr. Gross and his Claim for Total Disability Benefits

The plaintiff, Dr. Gross, purchased a disability income protection policy from UNUM in 1989.

Dr. Gross became disabled when, as a result of diabetes, he developed numbness in his hands and feet as well as problems with his eyes, forcing him to stop performing surgery in 2001. He then filed for disability benefits with UNUM, which denied his claim because it determined that he did not fit within the policy’s definition of “totally disabled.” UNUM also denied Dr. Gross residual (or partial) disability benefits because it claimed that he did not fit within the policy’s income loss requirements.

Dr. Gross then filed a lawsuit seeking to recover past due disability payments.

“Total Disability” and “Residual Disability” under UMUM’s Policy

Under UNUM’s policy, “total disability” means that because of injury or sickness, you are unable to perform the important duties of your occupation. Whereas, “Residual disability” means that due to injury or sickness:

  • You are unable to perform one or more of the important duties
  • of your occupation; or
  • You are unable to perform the important duties of your occupation for more than 80% of the time normally required to perform them; and
  • Your loss of earnings is equal to at least 20% of your prior earning while you are engaged in your occupation or another occupation.

Dr. Gross argued that the court should interpret the definition of total disability to mean the inability to perform most of the substantial and material duties of his occupation – and not require “absolute helplessness.” On the other hand, UNUM argued that the policy’s inclusion of a residual disability clause meant that Dr. Gross was not entitled to total disability benefits because he was still able to perform some non-surgical duties of his occupation.

The court found UNUM’s reasoning unpersuasive and stated:

“If the insurer meant, in the total disability provision, to say “all,” the insurer easily could have done so. … There must be a point at which an insured passes over from partial disability to total disability, a point that may be short of being disabled from performing all the substantial and material duties of [his] profession.”

In the end, the court held that Dr. Gross’s entitlement to total disability benefits was a factual issue for a jury to decide after determining whether his disability prevented him from performing in-office patient care in his “usual or customary way.”

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