Opinion
Case No. 3:01CV7258
September 12, 2002
ORDER
Plaintiff Janice Marsteller brings this suit against defendant Security of America Life Insurance Company claiming breach of contract and bad faith because of defendant's denial of benefits under a disability insurance policy. This court has jurisdiction pursuant to 28 U.S.C. § 1332. Pending are plaintiff's motion for partial summary judgment on the breach of contract claim and defendant's motion for partial summary judgment on the bad faith claim. For the following reasons, plaintiff's motion shall be denied and defendant's motion shall be granted.
BACKGROUND
In December, 1999, plaintiff purchased "own occupation" disability insurance from defendant; the policy became effective in March, 2000. The policy provides: "Security of America will pay You the benefits described in this Policy if You become Disabled due to Injury or Sickness." Under the policy, "Total Disability" is defined as:
[D]ue to Injury or Sickness, You:
1. Are unable to perform the substantial and material duties of Your occupation; and
2. Are receiving regular care by a Physician.
In April, 2000, plaintiff was employed by Ernst Young as a Certified Public Accountant (CPA) with a concentration in tax. At that time, plaintiff alleges she began to experience symptoms of severe pain in her neck, back, and shoulders-all caused by the constant use of the computer in her profession. After consultation by Dr. Jay W. Nielsen, plaintiff went on short term disability leave from Ernst Young on May 30, 2000. The precise condition stated by Dr. Nielsen in his attending physician statement to Ernst Young was Thoracic Outlet Syndrome. In mid-July, plaintiff's short term disability leave was extended until October, 2000. But on August 1, 2000, plaintiff decided to return to work under restrictions from Dr. Nielsen. These restrictions included a maximum eight hour work day and forty hour work week, a light work load, a minimization of stress, continued medical treatment and examinations, and an allowance of work breaks. Marsteller, however, claimed to be unable to continue working even under the restrictions, and on August 23, 2000, Marsteller resigned from Ernst Young.
Plaintiff later asserted that the name of her condition is "Regional myofascial pain syndrome with related muscle and connection tissue dysfunction." Plaintiff's Answers to Interrogatories at 12.
Dr. Nielsen's records contain numerous possible diagnoses of plaintiff's condition:
• When plaintiff first began seeing Dr. Nielsen on April 20, 2000, his diagnosis included: "Thorax and arm pain," "TMJ syndrome Right crepitant," "thoracic scoliosis mild," "Possible Cervical disc disease," "Right sacroiliac instability with pubitis-minor," "Acne secondary to hormonal changes," and "R/O androgen excess."
• On May 11, 2000, Dr. Nielsen's diagnosis was "Possible Thoracic Outlet Syndrome."
• On May 25, 2000, Dr. Nielsen's diagnosis was "Possible Thoracic Outlet Syndrome, "weird (sic) doppler studies," and "Pregnenolene, DHEA, and testosterone deficiency."
• On July 6, 2000, Dr. Nielsen's diagnosis was "Cervical and thoracic fixation," "r/o occult disc disease," "Continued possible hormone synthesis problem," and "TMJ syndrome worse than I first thought."
• On August 17, 2000 Dr. Nielsen's diagnosis was "Sex hormone failure."
• On October 31, 2000, Dr. Nielsen's diagnosis was "Sex hormone failure," "chronic cervical strain," and "acne of unknown cause."
• On February 16, 2001, Dr. Nielsen's diagnosis was "Brachial Plexitis/Right arm and Left arm overuse syndrome/ Thoracic Outlet syndrome/ cervical spasm/ scoliosis/ menopause."
At the request of Dr. Nielsen, Marsteller received a second opinion from Dr. Gregory Thomas. On May 8, 2001, Dr. Thomas concluded: "After all is said and done, I think this lady has a chronic regional myofascial pain syndrome if not full blown fibromyalgia." However, according to Dr. Thomas, an MRI scan of plaintiff's cervical spine looked "pretty pristine." Lab work and x-ray reports demonstrated a "normal scoliosis series" and a "normal vascular study." Carpel tunnel syndrome was ruled out. Dr. Thomas also concluded that he "can't make the diagnosis of thoracic outlet syndrome on her."
Dr. William Bauer examined plaintiff at the request of Security of America in March, 2002. His diagnosis found a "potentially disabling illness, that is neuromusculoskeletal manifest by pain in the neck, back, as well as fatigue and worsening with the physical activity, particularly use of the arms." Dr. Bauer also concluded that the medical condition preventing plaintiff from performing the substantial material duties of her occupation was "the musculoskeletal problem, along with thoracic outlet. . . ."
In June of 2000, Marsteller, while on short term disability from Ernst Young, applied for a part time teaching position at the University of Toledo. Plaintiff obtained the position and has continued to teach on a part time basis. She is also currently pursuing a Doctor of Pharmacy degree.
In June of 2000, Marsteller also submitted a claim for disability benefits to Security of America.
In November, 2000, Security of America paid short term disability benefits to Marsteller for the period
June 29, 2000 through July 31, 2000. However, Security of America denied Marsteller's claim for long term disability benefits after August 1, 2000.
Plaintiff immediately appealed the denial of long term benefits. Security of America alleges that it then reviewed Marsteller's appeal and retained a third party claims reviewer-Genex Services-to review Marsteller's claim file and make a recommendation on her appeal. In April, 2001, Genex recommended that Security of America deny Marsteller's claim. On April 18, 2001, Security of America informed plaintiff of its final decision to deny her claim for long term disability benefits; stating:
A medical review of your claim file was completed on appeal. Based on the review, the medical records demonstrate varied diagnoses that are not consistent. There is a lack of documented objective findings and MRI and Doppler studies are essentially negative in result. Other lab evaluations are of a non-standard variety medically. Additionally, restrictions noted are relative to work conditions and hours but there are no restrictions for the physical activities of your regular occupation.
Therefore, based on insufficient medical substantiation through medical standard objective means and the absence of physician restrictions affecting the ability to perform regular occupation duties, we are unable to provide additional benefit payments.
Def.'s Ex. at 00023
As a result of defendant's denial of benefits, plaintiff brought this lawsuit claiming breach of contract and bad faith. Under Count I of plaintiff's complaint, she alleges that the medical evidence establishes that she is "totally disabled" as defined by Security of America's insurance policy. Plaintiff has filed her motion for partial summary judgment as to this claim.
Count II of plaintiff's complaint alleges Security of America denied benefits to Marsteller without a good faith basis. Marsteller claims Security of America failed and refused to conduct an dequate investigation of her claim of disability. Defendant has filed a motion for partial summary judgment on Count II alleging that they had a reasonable justification for denying Marsteller's claim.
For the following reasons, I shall deny plaintiff's motion and grant defendant's motion.
STANDARD OF REVIEW
Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting FED. R. CIV. P. 56(e)).
Once the burden of production shifts, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is insufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex, 477 U.S. at 324.
In deciding the motion for summary judgment, the evidence of the non-moving party will be accepted as true, all doubts will be resolved against the moving party, all evidence will be construed in the light most favorable to the non-moving party, and all reasonable inferences will be drawn in the non-moving party's favor. Eastman Kodak Co. v. Technical Servs., Inc., 504 U.S. 451, 456 (1992). Summary judgment shall be rendered only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).
DISCUSSION I. Breach of Contract
Plaintiff claims defendant breached the insurance contract because she meets Security of America's definition of "Total Disability" as a matter of law. According to the plaintiff, the public accounting profession in today's world requires constant and extensive use of the computer. Considering her physical condition, plaintiff alleges she is unable to use the computer for the amount of time required for a CPA with a concentration in tax. Plaintiff's supporting evidence includes Dr. Nielsen's and Dr. Bauer's conclusions that she is unable to perform the substantial and material duties of her occupation due to her physical condition.
Some courts have suggested that interpretation of an insurance policy's "Total Disability" provision is generally a jury question. See, e.g., Lewis v. Paul Revere Life Ins. Co. 80 F. Supp.2d 978, 988 (E.D.Wis. 2000) ("Whether an insured is totally disabled is thus a question of fact that generally must be submitted to a jury."); Ames v. Provident Life Accident Ins. Co., 73 F. Supp. 551, 556 (S.D.Fla. 1994) ("[T]he Florida Supreme Court followed the principle that the phrase "total disability" is a relative term, depending upon the character of the occupation, the capabilities of the insured and the circumstances of the particular case, so that ordinarily, any question involving application of the term disability, is a question of fact for the jury.") The Sixth Circuit has concluded that state law determines the issue. Kerwin v. Paul Revere Life Ins. Co., No. 99-2313, 2001 U.S. App. LEXIS 3585, at *10-11 (6th Cir. Mar. 1, 2001) (finding that Michigan courts have declined to set forth a blanket rule requiring submission of such a question to a jury and have, on occasion, disposed of such cases on summary judgment). Ohio does not appear to have a similar rule requiring the question of whether an insured meets an insurance policy's definition of "total disability" to go to the jury.
Under summary judgment standards, however, a case will go to the jury if there is an issue of fact for a jury to determine at trial, which is the case when there is sufficient evidence favoring the non-moving party on which a jury can return a verdict for that party. As stated above, the non-moving party must produce this sufficient evidence and the evidence of the non-moving party will be accepted as true. Eastman Kodak, 504 U.S. at 456. While plaintiff argues that she is unable to work because she cannot work with computers, Security of America has produced evidence to demonstrate that a CPA with a concentration in tax may be able to perform the substantial and material duties of her occupation with limited use of the computer. Thus, the facts are sufficiently in conflict, and summary judgement should be denied.
The affidavit of Mark B. La Place, a CPA practicing in tax, states that it is possible to perform the material and substantial duties of a CPA practicing in tax with limited computer use. He believes it is possible to perform the duties while using the computer for two to four hours a day on a non-continuous basis. (Affidavit of Mark B. LaPlace at ¶¶ 3, 5) Taking this as true and combining it with the evidence that two of the doctors diagnosing plaintiff concluded that plaintiff may be able to work with less use of the computer, defendant has met its burden. The evidence presented by defendant is colorable, and by construing all evidence in the light most favorable to the defendant, there is a genuine issue of fact remaining whether someone with plaintiff's condition can perform the substantial and material duties of a CPA with a concentration in tax.
Plaintiff incorrectly argues that the affidavit of Mr. LaPlace is inadmissible because he is expressing a medical opinion. It is true that any opinion LaPlace gives concerning what plaintiff can accomplish with her medical condition would be beyond his qualifications. However, Mr. LaPlace is certainly capable of giving his opinion of the time required to use a computer for a CPA concentrating in tax. Plaintiff may disagree about what duties a CPA in tax can perform without the use of a computer, but her disagreement plainly shows that there is sufficient conflict of what the duties of a CPA in tax are and how extensive computer use is. Plaintiff has made no attempt, besides her own speculation, to document the time a CPA with a concentration in tax spends on the computer. As the Sixth Circuit has concluded, "Speculation cannot supply the place of proof." Green v. River Terminal Ry., 763 F.2d 805, 807 (6th Cir. 1985).
Plaintiff also argues that her condition is easily aggravated by any amount of computer usage, constant sitting, and stress. Thus, even a limited use of the computer-two to four hours a day-would aggravate her condition. However, Dr. Bauer stated that if the use of the computer were reduced or modified and other means of communication were used to avoid the repetitive motion of the arms, plaintiff would be able to do her job. (Plaintiff's Motion for Partial Summary Judgment at Exhibit 2) Likewise, Dr. Nielsen agreed that plaintiff may be capable of working and using a computer so long as she is flexible about it. (Dr. Nielsen's Depo. at 23) Also, defendant has produced evidence that Marsteller uses a computer for internet access, her current teaching job, and her pursuit of earning a Doctor of Pharmacy. (Marsteller Depo. at 23-25, 27, 42-43, and 255-56) Thus, in view of the conflicting evidence and related inferences reasonably arising therefrom, the issue of whether Marsteller is totally disabled remains an issue to be resolved at trial.
II. Bad Faith
Defendant claims that its decision to deny long term disability benefits was reasonably justified; thus, its motion for partial summary judgment on plaintiff's bad faith claim should be granted.
Under Ohio law, an insurer owes a duty of good faith to its insured in the processing, payment, satisfaction, and settlement of the insured's claims. Tokles Sons, Inc. v. Midwestern Indemnity Co., 65 Ohio St.3d 621, 629 (1992); Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 275 (1983); Hart v. Republic Mut. Ins. Co., 152 Ohio St. 185, 187-88 (1949). The appropriate test to determine whether an insurance company breached this duty and denied an insurance benefit in bad faith is the "reasonable justification" standard. Friendly Farms v. Reliance Ins. Co., 79 F.3d 541, 545-46 (6th Cir. 1996); Zoppo v. Homestead Ins. Co., 71 Ohio St. 552, 554 (1994) (finding that over the past forty-five years the Supreme Court of Ohio has consistently applied the "reasonable justification" standard to bad faith cases). Under this standard, the crucial inquiry is whether "the decision to deny benefits was arbitrary or capricious, and there existed a reasonable justification for the denial," not whether the insurance company's decision to deny benefits was correct. Rauh Rubber, Inc. v. Berkshire Life Ins. Co., No. 98-4122/98-4244, 1999 U.S. App. LEXIS 34043, at *5 (6th Cir. Dec. 16, 1999) (citing Thomas v. Allstate Ins. Co., 974 F.2d 706, 711 (6th Cir. 1992)).
The Supreme Court of Ohio has given some guidance when applying this standard. Under Ohio law, "[w]here a claim is fairly debatable the insurer is entitled to refuse the claim as long as such refusal is premised on a genuine dispute over either the status of the law at the time of the denial or the facts giving rise to the claim." Motorists Mut. Ins. Co. v. Said, 63 Ohio St.3d 690, 630 (1992). To grant a motion for summary judgment brought by an insurer on the issue of whether it lacked good faith in the satisfaction of an insured's claim, a court must find, after viewing the evidence in a light most favorable to the insured, that the claim was fairly debatable and the refusal was premised on either the status of the law at the time of the denial or the facts that gave rise to the claim. Tokles Son, 65 Ohio St. at 630. To withstand a motion for summary judgment in a bad faith claim, an insured must oppose such a motion with evidence which tends to show that the insurer had no reasonable justification for refusing the claim. Id. Intent, however, "is not and has never been an element of the reasonable justification standard." Zoppo, 71 Ohio St.3d at 555.
Security of America contends that based on the information made available to it, it cannot be found that it acted without a reasonable justification. Specifically, defendant alleges that plaintiff's medical records do not contain objective medical evidence demonstrating that she was disabled. To support this conclusion, defendant points to the numerous conditions Dr. Nielsen diagnosed and the differing names the three doctors and Marsteller herself give to describe her condition. Defendant also argues the tests Dr. Nielsen used to diagnose and treat Marsteller were non-standard. Additionally, defendant argues that the claim file submitted to it does not contain any work related restrictions or limitations. Thus, under Ohio law, reasonable minds could only find that Marsteller's claim of disability was fairly debatable, therefore, Security of America did not act without reasonable justification.
In an attempt to meet its reciprocal burden, plaintiff urges that Security of America's decision was not justified. Plaintiff asserts that the record describes how the substantial use of computers in Marsteller's occupation caused the discomfort she experienced. Plaintiff also purports that the short term disability statements given to her employer and Dr. Nielsen's attending physician statement given to Ernst Young and Security of America both contain restrictions relative to plaintiff's occupation.
Furthermore, plaintiff argues that the differing diagnoses only indicate that Dr. Nielsen was searching for an explanation of plaintiff's condition and that, moreover, his possible diagnoses were consistent and not varied. Most importantly, plaintiff argues that both her own treating physician, Dr. Nielsen, and Security of America's physician, Dr. Bauer, concluded that plaintiff was unable to perform the substantial and material duties of her occupation. Thus, because Security of America was aware of these facts, its denial was without reasonable justification and in bad faith.
Plaintiff's arguments, however, are either not relevant or not accurate. The record shows an absence of any set of facts to support a claim of bad faith. Plaintiff argues that she is disabled under the policy definition, and Security of America was therefore wrong in denying her claim. This, however, is not relevant for a bad faith claim. Under Ohio law, in a refusal-to-pay action, it is clear that whenever an insurance company denies a claim of its insured, it will not automatically expose itself to an action in tort. "Mere refusal to pay insurance is not, in itself, conclusive of bad faith. . . .The conduct of the insurer must be based on circumstances that furnish reasonable justification therefor." Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 277 (1983) (citing Hart v. Republic Mut. Ins. Co., 152 Ohio St. 185, 188 (1949)). Likewise, the liability of the insurer for bad faith does not arise from its mere omission to perform a contract obligation. Rather, the liability arises from the breach of the positive legal duty imposed by law due to the relationships of the parties. Staff Builders, Inc. v. Armstrong, 37 Ohio St.3d 298, 302 (1998). Thus, providing evidence that Marsteller was disabled under the policy definition is not supporting evidence of a bad faith claim.
Part of plaintiff's argument is that defendant acted in bad faith because it ignored the opinion of its own consulting physician, Dr. Bauer, when he concluded that plaintiff was unable to perform the substantial and material duties of her profession. Dr. Bauer's examination, however, was in 2002-after the claims process had ended. Furthermore, Dr. Bauer concluded: "It is also my opinion that based upon the claims file the patient was not disabled for her job as described."
Furthermore, the evidence plaintiff does purport is not enough to avoid summary judgment. A review of the claims file demonstrates that there was not a consistent diagnosis of what condition plaintiff was suffering from and how it affected her as a CPA concentrating in tax. The reports of Dr. Nielsen-the only medical reports defendant had in its file when it made the final denial-demonstrate varying diagnoses. Dr. Nielsen's diagnosis of thoracic outlet syndrome was far from certain. His May 11 and May 25, 2000 reports only state "Possible Thoracic Outlet Syndrome" and the results from the May 16, 2000 Doppler test indicate: "This is a questionably negative study for thoracic outlet syndrome." Nowhere in Dr. Nielsen's report is plaintiff's condition referred to as "Regional myofascial pain syndrome with related muscle and connection tissue dysfunction,"-the name plaintiff gives her condition. Thus, the varying diagnoses show the validity of plaintiff's claim was at least fairly debatable.
Plaintiff also claims the record explains how the substantial use of computers caused her discomfort. But a review of the file demonstrates that this is untrue. Plaintiff never specifically describes how use of the computer makes her job as a CPA impossible. Moreover, although Dr. Nielsen states that Marsteller is unable to perform the substantial and material duties of her job, his restrictions are not specifically work-related. The only restrictions placed on plaintiff were from the short term disability statement submitted by Dr. Nielsen to Ernst Young-which Security of America received from Ernst Young. These general restrictions, however, were "light work," "minimize stress," "allow work breaks," etc. These are not restrictions relating to the occupational activities of a tax accountant nor do they indicate that plaintiff's condition is caused by the use of a computer.
Furthermore, as defendant points out, the attending physician statement submitted to Security of America by Dr. Nielsen in February, 2001 is contradictory on its face. Dr. Nielsen classified plaintiff's level of physical impairment as "Class 4"-"Moderate limitation of functional capacity; capable of clerical/administrative (sedentary) activity." But Dr. Nielsen concluded in his deposition that accounting was sedentary work; thus, she should have been capable of performing it. Plaintiff also claims that any assertion that plaintiff's condition was not measured by objective or standard medical tests or that she was treated for subjective symptoms with non-standard medical care is not true. However, the record shows Doppler studies and MRI scans did not reveal a definite condition, and Dr. Nielsen admits that treatment he either gave or recommended to her was "outside the mainstream of medicine." Thus, though plaintiff disputes the significance of these studies, she has not sufficiently rebutted defendant's claim that objective medical tests show that the denial of benefits was at least fairly debatable.
Finally, plaintiff also states Security of America acted in bad faith because they failed adequately to investigate her claims. However, like all of plaintiff's arguments, she has failed to identify any evidence of this assertion.
Under Ohio law, the burden establishing bad faith is on the insured; the burden is not on the insurer to establish it acted in good faith. Rauh Rubber, 1999 U.S. App. LEXIS 34043, at *7; Hoskins, 6 Ohio St.3d at 276. Therefore, the burden to present evidence of Security of America's bad faith remained with the plaintiff even on defendant's motion for summary judgment. Security of America need only show there was no evidence of bad faith in the record, as it has here. Not only can plaintiff not prove a lack of reasonable justification, plaintiff has not been able to demonstrate that she is relying on anything more than her pleadings.
Because defendant has shown that Marsteller's claim of disability was at least fairly debatable, Security of America could refuse the claim and not be liable for a lack of good faith in denying the claim. There is a conflict of evidence from the claims file whether plaintiff was disabled and how her condition made her unable to work as a CPA. A review of the record indicates that Security of America had a reasonable justification to deny Marsteller's claims; thus, the denial of benefits was not arbitrary or capricious.
CONCLUSION
It is, therefore,
ORDERED THAT
Defendant's motion for summary judgment be, and hereby is, granted, and plaintiff's motion for partial summary judgment be, and hereby is, denied.
So ordered.