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COTTON v. PROVIDENT LIFE & CAS. INS. CO.

January 24, 1997

ANTHONY COTTON, Plaintiff,
v.
PROVIDENT LIFE AND CASUALTY INSURANCE COMPANY, Defendant.



The opinion of the court was delivered by: SPATT

 SPATT, District Judge:

 This diversity action arises from the claims of the plaintiff, Anthony Cotton ("Cotton" or the "plaintiff"), against the defendant, Provident Life and Casualty Insurance Company ("Provident" or the "defendant"), based on the defendant's alleged failure to pay disability benefits pursuant to the terms of two policies held by the plaintiff. Presently before the Court are Provident's motion and Cotton's cross motion for summary judgment pursuant to Fed. R. Civ. P. 56.

 I. Background

 The plaintiff is a resident of Nassau County. The defendant is a foreign corporation licensed to do business within the State of New York and maintains a principal office in Chattanooga, Tennessee.

 The defendant has issued two insurance policies to the plaintiff: (1) Policy No. 36GC-6378, effective August 1, 1970 (the "1970 Policy"); and (2) Policy No. 36-334-66769 effective July 1, 1987 (the "1987 Policy"). Both policies insure Cotton against disability. The 1970 Policy provides in relevant part:

 
Part 3. Loss of Sight, Speech or Hearing, or use of Two Members -- Accident or Sickness: If injuries or sickness shall result in the entire and irrevocable loss of (1) sight, (2) speech, or (3) hearing, or shall result in the entire and irrevocable loss of (a) both hands, (b) both feet, or (c) one hand and one foot, and satisfactorily proof of such loss is furnished, the Insured shall be deemed to be totally disabled and shall while he lives be entitled to periodically receive indemnity at the rate of Monthly Benefit for Total Disability, beginning on the day of such loss, and for as long as the applicable Maximum Benefit Period shown in Policy Schedule, without requirement of further medical attention, without requirement of further proof, and without regard to whether the Insured thereafter engages in any gainful occupation.

 The 1987 Policy provides in relevant part:

 
Presumptive Total Disability -- Loss of Speech, Hearing, Sight or the Use of Two Limbs
 
1. the entire and irrevocable loss of speech or hearing;
 
2. the entire and irrevocable loss of sight of both eyes; or
 
3. the entire and irrevocable loss of the use of both hands, both feet or one hand and one foot.
 
You must present satisfactory proof of your loss. Your ability to engage in any occupation will not matter. Further medical care and attendance will not be required. Benefits will be paid according to the Total Disability provisions of this policy. But, benefits will start on the date of loss if earlier than the day benefits start as shown on Page 3. If loss occurs prior to age 65, the Monthly Benefit for Total Disability will be paid as long as you live regardless of the Maximum Benefit Period shown on Page 3.

 The 1970 Policy provides for benefits in the amount of $ 700 per month for life. The 1987 Policy provides for benefits in the amount of $ 2500 per month for life.

 According to his supporting affidavit, in 1989, Cotton suffered a stroke. His vision began to deteriorate shortly thereafter due to a condition known as "optic atrophy." When it deteriorated to the point that it could not be corrected to better than 20/200, on a scale where 20/20 would constitute normal vision, the plaintiff registered as legally blind with the State of New York. Cotton argues that his vision has now degenerated to the point that "when [he] was tested by the defendant's expert optometrist, [his] vision was documented at 5/100 in [his] left eye, and 5/200 in [his] right eye." Further, the plaintiff suffers from a condition referred to as "nystagmus," which causes his eyes to abnormally and involuntarily shift from side to side.

 Nevertheless, the defendant denied Cotton's claims that he was entitled to benefits under the two policies' reasoning that the plaintiff has not suffered an "entire and irrevocable" loss of his "sight." Although Provident concedes that Cotton's vision has greatly diminished, it argues that he has not lost his sight entirely, and therefore he has not qualified for the benefits he seeks.

 On May 2, 1995, the plaintiff filed this lawsuit in federal court, based on the facts outlined above. The complaint contains three causes of action for failure to pay insurance benefits, a declaration ordering Provident to pay benefits in the future, and sanctions based on the defendant's alleged "bad faith."

 The defendant moves for summary judgment arguing that the evidence demonstrates that Cotton is not entitled to the insurance benefits he seeks as a matter of law. The plaintiff opposes Provident's motion and cross moves for summary judgment ...


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