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LEWIS v. JOHN HANCOCK MUT. LIFE INS. CO.

May 29, 1998

Melvin C. Lewis, Plaintiff
v.
John Hancock Mutual Life Insurance Company, Marc J. Willienfeld, M.D., Francis Gillis, Defendants



The opinion of the court was delivered by: POLLACK

Opinion and Order

 Plaintiff Melvin C. Lewis brought breach of contract and fraud claims against his former employer, John Hancock Mutual Life Insurance ("John Hancock"), after John Hancock terminated both long term disability benefits and a premium waiver provision in two individual life insurance policies purchased from John Hancock. John Hancock moved for partial summary judgment with respect to plaintiff's claims for long term disability benefits. For the reasons discussed below, John Hancock's motion for partial summary judgment is granted.

 Background

 Plaintiff Melvin C. Lewis commenced his employment as a marketing representative at defendant John Hancock ("John Hancock") on or about November, 1979. Plaintiff's position at the company was covered by a collective bargaining agreement between John Hancock and the United Food and Commercial Workers International Union, AFL-CIO and CLC. Part of the collective bargaining agreement includes a "Security Program," which provides, inter alia, long term disability benefits for employees upon proof of total disability due to accidental bodily injury or disease. As a qualified employee benefit plan, the Security Program is governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. ยง 1001 et. seq. ("ERISA").

 John Hancock's long term disability coverage includes two definitions of "total disability." During the first sixty months of continuous disability, the phrase "totally disabled" is defined as "wholly and continuously disabled by accidental bodily injury or sickness to the extent that the employee is thereby prevented from performing any and every regular duty of his occupation or employment." After sixty consecutive months of disability, the phrase "totally disabled" is narrowed to include "only such complete incapacity, resulting for accidental bodily injury or sickness, as prevents the employee from performing any and every duty of any occupation or employment for which is reasonably qualified by education, training or experience."

 In response to plaintiff's claims that he was unable to continue working at John Hancock due to the onset of a skin condition, severe atopic dermatitis, John Hancock deemed plaintiff totally disabled as of February 14, 1985. From that date until August 21, 1985, plaintiff received Accident and Sickness benefits under the terms of the Security Program. Upon the expiration of these benefits on August 21, 1985, plaintiff sought long term disability coverage. On or about September 1985, John Hancock authorized payment of long term disability benefits to plaintiff, retroactive to August 22, 1985. Plaintiff received monthly payments under the Security Program's long term disability coverage until February 13, 1990.

 On December 21, 1989, John Hancock notified plaintiff by letter about the impending change in the definition of "total disability" under John Hancock's long term disability coverage. Plaintiff was further informed that he would be entitled to continued long term disability benefits only if he was unable to perform any occupation for which he was reasonably qualified by education, training or experience. John Hancock also indicated that it would undertake an investigation to ascertain plaintiff's continued eligibility for such benefits.

 After reviewing plaintiff's medical records and having plaintiff examined by an independent physician, John Hancock determined that plaintiff was not "totally disabled" as defined by the Security Program. By letters of October 17 and October 28, 1990, John Hancock notified plaintiff that as of February 13, 1990, he would no longer be eligible for long term disability benefits. In these letters, John Hancock explained that plaintiff or his authorized representative could request a review through union grievance procedures.

 On November 21, 1990, plaintiff's' former attorney, H.J. Edwards, sent a letter to John Hancock requesting that the company review its decision to terminate plaintiff's long term disability benefits. On January 21, 1991, John Hancock responded by reiterating that any appeal of its October 17, 1990 determination had to be pursued through established union grievance procedures. It is uncontroverted that neither plaintiff nor any authorized representative pursued such an appeal within the proscribed time period (60 days) or at any time thereafter.

 On March 24, 1997, plaintiff commenced this action, asserting breach of contract and fraud claims under state law against John Hancock; Marc Willienfeld a physician; and, Defendant Francis L. Gillis, a senior claim consultant working at John Hancock. The individual defendants were not served and the action has been discontinued as to them. Plaintiff asserts claims for "lost" disability benefits totaling $ 108,000 and a separate claim for $ 2,550 in damages resulting from John Hancock's termination of the premium waiver provision in two life insurance policies purchased from John Hancock. On March 27, 1998, John Hancock moved for partial summary judgment with respect to Lewis' claim for long term disability benefits.

 Discussion

 A. Summary Judgment

 Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). In considering a motion for summary judgment, "the court's responsibility is not to resolve disputed issues of fact but to assess whether there are factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986).

 "[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion..." and identifying the matter "which it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). If the movant satisfies this initial burden, the burden shifts to the non-movant who must "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). "Mere speculation or conjecture as to the true nature of the facts" will not suffice "to overcome a motion for summary judgment." Knight, 804 F.2d at 12. In demonstrating that the factual issue in dispute is "genuine," the ...


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