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Falco v. Unum Provident Corp.

March 30, 2007


The opinion of the court was delivered by: VITALIANO, D.J.


Plaintiff Michael J. Falco, Jr. ("Falco") brings this action against Unum Provident Corporation ("Unum"), Provident Life and Accident Insurance Company ("Provident"), and the Paul Revere Life Insurance Company ("Paul Revere") seeking to recover upon two insurance policies issued to him by Paul Revere in 1988 to cover the peril of his total disability. Defendants now move for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, their motion is granted.


This action concerns two separate, yet almost identical, total disability insurance policies purchased by Falco*fn1 from Paul Revere in 1988. Unless otherwise indicated, the following facts are uncontested in the record. Policy number 0102326923 ("Policy 1") was issued to Falco on March 1, 1988. This policy provided for the payment of a monthly indemnity of $5000 to Falco upon the event of his "total disability." "Total disability," in turn, was specifically defined within the policy to mean that "because of Injury or Sickness: a. You are unable to perform the important duties of Your Occupation; and b. You are under the regular and personal care of a Physician." An attached schedule set forth the annual premium Falco was required to pay in order to keep Policy 1 effective, noting that "[i]f the policy is not paid when it is due or within the [31-day] grace period, the Policy will lapse."*fn2 The "Claims" section of this policy stipulated that "[a]ll losses must occur while Your Policy is in force" and that "[w]ritten notice of claim must be given to Us within 30 days after a covered loss starts, or as soon as reasonably possible." The contract further required that "[w]ritten proof of loss must be sent to Us within 90 days of the end of a period for which You are claiming benefits. If that is not reasonably possible, Your claim will not be affected. But, unless You are legally incapacitated, written proof must be given within one year." Finally, Part 10.4 of the agreement set specific limitations on the time period in which legal actions on Policy 1 could be commenced: "You cannot bring legal action within 60 days from the date written proof of loss is given. You cannot bring it after 3 years from the date written proof of loss is required." Defs.' Rule 56.1 Stmt., Ex. 1.

It is undisputed that, in 1998, Falco failed to submit his annual premium payment as required by the terms of Policy 1. Policy 1, consequently, was deemed lapsed by defendants for nonpayment of premium as of March 1, 1998. Defs.' Rule 56.1 Stmt. ¶ 5; Compl. ¶¶ 8, 13.

The record is devoid of any communications between Falco and Paul Revere concerning any potential claims for total disability under Policy 1 during the years it was in effect and for several years after its lapse. In January 2003, however, Falco's friend and attorney, Richard Reisch ("Reisch"), telephoned Unum, Paul Revere's parent company, inquiring as to Falco's eligibility for benefits under Policy 1. This was apparently done in connection with Falco's admission earlier that year to a Long Island hospital for psychiatric treatment. During this conversation, Reisch was informed by an Unum claim representative that no benefits would be payable under Policy 1 since it had lapsed in 1998, several years prior to Falco's initial notice of disability. See, e.g., Defs.' Rule 56.1 Stmt., Ex. 3-4.

Falco, nevertheless, commenced the instant suit in 2004 claiming entitlement to total disability benefits, on a retroactive basis, under Policy 1.*fn3 Although Falco concedes in his complaint that Policy 1 lapsed for nonpayment of premium in 1998, over six years prior to the commencement of this action, see Compl. ¶¶ 8, 13, Falco argues that he should receive total disability benefits under it as a result of an episode of severe depression that he claims first manifested itself in 1994. This depression, Falco further contends, not only rendered him incapable of filing a claim "within the nominal time set out therefore under the terms of the policy" (thus excusing his delay of six years in filing the instant action), see id. ¶ 14, but may also have excused him from paying premiums after 1998, in light of Part 5.1 of the policy providing for waivers of premiums in the event the insured became disabled.*fn4 As such, Falco argues, defendants owe him retroactive total disability benefits under Policy 1 in the amount of $504,000. See generally Compl.; Pl.'s Mem. in Opp. at 5-9.

Falco also asserts claims under a second total disability policy, identified as policy number 0102350264 ("Policy 2"). Policy 2 became effective September 9, 1988. Like Policy 1, Policy 2 initially provided for a monthly indemnity of $5000 to be paid to Falco in the event of his total disability. This indemnity, pursuant to an addendum attached to the contract, increased to $6000 per month as of July 22, 1992. Defs.' Rule 56.1 Stmt, Ex. 6. Otherwise, however, Policy 2's terms and conditions as to the definition of total disability, notice, written proof of loss, and time period in which to bring legal action upon the contract were identical to those of Policy 1. See Defs.' Rule 56.1 Stmt., Ex. 5.

Falco continued paying the premium on Policy 2 until 2001, when he notified Unum via telephone of his intention to file a claim for total disability benefits on Policy 2 due to a disabling psychiatric condition. On May 22, 2001, Unum received Falco's written proof of loss. Shortly thereafter, Falco's treating psychiatrist, Dr. Richard Pitch, completed the Attending Physician's Statement certifying that Falco's limitations from his claimed illness began in September 2000, although another physician, Dr. Donald Proferes, later certified that Falco had been, pursuant to the terms of Policy 2, under his regular and personal care for severe depression since May 2000. On July 26, 2001, Unum notified Falco of its determination, based on Dr. Proferes' certification of his medical condition, that Falco was entitled to total disability benefits dating back to May 1, 2000. Falco concedes that Unum has paid him all benefits due and owing under Policy 2 from that date to the present. See Defs.' Rule 56.1 Stmt. ¶¶ 25-30.

But, Falco claims he is entitled to more, asserting in the instant action that defendants owe him benefits under Policy 2 for an unspecified period in which he alleges that he was totally disabled prior to Dr. Proferes' certification date of May 1, 2000. In support of this argument, Falco offers evidence that a friend of the family, Dr. Jay Cuti, had prescribed the antidepressant Prozac for him in 1994. Cuti Aff. ¶ 7. Dr. Cuti, in an attachment to his affidavit, also provides CVS pharmacy receipts reflecting that the pharmacy filled this prescription for Prozac on an intermittent basis from November 1994 until April 1996. See Cuti Aff., Ex. 1. Falco contends, on the basis of this evidence, that he is entitled to retroactive total disability benefits under Policy 2 for at least a portion of the period between the alleged onset of his disability in late 1994 and May 2000.

Defendants disagree and move for summary judgment. Falco, they assert, is not entitled to any total disability benefits whatsoever under Policy 1 nor to any benefits under Policy 2 prior to May 1, 2000. With regard to Policy 1, defendants argue that Falco's action is time-barred pursuant to § 3211(d) of the New York Insurance Law, which provides that no legal action may be maintained on a lapsed policy of disability insurance unless the action is brought within two years of the date of default. Defendants also assert that Falco is not entitled to any benefits under Policy 1 because he did not a) submit a notice of claim, b) provide written proof of loss, and c) institute his legal action within the relevant limitations periods mandated by the terms of the policy. Additionally, defendants contend that Falco's claims both under Policy 1 and Policy 2 are time-barred pursuant to § 3216(d) of the New York Insurance Law, which requires that all actions on insurance policies be commenced within three years of the time written proof of loss was required to be furnished. Finally, as an alternative ground upon which this Court may grant summary judgment, defendants note that Falco has not put forth any evidence that he was under the regular and personal care of a physician for any alleged disability prior to May 2000, as is mandated for an insured to be eligible to receive total disability benefits under Section 1.9 of both Policy 1 and Policy 2. See generally Defs.' Mem. at 19-20.


A. Standard for Summary Judgment

Under the Federal Rules of Civil Procedure, a district court may grant summary judgment upon finding 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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).The Court's responsibility in assessing the merits of a summary judgment motion is thus not to try issues of fact, but rather to "determine whether there are issues of fact to be tried." Sutera v. Schering Corp., 73 F.3d 13, 16 (2d Cir. 1995) (quoting Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 244 (2d Cir. 1984)). Accordingly, the moving party bears the burden of demonstrating that there is no genuine issue as to any material fact, see, e.g., Jeffreys v. City of New York, 426 F.3d 549, 554 (2d Cir. ...

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