The opinion of the court was delivered by: Spatt, District Judge.
MEMORANDUM OF DECISION AND ORDER
This is a diversity jurisdiction action to recover payments allegedly due to the plaintiff George Glew ("the plaintiff" or "Glew") under an accident and sickness policy issued by the defendants Cigna Group Insurance and Cigna Life Insurance Company ("CIGNA") to the Shirley Community Ambulance Company ("Ambulance Company") for the period of 1994.
According to the facts set forth in the complaint, in March 1994, while the plaintiff was performing his duties as a volunteer member of the Ambulance Company he was "stuck with a needle by a patient who was being transported" (Complaint ¶ Fourth). The plaintiff notified CIGNA of this injury. In April 2001, the plaintiff was notified that he had developed hepatitis C, cirrhosis of the liver, diabetes and other illnesses. The plaintiff contends that these serious ailments "progressed from the initial diagnosis" (Complaint ¶ Sixth), meaning from the needle incident of March 1994.
The complaint further alleges that on or about February 2005, after he was disabled from working, a claim was made to CIGNA for payment "pursuant to said policy and no payment has been made to this date." (Complaint ¶ Seventh) This law suit was brought to recover payments allegedly due under the CIGNA accident and sickness policy.
In 1993-1994, Nancy Marks was both a volunteer riding member in ambulances and a Commissioner for the Ambulance District in the Town of Brookhaven. As a riding member from the early 1990s, she responded to 911 calls as an emergency medical technician ("EMT"). As Commissioner she was responsible for overseeing the Ambulance Company, including its expenses and insurance policies.
The Ambulance Company regularly rendered assistance to persons with AIDS, tuberculosis and other communicable diseases. Therefore, there was concern for the health of the EMTs. This problem was addressed by a protective insurance policy. In 1993 and 1994, the Ambulance Company had a sickness and accident policy with CIGNA, covering members who contracted diseases. In 1994, CIGNA informed the Ambulance Company that it no longer would insure the Company and bids for a new policy were obtained.
Marks had reviewed the 1994 CIGNA policy at issue. It covered both accidental injury and sickness. She testified that the CIGNA policy had no time frame with regard to sickness. Marks attributes this unusual condition to the fact that "HIV takes some time to show." The testimony of Marks, in this regard, is meaningful:
Q: Ms. Marks, when Mr. Horbatiuk was questioning you about notice provisions, you indicated that you had to file a notice of claim?
A: Yes, you have to file.
Q: And when you were dealing with these latent illnesses; HIV, hepatitis C, tuberculosis--what were the policy provisions as far as those illnesses were concerned?
A: There was no basic time frame.
MR. HORBATIUK: Note my objection your Honor.
A: There was no basic time frame, because you did not know when and if you were infected, when it would show up on test results.
Q: And when Mr. Horbatiuk asked you about the important issues; this was an important issue for the ambulance company. Was it not?
Q: This is the coverage that you sought because of the question mark as to whether in fact the illness would ever show itself?
The Ambulance Company wanted to receive a new policy for post 1994 having the same terms and coverage as the CIGNA policy. Their major concern was sickness. As Marks stated in her testimony and in her deposition:
Q: Did you review the CIGNA policy?
Q: And what did it cover?
THE COURT: I'm sorry, I didn't hear you.
A: It particularly covered any accidental injuries, sickness. There was no time frame that was placed on the sickness. Because if you were infected--we'll use, I guess HIV--if you were infected with that, there is no basic time frame of when you're going to be diagnosed.
MR. HORBATIUK: This is beyond her scope of knowledge as a lay person.
THE COURT: Well, I don't know about that. I think it is common knowledge that people can contract HIV. And it takes quite awhile sometimes for it to show. And it is common knowledge.
A: I guess I could use myself as a example.
I had been tested for TB a couple of times because I had come across some patients that had it. And I think I was actually tested two or three times within a year and-a-half time period to see if I had gotten it.
You know, so there was no time frame on it.
Q: When you were procuring this new policy because CIGNA wasn't going to cover you any further, what were the important factors that you were looking for in procuring this new policy?
A: It needed to be exactly the same as the old one, as the CIGNA policy.
The CIGNA policy was provided to anybody that was interested in placing a bid on it to obtain the exact same coverage that was in that existing policy.
Q: What were the concerns of the ambulance corps in getting this new policy?
A: One of the major concerns was sickness.
In addition, in her deposition, Marks testified as follows:
Q: Do you remember specifics about the coverage that was in effect in 1994?
A: Well, the specifics I can remember is we had the accident policy. We had infectious disease, which was a very big concern. The sickness policy and the entire policy, what I remember, especially in this area, that the ambulance company serves, those particular areas were very much of concern because we did have a lot of calls that involved overdose people, that involved people that had HIV, people that just had TB, nasty sicknesses that could have been spread. So, that was a major concern because any volunteer that would ride on an ambulance you just did not know what you were going to come across. So, those are specifics that I remember and it still exists until today.
The Ambulance Company did procure a new accident and sickness insurance policy from a company called VFIS. (Plf. Ex. 10). This policy was effective from February 1, 1995 to February 1, 1996. Although the VFIS policy also refers to other companies, namely, National Union Fire Insurance Company, an AIG company, and AAIC, the Court will refer to this policy as the "VFIS policy." Significantly, Marks testified that this 1995 policy had the same terms and conditions as the 1994 CIGNA policy. A review of the 1995 VFIS policy does reveal some relevant notice and time requirements as follows:
A. vital first step in the successful handling of a claim is prompt and accurate notification to us of your claim. By providing timely, relevant information concerning your organization's claim, you will assist us in serving your claim needs. It is our hope that you will never experience the inconvenience of a claim. If you do, you have our resources, experience and knowledge to rely upon.
All non-fatal claims should be reported directly to your agent's office as soon as possible.
To process these claims, please provide the following information:
1. Completed Accident Report (These forms are provided with the policy and additional forms will be provided upon request), which includes the following:
a. The top section must be completed and signed by the injured person, giving a clear description of the activity and circumstances surrounding the injury.
b. The bottom section must be completed by a fire company official (other than the injured person), certifying that the information on the report is true.
2. Confirmation of disability by the attending physician. If disability persists, confirmation will be required approximately once a month. Ongoing disability payments are made once every two weeks as disability is confirmed. Wage verification will be needed if disability persists longer than 2 month.
GENERAL POLICY DEFINITIONS Covered Activity-means any activity, including travel directly to and from such activity, which is a normal duty of an Insured Person, including any:
1. emergency response for fire suppression and rescue or emergency medical activity.
Infectious Disease-means a disease included within the list of potentially life-threatening infectious diseases, developed by the Secretary of Health and Human Services, pursuant to Title XXVI of the Public Health Service Act, such as hepatitis, clostridium, rubella, and tuberculosis.
Sickness-means any disease, sickness, or infection of an Insured Person while coverage under the policy is in force as to the Insured Person. The Sickness must: 1) manifest itself during a Covered Activity with the result that the Insured Person interrupts his or her participation in such Covered Activity in order to receive immediate medical treatment; or 2) directly result from participation in a Covered Activity and also result in the Insured Person receiving medical treatment within 48 hours of participation in such Covered Activity. The requirement that medical treatment be received within 48 hours is waived for Infectious Diseases. Medical treatment means treatment by a Physician or at a Hospital for the Sickness.
PART IV. WEEKLY INCOME BENEFITS
A. TOTAL DISABILITY BENEFITS
(1) If Injury or Sickness to an Insured Person results in Total Disability, we will pay the Total Disability Weekly Income Benefit in the Schedule for the first 28 days of Total Disability.
(2) If Total Disability continues beyond 28 days, we will pay 100% of the difference between the Insured Person's Average Weekly Wage and any disability income benefits received by the Insured Person from any workers' compensation act, VAWBL, BFBL, or similar law and Other Valid and Collectible Insurance, not to exceed the Total Disability Maximum Weekly Amount shown in the Schedule, for each week the Insured Person is Totally Disabled up to a maximum of 260 weeks.
(3) The minimum benefit payable for total Disability will be the Total Disability Minimum Weekly Amount shown in the Schedule.
B. PARTIAL DISABILITY BENEFITS
(1) If Injury or Sickness to an Insured Person results in Partial Disability, we will pay the Partial Disability Weekly Income Benefit shown in the Schedule for the first 28 days of Partial Disability.
(2) If Partial Disability continues beyond 28 days, we will pay 50% of the difference between the Insured Person's Average Weekly Wage and any disability income benefits received by the Insured Person from any workers' compensation act, VAWBL, VFBL, or similar law and Other Valid and Collectible Insurance, not to exceed the Partial Disability Maximum Weekly Amount shown in the Schedule, for each week the Insured Person is Partially Disabled up to a maximum of 52 weeks.
(3) The minimum benefit payable for Partial Disability will be the Partial Disability Minimum Weekly Amount shown in the Schedule.
C. DISABILITY BENEFITS GENERAL
If an Insured Person is Totally Disabled or Partially Disabled for less than a week, we will pay 1/7 of the benefit otherwise payable for each full day the Insured Person is so disabled.
The amount of Total Disability Benefits or Partial Disability Benefits payable to an Insured Person who is Totally Disabled or Partially Disabled may be increased after Total Disability Benefits or Partial Disability Benefits have been paid to that Insured Person for at least 52 consecutive weeks. The increase will equal the percentage increase, if any, in the Consumer Price Index for the preceding calendar year. The increase will apply to either the Insured Person's Average Weekly Wage at the time of the Covered Activity which caused the Injury or Sickness, or to the Total Disability Benefit or Partial Disability Benefit, whichever results in the higher benefit to the Insured Person. Any increase in benefits will become effective on July 1 next following the 52 week benefit period. Successive annual increases, if any, on July 1 of each subsequent year will be compounded.
In the event that benefits are payable for both Total Disability and Partial Disability resulting from Injury or Sickness sustained while participating in the same Covered Activity, the maximum benefit period for all benefits is 260 weeks.
Periods of Total Disability or Partial Disability separated by less than five (5) years will be considered one period of disability unless due to separate and unrelated causes. "Average Weekly Wage" means an average weekly wage determined by the greater of: (1) the total of wages, salaries, tips, and commissions, etc., for the calendar year immediately preceding the year in which the loss occurred; (2) the average weekly wage earned in the 12 months preceding the loss; (3) the annualized weekly wage earned in the 3 months preceding the loss; or (4) for the self-employed, the amount taken from Schedule C, E, or F which is reported on page one (1) of IRS Form 1040 as net taxable income, excluding rental, investment or passive income. The Average Weekly Wage will be verified by the Insured Person's employer and/or tax records. "Partial Disability," "Partially Disabled" means an Insured Person's inability to do one or more, but not all, of the material and substantial duties of his or her regular occupation. The Insured Person must be under the regular care of a Physician during Partial Disability. "Total Disability," "Totally Disabled" means an Insured Person's inability to perform all material and substantial duties of his or her regular occupation. The Insured Person must be under the regular care of a Physician during Total Disability.
PART V. OPTIONAL SUPPLEMENTARY BENEFIT PACKAGE
B. PERMANENT PHYSICAL IMPAIRMENT BENEFIT
We will pay a Permanent Physical Impairment Benefit if Injury to an Insured Person results in a Permanent Physical Impairment and the Insured Person participates in an approved physical rehabilitation program (if his or her physical condition so warrants).
To Determine the Benefit Payable The Insured Person's Permanent Physical Impairment will be assigned an impairment value by an examining Physician. This value will be expressed as a percentage in relation to the whole person. The impairment value will be determined by the most current edition of the American Medical Association's "Guide to the Evaluation of Permanent Impairment." (In the event the referenced guide ceases to be published, we will use another appropriate measurement of impairment values with the prior approval of the Superintendent of Insurance). This percentage value will be applied to the Permanent Physical Impairment Benefit Principal Sum shown in the Schedule to determine the Permanent Physical Impairment Benefit dollar amount payable under this policy.
Any Permanent Physical Impairment Benefit paid or payable hereunder will be in addition to any Accidental Dismemberment Benefit paid or payable under the Policy. However, in no event will the total mount of benefits payable as a result of any one accident exceed 100% of the largest Principal Sum shown in the Schedule for these Benefits.
If the Insured Person has a physical impairment prior to the time of loss, the impairment value that represents the pre-existing condition will be deducted from the Permanent Physical Impairment evaluation.
C. WEEKLY PERMANENT PHYSICAL IMPAIRMENT BENEFITS
We will pay Weekly Permanent Physical Impairment Benefits if: 1) Injury to an Insured Person results in a Permanent Physical Impairment; and 2) it is determined that the Insured Person has a Permanent Physical Impairment percentage value of 50% or greater for purposes of the Permanent Physical Impairment Benefit. This Weekly Permanent Physical Impairment Benefits will begin in the 261st week from the date of participation in the Covered Activity which caused the Injury and will continue to be paid weekly for the remainder of the Insured Person's lifetime.
The Weekly Permanent Physical Impairment Benefit amount will be determined by multiplying the Weekly Income Benefit amount payable on the 29th day of Total Disability, as determined under Weekly Income Benefits section of this policy, by the percentage value of the Insured Person's Permanent Physical Impairment Example: If the Total Disability Weekly Income Benefit payable on the 29th day of Total Disability is $600.00 and the Insured Person's Permanent Physical Impairment percentage value is 70%, the lifetime Weekly Permanent Physical Impairment Benefit amount would be $420 per week ($600 x 70% = $420).
Weekly Permanent Physical Impairment Benefits will be paid in addition to any benefits paid or payable under this policy.
Notice of Claim: Written notice of claim must be given to us within 30 days after a covered loss occurs, or as soon as reasonably possible. The notice can be given by or on behalf of the Insured Person to us at our executive office or to one of our authorized agents.
Claim Forms: When we receive the notice of claim, we will send the claimant forms for proof of loss. If these forms are not furnished within 15 days, the claimant will meet the proof of loss requirements by giving us written proof of the nature and extent of the loss within the time limit stated in the "Proof of Loss" Section.
Proof of Loss: If this policy provides for periodic payment for a continuing loss, we must be given written proof within 90 days after the end of each period for which we are liable. For any other loss, we must be given written proof within 90 days after that loss. If it was not reasonably possible to give written proof in the time required, we will not reduce or deny the claim for this reason, if the proof is filed as soon as reasonably possible.
Time Payment of Claims: When we receive written proof of loss, we will pay any benefits due within 45 days of receipt of such written proof. Benefits that provide for periodic payment will be paid at least monthly. When our liability ends, we will pay ...