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Clarke v. Aetna Life Insurance Co.

December 3, 2009



This is an action brought by plaintiff Trevor Clarke against Aetna Life Insurance Company ("Aetna") for breach of contract for failure to pay disability benefits to Plaintiff pursuant to a long term disability policy issued by Aetna (the "Policy").

This case was tried before the Court without a jury from April 1 to April 3, 2008. This opinion sets forth the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). To the extent that any finding of fact reflects a legal conclusion, it should be to that extent deemed a conclusion of law and vice versa. For the reasons explained below, the Court finds that Clark has not proved, by a preponderance of the evidence, that he was entitled to either total disability or partial disability benefits under the Policy.


Plaintiff's Occupation

1. Trevor Clarke is a solicitor specializing in pensions law in the UK. In 1994, Clarke helped to start Garrett's, a Leeds law firm financially backed by Arthur Andersen ("Andersen"). Andersen, the largest professional services organization in the world, was seeking to establish multi-disciplinary partnerships throughout the world.

2. Clarke joined Garrett's as a National Partner in May 1994. At Garrett's, Clarke was guaranteed a "Capped Equity," which was a share of the firm's profits. When he first joined Garrett's, his guaranteed profit share was about $240,000. By 1998, this had increased to about $273,000.

3. Prior to working at Garrett's, Clarke had worked at the law firms Edge Ellison and Simpson Curtis.

4. Garrett's was a competitive environment. Garrett's partners were expected to perform at a high level and to be "on call" to address work issues outside normal working hours, including weekends and holidays. (Clarke Aff. ¶¶ 24, 32.) At Garrett's, Clarke handled pension schemes of large corporate clients, drafted trust deeds for small self-administered pension schemes ("SSASs"), and acted as a Pensioner Trustee for these SSASs. (Clarke Aff. ¶ 34.) Initially, Clarke had responsibility for all pensions work generated in the Leeds and London offices. Later he moved to Birmingham and assumed responsibility for pensions work in England and Scotland. He supervised three or four pension lawyers in Birmingham and assisted with other offices. Clarke also assisted regional offices in appointing their own pension lawyers.

As these offices' pensions practices developed, Clarke was responsible for replacing the work that had previously been referred from these offices with work for Birmingham clients. (Clarke Aff. ¶¶ 23--35.)

5. After a merger between Garrett's Employment Law and Pensions department and the Human Capital Services ("HCS") Department of Andersen, Clarke became the joint head of the HCS practice in the Midlands. In this role, Clarke was asked to recruit for a new division within HCS that specialized in pensions and financial services as part of creating a new full-service pensions and investment services. Clarke also had to recruit and supervise non-legal personnel for the HCS department. In total, Clarke and one other partner were responsible for a group of approximately forty individuals. (Clarke Aff. ¶¶ 26--35.)

6. Andersen set an annual target for the increase in the number of qualified staff working under each partner. Clarke was required not only to increase the number of qualified staff working for him but also to find enough client work to occupy all of these individuals. (Clarke Aff. ¶¶ 30--32.)

7. Clarke's occupation was that of a senior partner in a large law and accounting firm in Birmingham, England. The material duties of Clarke's occupation were to oversee Garrett's pension work in England and Scotland, to practice pensions law, to be "on call" outside of regular working hours, to recruit personnel for the HCS division, to supervise legal and non-legal personnel, and to maintain client relationships and obtain new clients.

The Policy

8. As a partner at Garrett's, Clarke was covered by Long-Term Disability Policy No. LTD-299098 ("the Policy"), issued by Aetna.

9. The parties have provided competing versions of the Policy as trial exhibits; there is a dispute over which version governs Clarke's 2001 claim for disability benefits under the Policy. (Aetna Ex. 1; Clarke Ex. 2.) Clarke notes that his version is labeled with the code "94BERM," while Aetna's version is labeled "93BERM." In addition, Clarke provides an August 3, 1999 letter from Aetna to Clarke indicating that total disability benefits are paid at a rate of 70% of monthly basic earnings until age 62. (Clarke Ex. 4 at 5--7.) This is consistent with the total disability benefits described in the 94BERM policy offered by Clarke (Clarke Ex. 2 at 4, 5, 7, 26), but not the 93BERM policy offered by Aetna (Aetna Ex. 1 at 6, 8, 31.). Aetna has offered no argument or evidence on this issue. The Court finds that Clarke's claim for disability benefits is governed by the version of the Policy designated 94BERM (Clarke Ex. 2).

10. The relevant provisions of the Policy are as follows:

II.A.2. An individual will remain eligible [for Long-Term Disability Coverage] as long as he or she:

a. Continues to be an active partner; or

b. Is a retired partner under age 62 (only for total disability benefits).

VII.3. Actively Employed or Active Employment for partners means:

a. Devoting all professional time, skill and attention to the affairs of the Policyholder; and

b. Not being:

(1) Hospital confined;

(2) Confined in any institution/facility other than a hospital due to an injury or sickness; or

(3) Confined at home and under the supervision of a physician.

II.D.2. If a covered individual is eligible because of employment, he or she will no longer be eligible when the covered individual:

a. Resigns;

c. Is dismissed, disabled or suspended;

d. Is no longer in an eligible class;

e. Does not satisfy the requirements for hours worked or any other eligibility provisions.

VII.33. Total Disability/Totally Disabled for LTD means:

b. For Active Regular Partners or for Retired Partners disabled while active that solely because of an illness, pregnancy or accidental bodily injury, an insured partner is unable: (1) To perform each of the material duties of the partner's regular occupation on a full-time basis;

c. For Retired Partners disabled after retirement that solely because of an illness, pregnancy or accidental bodily injury, an insured partner is unable . . . to perform independently the functions needed for the basic Activities of Daily Living: (a) Bathing; (b) Dressing; (c) Feeding; (d) Continence; (e) Toileting; (f) Transferring (getting in and out of a chair, bed, toilet, etc.) . . .

III.B.1. If, while insured under this provision, a covered individual becomes Totally Disabled, Aetna will pay [Total Disability benefits].

Benefits will begin [after a one-year waiting period] ends. Benefits will be payable for a period of Total Disability until the earliest of:

a. [Age 62]

b. The day the covered individual is no longer Totally Disabled; or

c. The day of the covered individual's death.

VII.21.b. Partial Disability or Partially Disabled for an active partner means that an active partner returns to work, but cannot fully perform the duties of his or her regular occupation solely because of an illness, pregnancy, or accidental bodily injury, but:

(1) is able to perform one or more, but not all of the material and substantial duties of his or her own occupation on a full-time or part-time basis; or

(2) is earning less than 80% of Pre-disability Income at the time partial disability employment begins.

III.C.1. If an active partner has been released for part-time work by his or her physicians, but is unable with diligent effort to find work which meets the Partial Disability requirements, Partial Disability benefits may be paid with approval of Aetna Life.

III.C.2. [Partial Disability] [b]enefits will be payable until the earliest of:

a. [Age 62] (see Clarke Ex. 2 VII.11.)

b. The day the partner is no longer Partially Disabled;

c. The day the active partner retires;

d. The day of the covered individual's death;

e. The first day following the month in which current monthly earnings exceed 80% of the Basic Monthly Earnings prior to disability.

VI.A. Before Benefits are paid, Aetna must be given a written proof of loss.

VI.A--C. [A Proof of Loss form must be completed by the claimant and a physician and submitted to Aetna] at least once each ninety days as long as the covered individual is disabled. If he or she does not send Aetna the form when due, Aetna will still honor the claim if he or she sends Aetna the form as soon as reasonably possible. The form must be sent to Aetna not later than one year after it is otherwise required (unless the claimant is not legally capable).

III.D. Aetna will not pay for any disability . . . during which a covered individual is not under the regular care and attendance of a physician; [or] . . . which begins while the covered individual is not insured under the Policy.

III.D.8. Partial Disability Benefits will not be paid to retired partners.

Onset of Plaintiff's Condition

11. Around late October 1997, Clarke's fiancée, Gay Nebel, noticed that Clarke was acting strangely, was having trouble sleeping, and was drinking more than usual. (Nebel Aff. ¶¶ 18--20.)

12. Around January 1998, in addition to the pressures of his job, Clarke had clashed with other Andersen partners and had been named in a claim for legal negligence. Around the same time, he discovered that Nebel was having an affair. (See Clarke Aff. ¶ 46)

13. In early 1998, Clarke became increasingly anxious and paranoid, and became preoccupied with the possibility that he had made mistakes in his work. He started to believe that he was being monitored by Andersen and/or the police and that his conversations were being recorded. Clarke continued to drink heavily. He engaged in erratic driving and bizarre behavior.

14. At some point during this 1998 episode, Clarke contemplated suicide and took some steps towards a suicide attempt. He gathered all of the over-the-counter drugs in the house so he could use them "if things got too bad." (Clarke Aff. ¶ 63.) Clarke became aggressive when Nebel attempted to remove the pills.

15. In April 1998, Clarke's general practitioner Dr. Hyde threatened to have Clarke forcibly admitted to a psychiatric hospital, and Clarke agreed to receive outpatient treatment. He was prescribed medication at this time, and, at Dr. Hyde's suggestion, began consulting with psychiatrists at Kidderminster General Hospital. (Clarke Ex. 6 at 195--213.) Clarke reported to one of these psychiatrists, Dr. Simon Smith, that both his mother and brother had been treated for depression. (Clarke Ex. 6 at 201; see also Clarke Aff. ¶¶ 53--56.)

16. Due to his depressive state, Clarke stopped going to work around April 1998. For some months, Clarke became very isolated and drank heavily. He reports being very agitated and having trouble concentrating and getting to sleep. He stayed indoors most days and did not maintain personal hygiene. At some point, he became lethargic and stayed in bed all day and night. (Clarke Aff. ¶ 61.)

17. During the summer of 1998, Clarke had discussions with Garrett's about returning to work. Though he was not fully recovered, Clarke was interested in returning to work, at least on a part-time basis. Clarke told Paul Finlan, the managing partner in Birmingham, that his doctors had told him it took an average of ten months for recovery from a bout of severe clinical depression without treatment. Clarke said that since he was being treated and had already begun his recovery, he might be able to return to work in "a matter of months."

18. On July 21, 1998, Clarke was informed by Paul Finlan that Garrett's was going to recruit a senior pensions lawyer. The next day, Clarke asked Dr. Khan to write him a letter in support of not returning to work at that time. (Tr. 34--37.) Dr. Khan wrote Clarke a letter dated July 24, 1998, stating that Clarke was progressing in his recovery but that it would be "some months" before Clarke was fully recovered and able to return to full-time work.

19. On July 30, 1998, Clarke was informed that he would not be permitted to return to Garrett's as the leader of the pensions practice. (Aetna Ex. 3.) At this time, Clarke was told that he would be allowed to return to work on a part-time basis as long as he saw a psychiatrist. (Clarke Aff. ¶¶ 86--93; Aetna Ex. 3.) In August, Clarke was told that if he did not return to work by the end of September, he would be asked to resign. (Clarke Aff. ¶ 90.)

20. In August 1998, Clarke asked Dr. Khan for a letter supporting his return to work. (Tr. 38.) On August 20, 1998, Dr. Khan wrote a letter to Sukki Kaur, HR manager at Andersen, stating "I would anticipate that [Clarke] will be able to return to work, eventually full-time. . . . I do not believe that he is presently well enough for this, though may now be well enough to undertake part-time duties." (Clarke Ex. 6 at 218.)

21. On September 16, 1998, Dr. Khan wrote to Sukki Kaur that Clarke was "making very good progress in recovery from his depression." (Clarke Ex. 6 at 222.) However, Clarke was told in late September that, due to his medical condition, he would ...

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