Burnett v. Combined Insurance of Amercia
ORDER GRANTING 14 Motion for Summary Judgment. Ordered by Judge Marc Thomas Treadwell on 12/1/2011. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COMBINED INSURANCE OF
FILE NO. 5:10-cv-338 (MTT)
This matter is before the Court on Defendant Combined Insurance of America’s
Motion for Summary Judgment. (Doc. 14). For the following reasons, the Motion is
I. PROCEDURAL AND FACTUAL BACKGROUND
This action involves a disability insurance policy issued by Defendant Combined
Insurance of America. Plaintiff Devereaux Burnett seeks coverage for an injury
resulting from his fall from a step-ladder on February 5, 2009. The Plaintiff first became
disabled on February 23, 2007 after falling from a tractor trailer truck. After the
February 2007 fall, the Plaintiff filed a claim for disability benefits under his Policy with
the Defendant. The Defendant agreed that the Plaintiff was “totally disabled” and began
paying a monthly benefit of $3,000 on March 26, 2007.1 The Policy defines “totally
The Policy required an elimination period of thirty days; thus, the insured had to be totally
disabled for thirty days following the filing of his claim before the benefits began. (Doc. 14-2 at
disabled” or “total disability” as “the inability to perform all of the substantial and material
duties of the Insured’s occupation.” (Doc. 14-2 at 4). The maximum benefit period the
insured could receive total (or partial) disability benefits “for any one accident or
sickness” is two years. (Doc. 14-2).
In the two years following the Plaintiff’s initial accident, he remained totally
disabled. (Doc. 14-6 at ¶¶ 11-13, Doc. 20 at ¶¶ 11-13). Thus, at the time of the second
fall on February 5, 2009, the Plaintiff was still receiving disability payments. Following
the second fall, the Plaintiff began experiencing both lower and upper back pain, along
with shoulder pain. (Doc. 21 at 3). The Plaintiff submitted his second claim on March
16, 2009, in which he sought disability benefits based on an injury to his “left shoulder
lower back” from the February 5, 2009 fall off the ladder. (Doc. 14-4).
The Policy has two provisions that are potentially applicable when an insured is
disabled from more than one injury or sickness—a recurrent disability provision and a
concurrent disability provision. The recurrent disability provisions states that
“[s]uccessive periods of total disability will be considered one period of total disability
unless such periods are separated by at least 180 days or the disabilities resulted from
different or unrelated injuries or sickness.” (Doc. 14-2 at 7). The concurrent disability
provision provides that “[i]f the insured is disabled as the result of one injury or sickness
or both an injury and a sickness, [then the] benefits will be paid as if disability were the
result of only one injury or sickness.” (Doc. 14-2 at 6).
The Defendant denied the Plaintiff’s second claim for disability benefits, stating:
“From the medical information obtained, it appears that you have been continuously and
totally disabled since 2/23/07 and have never had a period of recovery. In view of this
and since we have already provided the maximum benefit of two years of total disability
benefits under the above policy for your loss of 2/23/07, we are sorry but we are unable
to provide any disability for your loss of 2/5/09.” (Doc. at 14-2).
The Plaintiff’s attorney, on November 10, 2009, wrote the Defendant and
asserted that although the Plaintiff had received maximum benefits based on his original
lower back injury, he was now disabled as the result of a new injury, and, because of
this new injury, additional benefits should be paid. The Plaintiff’s attorney sent another
letter dated December 10, 2009, stating that the Plaintiff was suffering from a “recurrent
disability” as defined by the policy and was entitled to the additional benefits.
Following the Defendant’s denial of coverage based on its conclusion that the
Plaintiff’s injury was a concurrent disability, the Plaintiff filed this suit for disability
benefits and for attorney’s fees pursuant to Georgia’s stubbornly litigious statute.
O.C.G.A. § 13-6-11.
II. SUMMARY JUDGMENT STANDARD
Summary judgment must be granted if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to
any material facts and that the movant is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(c). “A factual dispute is genuine only if ‘a reasonable jury could return a
verdict for the nonmoving party.’” Info. Sys. & Networks Corp. v. City of Atlanta, 281
F.3d 1220, 1224 (11th Cir. 2002) (quoting United States v. Four Parcels of Real Prop.,
941 F.2d 1428, 1437 (11th Cir. 1991)). Further, the burden rests with the moving party
to prove that no genuine issue of material fact exists. Info Sys. & Networks Corp., 281
F.3d at 1224. The district court must “view all evidence in the light most favorable to the
nonmoving party, and resolve all reasonable doubts about the facts in its favor.” Id.
A. The Disability Insurance Policy
The Plaintiff argues his new shoulder injury is a “recurrent disability and
necessitates a new and distinct claim.” (Doc. 1-4 at ¶ 16) (internal quotation omitted).
As noted, the recurrent disability provisions provides “[s]uccessive periods of total
disability will be considered one period of total disability unless such periods are
separated by at least 180 days or the disabilities resulted from different or unrelated
injuries or sickness.” (Doc. 14-2 at 7). The Plaintiff interprets this clause to provide
coverage for a second disabling injury if either 180 days has passed after the first period
of disability or if the second disability was caused by a different injury or illness. Thus,
the Plaintiff argues that because the Policy does not require a time period between
successive periods of total disability if the second disability is the result of a different
injury, then his second injury falls within the definition of recurrent disability.
The Defendant contends that the recurrent disability provision, by its express
language, applies to successive periods of total disability, not successive injuries. Thus,
because the Plaintiff was totally disabled at the time of the second injury, there cannot
be successive periods of disability. Rather the Plaintiff’s second injury, even if totally
disabling, resulted in a concurrent disability which the Policy defines as a disability
resulting from “more than one injury, for which benefits are paid as if they were the
result of only one injury.” (Doc. 14-5 at 10) (internal quotations and emphasis omitted).
The Defendant asserts the purpose of the concurrent disability provision is to prevent a
totally disabled claimant from receiving benefits for more than one maximum period by
claiming successive periods of disability when the original disability is continuous.
Thus, because the Plaintiff was already totally disabled and receiving total disability
benefits at the time of the second injury, there was only one single continuous total
disability period that began in 2007 and continued through March 2009, not two
successive periods of total disability. (Doc. 14-5 at 11).
Neither party cites any Georgia case interpreting similar “recurrent disability” and
“successive period” provisions, nor has the Court found any applicable Georgia
authority. However, cases from other jurisdictions, along with Georgia rules of
insurance contract interpretation, provide a framework for interpreting this provision and
applying it to the Plaintiff’s injuries.
“‘In construing an insurance policy, [t]he test is not what the insurer intended its
words to mean, but what a reasonable person in the position of the insured would
understand them to mean…. Where a provision in the policy is susceptible to two or
more constructions, the court will adopt that construction which is most favorable to the
insured.’” Hill v. Nationwide Mutual Fire Insurance Co., 214 Ga. App. 715, 715, 448
S.E.2d 747, 747-48 (1994) (quoting Atlantic Wood Indus. v. Lumberman’s Underwriting
Alliance, 196 Ga. App. 503, 505, 396 S.E.2d 541, 543 (1990) (internal citation omitted)).
Additionally, an insurance contract should be examined as a whole when the court is
attempting to construe any portion within the contract. Edwards v. Atlantic Insurance
Co., 203 Ga. App. 608, 609, 417 S.E.2d 410, 412 (1992). An interpretation of a contract
that will uphold a contract in whole and in every part is preferred, and the whole contract
should be looked to in arriving at the construction of any provision. Alea London Ltd. v.
American Home Servs., Inc., 2011 WL 1437003, at *3 (11th Cir. 2011). However, if, by
the language of the contract, no coverage exists, “we will not…extend coverage where
none was contracted or intended.” Jefferson Insurance Co. of New York v. Dunn, 269
Ga. 213, 215, 496 S.E.2d 696, 699 (1998); See also Bold Corp. v. National Union Fire
Ins. Co., 216 Ga. App. 382, 383, 454 S.E.2d 582, 584 (1995) (“Where the language of
the contract fixing the extent of coverage is unambiguous…and but one reasonable
construction is possible, this court must enforce the contract as written. A term in an
insurance policy that unambiguously and lawfully limits the insurer’s liability may not be
extended beyond what is fairly within its plain terms”).
Here, the Policy provides that an insured can suffer a recurrent disability when
there are “[s]uccessive periods of total disability.” Although “successive periods” is not
defined in the Policy, the term is unambiguous and not susceptible to more than one
reasonable interpretation. It contemplates a second period of disability following a first
period of disability.
Other courts have reached the same conclusion. The United States District
Court for the Eastern District of Michigan interpreted an almost identical insurance
policy provision in Taylor v. Unum Provident Corporation, 2007 WL 1016987 (E.D. Mich.
2007). In Taylor, the insured suffered a second injury while still suffering from a totally
disabling neck injury. Id. at *1. The plaintiff in Taylor, like the Plaintiff here, argued that
he was entitled to additional benefits for the second injury because the subsequent
disability was “successive,” as contemplated by the Policy because his second disability
was due to a different underlying cause. Id. at *7-8. The defendant contended that
there was only one continuous period of disability because the plaintiff was injured while
he was already completely and totally disabled. Id.
The insurance policy in Taylor stated: “Successive periods will be deemed to be
the same period unless the later period: (1) is due to a different or unrelated cause, or
(2) starts more than twelve months after the end of the previous period…in which event,
the later period will be a new or separate period of disability….” Id. at *9-10. Although
not labeled as a “recurrent disability,” this language is almost identical to the recurrent
disability provision in this case. The court in Taylor interpreted “successive periods” to
mean “two separate periods of disability following one another in succession.” Id. at
*11. The court rejected the plaintiff’s argument that a successive period can begin
during a previous period if there is a different cause, because, not only was it not the
natural interpretation of the term successive period, but it would also render another
provision of the insurance policy irrelevant. See id. at *11. This provision provided that
“in no event will you be considered to have more than one disability at the same time.
The fact that a disability is caused by more than one injury or sickness from both will not
matter. We will pay benefits for the disability that provides the greater benefit.” Id. at
*11. The court reasoned that the ordinary reading of that language in conjunction with
the rest of the insurance policy meant that even if an individual suffers from several
disabilities at one time, there can only be one period of disability. Id.
Similarly, in Zieglemann v. TMG Life Insurance Company, 607 N.W.2d 898
(2000), the North Dakota Supreme Court interpreted an insurance policy that also
provided that a recurrent disability occurs when a “subsequent” period of disability is the
result of an injury unrelated to a previous disability. Zieglemann, 607 N.W.2d at 899.
The court reasoned that the plaintiff was not covered under the recurrent disability
provision because his totally disabling eye condition was “continuous and uninterrupted
and therefore, [his new] back condition [had] not resulted in a subsequent period of
disability.” Id. at 900. The court held that the plaintiff’s injury could only be a recurrent
disability, entitling him to a new disability period, if the unrelated injury had been
subsequent to the “cessation of the prior cause or causes of disability for which he
received benefits under the policy.” Id. at 901; See also Pennsylvania Life Insurance
Co. v. Green, 367 So.2d 463 (Ala. Civ. App. 1978); Pappas v. Unum Life Insurance Co.
of America, 856 A.2d 183 (Pa. Super. Ct. 2004); Christensen v. S.L. & Assoc., Inc., 207
P.3d 1020, 1026 (Idaho 2009) (holding that a totally disabled plaintiff could not have a
subsequent disability from a different injury because “her disability could not be greater
than total” and she could not become “more than disabled”).
Here, when the Policy is read as a whole and its words are given their plain and
ordinary meaning, there is only one reasonable interpretation—that the Plaintiff did not
have successive periods of disability due to different injuries, but rather, the Plaintiff had
one single and uninterrupted period of disability. The undisputed evidence shows that
the Plaintiff was totally and continuously disabled from his initial lower back injury from
February 2007 through March 2009. It is also undisputed that the Plaintiff continuously
received benefits for his total disability, starting on March 26, 2007 and ending, after his
second injury, on March 26, 2009. At the time he injured his shoulder in February 2009,
the Plaintiff was still totally disabled and had not at any point been classified as anything
other than totally disabled by his doctors. A new, successive, disability period could not
begin while the Plaintiff was still disabled from his first injury. The fact that there was a
second injury during the Plaintiff’s period of complete disability does not change the fact
that the Plaintiff only had one period of disability and not two successive periods. The
Plaintiff’s injury could only be a recurrent disability, entitling him to a new disability
period, if the unrelated injury had been after the end of his first disability period. Thus,
even viewing the evidence in the light most favorable to the Plaintiff, there is no genuine
issue of material fact, and the Defendant is entitled to judgment as a matter of law.
B. The Plaintiff’s Claim for Attorney’s Fees
The Defendant also moves for summary judgment on the Plaintiff’s claim for
attorney’s fees. The Court’s conclusion that the Plaintiff is not entitled to disability
benefits for his second injury effectively disposes of his claim for attorney’s fees.
However, as the Defendant notes, the Plaintiff seeks the attorney’s fees pursuant to
O.C.G.A. § 13-6-11, which allows litigation expenses to be paid to the plaintiff if he has
specially plead such damages, and the defendant has acted in bad faith or has been
stubbornly litigious. The exclusive basis for recovering attorney’s fees based on an
insurance company’s bad faith refusal to pay benefits is O.C.G.A. § 33-4-6. Anderson
v. Georgia Farm Bureau Mutual Insurance Co., 255 Ga. App. 734, 737, 566 S.E.2d 342,
345 (2002). Therefore, the Plaintiff’s claims for litigation expenses pursuant to O.C.G.A.
§ 13-6-11 are not recoverable as a matter of law. See United Service Auto. Ass’n v.
Carroll, 226 Ga. App. 144, 149, 486 S.E.2d 613, 617 (1997). While the Court would
normally allow a Plaintiff to amend his Complaint to cure such a pleading mistake, an
amendment here would be pointless.
Accordingly, the Defendant’s Motion for Summary Judgment is GRANTED in its
entirety. (Doc. 14).
SO ORDERED, this the 1st day of December, 2011.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
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