ONEX CREDIT PARTNERS, LLC v. CERTAIN UNDERWRITERS AT LLOYD'S
Filing
138
OPINION. Signed by Judge John Michael Vazquez on 07/16/2018. (ek)
Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ONEX CREDIT PARTNERS, LLC,
Plaintiff
Civil Action No. 13-5629
(JMV) (Mf)
v.
CERTAIN UNDERWRITERS AT LLOYD’S;
ATRIUM 5 LTD., an Underwriter at Lloyd’s,
London individually, and in its capacity as
representative Underwriter at Lloyd’s, London
for certain subscribing Underwriters at Lloyd’s,
Policy
to
subscribed
London
who
#RC967307/127,
OPINION
Defendants.
John Michael Vazguez, U.S.D.J.
Plaintiff Onex Credit Partners, LLC (“Onex”) filed suit against Defendant Atrium 5 Ltd.
(“Atrium”) after Atrium denied insurance coverage under a “key man” clause covering Onex’s
former co-CEO, Stuart Kovensky. Currently pending before the Court is Atrium’s motion for
summary judgment. D.E. 109. The Court reviewed the parties’ submissions’ and decided the
motion without oral argument pursuant to fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). for the
reasons set forth below, Defendant’s motion for summary judgment is DENIED.
‘The following briefs were submitted in connection with this motion: Defendant Atrium 5 Ltd.’s
Memorandum of Points and Authorities in Support of Motion for Summary Judgment, D.E. 1093, hereinafter “Defendant’s Brief’ or “Def. Br.”; Plaintiffs Memorandum of Law in Opposition
to Defendant Atrium 5 Ltd’s Motion for Summary Judgment; D.E. 121, hereinafter “Opposition”
or “Opp.”; Defendant Atrium 5 Ltd.’s Reply Memorandum of Law in further Support of Motion
for Summary Judgment, D.E. 122, hereinafter “Reply Br.” or “Reply.”
Factual Background & Procedural History
I.
The following facts are taken from the parties’ respective statements of material fact and
documents annexed thereto.2 Kovensky is the former co-CEO of Onex, a hedge fund. Plaintiffs
SOMF at
¶ 135, Defendant’s $OMF at ¶ 1. Onex bought an insurance policy from Certain
Underwriters at Lloyd’s of London (“Lloyd’s)3 (“the Policy”). See D.E. 10, Exhibit A to Amended
Complaint. The Policy provides insurance coverage for certain high-ranking corporate officers,
including Kovensky, if the officers become disabled. Defendant’s SOMF at
¶ 2. Kovensky’s
coverage is for $5,000,000. On his application, Kovensky indicated that his traveled overseas “for
a total of 2-3 [weeks] per year.”4 Policy at 21.
The Policy states that a “Permanent Total Disability Benefit” will be paid under the
following circumstances:
1. The Insured becomes Permanently and Totally Disabled as
defined below as a result of.
(b) a Sickness which first manifests itself while this
benefit is in force and causes Permanent Total
Disability to commence within 365 days of a covered
Sickness; and
2. The Insured satisfies the Elimination Period shown on the
Schedule; and
3. The Insured is under the regular care of a Physician that is
appropriate for the condition causing the disability.
Defendant Atrium 5 Ltd.’s Statement of Undisputed Facts in Support of Summary Judgment,
D.E. 109-1, hereinafter “Defendant’s SOMf”; Plaintiff Onex Credit Partners, LLC’s Response to
Atrium’s Statement of Undisputed Facts and Counterstatement, D.E. 121-1, hereinafter “Plaintiffs
SOMF.”
2
Atrium was named in the Amended Complaint in its individual capacity and in its capacity as a
representative of Lloyd’s. See D.E. 9 at 2.
Defendant repeatedly indicates that Kovensky stated in his application he only travelled for two
to three weeks per year. See, e,g, Def. Br. at 2. This is an inaccurate claim, as the application did
not call for all travel but only overseas travel.
2
Policy at 17. The Elimination Period is twelve months. Id. at 12.
“Permanently and Totally Disabled” occurs when
{a]s a result of a covered Injury or Sickness, the Insured is
pennanently and totally unable to perform the substantial and
material duties of his or her regular occupation as shown on the
Schedule for the entire Elimination Period and is not expected to
recover for the remainder of his or her life. The Insured must also
be under the regular care of a Physician that is appropriate for the
condition causing the disability.
No benefit will be paid prior to the completion of the Elimination
Period.
Id. “Sickness” is defined as follows:
[A]ny sickness, illness or disease that (l)(a) is diagnosed or treated
by a Physician while this policy is in force; and (b) is not a Pre
existing Condition as defined above; or (2) is a Pre-Existing
Condition but: (a) is declared on the Application for this Policy; and
(b) is not excluded from coverage by name or specific description.
Id. at 13.
The Policy also contains an exclusion for “any loss caused by, in whole or in part, or as a
result of.
..
[a]ny psychosis, neurosis, or neuropsychiatric illness including, but not limited to, any
emotional anxiety or depression illness for which any form of psychiatric or psychological therapy
is indicated or received.” Id.
On February 24, 2011, Onex submitted a notice of claim under the Policy, which stated
that Kovensky “suffered an acute aortic dissection5 on March 3, 2010, while in Vancouver,
Canada.” Defendant’s SOMF at
¶ 7; Exhibit 2 to the Declaration of Grant E.
Ingram in Support
of Defendant Atrium 5 Ltd.’s Motion for Summary Judgment, D.E. 109-2, hereinafter “Ingram
Aortic dissection “is a serious condition in which the inner layer of the aorta, the large blood
vessel branching off he heart, tears. Blood surges through the tear, causing the inner and middle
layers of the aorta to separate (dissect).” See Mayo Clinic, A0RTIc DISSECTION, available at:
https ://www.mayoclinic.org/diseases-conditions/aortic-dissectionlsymptoms-causes/syc
20369496 (last visited July 13, 2018).
3
Dccl.” On March 3, 2010, Kovensky had a surgery involving a “Bentall procedure,” which
included the replacement of “his ascending aorta with a Dacron graft and a replacement of his
aortic valve with a prosthetic valve.” Defendant’s SOMF at ¶ 8.
The notice of claim stated that Kovensky was permanently unable to perform his job as co
CEO. The notice described Kovensky’s role as follows:
Mr. Kovensky is the Co-Chief Executive Officer and co-owner of
Onex Credit Partners, LLC. Before his heart event, his work
After
involved 60-70 hour work weeks and extreme stress.
with his doctors, who recommended against his return
consultation
to work due to the extreme stress involved in his position, Mr.
Kovensky nevertheless determined to try to return to his job in a
By August 2010, Mr.
limited capacity, in June 2010.
Kovensky’s condition had deteriorated to the point where at times
Even with this
he was unable to work for several days at a time.
more limited workload, Mr. Kovensky has not been able to handle
the stress of his position, and continues to experience the symptoms
Based on the foregoing, Onex Credit Partners,
discussed above.
LLC, as owner of the Policy, is now submitting a claim for Mr.
Kovensky’s permanent and total disability under the Policy.
.
.
.
.
.
.
.
.
.
.
.
Ex. 2 to Ingram Decl. at 2-3. The notice added that Kovensky was re-admitted to the hospital
thirteen days after his initial surgery “where it was determined that he had fluid built up in and
around his heart,” returned to the hospital again in April 2010, and underwent more testing in 2010
and 2011. Id. at 2. The notice of claim further indicated that “Kovensky has a dissection in the
aortic arch that was not repaired” during the Bentall procedure and that “he is at risk of further
tearing his aorta.” Id.
Lloyd’s used an independent claims adjuster, International Risk Management Group
(“IRMG”), to investigate the claim. Defendant’s SOMF at ¶ 14. Ultimately, IRMG notified Onex
via letter that Lloyd’s denied their claim. Id. Citing evidence collected by experts retained by
IRMG, the letter concluded with the following:
4
The record establishes that Mr. Kovensky is physically capable of
performing and is actually performing the substantial and material
duties of his occupation at least through May 2012. To the extent
that Onex and Mr. Kovensky claim that Mr. Kovensky cannot
perform the substantial and material duties of his occupation, such
claimed inability is caused in whole or in part, or as a result of
psychological issues and/or emotional anxiety regarding his cardiac
condition for which her received psychological therapy. Such a
claimed loss is specifically excluded from coverage[.]
Ex. 1 to Ingram Decl. at 22.
Additional information concerning the medical evidence and Kovensky’s activities
following his aortic dissection are discussed below.
Onex filed its Complaint on September 20, 2013, and then filed an Amended Complaint
on December 16, 2013. D.E. 1, 9. The Amended Complaint lists two counts for (1) breach of
contract; and (2) breach of the covenant of good faith and fair dealing. D.E. 9 at ¶‘jJ 30-41. Atrium
filed a motion to dismiss Count Two, or, in the alternative, for summary judgment, on January 22,
2014, which was granted on September 26, 2014. D.E. 16, 33, 34. Only Count One, breach of
contract, remains. See D.E. 33, 34. The case was transferred to the undersigned on February 23,
2016. D.E. 91. Atrium filed the instant motion on March 6, 2017, D.E. 109, which Plaintiff
opposed, D.E. 121. Defendants filed a reply. D.E. 122.
II.
Standard of Review
Summary judgment is proper where the moving party “shows that there is no genuine
dispute as to any material fact,” and the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. p. 56(a); Abraham v. Raso, 183 F.3d 279, 287 (3d Cir. 1999). A fact in dispute is
material when it “might affect the outcome of the suit under the governing law” and is genuine “if
the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
5
Disputes over irrelevant or
unnecessary facts will not preclude granting a motion for summary judgment. Id.
considering
a motion for summary judgment, a district court may not make credibility determinations or engage
in any weighing of the evidence; instead, the nonmoving party’s evidence ‘is to be believed and
all justifiable inferences are to be drawn in his favor.” Marino v. Indus. Qating so., 358 F.3d
241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255)). A court’s role in deciding a motion
for summary judgment is not to evaluate the evidence and decide the truth of the matter but rather
“to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249.
A party moving for summary judgment has the initial burden of showing the basis for its
motion and must demonstrate that there is an absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). After the moving party adequately supports its motion,
the burden shifts to the nonmoving party to “go beyond the pleadings and by her own affidavits,
or by the depositions, answers to interrogatories, and admissions on file, designate specific facts
showing that there is a genuine issue for trial.” Id. at 324 (internal quotation marks omitted). To
withstand a properly supported motion for summary judgment, the nonmoving party must identify
specific facts and affirmative evidence that contradict the moving party. Anderson, 477 U.S. at
250. “{I]f the non-movant’s evidence is merely ‘colorable’ or is ‘not significantly probative,’ the
court may grant summary judgment.” Messa v Omaha Prop. & C’as.
Ins.
Co., 122 F. Supp. 2d
523, 528 (D.N.J. 2000) (quoting Anderson, 477 U.S. at 249-50)).
Ultimately, there is “no genuine issue as to any material fact” if a party “fails to make a
showing sufficient to establish the existence of an element essential to that party’s case.” Celotex
Corp., 477 U.S. at 322. “If reasonable minds could differ as to the import of the evidence,”
however, summary judgment is not appropriate. See Anderson, 477 U.S. at 250-5 1.
6
III.
Analysis
This matter is based diversity jurisdiction pursuant to 28 U.S.C.
§
1332(a).6 The Court,
therefore, reviews the Policy pursuant to the substantive law of the state whose laws govern the
action. Robertson v. Allied Signal, Inc., 914 F.2d 360, 378 (3d Cii-. 1990) (citing Erie Railroad
Co. v. Tompkins, 304 U.S. 64 (1938)). As an initial matter, the parties appear to assume that New
Jersey law applies. Seeing no clear reason to deviate from the parties’ assumptions, the Court will
apply New Jersey law. See Manley Toys, Ltd. v. Toys R Us, Inc., 2013 WL 244737, at *2 (D.N.J.
Jan. 22, 2013) (“Because the parties have argued the viability of the remaining claims as though
New Jersey substantive law applies, the Court will assume that to be the case.”) (citing USA Mach.
Corp. v. CSC, Ltd., 184 f.3d 257, 263 (3d Cir. 1999)).
Defendant essentially makes three arguments in support of its motion for summary
judgment: first, that Kovensky is not permanently and totally disabled under the Policy; second,
that Kovensky continued to work regularly during the twelve-month elimination period; and third,
that Kovensky’s symptoms are caused by psychological complications, which are excluded from
the Policy. Def. Br. at 27-32; 32-38; 38-45. In its Opposition, Plaintiff argues that neither the
mental health exclusion nor the elimination period rule bars coverage. Plaintiff continues that
there are conflicting medical opinions on the issue of Kovensky’s permanent and total disability,
creating a genuine issue of material fact that precludes summary judgment. Opp. at 15-19; 27-40;
19-27.
6
Onex is a limited liability company whose citizenship is detennined by the citizenship of its
members. See Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010). Onex’s
members are citizens of Delaware, New York, and Canada. See D.E. 9 at ¶ 9. Plaintiff refers to
Atrium and Lloyd’s as “Defendant,” and in the Amended Complaint states that Defendant is a
foreign corporation, organized under the laws of the United Kingdom. Id. at ¶ 12.
7
The Policy is a contract. To state a claim for breach of contract, a plaintiff must allege (1)
the existence of the contract; (2) breach of the contract; (3) damages as a result of the breach; and
(4) that the plaintiff performed its own duties under the contract. faistl v. Energy Plus Holdings,
LLC, 2012 WL 3535815, at *7 (D.N.J. Sept. 4, 2012). “The appropriateness of granting summary
judgment depends on whether the contract terms at issue in this case are questions of contract
construction or contract interpretation.” Kaufman v. Provident Lzfe and Cas. Ins. Co., $28 f.$upp.
275, 282 (D.N.J. 1992). Construction of a contract is purely a question of law, and thus rests with
the Court, as does whether a contract tenu is clear or ambiguous. Id. at 282-283. Interpretation
of an ambiguous term is “generally a question of fact.” Id. at 283.
“The basic principles of law governing insurance policies are well-settled in New Jersey,”
and the goal of any court enforcing such a policy is to “determine the intent of the parties.”
Kachigian v. Berkshire Lf€’ Ins. Co. ofAmerica, 2012 WL 762486, at 3 (D.N.J. March 8, 2012).
When the terms of an insurance contract are clear “it is the function of a court to enforce it as
written and not make a better contract for either of the parties.” Resolution Tr. Corp. v. Fid. &
Deposit Co. of Maryland, 205 f.3d 615, 643 (3d Cir. 2000) (citing New Jersey v. Signo Trading
hit ‘1, Inc., 130 N.J. 51, 63 (1992) (citation and internal quotation marks omitted)). However, when
ambiguities in an insurance contract exist, New Jersey law requires that any ambiguities “be
resolved in favor of the insured. Id. (citing Pittston Co. Ultramar Am. Ltd. v. Allianz Ins. Co.,
124 F.3d 508, 520 (3d Cir. 1997)). When there is a dispute as to insurance coverage, the insured
bears the burden of establishing coverage, and the insurer bears the burden of establishing the
claim is excluded by the policy. Chemical Leaman Tank Lines, Inc. v. Aetna Cas. And Stir. Co.,
817 F.Supp. 136, 1143 (D.N.J. 1993) (citing Hartford Accident & Indem. Co. v. Aetna Lfe &
$
Casualty Ins. Co., 98 N.J. 18, 26 (1984)); Rosario ex reL Rosaulo v. Haywood, 351 N.J. Super.
521, 529-30 (App. Div. 2002).
a. Psychiatric Exclusion under the Policy
Because it is an exclusion, Defendant bears the burden of proof.
Defendant must show
that Plaintiffs claim is barred by the Policy’s exclusion for any loss caused by “[a]ny psychosis,
neurosis, or neuropsychiatric illness including, but not limited to, any emotional anxiety or
depression illness for which any form of psychiatric or psychological therapy is indicated or
received.”
Defendant relies on the record review perfonned by psychiatrist James High.
Defendant also points to the “diagnosis” given by Kovensky’s psychologist, Dr. Robert Allan of
“Adjustment Disorder with Mixed Anxiety and Depressed Mood” to support their argument that
Kovensky’s illness is psychological, rather than physical. Def Br. at 25. Defendant did not have
its own expert psychiatrist or psychologist meet with Kovensky.7
However, Dr. Allan testified that he did not diagnose Kovensky with any psychiatric
disorder; instead, he stated that Kovensky’s therapy helps to adjust Kovensky to life with his
disability. See Ex. S to King Cert at 116:2-10; 166:12-20; 276:14-20. Dr. Allan explained that
the “diagnosis” Defendant cites was necessary for the relevant insurance reimbursement forms.
Id. at 22:11-13; 23:8-9. Dr. Allan also testified that no Diagnostic and Statistical Manual (“DSM”)
diagnosis culTently applies to Kovensky.8 Id. at 276:14-20. Dr. Allan indicated that Kovensky
does not suffer from a psychiatric impairment that prevents Kovensky from working as co-CEO.
Dr. High’s report states: “I have had an extensive opportunity to view Mr. Kovensky on video
during his deposition, I have not directly examined him nor have I submitted him to psychological
testing as I would usually do when assessing and diagnosing someone’s mental state.” Ex. 92 to
Ingram Dccl. at 3.
Dr. Allan also stated that the diagnosis cited on the insurance forms is the “mildest diagnosis
that’s allowed in the DSM.” Ex. S to King Decl. at 27:19-20.
9
Id. at 33:6; 9-12. Ultimately, Dr. Allan stated (reading from his notes): “Stuart [Kovensky] does
not have any psychosis, neurosis, neuropsychiatnc illness, emotional, anxiety illness or depression
illness that causes, underlines or contributes to any cardiac disability from which he may suffer.”
Id. at 116:3-8. In light of Dr. Allan’s testimony, there is a genuine issue of material fact that
precludes summary judgment for Defendant as to the psychiatric exclusion.
b. Permanent & Total Disability under the Policy
Defendant argues that Kovensky is not permanently and totally disabled in light of the
medical evidence and Kovensky’s activities afier the dissection. To prevail, Defendants must to
show that there is no genuine material issue of fact that Onex will not be able to establish
Kovensky’s permanent and total disability under the Policy. In Onex’s claim letter, their general
counsel Steven Gutman described Kovensky’s duties as co-CEO and co-owner before the
dissection as “involve[ing] significant marketing contributions (requiring extensive travel), as well
as investment and portfolio management.”
Before turning to the evidence, the Court reviews the standards that govern the Policy’s
language. The Policy indicates coverage applies if Kovensky “is permanently and totally unable
to perfonTi the substantial and material duties of his.
to recover for the remained of his
...
.
.
regular occupation.
.
.
and is not expected
life.” Written Policy at 17. Additionally, Kovensky “must
also be under the regular care of a Physician that is appropriate for the condition causing the
disability.” Id.
Here, the Policy uses the word “his” (meaning Kovensky) to modify “regular occupation.”
The Third Circuit has determined that the use of the modifier “his or her” before “regular
occupation” means “that ‘regular occupation’ is the usual work that the insured is actually
performing immediately before the onset of disability.” Lasser v. Reliance Standard Lfe Ins. Co.,
10
344 F.3d 381, 386 (emphasis added). Thus, the Court reviews Kovensky’s claim in light of his
actual, regular duties as co-CEO.
The Policy also requires a permanent disability. Relying on Bowler v. fidelity & Cas. Co.
ofNew York. 53 N.J. 313, 324 (1969), Plaintiff argues that the “permanence” requirement can be
met by in indefinite continuance. In Bowler, the insurance contract also required a permanent
disability, but permanent was not defined in the policy. Id. at 321. The court in Bowler explained
that “[a]n insured’s total disability is deemed permanent when it is shown to be in a state of
indefinite continuance, i.e. that recovery, even if such a possibility exists, is so far removed that
the end of the disability cannot be foreseen.” Id. at 324. In comparison, the Policy here expressly
states that Kovensky must not be expected to recover “for the remainder of his life.” Thus, Plaintiff
may be correct as to the application of Bowler if permanence was not explicitly addressed in the
Policy.
Nevertheless, because the Policy explicitly and clearly provides the standard for
permanence, the Court will apply here.
Defendant argues that the Policy requires Onex to show that Kovensky cannot perform
“each and every” of his substantial and material duties, citing to Kachigian v. Berkshire Life Ins.
Co. ofAmerica. 2012 WL 762486, at *3 (D.N.J. March 8, 2012). However, the Policy does not
contain the “each and every” language, and the Court will not re-write a better contract for
Defendant than it agreed to. Instead, the Court relies on the plain and unambiguous language of
the Policy. As Plaintiff indicates, many disability policies use the limiting “each and every”
language, e.g. Bowler, 53 N.J. at 583, but it does not appear here.
Defendant assails Plaintiffs medical evidence,9 including that of Kovensky’s treating
cardiologist, Dr. Allan Schwartz. In June 2010, two months after the dissection, Dr. Ronnie
Defendants did not file a Daithert motion to exclude any of Plaintiffs expert testimony.
11
Hershrnan indicated that Kovensky was “unable to work a full load,” and was “unable to travel.”
Plaintiffs SOMF at
¶
218. As to Dr. Schwartz, he is the Chief of Cardiology at Columbia
University Medical Center in New York. Plaintiffs SOMF at
¶ 205.
Dr. Schwartz wrote in his
Attending Physician Statement (“APS”) dated December 2010 that Kovensky should limit his
stress, not travel for work, or do any heavy lifting. Id. at
¶J 219-221;
Ex. 4 to Ingram Cert. On
April 26, 2011, Dr. Schwartz indicated on his APS that Kovensky was totally disabled from March
2011 to “indef.” (presumably meaning indefinitely), and that Kovensky was partially disabled
from March 3, 2010 to February, 2011. Ex. 4 to Ingram Cert. Under “prognosis,” Dr. Schwartz
wrote that “[b]ecause of continuing dissection {Kovensky’s] condition could worsen but not
expected to improve.” Id. Dr. Schwartz again wrote in February 10, 2012 APS that Kovensky
was “indefinitely” disabled, that “there [was] no treatment available,” and that Kovensky was
experiencing “frequent episodes of pain w/ remaining dissection in the aortic arch.” Ex. 5 to
Ingram Cert.
The parties disagree about the impact of Dr. Schwartz’s records and deposition testimony.
Plaintiff states repeatedly that Dr. Schwartz does not consider Kovensky “physically capable of
performing the material and substantial duties of his position as co-CEO of Onex.” Plaintiffs
SOMF at
¶ 278.
Dr. Schwartz testified that, based on his treatment of Kovensky over time, he
believed that Kovensky was disabled. See, e.g., Ex. J to the Declaration of David R. King, D.E.
12 1-2, hereinafter “King Decl.” at 189:
612I0
Dr. Schwartz’s testimony creates a genuine issue
of material fact that precludes summary judgment. Of course, subject to any meritorious evidential
arguments made by Plaintiff, Defendant can cross-examine Dr. Schwartz on the factual issues
Defendant did not include this page of Dr. Schwartz’s deposition in its “excerpts” attached to
the Ingram Declaration.
10
12
which Defendant believes undercut the physician’s view, including Dr. Schwartz’s previous
prognosis of “indefinitely,” Kovensky’s pericarditis, and Dr. Schwartz’s general advice to patients
to start out with part-time work and increase to full time. At the same time, Dr. Schwartz will be
able to explain that patients progress differently.
c. Kovensky’s Work History after the Dissection
Defendant further argues that because Kovensky continued to work during the elimination
period (and thereafier), he was not disabled under the Policy. As proof that Kovensky was working
during the elimination period, Defendant points to, among other things, Kovensky’s email traffic
and the amount of money he earned from Onex. As to the ernails, while they may be probative of
the time that Kovensky worked, they do not definitively demonstrate that he performed the
substantial and material duties of his regular occupation. As to Kovenksy’s compensation, he had
profits.
an ownership interest in Onex that entitled him to a percentage of Onex’s
SOMF at
¶
Plaintiffs
115. Defendant fails to demonstrate that the amounts Kovensky earned reflect his
actual time working. The Policy pertains to whether Kovensky could work in his position as co
CEO, not whether he could earn money from his ownership interest. Cf Kaufman, $22 f.Supp. at
226-87 (noting that a disability insurance policy insures against loss of capacity to work, not loss
of income).
Moreover, Plaintiff has submitted sufficient evidence precluding summary judgment. In
2010, afier his heart surgery, Kovensky attempted to work five hours a day for three days a week.
Plaintiffs SOMF at
¶ 206.
Kovensky was unable to continue working four to five hours a day,
and in August 2010 he had to cease working for several days at a time. Ex. 2 to Ingram Cert. at 3.
“Defendant asserts that Kovensky made $1,221,000 in 2010, $211,983 in 2011, and $778,651 “in
the twelve month period ending February 29, 2012.” Defendants’ S OMF at ¶ 115. Kovensky sold
his remaining interest in Onex in December 2012. Id. at ¶ 116.
13
During this time, Kovensky ceased working on Onex’s marketing and tried to concentrate instead
on the finn’s investment portfolio, but even this was too strenuous for him. In 2011, he was
working ten to fifteen hours per month, Plaintiffs SOMF at
¶J 208-209, and he currently works
at most two hours a week for Onex, while also teaching a class at New York University for one
semester each year (or, for a half a semester, two times a year). Id. at ¶J 212-213.
The cases cited by Defendant do not require a different result. For example, Defendant
relies heavily on Kaufman, in which the plaintiff was an optometrist and a part-owner of two
related businesses. See Def. Br. at 34-37; Reply at 8-10; Kaufman, 838 F.Supp. at 276. The
plaintiffs duties included both management of the businesses and working as an optometrist. Id.
After he was diagnosed with thyroid cancer and underwent treatment, he submitted a claim for
permanent disability. Id. at 278-79. The court granted summary judgment in favor of the insurer
because the plaintiff admitted that his illness affected his job duties “a little bit,” and that he was
able to work in his management role daily. Id. at 286. Plaintiff was also able to practice as an
optometrist but decided not to so that he could collect disability. Id. Moreover, although the
plaintiff had suffered a loss of income, the Kaufman court determined the loss was due to
“independent issues affecting his corporations” rather than the plaintiffs illness. Id. Here, by
comparison, Kovensky has not testified that his aortic dissection only impacted his job duties to a
minimal degree nor has he admitted that he could continue with his regular work co-CEO but
decided not to so that Plaintiff could collect on the Policy.
IV.
Conclusion
14
For the foregoing reasons, Defendants’ motion for summary judgment is denied.
Defendant points to evidence which, if admissible, may help its cause at trial. But there is also
sufficient evidence to the contrary which precludes Defendant’s motion. An appropriate Order
accompanies this Opinion.
Dated: July 16, 2018
Qi2 “Jf
John Michael VazizU.S.D.J.
15
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