Berkshire Life Insurance Company of America v. Dorsky
Filing
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Opinion and Order. Plaintiff's Motion for Summary Judgment (Related doc # 38 ) is granted in part and denied in part. Defendant's Motion for Summary Judgment (Related doc # 46 ) is denied. Judge Christopher A. Boyko on 3/31/2016. (H,CM)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
BERKSHIRE LIFE INSURANCE
COMPANY OF AMERICA
Plaintiff and
Counterclaim
Defendant
Vs.
JOHN D. DORSKY, M.D.
Defendant and
Counterclaimant
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CASE NO.1:13CV2266
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J:
I. ISSUE
This matter is before the Court on Plaintiff and Counterclaim Defendant Berkshire
Life Insurance Company of America’s (“Berkshire Life”) Motion for Summary Judgment
(ECF DKT 38). For the following reasons, Berkshire Life’s Motion is granted in part and
denied in part. The Motion is granted as to the Breach of the Covenant of Good Faith and
Fair Dealing counterclaim. The Motion is denied as to Berkshire Life’s claims for Rescission
of Policy No. Z2228950 in accordance with Ohio Revised Code (“O. R. C.”) § 3923.14 and
Declaratory Judgment declaring the policy null and void, as well as the Breach of Contract
counterclaim.
Also before the Court is Defendant and Counter-Claimant Dr. John D. Dorsky’s
(“Dorsky”) Motion for Summary Judgment. (ECF DKT 46). Dorsky’s Motion is denied on
all claims.
II. FACTS
Berkshire Life issued a disability income insurance policy, Policy No. Z2228950 (the
“Policy”), to Dorsky in Ohio with a Policy Date of October 15, 2011 and an Expiration Date
of October 15, 2022. (Compl. ¶ 6). The Policy included a Monthly Indemnity of $1,000,
several riders and an annual premium of $3,730.89 to be paid quarterly. (Compl. ¶ 6; ECF
DKT 1, 4). The Policy was issued pursuant to an Individual Disability Income Insurance
Application (the “Application”). (Compl. ¶ 6). In the Application, signed by Dorsky on
September 28, 2011, Dorsky answered “yes” to Question 6(b):
Have you been continuously at work full time (at least 30 hours per week)
performing the duties of your occupation for the past 90 days without
limitation due to injury or sickness? (Disregard vacation days, normal nonworking days, and any absences that total less than seven days.) (ECF DKT 1,
39; Compl. ¶ 11).
Berkshire Life alleges that the answer Dorsky provided to Question 6(b) was false.
(Compl. ¶ 12). Berkshire Life also alleges that Question 6(b) is an important question
because Berkshire Life’s guidelines require that an underwriter review any response to
Question 6(b) other than “yes” when determining whether to approve an application. (Pl.’s
Memo. in Supp. of Pl. Mot. Summ. J. 3). Berkshire Life alleges that it issued the Policy in
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response to Dorsky’s “yes” answer to Question 6(b). (Pl.’s Memo. in Supp. of Pl. Mot.
Summ. J. 3).
Dorsky was the Chief of the Division of General Surgery at Cleveland Clinic from
2004 to approximately July 2012. (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J. 3). As Chief
of General Surgery, Dorsky performed the duties of a general surgeon, including evaluating
patients who potentially had surgical problems and performing surgeries such as gall bladder
removals, hernia repairs, gastric surgery and breast surgery. (Pl.’s Memo. in Supp. of Pl.
Mot. Summ. J. 3-4; Def.’s Mot. Summ. J. 3). Dorsky also performed numerous
administrative duties such as evaluating surgeons, investigating staff complaints, evaluating
equipment for use in the operating room, acting as site director for the hospital’s residency
program, drafting the on-call schedule for the emergency room and overseeing Morbidity and
Mortality Reviews (“M&M Review”). (Def.’s Mot. Summ. J. 3-4). Dorsky did not list these
administrative duties on the statement for disability benefits to Berkshire Life. (Pl.’s Memo.
in Supp. of Pl. Mot. Summ. J. 3).
In the 90 days prior to signing the Application, Dorsky performed less surgeries than
in prior months due to pain in his shoulder. (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J. 4).
Specifically, Dorsky testified that during the month of August 2011 he made a “self-imposed
decision” to complete less elective cases in order to give his shoulder time to recover. (Pl.’s
Memo. in Supp. of Pl. Mot. Summ. J. 7; Def..’s Mot. Summ. J. 4). Throughout the months of
August and September 2011, Dorsky saw many physicians and alternative health
professionals regarding his shoulder, including: orthopedic surgeon Dr. Peter Evans; primary
care physician Dr. Baljit Bal; anesthesiologist and pain management specialist Dr. Teresa
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Dews; licensed acupuncturist Edward Dea RA; neurosurgeon Dr. Teresa Ruch and spine
surgeon Dr. Thomas Mroz. (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J. 4-6).
Dorsky discussed his intense shoulder pain with these health professionals and how it
affected his work. Dorsky testified that he was trying “to limit heavy activities that put a
strain on his arm” and testified that he told Dr. Evans on August 8, 2011, he “was going to try
and back off from his workload.” (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J. 4). Dorsky
informed Dr. Bal that it was difficult to perform his job because it “caused pain.” (Pl.’s
Memo. in Supp. of Pl. Mot. Summ. J. 5). Dorsky visited Dr. Dews on three occasions during
August and September 2011 to receive steroid injections in his shoulder for pain. (Pl.’s
Memo. in Supp. of Pl. Mot. Summ. J. 6). On those three occasions, Dorsky received sedation
and on two of the occasions he could not return to work. (Pl.’s Memo. in Supp. of Pl. Mot.
Summ. J. 6). Dorsky reported to Dr. Dea that he was not working a full schedule and that
work was difficult due to his shoulder pain. (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J. 6).
On September 12, 2011, Dorsky told Dr. Ruch that he had recently received a C5 nerve block
to relieve the pain, but prior to receiving the block he was unable to work. (Pl.’s Memo. in
Supp. of Pl. Mot. Summ. J. 7). Finally, Dorsky testified that he told Dr. Mroz that the pain
was exacerbated by his work, particularly on long operating days. (Pl.’s Memo. in Supp. of
Pl. Mot. Summ. J. 7). Of these physicians, only Dr. Ruch testified that she knew whether
Dorsky had been working full time without limitation due to injury or sickness, and she
testified that he was working full time without limitation due to his shoulder pain. (Def.’s
Mot. Summ. J. 10).
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Although Dorsky sought pain management for his shoulder during August and
September 2011, he testified that “unquestionably, yes, [he] could have performed any
surgery [he] needed to perform in August of 2011.” (Def.’s Mot. Summ. J. 4). Dorsky
remained “on-call” for his scheduled days in August 2011. (Def.’s Mot. Summ. J. 5). On
these “on-call” days he would handle all patient encounters for the day. (Def.’s Mot. Summ.
J. 5). During August 2011, Dorsky also performed multiple M&M Reviews, which consisted
of reviewing records of surgeries performed by peers that involve complications, after
receiving pressure from hospital administrators. (Def.’s Mot. Summ. J. 5). During
September 2011, Dorsky chose to perform elective surgeries even though he felt shoulder
pain and never declined to perform a surgery due to pain. (Def.’s Mot. Summ. J. 8).
On August 16, 2011, Dorsky signed a Cleveland Clinic form entitled “Application for
Absences” at the request of Cleveland Clinic main campus. (Pl.’s Memo. in Supp. of Pl. Mot.
Summ. J. 8; Def.’s Mot. Summ. J. 7). The main campus directed Dorsky’s office manager,
Laura Ardire, to code August 8 - August 31, 2011 as medical leave. (Pl.’s Memo. in Supp. of
Pl. Mot. Summ. J. 8; Def.’s Mot. Summ. J. 6-7). This time period coded as medical leave is
when Dorsky was limiting his elective surgeries, focusing on administrative tasks and also
taking nine days vacation. (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J. 8; Def.’s Mot. Summ.
J. 6-7). Ms. Ardire and Dorsky did not understand or agree with the decision to code the time
as medical leave because it included “a period of time [he] had already worked” and Ms.
Ardire testified that Dorsky was able to perform clinical work during the period. (Def.’s Mot.
Summ. J. 7-8).
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Berkshire Life offers a disability income insurance policy to Cleveland Clinic
physicians and staff who earn in excess of $400,000. (Def.’s Mot. Summ. J. 10). Dorsky
learned about the program through David Dickenson (“Dickenson”), an insurance agent with
Berkshire Life, whom Dorsky had purchased other insurance products through in the past.
(Def.’s Mot. Summ. J. 10). Dorsky informed Dickenson of his ongoing medical issues and
work schedule and in response Dickenson told Dorsky to apply for the Policy. (Def.’s Mot.
Summ. J. 10-12). Dickenson completed the Application on Dorsky’s behalf and Dorsky
signed the Application on September 28, 2011. (Def.’s Mot. Summ. J. 12) Dorsky did not
review the Application prior to signing it. (Def.’s Mot. Summ. J. 12). Berkshire Life issued
the Policy based on the Application on October 15, 2011. (Def.’s Mot. Summ. J. 12).
On July 24, 2012, Dorsky submitted a claim for disability benefits. (Pl.’s Memo. in
Supp. of Pl. Mot. Summ. J. 9; Def.’s Mot. Summ. J. 12). The Policy includes an
incontestability period in which the Policy “will be incontestable as to the statements, except
fraudulent statements, contained in the application after it has been in force for a period of
two years during [the applicant’s] lifetime, excluding any period during which [the applicant
is] disabled.” (ECF DKT 1, 19). In a letter dated October 11, 2013, Berkshire Life denied
Dorsky’s claim for benefits and rescinded the Policy, based on Dorsky’s alleged material
false statement in response to Question 6(b). (Pl.’s Memo. in Supp. of Pl. Mot. Summ. J.9;
Def.’s Mot. Summ. J. 12). October 11, 2013, was two days short of the two-year
incontestability period of the Policy. (Def. Opp. Pl. Mot. Summ. J. 13)
On or about October 11, 2013, Berkshire Life commenced an action against Dorsky in
the United States District Court Northern District of Ohio. Berkshire Life’s Complaint
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alleges two Counts against Dorsky: (I) Rescission of Policy No. Z2228950 and (II)
Declaratory Judgment - Policy No. Z2228950. On or about January 23, 2014, Dorsky filed a
Counterclaim alleging two Counts against Berkshire Life: (I) Breach of Contract and (II)
Breach of Covenant of Good Faith and Fair Dealing. Berkshire Life filed a Motion for
Summary Judgment on Counts I and II of the Complaint and Counts I and II of the
Counterclaim. Dorsky filed a Motion for Summary Judgment on Counts I and II of the
Complaint and Counts I and II of the Counterclaim. These Motions are considered here.
III. LAW AND ANALYSIS
A. Summary Judgment Standard
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” See
Fed. R. Civ. P. 56(a). The burden is on the moving party to conclusively show no genuine
issue of material fact exists, Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Lansing
Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir. 1994); and the court must view the facts and
all inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Once the movant presents evidence to meet
its burden, the nonmoving party may not rest on its pleadings, but must come forward with
some significant probative evidence to support its claim. Celotex, 477 U.S. at 324; Lansing
Diary, 39 F.3d at 1347. The Court does not have the responsibility to search the record sua
sponte for genuine issues of material fact. Betkerur v. Aultman Hosp. Ass’n., 78 F.3d 1079,
1087 (6th Cir. 1996); Guarino v. Brookfield Township Trs., 980 F.2d 399, 404-06 (6th Cir.
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1992). The burden falls on the nonmoving party to “designate specific facts or evidence in
dispute,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); and if the nonmoving
party fails to make the necessary showing on an element upon which it has the burden of
proof, the moving party is entitled to summary judgment. Celotex, 477 U.S. at 323. Whether
summary judgment is appropriate depends upon “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one party must
prevail as a matter of law.” Amway Distribs. Benefits Ass’n v. Northfield Ins. Co., 323 F.3d
386, 390 (6th Cir. 2003), quoting Anderson, 477 U.S. at 251-52.
B. Summary Judgment is Denied to Berkshire Life and Dorsky on the Rescission
Claim of the Complaint.
1. The Policy Language is Ambiguous.
Insurance policies issued in Ohio are governed by Ohio law. Celina Mut. Ins. Co. v.
Sadler, 217 N.E.2d 255 (Ohio Ct. App. 1966). The Policy was issued in Ohio; thus it is
governed by Ohio law. Under Ohio law “the determination whether a contract is ambiguous
is made as a matter of law by the court.” Potti v. Duramed Pharm., Inc., 938 F.2d 641, 647
(6th Cir. 1991); Broad St. Energy Co. v. Endeavor Ohio, LLC, 975 F. Supp.2d 878, 883 (S.D.
Ohio 2013). “Ambiguity exists only where a term cannot be determined from the four corners
of the agreement or where contract language is susceptible to two or more reasonable
interpretations.” Potti, 938 F.2d at 647; see Schachner v. Blue Cross & Blue Shield of Ohio,
77 F.3d 889, 893 (6th Cir. 1996). However, “the mere possibility of multiple readings of a
term does not necessarily warrant a finding of ambiguity.” Skinner v. Guarantee Trust Life
Ins. Co., 813 F. Supp. 2d 865, 868-69 (S.D. Ohio 2011) (quoting Nationwide Life Ins. Co. v.
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Canton, No. 09AP–939, 2010 WL 3405745, at *5 (Ohio App. Aug. 31, 2010)); see State v.
Porterfield, 829 N.E.2d 690 (2005).
Question 6(b) on the Application, to which Dorsky responded “yes,” asked:
Have you been continuously at work full time (at least 30 hours per week)
performing the duties of your occupation for the past 90 days without
limitation due to injury or sickness? (Disregard vacation days, normal nonworking days, and any absences that total less than seven days.) (ECF DKT 1,
39).
Question 6(b) is subject to two reasonable interpretations and thus, is ambiguous.
Berkshire Life interprets the term “duties” in Question 6(b) to mean “primary duties” and
stresses that “Dorsky’s primary job duties included not only evaluating patients with surgical
problems, but performing surgery on patients who needed general surgery.” (Pl.’s Memo. in
Supp. of Pl. Mot. Summ. J.12, emphasis added). In contrast, Dorsky interprets the term
“duties” to include all duties as the Chief of the Division of General Surgery, not strictly
performing surgery. (Def.’s Opp. to Pl.’s Mot. Summ. J. 6). Thus, the term “duties” as used
in the Application is subject to two reasonable meanings and Question 6(b) is ambiguous.
Further, the term “duties” is not defined in the Policy. A term is ambiguous if it
cannot be determined from the four corners of the agreement. Potti, 938 F.2d at 647; see
Schachner, 77 F.3d at 893. Because the term “duties” is not defined within the policy, it
cannot be determined from the four corners of the agreement. Consequently, the term is
ambiguous.
2. The Ambiguous Policy Language Must be Interpreted Against Berkshire Life
and in Favor of Dorsky.
The Sixth Circuit has held that “[i]f a court determines that a contract provision is
ambiguous, then it may use traditional methods of contract interpretation to resolve the
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ambiguity . . . .” Schachner, 77 F.3d 889, 893. Ambiguities in insurance policies are
“ordinarily interpreted against the insurer and in favor of the insured.” Westfield Ins. Co, 797
N.E.2d 1256, 1262 (Ohio 2003) (“[W]here the written contract is standardized and between
parties of unequal bargaining power, an ambiguity in the writing will be interpreted strictly
against the drafter and in favor of the nondrafting party”); King v. Nationwide Ins. Co., 519
N.E.2d 1380, 1383 (Ohio 1988) (“[I]t is well-settled that, where provisions of a contract of
insurance are reasonably susceptible of more than one interpretation, they will be construed
strictly against the insurer and liberally in favor of the insured.”).
Because the language in Question 6(b) is ambiguous it must be interpreted against the
insurer, Berkshire Life, and in favor of the insured, Dorsky. Thus, the term “duties” must be
interpreted to include all duties as the Chief of the Division of General Surgery, not strictly
performing surgery.
3. Summary Judgment is Denied to Both Parties Because Whether Dorsky’s
Answer to Question 6(b) is Willfully False or Fraudulently Made is an Issue of
Fact for the Jury.
Ohio Revised Code § 3923.14 provides that:
The falsity of any statement in the application for any policy of sickness and
accident insurance shall not bar the right to recovery thereunder, or be used in
evidence at any trial to recover upon such policy, unless it is clearly proved
that such false statement is willfully false, that it was fraudulently made, that it
materially affects either the acceptance of the risk or the hazard assumed by
the insurer, that it induced the insurer to issue the policy, and that but for such
false statement the policy would not have been issued.
The insurer has the burden of establishing all five factors of the statute by clear and
convincing evidence. Golden Rule Ins. Co. v. Michnay, Nos. 90–3276, 90–3291, 1991 WL
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112810, at *4 (6th Cir. June 26, 1991). “[A] false answer on a signed insurance application is
[not], as a matter of law, both willful and fraudulent.” B-T Dissolution, Inc. v. Provident Life
& Acc. Ins. Co., 123 F. App'x 159, 162 (6th Cir. 2004). A false statement is willfully false or
fraudulently made if the applicant knew the answer was false and there is no evidence that the
insured made an honest mistake. Golden Rule Ins. Co., 1991 WL 112810, at *4; Johnson v.
Connecticut Gen. Life Ins. Co., 324 F. App'x 459, 467 (6th Cir. 2009); Buemi v. Mut. of
Omaha Ins. Co., 524 N.E.2d 183, 189 (Ohio Ct. App.1987); Redden v. Constitution Life Ins.
Co., 173 N.E.2d 365, 365 (Ohio 1961) (“[R]ecovery is precluded by false answers knowingly
given by the insured”).
It is an issue of fact whether Dorsky’s response to Question 6(b) was willfully false or
fraudulently made. The Ohio Court of Appeals has held that whether an insured willfully and
fraudulently made false statements regarding his or her “good health” in an application for an
insurance policy is a question of fact for the jury. Green v. Acacia Mut. Life Ins. Co., 128
N.E.2d 222, 226 (Ohio Ct. App. 1954). There is conflicting evidence about Dorsky’s medical
condition, including Dorsky’s own admission that he placed “self-imposed” limits on
performing surgeries, as well as Dorsky’s concern that he would not be eligible for the Policy
due to his ongoing medical issues. (Def.’s Opp. to Pl.’s Mot. Summ. J. 10). Thus, the
determination of Dorsky’s medical condition and how it affected his work is for the jury.
“[G]enerally, medical conditions known to an agent are imputable to the insurer, and,
in the absence of fraud or collusion on the part of the insured, the insurer is estopped from
relying on such conditions to void the policy.” Sept. Winds Motor Coach, Inc. v. Med. Mut. of
Ohio, No. L-03-1151, 2004 WL 628236, at *3. Additionally, when an insurance application
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is completed by someone other than the insured, and the insured signed the application
without reading it, the insured is bound by the answers. Green, 128 N.E.2d at 226. There is
testimony that Dorsky “informed [Dickenson] of ongoing medical issues that he was
experiencing” and in response Dickenson told Dorsky he would be “an idiot not to get [the]
policy.” (Dickenson Decl. ¶9; Dorsky Dep. 238). However, it is unclear to what extent
Dickenson knew the details of Dorsky’s medical condition and how it affected his work in
order to accurately encourage Dorsky to purchase the Policy. Moreover, Dickenson
completed the Application for Dorsky and Dorsky testified that he did not review the
Application before signing it. Thus, it is a question of fact whether Dickenson was truly
informed of Dorsky’s condition and whether Dorsky’s signature on the Application without
reviewing the answers made the statements willfully false and fraudulently made.
There are genuine issues of material fact regarding the element of willfully false and
fraudulently made. Consequently, Summary Judgment is precluded for both parties on the
Rescission claim.
C. Summary Judgment is Denied to Berkshire Life and Dorsky on the
Declaratory Judgment Claim.
There are issues of fact for the jury to decide regarding whether the Policy should be
rescinded. Therefore, the Court cannot declare and enter judgment that the Policy is null and
void. Thus, Summary Judgment is denied to both parties on the Declaratory Judgment claim.
D. Summary Judgment is Denied to Berkshire Life and Dorsky on the Breach of
Contract Counterclaim.
In Ohio, the elements of breach of contract are: “1) the existence of a valid contract; 2)
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performance by the plaintiff; 3) breach by the defendant; and 4) damage or loss to the
plaintiff.” Res. Title Agency, Inc. v. Morreale Real Estate Servs., Inc., 314 F. Supp. 2d 763,
769 (N.D. Ohio 2004). “An insurance policy is a contract.” Westfield Ins. Co. v. Galatis, 797
N.E.2d 1256, 1261 (Ohio 2003). Because there are issues of fact for the jury the Court cannot
decide whether the Policy was properly rescinded. Thus, the Court cannot decide whether
there was a breach of contract and Summary Judgment is precluded for both parties on the
Breach of Contract Counterclaim.
E. Summary Judgment in Favor of Berkshire Life is Granted on the Breach of
the Covenant of Good Faith and Fair Dealing Counterclaim Because Berkshire
Life Acted Within the Terms of the Policy.
Under Ohio law, “an insurer has a duty to act in good faith in the handling and
payment of the claims of its insured.” Hoskins v. Aetna Life Ins. Co., 452 N.E.2d 1315, 1319
(Ohio 1983); see Little v. UNUM Provident Corp., 196 F. Supp 2d 659, 666 (S.D. Ohio 2002).
An insurer breaches this duty when its failure to perform under the contract “is not predicated
upon circumstances that furnish a reasonable justification therefor.” Zoppo v. Homestead Ins.
Co., 644 N.E.2d 397, 400 (Ohio 2012). Mere refusal to pay an insurance claim is not enough
to show an insurer's bad faith. Little, 196 F. Supp 2d at 666. The test for a breach of the duty
of good faith and fair dealing “is not whether the [insurer’s] conclusion to deny benefits was
correct, but whether the decision to deny benefits was arbitrary or capricious, and there
existed a reasonable justification for the denial.” Thomas v. Allstate Ins. Co., 974 F.2d 706,
711 (6th Cir. 1992). There may be a reasonable justification for the denial when “the claim
was fairly debatable and the refusal is premised on either the status of the law at the time of
the denial or the facts that gave rise to the claim.” Barbour v. Household Life Ins. Co., No.
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1:11 CV 110, 2012 WL 1109993, at *5 (N.D. Ohio Apr. 2, 2012) (quoting Tokles & Sons,
Inc. v. Midwestern Indemn. Co., 605 N.E.2d 936, 943 (1992)); see also Corbo Properties,
Ltd. v. Seneca Ins. Co., Inc., 771 F.Supp.2d 877, 880 (N.D.Ohio 2011) (“[A]n ‘arbitrary and
capricious' denial is not reasonably justified; but a claim that is ‘fairly debatable’ would be
reasonably justified.”). Berkshire Life acted reasonably and its denial of benefits was not
arbitrary and capricious because the contract language was susceptible to two different
interpretations and thus the claim was “fairly debatable.” Further, the Policy includes an
incontestability period in which the Policy is incontestable after it has been in force for two
years. Berkshire Life denied Dorsky’s claim and rescinded the Policy two days before the
end of the incontestability period. Dorsky alleges that Berkshire Life breached their fiduciary
duty of good faith and fair dealing by “foot dragging in the claims-handling and evaluation
process.” (Def’s Opp. To Pl. Mot. Summ. J. 14). However, “the implied duty of good faith
cannot be breached by acting as allowed by the specific terms of the contract.” Wendy's Int'l,
Inc. v. Saverin, 337 F. App'x 471, 477 (6th Cir. 2009); Jim White Agency Co. v. Nissan Motor
Corp. in U.S.A., 126 F.3d 832, 834 (6th Cir. 1997) (holding that a franchisor cannot “be found
liable for failure to act in good faith where it has done no more than to insist on enforcing its
contract rights to the detriment of its franchisee”). The incontestability period was a specific
term of the Policy agreed upon by both parties. Berkshire Life investigated the claim, denied
the claim and rescinded the policy within the incontestability period. Thus, Berkshire Life
was acting within the specific terms of the contract and did not breach its duty of good faith.
The Court grants Summary Judgment to Berkshire Life on the Breach of the Covenant of
Good Faith and Fair Dealing Counterclaim.
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IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff and Counterclaim Defendant
Berkshire Life’s Motion for Summary Judgment on the Breach of the Covenant of Good Faith
and Fair Dealing Counterclaim. The Court DENIES Berkshire Life’s Motion for Summary
Judgment on the Rescission and Declaratory Judgment Claims, as well as the Breach of
Contract Counterclaim. The Court DENIES Defendant and Counter-Claimant Dorsky’s
Motion for Summary Judgment on the Rescission and Declaratory Judgment Claims, as well
as Dorsky’s Breach of Contract and Breach of the Covenant of Good Faith and Fair Dealing
Counterclaims.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
UNITED STATES DISTRICT JUDGE
DATED: March 31, 2016
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