Jacobs v Northwestern Mut. Life Ins. Co.

[*1] Jacobs v Northwestern Mut. Life Ins. Co. 2010 NY Slip Op 52330(U) [30 Misc 3d 1209(A)] Decided on December 23, 2010 Supreme Court, Nassau County Marber, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through January 13, 2011; it will not be published in the printed Official Reports.

Decided on December 23, 2010
Supreme Court, Nassau County

Brad J. Jacobs, Plaintiff,

against

The Northwestern Mutual Life Insurance Company, Defendant.



021913/08



Attorneys for the Plaintiff:

Markowitz & Rabbach LLP

Heath Olnowich, Esq.

290 Broadhollow Road

Suite 301

Melville, New York 11747

(631) 427-7888

Attorneys for the Defendant:

Rivkin Radler

Norman L. Tolle, Esq.

926 RXR Plaza

Uniondale, NY 11556

(516) 357-3000

Randy Sue Marber, J.

Upon the foregoing papers, Defendant, The Northwestern Mutual Life Insurance Company (hereinafter Northwestern), motion, pursuant to CPLR § 3212, for an order granting summary judgment dismissing the Plaintiff's Amended Complaint (Sequence No.001), and the Plaintiff, Brad J. Jacobs, cross-motion brought pursuant to CPLR § 3212, seeking an order granting summary judgment on the within complaint, as well as for an award of costs and disbursements (Sequence #002) are determined as hereinafter provided.

Facts:

In June of 2007, the Plaintiff, Brad J. Jacobs, was insured under nine disability insurance policies issued by the Defendant, Northwestern, bearing the following identification numbers: XX XXX 026; XX XXX 179; XX XXX 873; XXXXX 306; XX XXX 556; XX XXX 575; XX XXX 954; XX XXX 043; XX XXX 957 (see Hyde Affidavit in Support at ¶ 2). On or about January 4, 2008, the Plaintiff submitted a claim for disability benefits, on which he stated that as a result of his "suffering from various conditions, including, but not limited to Bipolar II disorder * * * he [was] unable to engage in the principal duties of his regular occupation as a plastic surgeon" (id. at ¶ 8; see also Exhibit B). The Plaintiff further indicated that as a result of his disability, he did not perform any duties in connection with his occupation during the period commencing on June 18, 2007 to the present and "voluntarily surrendered his New York State Medical License: (id.).

In the interim, on June 18, 2007, the Commissioner of Health for the New York State Department of Health issued an "ORDER AND NOTICE OF HEARING" (hereinafter the Order), which stated that "after an investigation, upon the recommendation of a Committee on Professional Medical Conduct of the State Board for Professional Medical Conduct, and upon the Statement of Charges attached hereto and made a part hereof, (the commissioner) has determined that the continued practice of medicine in the State of New York by Brad J. Jacobs, M.D., the Respondent, constitutes an imminent danger to the health of the people of this state." (id. at Exhibit C). The Order also stated "effective immediately BRAD J. JACOBS, M.D., Respondent, shall not practice medicine in the State of New York." (id.). Subsequently, on September 12, 2007, the Plaintiff formally requested permission of the State Board of Medical Conduct to surrender his license as a physician on the grounds that he could not "successfully defend against acts of misconduct alleged in the Statement of Charges" (id.). On September 13, 2007, a Surrender Order was issued by the State Board of Medical Conduct (id. at Exhibit E).

Thereafter, on April 3, 2008, Northwestern denied the Plaintiff's claim for benefits on the basis that his inability to perform his work did not result from a physical or mental disability, but rather as a result of his being ordered to cease the practice of medicine (id. at ¶ 12; see also Exhibit J). Following this initial denial, the Plaintiff submitted additional information and was interviewed by a Mr. Bonney, a field representative from Northwestern (id.). Following this investigation, Northwestern elected to uphold it's prior denial of the claim (id. at ¶ 16; see also Exhibit O).

As a result, the underlying action was commenced by the Plaintiff on or about December 8, 2008 and originally contained causes of action for breach of contract, unjust enrichment, as well as for punitive damages (see Tolle Affirmation in Support at Exhibit A). Subsequently, the Plaintiff served an Amended Complaint, which contained two causes of action, the first of which sounds in breach of contract and the second of which sounds in unjust enrichment (id. at Exhibit B). The instant applications for summary judgment respectively interposed by the Plaintiff and the Defendant thereafter ensued.

[*2]Northwestern's Motion for Summary Judgment and Jacobs' Cross-Motion for Summary Judgment:

In moving for dismissal of the within complaint, counsel for the Defendant contends that the disability which prevented the Plaintiff from engaging in his occupation was a legal disability and not a factual disability, and accordingly Dr. Jacob was not disabled as contemplated by the terms of the insurance policies (see Tolle Affirmation in Support at ¶¶ 6, 7, 10, 11; Defendant's Memorandum of Law at pp.13-18; see Defendant's Memorandum of Law in Opposition to Plaintiff's Cross-Motion for Summary Judgment at pp. 1). Specifically, counsel for Northwestern posits that the precipitating factor which caused the Plaintiff to stop practicing medicine was not the result of an accident or a sickness, but rather due to the Order directing him to cease practicing medicine and his subsequent surrender of his medical license (see Tolle Affirmation in Support at ¶ 6; see also Defendant's Memorandum of Law at pp. 8, 12, 13-18; Defendant's Memorandum of Law in Opposition to Plaintiff's Cross-Motion for Summary Judgment at pp. 9, 11).

Additionally, and with respect to the express terms of the policies in issue, counsel argues that while an insured is entitled to benefits thereunder when "unable to perform the principal duties of the regular occupation", the evidence adduced herein establishes that prior to June 18, 2007, the Plaintiff was fully engaged in the duties attendant to his occupation as a plastic surgeon and thus not "totally disabled" as defined in the policies (see Tolle Affirmation in Support at ¶ 6 ;see also Defendant's Memorandum of Law at pp. 12, 13; see also Defendant's Memorandum of Law in Opposition to Plaintiff's Cross-Motion for Summary Judgment at pp. 2, 3, 5, 6, 7, 8, 13). Further, counsel argues that while the Plaintiff may not have been working at an optimal level, he was nonetheless performing the duties of his profession (id.). In so arguing, counsel relies upon Dr. Jacobs' deposition testimony, wherein he stated that between 2003 and up until June 2007, he maintained and actively engaged in his plastic surgery practice on a full time basis (see Defendant's Memorandum of Law at pp. 5-6, 12-13, 17).

The Plaintiff opposes Northwestern's application and cross-moves for summary judgment on the causes of action contained in the complaint. In opposing the application, the central contention posited by counsel for the Plaintiff is that Dr. Jacob began to suffer from a factual disability at least four years prior to the suspension of his medical license, which "stemmed from his abuse of drugs and engagement in sexually compulsive behaviors" (see Plaintiff's Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment and in Support of Cross-Motion at pp. 6, 7, 9, 11). Counsel asserts that at the time of his license suspension, the Plaintiff was abusing crystal methamphetamine, as well as self-medicating his addiction with Xanax and Fentanyl, and that said actions negatively impacted his work and impaired his ability to execute his responsibilities as a plastic surgeon (id. at pp. 6, 7, 10, 11, 28, 30, 31, 32). Counsel posits that the suspension of the Plaintiff's medical license, which was the result of 29 separate violations occurring between 2001 and 2005, clearly establishes that Dr. Jacob was not competently performing his duties as a physician and thus was totally disabled as contemplated by the various policies of insurance (id. at p.32).

In further opposing Northwestern's application, counsel also argues that questions of fact remain as to whether the Plaintiff's factual disability predated his legal disability and whether the Plaintiff's mental illness and drug addiction rendered him unable to perform the principal duties attendant to his profession (id. at pp. 15, 27-28, 30, 32).In addition to the foregoing opposition, the Plaintiff argues that as the evidence adduced herein demonstrates that the Plaintiff was totally [*3]disabled within the meaning of the insurance policies, summary judgment on the complaint should be granted to the Plaintiff (id. at pp. 17, 19). In support of the cross-motion for summary judgment, counsel provides the following: the affidavit of Deborah Porter, PhD; the affirmation of Dr. Howard Kirschen, M.D.; the affidavit of Dr. James Montgomery, M.D.; the affirmation of Dr. Joel S. Hoffman, M.D., and; the affidavit of Claudia Albetta, a licensed master social worker.[FN1]

Dr. Deborah Porter, PhD, a licensed psychologist since 1979, avers that she first "treated Plaintiff Jacobs on August 31, 2007, at which time he presented with a constellation of symptoms fully consistent with a diagnosis of Bipolar-II Disorder" (see Porter Affidavit at ¶¶ 1, 3, 4). Dr. Porter stated that her examination of the Plaintiff "revealed a history of periodic, intensified, sexually directed activity and excessive and impulsive involvement in pleasurable pursuits having a high potential for painful consequences, with little consideration of the associated negative ramifications to himself or others" (id. at ¶ 8). Dr. Porter further stated that the Plaintiff "has undoubtedly suffered from Bipolar -II Disorder for many years prior to our initial consultation in August of 2007, most significantly prior to the initial suspension of his medical license in June of 2007" and that the effects thereof rendered him "unable to perform the principal duties of his occupation as a plastic surgeon, let alone safely and competently"(id. at ¶¶ 16, 17).

Dr.Kirschen, is a licensed physician who has been practicing psychiatry since 1975 and first treated the Plaintiff on September 1, 2007 (see Kirschen Affirmation at ¶¶ 1, 3). Dr. Kirschen diagnosed the Plaintiff with "Bipolar Disorder and Substance Abuse Disorder" (id. at ¶ 6). Dr. Kirschen stated that the Plaintiff had suffered with these conditions "for many years prior to our initial consultation in September 2007, most significantly prior to the initial suspension of his medical license in June 2007" (id. at ¶¶ 6, 12). Dr. Kirschen opined that the effects of such disorder "have compromised the safety and welfare of himself and his patients" and rendered Dr. Jabobs "unable to perform the principle duties of his occupation as a plastic surgeon, let alone safely or competently" (id. at ¶ 13).

Dr. Montgomery, a licensed physician practicing psychiatry since July 1995, first treated the Plaintiff on October 26, 2007, when he was admitted to the Sante Center for Healing, in Argyle, Texas (Montgomery Affidavit at ¶¶ 1, 3, 4). Dr. Montgomery diagnosed the Plaintiff with "Bipolar II Disorder, Impulse Control Disorder and Amphetamine Dependence" from which the Plaintiff had "undoubtedly suffered * * * for many years prior to my initial treatment of him in October of 2007" (id. at ¶¶ 7, 11). Consonant with the opinions espoused by the other medical experts, Dr. Montgomery opined that the effects of such conditions rendered Dr. Jacobs "unable to perform the principle duties of his occupation as a plastic surgeon" (id. at ¶ 12).

Dr. Hoffman, is a licensed physician, board certified by the American Board of Psychiatry [*4]and Neurology (see Hoffman Affirmation at ¶¶ 1, 3). Dr. Hoffman stated that he "first treated Plaintiff Jacobs on February 25, 2008, following the conclusion of his three (3) month stay for methamphetamine addiction at Sante Center for Healing * * * from October 2007 through January 2008" (id. at ¶ 4). After an examination, Dr. Hoffman"diagnosed the plaintiff with Bipolar Disorder" (id. at ¶¶ 4, 6). Similar to the opinion espoused by Dr. Porter, Dr. Hoffman stated that the Plaintiff "has undoubtedly suffered from Bipolar Disorder for many years prior to my initial treatment of him in February 2008, most significantly prior to the initial suspension of his medical license in June 2007 and at the time the conduct which led to that suspension is alleged to have taken place" (id. at ¶ 14).

In addition to the foregoing, counsel provides the affidavit of Claudia Albetta, a licensed master social worker who initially treated Dr. Jacobs "from March 2003 to November 2004" (see Albetta Affidavit at ¶¶ 1, 4). Ms. Albetta stated that "based upon my treatment of the plaintiff * * * from March 2003 through November 2004, I have no doubt that he was suffering from substance abuse and mental illness" prior to the suspension of his license (id. at ¶¶ 7, 11).

The Insurance Policies:

Of the polices at issue herein, all but that denominated XX XXX 026, provide the following:

Benefits are provided for the Insured's total or partial disability only if: the Insured becomes disabled while this policy is in force; the Insured is under the Regular Care of a Licensed Physician during disability the disability results from an accident or sickness; and the disability is not excluded under Section 3.

Under the terms of the policies, "the Insured is totally disabled when unable to perform the principal duties of the regular occupation" and the term "regular occupation" is defined as "the occupation of the Insured at the time the Insured becomes disabled (see Hyde Affidavit in Support at ¶¶ 3, 4; see also Exhibit A).

The policy denominated XX XXX 026, similarly provides the following:

Benefits are provided for the Insured's total or partial disability only if: the Insured becomes disabled while this policy is in force; the Insured is under the care of a licensed physician other than himself during the time he is disabled the disability results from an accident or sickness; and the disability is not excluded under Section 2.

Here, "the Insured is totally disabled when he is unable to perform the principle duties of his occupation" and the term "occupation" is defined as "the occupation of the Insured at the time he becomes disabled" (id. at ¶¶ 5, 6, 7; see also Exhibit A).

Decision:

As a general proposition, it is the insured who bears the initial burden of demonstrating that he or she is disabled as contemplated by the insurance policy and thus entitled to benefits afforded thereunder (Consolidated Edison Co. of New York, Inc. v. Allstate Ins. Co., 98 NY2d 208 [2002]). Thereafter "to negate coverage by virtue of an exclusion, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case" (Continental Casualty Co. v. Rapid-American Corp., 80 NY2d 640 [*5][1993] at 652; see also Seaboard Sur. Co. v. Gillette Co., 64 NY2d 304 [1984]).

In the instant matter and as recited above, Northwestern contends that it was a legal disability, in the form of the suspension of his medical license, which prevented Dr. Jacobs from engaging in his occupation thereby precluding coverage under the policies. Conversely, the Plaintiff argues that he suffered from a factual disability prior to the occurrence of the legal disability - in the manner of Bipolar disorder and drug dependency - and accordingly coverage under the policies of insurance is available.

"A factual disability' is an incapacity caused by illness or injury that prevents a person from engaging in his or her occupation, whereas a legal disability' includes all circumstances in which the law does not permit a person to engage in his or her profession, even though he or she may be physically and mentally able to do so" (44 Am Jur 2d Insurance § 1466 citing Massachusetts Mut. Life Ins. Co. v. Jefferson, 104 S.W.3d 13 [Tenn. Ct. App. 2002]; Gassler v. Monarch Life Ins. Co., 276 AD2d 575 [2d Dept. 2000]). The revocation or suspension of a professional license has been held to be a legal disability (Gassler v. Monarch Life Ins. Co., 276 AD2d 585 [2d Dept. 2000], supra; Massachusetts Mut. Life Ins. Co. v. Millstein, 129 F.3d 688 [2d Cir. 1997]).

Where as here, the Plaintiff is asserting that a factual disability preceded a legal disability, it is incumbent upon the Court to address the following: whether the factual disability alleged by the plaintiff is a medically bona fide disability; if so, whether the onset thereof occurred prior in time to the legal disability, and, if the factual disability is both medically determined and actually occurred prior to the legal disability, whether the factual disability actually prevented or impeded the insured from engaging in his or her profession or occupation (44 Am Jur 2d Insurance § 1466 citing Massachusetts Mut. Life Ins. Co. v.Jefferson, 104 S.W.3d 13 [Tenn. Ct. App. 2002] at 27-28).

Where it is determined that an insured is afflicted with both a factual disability and a legal disability and the factual disability clearly arose at a point in time prior to the legal disability, that the legal disability arose thereafter will not serve so as to preclude the insured from receiving benefits under the policy (Casale v. Provident Life and Cas. Ins. Co., 276 AD2d 459 [2d Dept. 2000]).

In the instant matter, the Court has carefully reviewed the record, and upon such review, finds that the evidence adduced herein clearly demonstrates the existence of questions of fact as to whether the Plaintiff's Bipolar disorder preceded the suspension of his medical license and whether this disorder impeded his ability to carry out his responsibilities as a plastic surgeon (Massachusetts Mut. Life Ins. Co. v. Jefferson, 104 S.W.3d 13 [Tenn. Ct. App. 2002], supra at 27-28).

In the matter sub judice, the record demonstrates that Dr. Deborah Porter examined the Plaintiff within two months following his suspension, at which time she diagnosed the Plaintiff with Bipolar-II Disorder, a condition with which he had reportedly suffered for many years prior to August of 2007. The record herein also includes the expert opinions of Drs. Hoffman, Kirschen, and Montgomery, all of whom diagnosed the Plaintiff with Bipolar disorder and all of whom opined that the Plaintiff suffered therefrom for many years prior to their respective treatment of Dr. Jacobs. The Court notes that Northwestern did not offer any expert testimony to rebut the opinions proffered by the Plaintiff's various medical experts.

Moreover, the Court finds unpersuasive Northwestern's argument that because Dr. Jacobs was practicing medicine until the day his medical license was suspended, he was therefore fully engaged in the principal duties of his occupation and not totally disabled. "The determination [*6]whether a particular injury renders a claimant disabled from performing the material and substantial duties of his or her occupation depends on the nature of a claimant's particular occupation." (Brumer v. National Life of Vermont, 874 F. Supp. 60 [ED NY 1995] at 63). By way of example, "[a]rthritis will disable a pianist, but perhaps not an opera singer" (id.). Here, Dr. Jacobs was a plastic surgeon who operated regularly on his patients. Thus, to adopt the position urged by Northwestern, would be to conclude that a physician, diagnosed with Bipolar Disorder two months after his license was suspended and who testified that between January and June of 2007, was "self-medicated with crystal meth almost on a daily basis", was nonetheless unquestionably capable of performing the principal duties of a medical doctor. This Court finds such a conclusion untenable given the evidence presented herein.

Based upon the foregoing, the application interposed by the Defendant, Northwestern Mutual Life Insurance Company, for an order granting summary judgment dismissing the Plaintiff's Amended Complaint is hereby DENIED (Sequence #001) and the Cross-motion interposed by the Plaintiff, Brad J. Jacobs, for an order granting summary judgment on the within complaint, as well as for an award of costs and disbursements, is hereby DENIED (Sequence #002).

This constitutes the Decision and Order of the Court.

All applications not specifically addressed are DENIED.

DATED:Mineola, New York

December 23, 2010

_______________________________

Hon. Randy Sue Marber, J.S.C. Footnotes

Footnote 1: The Court notes that in Plaintiff's Reply Affirmation, submitted in response to Northwestern's opposition to the Plaintiff's cross-motion for summary judgment, counsel provides, for the first time, the Affirmation of Dr. Lili Rysz, M.D., who allegedly treated the Plaintiff in or about November of 2004 (see Olnowich Reply Affirmation at ¶20). In addition, counsel provides copies of nine separate medical malpractice complaints, which were filed against Dr. Jacobs for misconduct alleged to have taken place up until his license was suspended (id. at ¶3; see also Exhs. 23-31). However, the Plaintiff cannot establish his prima facie case vis a vis his cross-motion for summary judgment, with evidence introduced for the first time in reply (Yeum v Clove alkes Health Care and Rehabilitation Center, Inc., 71 AD3d 739 [2d Dept 2010]; Tingling v C.I. N. H. R., Inc., 74 AD3d 954 [2d Dept 2010]). Accordingly, the Court did not consider these submissions (id.).