We represented Mr. Polnicky, who was employed as a Reserve Mortgage Consultant at Wells Fargo. He suffered from back and neck pain and was diagnosed with spondylolisthesis, chronic lumbago, hamstring contractures and generalized anxiety and mood disorders. All of these diagnoses were confirmed by Mr. Polnicky’s physicians, independent medical examiners and even Liberty Life’s own medical reviewers. Despite all this, Liberty Life Assurance Company of Boston (“Liberty Life”) and Wells Fargo & Company Long Term Disability Plan (“the Plan”) denied our client’s claim for long term disability insurance benefits.
Liberty Life insured benefits provided by the Plan under a group disability income policy (“the Policy”). The Plan provided benefits for the first 24 months of disability if a claimant was unable to perform his “own occupation.” “Own occupation” was defined in the Policy as that which the insured “was performing” at the time he became disabled.
Mr. Polnicky began receiving LTD benefits in September 2011 after submitting an LTD claim of work incapacity due to back pain. On June 1, 2012, Liberty Life terminated Mr. Polnicky’s LTD benefits, claiming that he was not disabled under the policy. After representing Mr. Polnicky in the administrative appeal, Corinne Chandler, Esq. of Kantor & Kantor filed suit to recover his benefits.
On November 25, 2014, the United States Northern District Court of California granted our client’s motion for judgment and denied the Defendants’ motion for judgment.
One of the main points of contention was the proper classification of Mr. Polnicky’s “own occupation.” The Policy defined “own occupation” as that which the claimant “was performing when his disability or partial disability began.”
In the termination of his benefits, Liberty Life characterized Mr. Polnicky’s “own occupation” as “sedentary” because, according to Liberty Life’s vocational report, there were “ample opportunities” in the local economy to perform his occupation at both the sedentary and light physical demand levels. Liberty Life thus classified his occupation as sedentary because it could be performed in such a manner, as opposed to how Mr. Polnicky actually performed his job. After also determining that Mr. Polnicky was physically capable of performing full-time sedentary work (with a sit/stand desk option), Liberty Life concluded that he could perform the duties of his “own occupation” and was no longer entitled to LTD benefits.
We argued that Liberty Life’s occupational analysis was deficient because Liberty Life did not consider his actual duties at Wells Fargo as required by the terms of the Policy. We further argued that his occupation required substantial out of office duties, placing it in the light physical demand level.
The court agreed with us and found that Liberty Life incorrectly applied the definition of “own occupation” under the terms of the Policy. It further found that Liberty Life completely disregarded the first sentence of the definition under the policy which states that “own occupation means the Covered Person’s occupation that he was performing when his Disability or Partial Disability began.” The court further held that Liberty Life could not simply ignore Mr. Polnicky’s actual job duties at Wells Fargo and define his “own occupation” solely by reference to how the positon could be performed in the local economy.
The court granted our motion for judgment and reinstated Mr. Polnicky’s benefits from the date of termination through the end of the 24 month “disability” period. The court further remanded the case to the Plan for a determination of Mr. Polnicky’s eligibility for LTD benefits after expiration of the 24 month period. The court also highlighted California Civil Code §1641 which states that in California, “[t]he whole of a contract must be read together, so as to give effect to every part, if reasonably practicable.” The Court also stated that is must not interpret contracts in a way that “renders some clauses nugatory, inoperative or meaningless.” City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Cal. App. 4th 445, 473 (1998). Liberty Life’s interpretation of “Own Occupation” would require the Court to disregard the first sentence of the “Own Occupation” definition as stated in the Policy.
This is another victory not only for Mr. Polnicky and the Kantor & Kantor, but for others who are also victims of insurers’ unfair and improper claim denials.
A copy of the full decision can be found here. http://docs.justia.com/cases/federal/district-courts/california/candce/3:2013cv01478/264875/63