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DAMASCUS v. PROVIDENT LIFE & ACCIDENT INS. CO.

June 21, 1996

ALEXANDER P. DAMASCUS, D.D.S., Plaintiff,
v.
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, et al., Defendants.



The opinion of the court was delivered by: ORRICK

 In this insurance action, plaintiff Alexander P. Damascus ("Damascus") sues defendants Provident Life and Accident Insurance Company ("Provident") and Lee Francis LaMarca ("LaMarca"), its agent, claiming Provident failed to pay benefits allegedly due him under the provisions of an accident and sickness policy requiring Provident to pay him indemnity "[if] Injuries or Sickness results in Total Disability," which is defined as "inability to perform the duties of your occupation." (Harnsberger Decl., Ex. A at 5.) Provident now moves for summary judgment, and for the reasons hereinafter stated, the Court grants summary judgment for Provident on all causes of action. *fn1" The Court also grants summary judgment, sua sponte, for LaMarca on all causes of action.

 I.

 In 1980, Provident issued Accident and Sickness Policy No. 6PC-454284 ("the policy") to Damascus. (Id., Ex. A.) The policy provides for insurance against total disability resulting from "(1) accidental bodily injuries . . . or (2) sickness or disease . . . " (Id. at 1.) The benefits provision of the policy provides, in relevant part, "If Injuries or Sickness result in Total Disability, the Company will pay periodically during the continuance of such Total Disability, indemnity at the rate of the Monthly Benefit for Total Disability shown in the Policy Schedule . . ." (Id. at 4.) Total Disability is defined as "your inability to perform the duties of your occupation." (Id. at 5.)

 Damascus is a dentist. On September 10, 1990, an Accusation was filed against him with the California Board of Dental Examiners (the "Board"), seeking to revoke his license to practice dentistry because of mental illness and grossly inappropriate care of patients, pursuant to §§ 820 and 822 *fn2" of the California Business and Professions Code. (Harnsberger Decl., Ex. J.) On July 31, 1991, the Board placed Damascus on probation for a five-year period during which Damascus was permitted to practice dentistry only under the supervision of another dentist. (Id., Ex. K at 5-6.) The Board also required Damascus to seek treatment from a psychotherapist and to continue treatment until the Board deemed that no further treatment was necessary. (Id. at 5.) The Board stated that "it is clear that [Damascus] does suffer from a mental illness which interferes with his judgment." (Id. at 3-4.) This probation order was stayed pending appeal. On May 25, 1994, the California Court of Appeal affirmed the Board's probation order of July 31, 1991, in an unpublished opinion, and vacated the stay. (Fleming Decl., Ex. H.)

 On May 31, 1994, another Accusation was filed against Damascus with the Board, seeking to revoke Damascus' license to practice dentistry for repeated acts of negligence and unprofessional conduct in violation of § § 1670 and 1680(p) of the California Business and Professions Code. *fn3" (Harnsberger Decl., Ex. L.) Although this Accusation referred to the Board's prior probation order, it did not seek to revoke Damascus' dental license on the grounds of mental illness. The Accusation alleged that Damascus performed defective root canal procedures on two patients in 1992 resulting in mechanical perforation of the pulpal wall, but did not notify the patients that any problem had occurred, and did not refer them to an endodontist. In one of these cases, Damascus allegedly provided the patient with thirty-five percodan and twenty-five penicillin VK tablets without informing the patient of proper use of the medications.

 On July 11, 1995, the Board revoked Damascus' dental license, effective August 11, 1995. (Id., Ex. M.) The July 11, 1995, order expressly stated that "The Board's order in the prior matter . . did not involve unprofessional conduct, acts of gross negligence or repeated negligent acts. Therefore, the prior order was not considered in formulating the appropriate penalty or disposition in this matter." (Id. at 4.) The Board found Damascus' conduct to constitute gross negligence, unprofessional conduct, and excessive prescribing of drugs. (Id. at 5.)

 On August 8, 1995, Damascus filed a complaint against Provident and Lee Francis LaMarca *fn4" in the Superior Court for the County of Santa Clara, alleging claims for breach of contract, bad faith, unfair claim settlement practices, breach of statutory duties, conspiracy, fraud, errors and omissions in the sale of insurance, and negligent and intentional infliction of emotional distress. On December 6, 1995, that complaint was removed to this Court.

 Provident now moves for summary judgment on the ground that Damascus' license revocation was due to his negligence and unprofessional conduct, and not due to mental illness; thus, no benefits are due under the policy.

 II.

 A.

 Rule 56(c) of the Federal Rules of Civil Procedure provides that a court may grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The Supreme Court's 1986 "trilogy" of Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986), and Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986), requires that a party seeking summary judgment show the absence of a genuine issue of material fact. Once the moving party has made this showing, the nonmoving party must "designate 'specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P. 56(c)). "When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (citations omitted).

 B.

 Damascus' cause of action alleges that the Board has held that he has a mental disability preventing him from practicing dentistry and, thus, Provident's failure to pay benefits on his insurance policy constitutes breach of contract. (Compl. PP 11-16.) In insurance disputes, the burden is on the insured to prove all facts necessary to show that his claim falls within the terms and conditions of coverage. Garvey v. State Farm Fire & Casualty Co., 48 Cal. 3d 395, 406, 257 Cal. Rptr. 292, 298, 770 P.2d 704 (1989).

 1.

 Provident argues that Damascus cannot possibly prove that he is totally disabled within the meaning of the policy because the Board revoked Damascus' license for gross negligence and unprofessional conduct, not for mental illness. (Harnsberger Decl., Ex. M at 4, 5, 7.) Provident further points to the following evidence as proof that Damascus' mental illness, if any, was not the cause of his Total Disability, as defined in the policy:

 1. The Board's 1991 probation order did not find Damascus unfit to practice dentistry, but required only that he practice dentistry under supervision for a probationary period. (Id., Ex. K at 5-6.)

 2. Damascus continued to practice dentistry after the probationary order was issued, and only stopped practicing when the Board revoked his license for gross negligence and unprofessional conduct. (Id., Ex. M.)

 3. During the 1991 hearings before the Board, Damascus testified that he was not mentally ill. (Fleming Decl., Ex. A, Hr'g Tr., July 2, 1991, at 5:23-24.) *fn5"

 4. During the 1991 hearings, Damascus' witness, Dr. John Stewart McGovern, testified that he did not believe that Damascus suffered from an emotional disorder or mental incompetence that would interfere with his ability to practice his profession. (Id., Ex. B, Hr'g Tr., Apr. 11, 1991, at 137:3-138:5.)

 5. On August 23, 1991, Damascus filed a petition for administrative mandamus and asserted under oath that the evidence did not establish that he had a mental illness affecting his ability to practice dentistry. (Id., Ex. C at P 6, Pet. for administrative mandamus; and Ex. D at P 4(e), Decl. of Alexander Damascus.) In support of his petition, Damascus submitted declarations from three doctors stating that he did not suffer from mental illness. (Id., Ex. E, ...


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