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McKennee v. Continental Casualty Co.

February 4, 2005

PATRICIA MCKENNEE, PLAINTIFF,
v.
CONTINENTAL CASUALTY CO., ET AL., DEFENDANTS.



The opinion of the court was delivered by: James Larson United States Magistrate Judge

SUMMARY JUDGMENT (Granting Docket # 16)

Introduction

The parties asked the Court to determine the amount of Plaintiff's monthly benefit under her employer's group long-term disability policy. They filed letter briefs amounting to cross-motions for summary judgment on this question, the only substantive issue in dispute in the case. The Court hereby finds that Plaintiff's "Monthly Benefit" under the contract between the parties is $3,500.00. The Court also finds that Plaintiff is not entitled to her fees and expenses for bringing this action.

Factual Background

In April 1998 Continental Casualty Company ("CNA") issued a Group Long Term Disability Insurance policy insuring Anacomp Inc.'s ("Anacomp") employees. (Policy number SR 83096460). The policy covers an Anacomp employee from the first day of employment.

From March 20, 2000 to June 30, 2001, Patricia McKennee ("Plaintiff") was insured by the CNA group policy.

There are two phases to CNA's disability coverage. Once an insured establishes permanent disability, CNA pays the insured the equivalent of the salary she received for performing her "own occupation" for 24 months. After the initial period, CNA pays based on an "any occupation" salary calculation.

Plaintiff worked as an account executive. She was hired in March, 2000. Her duties included: managing existing accounts and generating new business, maintaining and achieving sales goals and employing strong interpersonal skills. Her activities included: frequent sitting, constant reaching and using her hands to operate a computer, a telephone and other office equipment. She received a monthly salary plus a commission-based bonus. Plaintiff's salary without bonus was $5,833.33 per month, for the duration of her employment (approximately $70,000 annually).

Plaintiff stopped working in July 2001 due to the alleged permanent disability after approximately 16 months on the job.

Procedural Background

Since approximately July 29, 2001, Plaintiff claims she has been totally disabled from her occupation as an Account Executive for Anacomp. In February 2002, she filed a claim for long term disability benefits with CNA. CNA denied Plaintiff's claim on May 24, 2002. Plaintiff appealed on August 7, 2002. She filed her complaint in this court on July 9, 2003. Defendants were served on July 21. Plaintiff seeks permanent disability benefits as a result of the disability she claims developed while working for Anacomp.

On February 5, 2004, the parties mediated the "matter and reached a partial settlement. The "own occupation" provision was settled for a set amount. The parties agreed to review Plaintiff's disability and determine benefits under the "any occupation" provision of CNA's policy. CNA has agreed to pay Plaintiff in accordance with the language of the contract. The issue before the court is interpreting the language of the contract for purposes of calculating future benefits under the "any occupation" provision.

All parties have consented to the jurisdiction of this Court as provided by Civil Local Rule 73 and 28 U.S.C. §636(c).

Disputed Contractual Provisions

The portion of the CNA contract subject to this Court's interpretation states that Plaintiff's net Monthly Benefit is the lesser of: (1) multiplying Monthly Earnings by 60 percent; or (2) the maximum Monthly Benefit of $25,000, discounted by other sources of income. Monthly Earnings are defined as follows in the contract:

HOW DO WE DEFINE EARNINGS*fn1?

Salary means the Insured Employee's average monthly earnings calculated for the W-2 Form for the calendar year immediately prior to the date the Insured Employee's disability began, including base wages, overtime earnings, shift differential compensation, commissions, bonuses, pre-tax Employee contributions to the Employer's 401(k) policy, pre-tax Employee contributions to other deferred compensation policies sponsored by the Employer, and any pre-tax Employee contributions to other Employee benefit policies sponsored by the Employer, ("the W-2 ...


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