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Patricia Barbour v. Unum Life Insurance Company of America

August 15, 2011

PATRICIA BARBOUR,
PLAINTIFF,
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA, A DELAWARE CORPORATION; PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, A TENNESSEE CORPORATION, AND DOES 1-20, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge:

ORDER

The matter before the Court is the Motion for Partial Summary Judgment, filed by Defendants Unum Life Insurance Company of America and Provident Life and Accident Insurance Company. ECF No. 23.

I. Background

On October 26, 2009, Plaintiff Patricia Barbour initiated this action by filing a Complaint against Defendants in San Diego County Superior Court. ECF No. 1, Ex. A. In connection with Defendants' denial of benefits under a disability insurance policy, Plaintiff asserts claims for breach of contract, breach of the covenant of good faith and fair dealing, and intentional infliction of emotional distress. Plaintiff seeks punitive damages as to the latter two claims.

On December 4, 2009, Defendants removed the action to this Court, alleging diversity jurisdiction.*fn1 ECF No. 1.

On February 25, 2011, Defendants filed the Motion for Partial Summary Judgment, accompanied by evidence. ECF No. 23. Defendants seek partial summary judgment as to Plaintiff's claims for breach of the covenant of good faith and fair dealing and intentional infliction of emotional distress. In the alternative, Defendants seek partial summary judgment as to Plaintiff's request for punitive damages.

On May 2, 2011, Plaintiff filed an opposition to the motion, accompanied by evidence. ECF No. 26.

On May 9, 2011, Defendants filed a reply in support of the motion, accompanied by evidence and objections to the evidence submitted by Plaintiff. ECF No. 27.

On May 31, 2011, Plaintiff filed a surreply, accompanied by evidence and a response to Defendants' evidentiary objections. ECF Nos. 29, 30.

On June 17, 2011, Defendants filed a response to Plaintiff's surreply, accompanied by objections to the evidence submitted by Plaintiff on surreply. ECF Nos. 35, 36.

On August 4, 2011, the Court conducted oral argument on the Motion for Partial Summary Judgment. ECF No. 38.

II. Facts

Defendants issued a Group Salary Protection Insurance Policy ("Policy") to eligible employees of the Bonsall Union School District, effective September 1, 1991. Diegel Decl. ¶ 3, ECF No. 23-2. Plaintiff was employed by the Bonsall Union School District in the position of Principal effective August 19, 2002, and Plaintiff became covered under the Policy effective September 1, 2002. Id.; Diegel Decl., Ex. 2 at 1, ECF No. 23-2. The Policy provides Accident and Sickness Disability Benefits for one year in the event of total disability; after one year, the Policy provides monthly Long Term Disability Income Benefits for as long as the claimant remains totally disabled and otherwise qualifies for benefits, up to the claimant's 65th birthday. Diegel Decl., Ex. 1 at 4-5, 14, ECF No. 23-2. Under the Policy, during the first two benefit years, "Total Disability" is defined as the inability "to perform the material duties of your own occupation." Id. at 25. After the first two benefit years, "Total Disability" is defined as the inability "to engage in any gainful occupation for which you are reasonably qualified by training, education or experience." Id.

On February 5, 2003, Plaintiff submitted a claim for benefits under the Policy, claiming disability as a result of "severe right quadrant abdominal pain -- inflammation small intestines." Diegel Decl., Ex. 2 at 1, ECF No. 23-2. Plaintiff reported that she stopped working on January 6, 2003, when she was hospitalized for two weeks. Id. Plaintiff's claim contained a physician's statement from Dr. Jeffrey Yusim, who stated that Plaintiff was diagnosed with "abdominal pain inflammation," and stated that Plaintiff "has severe abdominal-pelvic pain." Id. at 2. In January 2003 and February 2003, hernia surgeries were performed on Plaintiff. Diegel Decl., Ex. 7 at 1, ECF No. 23-2.

In February 2003, Defendants began paying Plaintiff disability benefits pursuant to the Policy. Diegel Decl., Ex. 8 at 1, ECF No. 23-2.

On July 3, 2003, Plaintiff submitted a statement to Defendants indicating that she is restricted from driving, walking/standing and sitting for extended periods. Diegel Decl., Ex. 3 at 1, ECF No. 23-2. On July 16, 2003, Dr. Melissa Hurd, Plaintiff's physician, submitted a statement indicating that Plaintiff underwent hernia surgery on April 16, 2003, and Plaintiff was presently able to tolerate standing for 30 minutes, sitting for one hour, walking one block, and no lifting or carrying. Diegel Decl., Ex. 4 at 1, ECF No. 23-2. Dr. Hurd indicated that "workup remains in progress," and Plaintiff was not totally disabled from performing her occupation. Id.

On November 17, 2003, Plaintiff submitted a statement to Defendants indicating that she "can no longer stand, sit, or walk," due to "complication from ... hernia surgery." Diegel Decl., Ex. 5 at 1, ECF No. 23-2. On November 19, 2003, Dr. Hurd submitted a statement indicating that Plaintiff is "currently unable to stand, sit, walk or drive," and is totally disabled from performing her occupation or any other occupation. Diegel Decl., Ex. 6 at 1, ECF No. 23-2.

On February 10, 2004, Plaintiff submitted medical information to Defendants, including an August 13, 2003 MRI report which revealed an "irregular lesion," and records related to Plaintiff's hospitalization from December 8, 2003 through December 31, 2003. Pl. Ex. 2 at 2489, 2495, ECF No. 26-3. In a report dated February 2, 2004, Plaintiff's treating physician, Dr. David Smith, diagnosed Plaintiff with a "[n]euroma, right genitofemoral nerve." Diegel Decl., Ex. 7 at 5, ECF No. 23-2. Dr. Smith stated that in August 2003, an ilioinguinal nerve block was performed on Plaintiff but it "was ineffective," and in October 2003, another ilioinguinal nerve block was performed but it "caused increased pain." Id. at 1. Dr. Smith stated that Plaintiff takes three to six 2mg tablets per day of Dilaudid, which "provides adequate pain relief with minimal side effects." Id. at 5. Dr. Smith recommended that Plaintiff first undergo physical therapy, and "[i]f the physical therapy is not effective, then surgical explantation of the neuroma." Id. Dr. Smith stated that, "as a last resort," Plaintiff could undergo "a spinal cord stimulator trial in order to relieve [Plaintiff] of her persistent discomfort." Id.

On March 3, 2004, Defendants informed Plaintiff that she had received her final benefit check for Disability Income Benefits, and she was now eligible for long-term disability benefits pursuant to the Policy. Diegel Decl., Ex. 8 at 1, ECF No. 23-2.

From 2004 through 2007, Plaintiff submitted medical records and statements, and Defendants continued paying benefits pursuant to the Policy. See generally, Pl. Ex. 2, ECF No. 26-2 to 26-5. Among the records submitted by Plaintiff is a September 16, 2003 report from Dr. R. Lee Wagner, who stated that Plaintiff "will require significant intervention by treating physicians to get a handle on this problem and get her back to work. It is going to be a challenging problem...." Pl. Ex. 2 at 2519, ECF No. 26-3. The records reflect that between 2003 and 2005, Plaintiff underwent four "nerve block" procedures, and multiple operative procedures. Id. at 2531, 2559, 2622, 2632, 2669, 2936, 2942, 3088, ECF No. 26-3 to 26-4. On April 3, 2006, Plaintiff underwent a "right inguinal exploration" and "removal of hernia plug and excision of frayed genitofemoral nerve," performed by three surgeons. Id. at 2949-50, ECF No. 26-4. On June 23, 2006, Dr. Mark Talamini advised Plaintiff that "chronic pain" such as that reported by Plaintiff was a "rare but known complication of hernia surgery," and "sometimes this pain never goes away." Id. at 2948. In 2007, Plaintiff was taking nine 4mg tablets of Dilaudid per day. Id. at 2853. On August 17, 2007, Plaintiff underwent a surgical procedure to install a "Precision Bionics epidural stimulator." Id. at 2898. On August 21, 2007, after the spinal cord stimulator trial, Plaintiff reported that there was a 50% reduction in pain, and that "she was able to walk her dog comfortably but was unable to bend, twist or turn." Id. 2845.

On October 4, 2007, Defendants' representative Sonya Brewer spoke with Plaintiff. Id. at 2807. Plaintiff stated that "she uses a cane due to right groin and leg pain," "she can't stretch bend or stoop," "she can't sit for very long," she "can't drive" or do "house chores," but she can "[g]o for small walks [with] her dog." Id. at 2807, 2809.

In November 2007, Dr. Smith provided Defendants with the following restrictions and limitations for Plaintiff: "She could occasionally twist, bend, stoop and reach above shoulder level. She could occasionally lift up to 20 [pounds] and occasionally do hand/eye coordinated [movements]. She is unable to drive, sit/stand for long periods." Diegel Decl., Ex. 19 at 2, ECF No. 23-2.

On December 5, 2007, Brewer requested three days of surveillance be performed on Plaintiff. Pl. Ex. 2 at 3159, ECF No. 26-4. In the request, Brewer stated: "Please observe the claimant's daily activities as they pertain to her [restrictions and limitations]. [Plaintiff] states that she uses a cane and her mother does everything for her. She is 5'2 142 lbs." Id.

Defendants' investigator conducted the requested surveillance on December 10-12, 2007. Id. at 2701. The investigator's report states:

A female subject believed to be the insured and hereinafter referred to as such was observed as she departed her believed residence in a 2001 Honda CR-V ..., drove to a UPS store and a Vons grocery store, and then returned to the residence. During this time, the insured was observed as she walked around, entered and exited her vehicle, ... removed a box from [a shopping] cart, bent at the waist to place the box in her vehicle, stepped on and off the curb, and raised her arms. The insured moved in a smooth, fluid manner without exhibiting any external signs of impairment or physical restriction. No visible braces, supports or orthopedic devices were observed.

Id. The report includes a photo of the "female subject believed to be the insured," and indicates that she was "5 ft 2 in" and "160lbs." Id. at 2702. The investigator indicates that he obtained video of the "female subject believed to be the insured" during the surveillance. Id. at 2701.

It is undisputed that the "female subject believed to be the insured," who was observed during the December 2007 surveillance, was the Plaintiff's mother, not the Plaintiff.

On July 10, 2008, Dr. Smith submitted a statement to Defendants indicating that he examined Plaintiff on that date, and Plaintiff's restrictions were "lifting, pushing, pulling, bending, standing, walking, driving," and Plaintiff's limitations were "unable to drive, sit/stand for long periods," and Plaintiff was only "occasionally" able to lift up to ten pounds. Id. at 3378. Dr. Smith indicated that Plaintiff was able to sit, stand and walk less than one hour "per workday." Id.

On July 21, 2008, Defendants' representative Beth Stoker wrote in Plaintiff's file that "[s]ince [Plaintiff] was active at last surveillance in 12/07, further surveillance may be warranted." Id. at 2767.

On October 7, 2008, Defendants' representative Richard Gaume conducted a "field visit" with Plaintiff at Plaintiff's residence. Diegel Decl., Ex. 21 at 80, ECF No. 23-2. Gaume stated in his report of the visit:

[Plaintiff] maintains that she remains totally disabled due to the restrictions and limitations that she characterized for me during this interview. In part this includes a reported limited sitting ability, and inability to stand up without a cane, and a very limited standing ability with a cane. [Plaintiff]'s characterization of her restrictions and limitations during this ...


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