Opinion
No. 4:01 CV00184 SWW
December 4, 2002
Memorandum Opinion and Order
In this lawsuit, the plaintiff, James M. Kolb, Jr., M.D. ("Kolb"), claims that he is entitled to disability benefits under two insurance policies issued by the defendant, The Paul Revere Life Insurance Company ("Paul Revere"). This court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332.
The parties have stipulated to the dismissal of plaintiff' third and fourth causes of action, which were brought against Commercial Insurance Company of Newark, New Jersey and Unum Life Insurance Company of America. See docket entry 39.
During a telephone conference, the parties agreed that the matter involved a question of law for the Court and that a trial was unnecessary. Pursuant to a schedule set by the Court, the parties submitted briefs in support of their positions on the interpretation of the Paul Revere insurance policies and filed responses to the opposing party's brief. After careful consideration, and for the reasons stated below, the Court finds that judgment should be entered for Kolb.
Defendants' motion in limine and motion to excuse witness attendance (docket entries 22 24] and plaintiff's motion in limine [docket entry 26] are moot.
Background
The facts set forth in this background section are based upon the parties' Joint Stipulation of Agreed Facts [docket entry 34] and the deposition testimony of Drs. Harper, Bradford, and Kolb. The parties agree: that the deposition transcripts are true and accurate copies of the testimony given on the dates represented; to the statements in each of the deposition transcripts; that the Paul Revere policies are true and accurate copies; and that the operative report referenced is a true and accurate copy.
On May 25, 1995, Kolb underwent two surgical procedures on his right eye while under the same general anesthesia. Prior to the May 25, 1995 surgeries, Kolb did not have visual problems with the right eye which disabled him from performing his duties as an orthopedic surgeon. Thus, he was not disabled prior to May 25, 1995, and was practicing full-time as an orthopedic surgeon prior to that day.
On May 25, 1995, Richard Harper, M.D., performed the first procedure on Kolb's eye. Kolb had undergone cataract surgery in March 1987, and Harper's intention was to reposition the lens implant over the pupil. According to his testimony, Harper made an incision through the cornea in order to allow access into the eye where the lens implant is positioned. He inserted an instrument that is used to move the implant back into position. However, Harper discovered that the lens was fibrosed into place with scar tissue and, therefore, he did not attempt manipulation of the lens. See Pl's. Ex. D at 8, 11-13.
On May 25, 1995, David Bradford, M.D., performed the second surgery, a vitrectomy. The pars plana vitrectomy performed by Bradford is a procedure to "remove the cloudy vitreous and replace it with clear fluid to get rid of the floaters that were obstructing his clear view." Ex. C at 12. The day after the surgeries, following removal of bandages, Kolb was without sight in his right eye. Ex. G at 38. According to Bradford, Kolb had a "hyphema, which is blood up in the front of the eye, he had low pressure in his eye, and he had what is called a hemorrhagic choroidal detachment." Ex. C at 15. Bradford testified that "eyes can just have those things happen after surgery," that "it is a very rare problem outside of the operating room," but it is a known risk from surgeries of the kind performed on Kolb. Id. at 16. Bradford prepared an operative report concerning the May 25, 1995 surgeries.
In his Operative Report, Bradford states he performed a pars plana vitrectomy of the right eye. See Pl's. Ex. E. Because the report contains highly technical terms, plaintiff attached portions of the deposition testimony of Stephen Magie, M.D., an medical expert who reviewed the report. While the parties did not agree to include Magie's testimony in their Agreed Facts, there is no dispute that Bradford performed a vitrectomy, which Magie describes as an invasive procedure which involved surgically cutting the white section of the eyeball (pars plana) in three locations. See Pl's. Ex. F at 26-7. One incision is made into the eyeball behind the color part (iris) and a fiber optic light pipe is inserted into the eyeball to illuminate the eye cavity during the procedure. Id. at 28-9. A second incision is made into another section of the white part of the eyeball so that an instrument called a "mitro vit" can be inserted into and manipulated within the eyeball cavity. Id. The mitro vit, equipped with a guillotine cutter, simultaneously cuts up the vitreous gel all throughout the inside of the eyeball cavity, and sucks out the gel. Id. A third incision is made into another section of the white part of the eyeball so that a tube can be inserted into the eye and sutured in place during the procedure. Id. at 27-9. Through the tube, a saline solution enters and fills the eyeball cavity while the mitro vir aspirates the vitreous gel. Id.
Kolb suffered a significant loss of vision in the right eye as a result of complications from the May 25 surgical procedures. Subsequent to the surgeries, Kolb could no longer perform the material and substantial duties of his occupation as an orthopedic surgeon, and he ceased practicing immediately after suffering the vision loss.
Kolb filed claims for disability benefits under the two disability income policies which are involved in this case. Paul Revere Policy Number 1897906, which was issued on June 25, 1978, provides for monthly disability benefits. It contains the following pertinent definitions:
"Injury" means accidental bodily injury sustained while this policy is in force.
"Sickness" means sickness or disease which first manifests itself while this policy is in force.See Pl's. Ex. B. The benefit provision for accident provides: "Total Disability-Accident. If such injury results in continuous disability. . . the Company will pay . . . the Monthly Indemnity for Total Disability from Accident . . ." Id.
Paul Revere Policy No. 0102100404 was issued on August 1, 1983. It defines "Injury" as "accidental bodily injury sustained after the Date of Issue and while Your Policy is in force." See Pl's. Ex. A. It defines "sickness" as sickness or disease which first manifests itself after the Date of Issue and while Your Policy is in force." It provides for the payment of benefits for a lifetime if total disability is from "injury," and to age sixty-five if from "sickness." Id.
Paul Revere agreed that Kolb was disabled and paid him monthly benefits until Kolb reached the age of 65 in December 1997. Kolb filed this lawsuit on March 28, 2001, alleging breach of contract. He asserts that he is entitled to lifetime benefits because he sustained accidental bodily injury as a result of surgical complications. The issue the parties place before this Court is whether, under the terms of the contracts, Kolb's disability due to complications from surgery comes within the injury coverage of the policies.
In his brief, Kolb asserts that the terms in issue in the policies, "accidental bodily injury," "sickness," and "disease," are unambiguous; that courts have historically associated the phrase "accidental bodily injury" with a discrete, identifiable event, resulting in an unexpected and unintended harm to the body of a person; and that Kolb's loss of vision following surgery carries with it each of these characteristics. Thus, Kolb argues, the court must find that Kolb's disability is not from "sickness" or "disease," but rather from "accidental bodily injury." Kolb further asserts that even if the terms are deemed ambiguous. the rules of insurance policy construction require a finding in his favor.
Paul Revere contends that Kolb has the burden of proving coverage, i.e. that the surgeries constituted accidental bodily injury, and that given Kolb's burden of proof, this case does not present the option of choosing between the "sickness" or "injury" coverage. Paul Revere asserts that if the Court interprets "accident" from the perspective of accidental means rather than accidental results, plaintiff cannot prove that his surgeries were an accident. This is so, Paul Revere maintains, because the acts which led to the complications, incisions in Kolb's eye, were no accident. Paul Revere contends that Duvall v. Mass. Indem. Life Ins. Co., 748 S.W.2d 650 (Ark. 1998) controls this case.
Paul Revere further argues that even if Arkansas law is construed to reject the result versus means distinction, the better reasoned decisions hold that mistake-free medical treatment is not accidental. Paul Revere asserts, as does Kolb, that the terms involved are not ambiguous.
In reply, Kolb reasserts his position that complications from surgery in 1995 and the resulting substantial vision loss constituted an accidental bodily injury. He also maintains that the burden of proof is irrelevant in the Court's determination of a question of law, that the Court may not engage in an accidental means analysis as per a regulation made by the Insurance Commissioner to effectuate provisions of the Arkansas Insurance Code, and that Duvall does not govern the interpretation of the Paul Revere policies. Further, Kolb argues that even if the policies are interpreted to apply an accidental means analysis, the means were surgical complications and the result was disabling vision loss, and those complications fit within the definition as they "happened by chance" and "unexpectedly took place." Kolb also attacks Paul Revere's reliance on other jurisdictions' treatment of policy language which contains the accidental means language.
In reply, Paul Revere argues that while Arkansas courts have not addressed the precise issue presented by the case at bar, it is clear from the definition of "accident" in Duvall that the Arkansas Supreme Court would conclude that complications from medical treatment do not constitute "accident."
Discussion
"[W]hen federal courts are exercising diversity jurisdiction, the rules for construing insurance policies are controlled by state law." Langley v. Allstate Ins. Co., 995 F.2d 841, 844 (8th Cir. 1993) (interpreting Arkansas state law). See also Bell Lumber Pole Co. v. United States Fire Ins. Co., 60 F.3d 437, 441 (8th Cir. 1995). "In Arkansas, insurance policies are to be interpreted like other contracts." Foster v. Farm Bureau Mut. Ins. Co., 27 S.W.3d 464, 465 (Ark. 2000).
Under Arkansas law, when interpreting the language of insurance policies, the court must apply the following rules of general construction. First, "words must be construed in their plain, ordinary popular sense." Langley, 995 F.2d at 844-45 (quoting CNA Ins. Co. v. McGinnis, 666 S.W.2s 689, 691 (Ark. 1984)). The language of the insurance contract also must be construed so as to give effect to the parties' intent. Langley, 995 F.2d at 845. "Contracts of insurance should receive a practical, reasonable, and fair interpretation consonant with the apparent object and intent of the parties in light of their general object and purpose." Foster, 27 S.W.3d at 465. It is fundamental that an insurance policy, like any other contract, must be read as a whole. Sovereign Woodmen of the World v. Hardee, 66 S.W.2d 648 (1934).
If the language is unambiguous, the court will give effect to the plain language of the policy without resorting to the rules of construction. Norris v. State Farm Fire Cas. Co., 16 S.W.3d 242, 246 (Ark. 2000). However, sometimes an ambiguity arises regarding the meaning of language used in the insurance policy. "[A]n ambiguity exists only if a term or provision is subject to more than one reasonable construction . . . ." Langley, 995 F.2d at 845 (citation omitted). "Under Arkansas law whether an insurance policy or provision is ambiguous is a question of law which the court decides, not the fact-finder." Id. at 844. "In order to determine whether a particular clause is ambiguous, the court must consider the clause in light of the entire policy." Norton v. St. Paul Fire Marine Ins. Co., 902 F.2d 1355, 1358 (5th Cir. 1990) (citing Continental Cas. Co. v. Didier, 783 S.W.2d 29, 32 (Ark. 1990)). "Where the policy provisions are susceptible of two interpretations, that most favorable to the insured must be adopted." Commercial Union Ins. Co. of America v. Henshall, 553 S.W.2d 274, 277 (Ark. 1977) (citation omitted). All doubts are to be resolved "most strongly against the insured." Id.
The Court agrees with the parties that Arkansas law applies and that the term "accidental bodily injury" is not ambiguous. The Court further finds that because the matter before the Court is a question of law, the issue of burden of proof is irrelevant.
The Court is aware that under Arkansas law, "a party who files suit seeking to benefit from insurance coverage generally bears the burden of proving coverage." Am. Eagle Ins. Co. v. Thompson, 85 F.3d 327, 300 (8th Cir. 1996). Once the insured has met his burden, the burden shifts to the insurer to prove any applicable exclusion. Id. The burden of proof, however, is directed to instances in which the facts are in dispute, e.g. whether, as in Thompson, the insured was an employee. When the matter before the Court is a question of law, the parties have an equal opportunity to convince the Court of the soundness of their legal reasoning.
Paul Revere relies on Duvall for the proposition that Arkansas recognizes the means versus results distinction in determining whether injury or death was accidental, and that Duvall controls the issue before the Court. In Duvall, the insured died from Marfan's Syndrome while engaged in his work as a pulpwood cutter. The Arkansas Supreme Court ruled that the death was not "accidental" within the meaning of the accidental death and injury policy. The undisputed evidence was that the strenuous work of woodcutting caused Duvall's heart rate to increase and his blood pressure to rise, which in turn caused his aorta to rupture. The policy defined "injury" as "accidental bodily injuries from which loss results directly and independently of all other causes . . ." The Duvall court noted: "We have adopted the generally accepted definition of the term `accident' or `accidental, ' which is `something happening by chance, unexpectedly taking place, not according to the usual course of things, or not as expected.'" 748 S.W.2d at 652. The court held that Duvall's death was caused by his disease and, therefore, was not accidental under the policy.
In reaching its conclusion, the Arkansas Supreme Court noted that in past decisions it "struggled with the question of whether the injury or death was caused by an accident or through accidental means." The court further noted Justice Cardozo's dissent in Landress v. Phoenix Mut. Life Ins. Co., 291 U.S. 491 (1934), in which he opined that "[t]he attempted distinction between accidental results and accidental means will plunge this branch of the law into a Serbonian bog." Id. at 499. In Duvall, the court held "there was a disease and nothing out of the ordinary that intervened to cause Duvall's death. It is undisputed that Duvall, while engaged in his regular employment, died from Marfan's syndrome, a disease; therefore, his death was not accidental under the policy." 748 S.W.2d at 653-54.
Paul Revere argues that Kolb's surgery was not something "happening by chance" or "unexpectedly taking place," asserting that Kolb had a predisposed medical condition which he voluntarily chose to correct through surgical intervention. Paul Revere argues that, like in Duvall, Kolb's disability was the result of a standard complication of surgery, which is not an accident.
Kolb argues that Duvall does not govern the interpretation of the Paul Revere policies and, relying on an Arkansas Insurance Department regulation, asserts that the Court may not engage in an accidental means analysis.
The Court finds that there is no indication from case law that Arkansas has adopted the distinction between accidental means and accidental results. From the Court's reading of Duvall, it appears that in quoting Justice Cardozo dissent, the Arkansas Supreme Court was signaling its rejection of the distinction. See also Parker v. Danaher Corp., 851 F. Supp. 1287, 1292 (W.D.Ark. 1994) (observing that the Duvall court quoted Cardozo's Serbonian Bog dissent for the proposition that no distinction should be drawn between accidental means and accidental results). Further, the Insurance Regulation cited by Kolb indicates that an accidental means analysis is prohibited. Thus, the Court is left with rule that the policies at issue should be interpreted "by construing the words in a plain and ordinary manner." Duvall, 748 S.W.2d at 652.
Ark. Ins. Rule and Reg. 18, Minimum Standards for Disability Insurance, § 5 — Definitions, provides in pertinent part:
[N]o Policy or Policies delivered or issued for delivery to any person in this State shall contain definitions respecting the matters set forth below unless such definitions comply with the requirements of this section.
* * *
D. "Accident", "Accidental Injury", "Accidental Means", may be defined to employ "result" language and shall not include words which establish an accidental means tests or use words such as "external violent, visible wounds" or similar words of description or characterization.
The definition shall not be more restrictive than the following: Injury or injuries, for which benefits are provided, means accidental bodily injury sustained by the insured person which is the direct cause, independent of disease or bodily infirmity of any other cause and occurs which the insurance is in force.
As early as 1899, the Arkansas Supreme Court has defined the term "accidental" as "happening by chance; unexpectedly taking place; not according to the usual course of things; or not as expected." Standard Life Accident Ins. Co. v. Schmaltz, 53 S.W. 49, 52 (1899). The term's plain meaning continued to be adopted and recognized. See Aetna Life Ins. Co. v. Little, 225 S.W. 298, 300 (Ark. 1920); Continental Cas. Co. v. Bruden, 11 S.W.2d 493, 494 (Ark. 1928); Travelers Ins. Co. v. Johnston, 162 S.W.2d 480, 484 (Ark. 1942); Hartford Life Ins. Co. v. Catterson, 445 S.W.2d 109, 111 (1969); Duvall, supra, 748 S.W.2d at 652.
The Arkansas Supreme Court has routinely held unexpected happenings to be "accidental" when a disability or death can be linked to an event or trauma, identifiable by a date, time, or location. See, e.g., Standard Life Accident Ins. Co. v. Schmaltz, supra (machinist ruptured blood vessel in stomach while working on the job); Fidelity Cas. Co. v. Meyer, 152 S.W. 995 (Ark. 1912) (while standing in a wagon, insured thrown backward by sudden movement of horse); Aetna Life Ins. Co. v. Little, supra (man shot and killed when mistaken for a burglar); Washington Fidelity Nat'l Ins. Co. v. Anderson, 63 S.W.2d 535 (Ark. 1933) (death from eating spoiled food); Continental Cas. Co. v. Bruden, supra (machinist became overheated and died while working on an engine); Travelers Ins. Co. v. Johnston, supra (man injured when he fell out of taxi cab); Metropolitan Cas. Ins. Co. of New York v. Fairchild, 220 S.W.2d 803 (Ark. 1949) (man suffered coronary occlusion while using blowtorch to thaw frozen valve); Hartford Life Ins. Co. v. Catterson, supra (woman suffered death from exposure).
In each of these cases, the injury or death could be temporally and spatially tied to a specific event. In addition, the disability or death in these cases was held to be sudden, unexpected, unintended, unusual, by chance, or not in the ordinary course of events.
Applying the plain, ordinary meaning of the terms "accidental bodily injury," "sickness," and "disease," to the facts of this case, the Court finds that the complications from Kolb's surgery were accidental bodily injury. Kolb suffered discrete harm to his right eye, directly linked with a specific and identifiable event, i.e. the surgeries performed on May 25, 1995. As a result of complications of the surgeries, he suffered a substantial loss of vision in his right eye and became disabled from performing the duties of his occupation.
The harm which occurred to Kolb's eye was neither intended nor expected. Even though Kolb knew of the potential for complications from the procedures, such complications could never be said to have been expected. What happened to Kolb's right eye after surgery was a rare complication of the surgeries. When the plain meaning of the policies' terms are applied to the facts of Kolb's surgeries and ultimate disability, the only conclusion is that he experienced a definitive and identifiable end to the vision in his right eye immediately after the surgeries. He had no waxing or waning of symptoms with an indefinite onset. Any alternative interpretation would constitute a strained reading of the Paul Revere policies.
In addition, the Court finds that such an interpretation is consistent with the provisions of the policies which address total disability because of cosmetic or transplant surgery. Section 2.4 of Policy No. 0102100404 provides: "After six months from the Date of Issue, if You are Totally Disabled because You have surgery to: a. Improve Your appearance or prevent disfigurement; or b. Transplant part of Your body to someone else, We will consider You to be Totally Disabled due to Sickness." See Pl's. Ex. A at 9. Paragraph E of the Benefit Provisions of Policy No. 1897906 likewise provides: "If, while this policy is in force and more than six months after its Date of Issue, the Insured becomes totally disabled as a result of cosmetic surgery or as a result of the transplant of a part of his body to the body of another person, such total disability will be deemed to have resulted from sickness . . ." See Pl's. Ex. B, at 3.
Applying the maxim of interpretation expressio unius est exclusio alterius (the expression of one thing is the exclusion of another), the Court finds that it is reasonable to interpret from these policy provisions that disability resulting from surgeries other than cosmetic or transplant surgeries will be deemed to have resulted from accidental bodily injury. When these provisions are considered along with the ordinary, plain meaning of the term "accident," the Court finds further support for its conclusion that the complications arising from Kolb's surgery are injuries as defined by the policies.
E. ALLAN FARNSWORTH, FARNSWORTH ON CONTRACTS § 7.11 (2nd ed. 1998); 5 MARGARET N. KNIFFIN, CORBIN ON CONTRACTS § 24.28 (Joseph M. Perillo, ed., 1998).
Conclusion
The Court finds as a matter of law that the complications from surgery that led to Kolb's total disability was an injury as defined by the policies. Judgment will be entered for the plaintiff.