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Levy v. Minnesota Life Insurance Co.

February 25, 2008


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 03 C 5141-Sidney I. Schenkier, Magistrate Judge.

The opinion of the court was delivered by: Evans, Circuit Judge.


Before FLAUM, EVANS, and WILLIAMS, Circuit Judges.

In this insurance dispute, the plaintiff, Dr. Lawrence B. Levy, and the defendant, Minnesota Life Insurance Company (MLI), agree that Levy suffers from osteoarthritis in his right knee, which prevents him from performing his occupational duties and qualifies him for disability coverage under two policies issued by MLI. The parties disagree, however, on which provision of the policies applies, which, in turn, affects the duration of coverage. Levy claims that he qualifies for coverage under the "injury" provision, which entitles him to lifetime disability benefits. MLI, on the other hand, claims that Levy qualifies for coverage under the "sickness" provision, which only entitles him to benefits he has received for the 6-year period that ended after he turned 65 years old in 2003.

The district court (Magistrate Judge Sidney Schenkier, sitting with the parties' consent, 28 U.S.C. § 636(c)) resolved the parties' cross-motions for summary judgment in favor of MLI. The case is now before us on Levy's appeal. We review a grant of summary judgment de novo. Tanner v. Jupiter Realty Corp., 433 F.3d 913, 915 (7th Cir. 2006). Summary judgment is proper if "there is no genuine issue as to any material fact and [ ] the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).

The facts are without genuine dispute. In the early 1980s, MLI issued two disability insurance policies to Dr. Levy. The policies define "disability" and "disabled" to mean that "due to sickness or injury you are unable to perform the substantial and material duties of your regular occupation." The policies define "injury" as "[a]n accidental bodily injury you sustained while this policy is in force" and "sickness" as "[a] disease or illness which is diagnosed or treated while this policy is in force." The policies provide a maximum benefit period to age 65 if the insured is disabled due to a "sickness" but lifetime benefits if the disability is due to an "injury."

In 1987, Levy claims to have injured his right knee while playing basketball at a picnic. He experienced pain for 2 or 3 weeks, which he self-treated with anti-inflammatories. Levy did not seek medical treatment for his knee until 1989, at which point he was examined by Dr. Bruce Hallmann, an orthopedic surgeon.

In February 1989, Dr. Hallmann performed arthroscopic surgery on Levy's right knee on an outpatient basis. His preoperative diagnosis was "[i]nternal derangement-right knee." His post-operative diagnosis was "[c]omplex degenerative tear of posterior horn of medial meniscus, [and] advanced chrondromalacia[.]" Dr. Hallmann noted that Levy "had a long history of problems with his right knee," and "has had progressive difficulties with pain and clicking at the right knee." Dr. Hallmann also wrote that Levy had "apparently injured the right knee many years ago, but underwent no specific therapeutic intervention." Dr. Hallmann's notes do not mention the 1987 basketball incident.

In his deposition, Dr. Hallmann explained that the reference in his report to a "long history" of right knee problems did not mean "a problem two years before [the 1989 surgery]" because he "would have probably indicated that" in his notes. Rather, he stated that "[w]hen I say a long history of many years, I don't usually mean just a year or two. It's usually longer than that." Dr. Hallmann also testified that "[i]ndividuals can develop degenerative meniscal cartilage tears in association with osteoarthritis." He described Levy's degenerative tear at the time of the 1989 surgery as follows:

This was not a fresh meniscal cartilage tear. It wasn't a matter that the cartilage had a very clear and clean-it was not a clean or clear cartilage tear. The cleavage planes were not well defined. They had already become degenerated. They had become frayed, fibrillated, [of] irregular character and contour. So this was not a recent tear of the medial meniscus.

[A]nd, in fact, degenerative changes had already taken place at the tear site.

Dr. Hallmann further stated that he was unable to determine, based on his medical records, whether the degenerative meniscal tear noted in his report was the result of a specific trauma or a degenerative process such as osteoarthritis.

About 3 weeks after the arthroscopic surgery, Levy returned to work and resumed his normal duties as a physician. Levy continued to work for the next 7 years, during which time he did not seek medical diagnosis or treatment for his knee.

During the early 1990s, Levy's coverage under MLI's policies lapsed due to nonpayment of premiums. To obtain reinstatement of coverage, Levy made several certifications regarding his medical condition. On four occasions during 1992 to 1994, Levy certified that he "ha[d] not suffered a disability, been injured or sick" since the end of the policies' premium payment grace periods. In a 1994 application for life insurance coverage with MLI, Levy also ...

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