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Bakal v. Paul Revere Life Insurance Co.

September 10, 2008


The opinion of the court was delivered by: James F. Holderman Chief Judge, United States District Court



On March 7, 2006, plaintiff Edward P. Bakal ("Bakal") filed a three-count complaint in the Circuit Court of Cook County against defendant The Paul Revere Life Insurance Company ("Paul Revere"), alleging breach of contract pursuant to an occupational disability policy issued by Paul Revere (the "Policy") and seeking a declaratory judgment of Bakal's rights under the Policy, along with damages pursuant to Section 155 of the Illinois Insurance Code, 215 ILCS 5/155. After removing the case to federal court on the basis of diversity*fn1 and thereafter completing the discovery process, Paul Revere filed the pending Motion for Summary Judgment, (Dkt. No. 106), arguing that Bakal's failure to comply with certain provisions of the Policy and his failure to satisfy the Policy's definition of "total disability" prevent Bakal from recovering on his claims. For the reasons stated below, Paul Revere's Motion for Summary Judgment is granted in part and denied in part.


Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). When ruling on a motion for summary judgment, the court views the evidence in the light most favorable to the non-moving party and draws all reasonable inferences in the non-movant's favor. Omega Healthcare Investors, Inc. v. Res-Care, Inc., 475 F.3d 853, 857 (7th Cir. 2007). The court does not make credibility determinations or weigh conflicting evidence. Abdullahi v. City of Madison, 423 F.3d 763, 773 (7th Cir. 2005). Summary judgment will be granted in favor of the moving party if there are no genuine issues as to any material fact, such that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Ultimately, "the district court need[ ] only to decide whether, based on the evidence in the record, a material dispute of fact exist[s] that require[s] trial." Sound of Music Co. v. Minn. Mining & Mfg. Co., 477 F.3d 910, 914 (7th Cir. 2007).

When construing the terms of an insurance policy under Illinois law,*fn2 the court gives policy terms "their plain, ordinary, and popular meaning." Country Mut. Ins. Co. v. Livorsi Marine, Inc., 856 N.E.2d 338, 343 (Ill. 2006). Any ambiguities in the provisions of an insurance policy are construed in favor of the insured. Heller v. Equitable Life Assurance Soc'y, 833 F.2d 1253, 1256 (7th Cir. 1987).


The Policy providing occupational disability coverage to Bakal was issued by Paul Revere on August 20, 1991. (Def.'s Local. R. 56.1(a)(3) Stmt. ¶ 1.) Among other provisions, the Policy provides coverage in the event of "total disability." "Total disability" is defined as follows:

"Total Disability" means that because of Injury or Sickness:

a. You are unable to perform the important duties of Your Occupation; and

b. You are receiving Physician's Care. We will waive this requirement if We receive written proof acceptable to Us that further Physician's Care would be of no benefit to You.

(Id. ¶ 5.) "Your occupation" is further defined as "[t]he occupation in which You are regularly engaged at the time You become Disabled." (Id. ¶ 6.)

Bakal and Paul Revere do not dispute that Bakal suffers a disability, but dispute the date when Bakal became disabled, Bakal's occupation at the time he became disabled, and whether Bakal's disability falls within the Policy's definition of "total disability."*fn3 For purposes of its summary judgment motion, however, Paul Revere has adopted Bakal's assertion that the onset date of his alleged disability was "no later than March 12, 2004." (Id. ¶ 70; Def.'s Mem. at 2 n.1.) At that time, Bakal had been working as a commodities trader in the pits of the Chicago Mercantile Exchange for approximately two decades. (Def.'s Local R. 56.1(a)(3) Stmt. ¶ 13.) Bakal stopped trading commodities in the pits on March 12, 2004 and has not traded commodities in the pits since that date. (Id.) Bakal also began electronically trading commodities from his office in downtown Chicago and from his home in February 2003. (Id. ¶ 14.) Bakal stopped trading electronically on January 25, 2005. (Id. ¶ 19.)

On August 15, 2003, Bakal sought a consultation with Dr. Robert E. Berktold regarding problems Bakal was having with the hearing in his left ear. (Pl.'s Local R. 56.1(b)(3)(C) Stmt. ¶ 11.) At the August 15, 2003 consultation, Dr. Berktold diagnosed Bakal's symptoms as Eustachian tube dysfunction potentially related to allergies, and prescribed nasal spray and seasonal allergy medication for Bakal. (Def.'s Local R. 56.1(a)(3) Stmt. ¶¶ 39-40.) When Dr. Berktold saw Bakal again on September 12, 2003, he noted Bakal's symptoms were "a little bit improved" but not "as good as I would like to see." (Pl.'s Resp. to Def.'s Local R. 56.1(a)(3) Stmt ¶ 41.) Dr. Berktold prescribed a different brand of nasal spray at that time. (Def.'s Local R. 56.1(a)(3) Stmt. ¶ 41.) Bakal's third and final consultation with Dr. Berktold was on October 24, 2003. (Id. ¶ 37.) Dr. Berktold's notes from the October 24, 2003 examination state that Bakal was "better today," had "minimal postnasal drip," and that his nose "was open and clear." (Id. ¶ 42.) Dr. Berktold increased the dosage on Bakal's nasal spray to twice per day and continued Bakal's prescription for the seasonal allergy medication. (Id. ¶ 43.) Dr. Berktold advised Bakal to return if he continued to have problems. (Id. ¶ 45.) Bakal did not return to Dr. Berktold for treatment after the October 24, 2003 consultation. (Id. ¶¶ 45-46.)

Approximately sixteen months after his last consultation with Dr. Berktold, Bakal met with Dr. Stephen P. Becker on February 18, 2005, to address continued symptoms of hearing loss, ringing and tinnitus*fn4 in his left hear. (Pl.'s Local R. 56.1(b)(3)(C) Stmt. ¶ 16.) Dr. Becker prescribed a series of tests for Bakal, including an audiogram, tympanogram, and magnetic resonance imaging (MRI) of the head. (Def.'s Local R. 56.1(a)(3) Stmt. ¶ 49.) The audiogram and tympanogram tests were performed on February 25, 2005 and detected hearing loss in Bakal's left ear. (Id. ¶ 50.) The MRI scans of Bakal's head and brain were obtained on February 22, 2005 and February 24, 2005 and demonstrated symptoms consistent with an intracochlear neuroma.*fn5 (Id. ¶ 51.) At a consultation on March 4, 2005, Dr. Becker reviewed the audiogram test results with Bakal and advised him that he had severe hearing loss and suffered from pulsatile tinnitus. (Pl.'s Local R. 56.1(b)(3)(C) Stmt. ¶ 18.) On April 1, 2005, Dr. Becker completed the review of the MRI results with Bakal and advised Bakal that he had an intracochlear neuroma inside his left ear. (Id.) Dr. Becker referred Bakal to an otologist, Dr. Edward L. Applebaum, for treatment of the neuroma. (Id. ¶ 19.)

Dr. Applebaum performed his first examination of Bakal on April 6, 2005, which included a repeat audiogram and a word recognition score test. (Pl.'s Resp. to Def.'s Local R. 56.1(a)(3) Stmt. ¶¶ 57-58.) At the April 6, 2005 consultation, Dr. Applebaum opined that Bakal had diminished hearing and word recognition in his left ear and that the hearing in his right ear was essentially normal. (Def.'s Local R. 56.1(a)(3) Stmt. ¶ 59.) Dr. Applebaum further opined that Bakal's left-side hearing loss was due to an intracochlear neuroma and recommended ongoing observation of the neuroma, including MRI studies every six months. (Id. ¶ 60.) Dr. Applebaum performed follow-up examinations of Bakal on October 24, 2005, April 26, 2006, and November 1, 2006. (Id. ¶ 62.)

Pursuant to the terms of the Policy, "[w]ritten notice of claim must be given to [Paul Revere] within 30 days after a covered loss starts, or as soon as reasonably possible." (Id. ¶ 9.) On April 12, 2005, Bakal mailed a notice of claim form to Paul Revere, claiming disability caused by "tumor in left inner ear, hearing loss, [and] pulsatile tinnitus." (Id. ¶¶ 21, 23.) The Policy also states:

Written proof of loss must be sent to [Paul Revere] within 90 days after the end of a period for which You are claiming benefits. If that is not reasonably possible, Your claim will not be affected. But, unless You are legally incapacitated, written proof must be given within one year. (Id. ¶ 10.) Bakal signed Sections B and C of the written proof of loss form on May 4, 2005 and mailed them to Paul Revere. (Id. ¶¶ 25-26.) Section A of the written proof of loss form, the "Attending Physician's Statement," was signed by Bakal's treating otolaryngologist, Dr. Becker, on May 20, 2005, and thereafter submitted by Bakal to Paul Revere. (Id. ¶¶ 29, 34.) In the Attending Physician's Statement, Dr. Becker acknowledged that "[t]he patient has severe hearing loss and is unable to interpret different sounds." (Id. ¶ 31.) Dr. Becker opined that Bakal's medical limitations began on April 1, 2005. (Id. ¶¶ 32-33.) Later, in a June 3, 2005 letter faxed to Paul Revere, Dr. Becker stated "we would like to change the date [Bakal's] restrictions started from April 1, 2005 to February 25, 2005, which is when I confirmed the diagnosis with an audiogram and tympanogram." (Id. ¶ 36.)

In a letter dated June 2, 2005, Paul Revere acknowledged receipt of Bakal's disability claim. (Pl.'s Local R. 56.1(b)(3)(C) Stmt. ¶ 31.) Paul Revere then paid Bakal $28,000.00 for the period May 26, 2005 through September 26, 2005. (Id. ¶ 32.) However, on October 28, 2005, Paul Revere notified Bakal that "[w]e have determined that the hearing loss in your left ear does not preclude you from working as an electronic trader," and Paul Revere stopped ...

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