United States District Court, N.D. Illinois, Eastern Division
HENRY G. FIORENTINI, Plaintiff,
PAUL REVERE LIFE INSURANCE COMPANY, a Massachusetts Corporation, Defendant.
OPINION AND ORDER
CHARLES RONALD NORGLE, United States District Court Judge
Henry G. Fiorentini ("Plaintiff) sues Defendant Paul
Revere Life Insurance Company ("Defendant'') for
terminating Plaintiffs Total Disability benefits. Plaintiff
brings claims for breach of contract, unreasonable and
vexatious conduct under 215 III. Comp. Stat. § 5/155,
and an action for declaratory relief. Before the Court are
the Parties' cross-motions for summary judgment. For the
reasons set forth below, Plaintiffs motion is denied and
Defendant's motion is granted.
founded Panatech Computer Management, Inc.
("Panatech") in 1982 after graduating with a joint
bachelor's and master's degree in Electrical
Engineering and Computer Science from M.I.T. and an MBA from
the University of Chicago. Panatech provides customized
accounting software to small businesses and bundles hardware
maintenance contracts with the software. Plaintiff has been
the president and owner of Panatech since its inception in
September 1988, Plaintiff submitted an application for
disability insurance to Defendant and listed his occupation
as president and owner of Panatech. In October 1988,
Defendant issued Plaintiff Disability Policy Number:
0102363772 (the "Policy"). The Policy provided
total disability and residual disability benefits. Under the
Policy, Total Disability "means that because of Injury
or Sickness: You are unable to perform the important duties
of Your Occupation; and You are under the regular and
personal care of a Physician." Plaintiffs Response to
Defendants LR 56.1 Statement of Material Facts (hereinafter,
"PRDSF") ¶ 3. Under the Policy, Residual
Disability means "You are unable to perform one or more
of the important duties of Your Occupation; or You are unable
to perform the important duties of Your Occupation for more
than 80% of the time normally required to perform them; and
Your loss of Earnings is equal to at least 20% of Your Prior
Earnings while You are engaged in Your Occupation or another
occupation; and You are under the regular and personal care
of a Physician." Id. at ¶ 4. The Policy
further provides that '"Your Occupation7 means the
occupation in which You are regularly engaged at the time You
become Disabled." Id. at ¶ 5.
1998. Plaintiff was diagnosed with an invasive basal cell
carcinoma of the right ear, which is a common form of skin
cancer. Plaintiff subsequently underwent a number of minor
outpatient surgeries, which failed to completely remove the
cancer. On July 9, 2008, Plaintiff underwent major surgery
(the "Surgery") resulting in the removal of his
entire right ear and a portion of the right side of his head.
Over the course of the following twelve months, Plaintiff
underwent radiation treatment and had several more surgeries.
During these additional surgeries, Plaintiff had three metal
posts installed in the right side of his head for the purpose
of mounting a prosthetic ear. By the end of his radiation
treatment in 2009, there was "no evidence" that the
cancer had returned. PRDSF at ¶ 23. Plaintiff also began
wearing a prosthetic ear, which he admits is "virtually
indistinguishable" from his left ear, leaving him
"free of significant disfiguration." Id.
at ¶¶ 23-24. However, following Plaintiffs
surgeries and treatment he has been affected by various
ailments, including complete hearing loss in the right ear,
difficulty in localizing sounds, tinnitus, fatigue, dry
mouth, and migraines.
November 6, 2008, Plaintiff submitted a claim to Defendant
for payment of disability benefits under the Policy (the
"Claim"). The Claim included a written job
description, which identified Plaintiff s job title as
"President, Panatech Computers Management, Inc., "
and listed four duties of his occupation, in order of
importance: "Sales, 6-8 hours per week;
Consulting/meetings, 7- 10 hours per week; Programming, 15-25
hours per week; and Administrative, 2-3 hours per week."
PRDSF ¶ 15. Plaintiffs Claim stated that he did not work
at all for "2-3 [weeks] after each surgery" and
that he began working part time in late July 2008 for
approximately 5-10 hours per week, including
•"approving payroll, payables, bills" for 1-2
hours per week; "customer contact [with] existing
customers" for 1-2 hours per week; and fixing minor bugs
in existing programs" for 2-3 hours per week.
Id. at ¶ 16.
February 2009, Defendant began paying Plaintiff Total
Disability benefits and continued monitoring his condition
though annual medical updates and claim statements. From 2010
to 2013, Plaintiff reported to Defendant that his condition
was "unchanged" or "worse, " and he was
"not sure how long he will continue to work."
Id. at ¶¶ 18-22. In February 2013,
Plaintiff reported to Defendant that he was working 10-20
hours per week and that he was "working to keep
migraines under control." kk at ¶ 22. In December,
2013, Plaintiff reported to Defendant that he was continuing
to work 10-20 hours per week and that he spends his day
performing work "which involves calling clients,
programming, and work related paperwork." Id.
at ¶ 25. In 2013-2014, Plaintiff billed clients an
average of 15.35 hours per week for programming work, as
compared to 15.63 hours per week prior to the Surgery.
Plaintiffs Surgery and treatment, he has been able to
communicate with clients via text, email, phone, and face to
face meetings. Plaintiff has also been able to visit client
job sites on a weekly basis to discuss and resolve computer
problems. Id. at ¶ 29. Panatech, however, has
not acquired any new clients since 2008, and has billed
significantly fewer clients since that time. Panatech's
2013-2014 Federal Income Tax Returns show an average gross
profit of $256, 094. down approximately 20 percent from its
2006-2007 average gross profit of $322, 202.
Plaintiff continued to report to Defendant that he was
totally disabled, he was able to partake in a number of
extracurricular activities. In 2013, Plaintiff renewed his
pilot's license, originally obtained in the mid-1980s,
and purchased an airplane. Plaintiff spends between 75-80
hours per year flying his plane to different locations in the
Midwest, mostly to have breakfast with other flying
enthusiasts. In May 2013, Plaintiff presented a 90 minute
speaking seminar on ForeFlight, an iPad application used by
pilots. In June 2013, Plaintiff published a book about the
Foreflight application. In December 2013, Plaintiff reported
to Defendant that he was playing in an adult ice hockey
league once per week.
2013, a new claims representative, Mary Kate Thorpe
("Thorpe"), reviewed Plaintiffs file. Thorpe
ordered surveillance, spoke with Plaintiff on the telephone,
and sent a representative to conduct an on-site meeting with
Plaintiff in December 2013. Thereafter, Defendant decided to
cease payment of Plaintiff s Total Disability benefits. In a
letter from Defendant to Plaintiff, dated March 4, 2014,
Defendant stated: "Based on the information in your
claim file you are able to perform important duties of your
occupation as President of Panatech Computer Management, Inc.
Accordingly, we find you do not satisfy the policy definition
for Total Disability. We recognize, due to your Sickness you
may experience a loss of earnings. If you are experiencing a
loss of 20% or more of your prior earnings you may qualify
for Residual Disability benefits." PRDSF ¶ 50. The
letter also requested financial documents to calculate
whether Plaintiff was entitled to Residual Disability
benefits. Plaintiff never submitted the requested documents,
but rather insisted on payment of Total Disability benefits.
receiving Defendant's letter, Plaintiff wrote at least 14
letters to Defendant, the Illinois Department of Insurance,
and the Illinois House of Representatives, stating that he
disagreed with Defendant's determination that he did not
satisfy the Policy's definition of Total Disability. In
these letters, Plaintiff disputed Defendant's position,
argued the facts of his case, and made legal arguments in
support of his position. Plaintiff stopped paying premiums
and the Policy lapsed on December 1, 2014. On July 26, 2016,
the parties filed a written and signed Stipulation in which
Plaintiff waived "any claim to payment of benefits for
Residual Disability under the Policy." Stipulation
Regarding Residual Disability Benefits, Dkt. No. 33.