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Frazin v. The Paul Revere Life Insurance Co.

United States District Court, N.D. Illinois, Eastern Division

March 30, 2018

Michael B. Frazin, Plaintiff,
The Paul Revere Life Insurance Company and Unum Group, Defendants.



         Plaintiff Michael B. Frazin sued defendants The Paul Revere Life Insurance Company and its parent company Unum Group in connection with Paul Revere's termination of his disability benefits. Defendants move to dismiss Counts I and IV of Frazin's complaint under Fed.R.Civ.P. 12(b)(6). R. 7. For the following reasons, the Court grants defendants' motion.


         A Rule 12(b)(6) motion challenges the sufficiency of the complaint. E.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The statement must give defendant “fair notice” of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.


         In 2009, Frazin stopped working as a particular type of stock options trader known as a “Market Maker” due to anxiety and depression. R. 1-1 ¶¶ 7-8, 13. Frazin was insured under a disability policy issued by Paul Revere, which provided coverage in the event that Frazin could no longer work as a Market Maker. Id. ¶ 16. Paul Revere approved Frazin's disability benefits claim in June 2009. Id. ¶¶ 24-30.

         Paul Revere's policy does not prohibit Frazin from working in another gainful occupation; as long as he can no longer work as a Market Maker, he is entitled to benefits. Id. ¶¶ 16-18. Frazin informed a Paul Revere representative that he had returned to part-time work in a back office accounting position in June 2010, and Paul Revere continued to find benefits appropriate. Id. ¶¶ 33-41. Paul Revere asked an independent psychiatrist, Dr. Henry Conroe, to evaluate Frazin in August 2010, and Dr. Conroe found it unlikely that Frazin “could return to trading without “a recurrence of significant anxiety symptoms.” Id. ¶ 39(c).

         Paul Revere closed Frazin's claim and terminated benefits in October 2015 after finding an improvement in Frazin's condition. Id. ¶¶ 71-72. As part of the review that led to the closing of Frazin's claim, Paul Revere raised the issue of Frazin's part-time employment. Id. ¶¶ 52-54. A Paul Revere representative noted in April 2015 that “Frazin returned to gainful employment approximately January, 2011 but [didn't] notify us of that change until July, 2011, ” and further noted, “I don't see where we reacted to that change in status . . . . I'm not sure we ever clarified the pre-disability duties completely or compared/contrasted them to the current ones.” Id. ¶ 53. Paul Revere also learned from a personal visit in 2015 and follow up internet research that Frazin had played poker since 2005, including competing in poker tournaments reported online. Id. ¶¶ 59-60. Dr. Conroe's August 2010 report had mentioned Frazin's poker playing, stating: “[Frazin's] falling asleep is affected by his playing internet poker prior to bedtime.” Id. ¶ 39(b)

         The psychiatry consultant from Paul Revere who concluded that Frazin could not return to his Market Maker job back in 2010 came to a different conclusion in 2015. Id. ¶¶ 40, 63. He determined in 2015 that: “(1) Frazin is involved in ‘financial issues' [in his part-time job] without resurgence of anxiety; (2) the concern over relapse has not materialized; (3) Frazin seems gratified with capacity to use trading strengths in poker playing[;] and[ ] (4) Frazin is able to manage anxiety during poker tournaments.” Id. ¶ 63. Frazin alleges that Paul Revere came to the determination that he was no longer entitled to benefits and then “work[ed] backwards” to find justifications for that decision. Id. ¶¶ 56, 62.

         Frazin submitted an internal appeal of Paul Revere's revocation of benefits. Id. ¶¶ 74-76. After receiving the appeal, Paul Revere asked its vocational rehabilitation analyst to compare poker playing with Frazin's prior employment as a Market Maker, and then asked its doctors for further review. Id. ¶ 77-81. One of the doctors noted that Frazin was “active in playing in and running high-stakes poker tournaments, ” which he found “would engage the same cognitive capacities as would his prior occupation.” Id. ¶ 81. Frazin takes issue with Paul Revere allegedly ignoring the opinions of its own vocational rehabilitation analyst and Frazin's doctors in the course of rejecting his appeal. Id. ¶¶ 77-87.

         Frazin sued Paul Revere and its parent Unum, asserting claims for declaratory relief (Count I), breach of contract (Count II), insurance bad faith under 215 ILCS 5/155 (Count III), and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”) (Count IV). R. 1-1. Defendants removed the case from Illinois state court in March 2017 based on diversity jurisdiction. R. 1. Defendants answered Counts II and III and moved to dismiss Counts I and IV.


         Defendants' motion to dismiss argues that Frazin has taken a “straightforward breach of insurance contract and § 155 [insurance bad faith] action” and improperly attempted to dress it up with declaratory judgment and ICFA claims. R. 8 at 3. For the reasons set forth below, this Court agrees.

         I. ...

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