This is the first of a two-part column. The second part will be published Tuesday.

What is meant by “total disability” and “residual disability” under disability insurance policies is often unclear. A recent federal court ruling from Washington state, Simmons v. Paul Revere Life Insurance Co., 2018 WL 558960 (W.D. Wash. Jan. 25, 2018), took a stab at offering to explain the difference. The case involved William Simmons, a 67-year-old dentist who practiced in Seattle and Bellevue, Wash., and who suffered a shoulder injury in 2008 when his car was rear-ended.

Following the accident, Simmons was able to maintain a regular dental practice, although he ceased performing certain services such as wisdom tooth extraction, crown and bridge work and periodontal surgery due to his shoulder.

In 2013, Simmons filed a disability claim with his disability insurer, Paul Revere, which found him residually disabled except for a short period of time when he underwent shoulder surgery and recovered from that procedure.

However, benefits were terminated altogether when Simmons’ earnings returned to predisability levels. Simmons filed suit challenging the denial, but the court ruled against him.

Simmons argued that because he had purchased a rider providing for total disability in his own occupation, since he was unable to perform all of the duties he performed prior to his injury, he should be found totally disabled. Unum Life Insurance Company of America disagreed and asserted the rider had to be read in conjunction with the residual disability provisions of the policy. The court accepted Paul Revere’s argument, finding:

“In order to be considered totally disabled, Simmons must be unable to perform any of the important duties of his occupation; on the other hand, Simmons is residually disabled if he is not able to perform at least one but can perform at least some of his important duties (assuming he can meet the other requirements for residual disability).”

The court further explained that if it ruled otherwise, “it would be impossible for an insured to ever qualify for residual disability because any amount of disability would satisfy the criteria for total disability.”

The court cited numerous rulings from around the country that it viewed as being consistent with its finding, which included Dym v. Provident Life and Accident Insurance Co., 19 F. Supp. 2d at 1150 (S.D. Cal. 1998) (reading the definition of total disability in conjunction with the definition of residual disability in analyzing the definition of “total disability”) and Canu v. National Life Insurance Co., 2013 WL 1883534, at *6 (E.D. Mich. May 6, 2013) (“When total and residual disability are read together in an insurance policy such as the one here, total disability requires that the insured be unable to perform all of his significant duties of his occupation. Any other interpretation would render the policies’ residual disability provisions nugatory.”)

Although Simmons maintained that his own occupation rider was ambiguous in that it failed to explain what percentage of loss of duties was necessary to trigger total disability, the court disagreed.

The court also rejected the plaintiff’s argument that the rider, which removed the sentence “You are not engaged in any other gainful occupation” from the total disability definition, supported a finding that maintaining some duties in one’s own occupation would thus permit a total disability finding.

The court pointed out that the language Simmons cited was meant to apply to working in an occupation other than the insured’s initial occupation, noting:

“In other words, prior to the deletion of that language, Simmons would have been barred from recovering total disability payments if he was unable to perform any of his dental duties, but was gainfully employed as a chef. With the elimination of this language, he would now be free to seek gainful employment in a different occupation and still be eligible for total disability benefits.

Finally, the court rejected the plaintiff’s reliance on Leonor v. Provident Life and Accident Co., 18 F. Supp. 3d 863 (E.D. Mich. 2014), which had found the same language ambiguous and determined that the total disability and residual disability language needed to be read together as a “continuum of disability.”

The court found Leonor was factually distinguishable because in that case the insured was unable to practice dentistry after suffering an injury, but was able to manage a dental practice. In this instance, though, Simmons continued to practice dentistry.

Simmons does not represent the universal view of the courts on this issue. Part 2 of this column on Tuesday will address a differing viewpoint.

This article was initially published in the Chicago Daily Law Bulletin. 

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