Summary
The Second Circuit reviewed cross-appeals involving disability benefits under an insurance policy issued to anesthesiologist Louise M. Harris. The court held that conflicting medical evidence created genuine issues of material fact regarding whether Harris was totally disabled, requiring vacatur and remand of summary judgment on her breach-of-contract claim. It affirmed dismissal of her implied-covenant claim and Provident's counterclaim for rescission.
Topics
Practice areas
Questions Presented
- Whether genuine issues of material fact precluded summary judgment for Harris on whether she was totally disabled under the disability-insurance policy.
- Whether Harris's claim for breach of the implied covenant of good faith and fair dealing was duplicative under New York law or otherwise viable under California law.
- Whether Harris's failure to disclose the Johns Hopkins and Mayo Clinic reports entitled Provident to rescission of the insurance contract.
- Whether Provident's supplemental expert report was properly considered on summary judgment.
Holdings
- Summary judgment for Harris was improper because conflicting medical opinions created genuine issues of material fact concerning what condition, if any, affected Harris and whether it totally disabled her from working as an anesthesiologist.
- The district court properly dismissed Harris's implied-covenant claim because, under either New York or California law, the claim failed on the facts presented. Under New York law it was duplicative of the breach-of-contract claim; under California law Provident's denial was not unreasonable as a matter of law because there was a genuine dispute concerning coverage and disability.
- Provident was not entitled to rescission because Harris's nondisclosure of the Johns Hopkins and Mayo Clinic reports was immaterial to Provident's decision to deny benefits.
Key quotations
“Summary judgment is appropriate if there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” (¶ 17)
“"[W]here, as here, there are conflicting expert reports presented, courts are wary of granting summary judgment."” (¶ 21)
“Therefore, any nondisclosure by Harris was immaterial because it did not affect the outcome of Provident's decision.” (¶ 42)
Factual background
Harris, an anesthesiologist, stopped working after experiencing breathing difficulties while working in a hospital undergoing latex-abatement construction. Her treating physicians attributed her inability to work to latex-induced asthma and related conditions, while Provident's experts found no latex allergy, normal pulmonary function, and no disabling asthma. Provident initially paid benefits but later denied continued benefits after relying principally on an expert evaluation; Harris did not disclose the Johns Hopkins and Mayo Clinic evaluations until after the denial decision.
Procedural history
Harris sued in the United States District Court for the Northern District of New York after Provident denied continued disability benefits under her policy. The district court granted Harris summary judgment on her breach-of-contract claim and on Provident's rescission counterclaim, while granting Provident summary judgment on Harris's implied-covenant claim. The Second Circuit vacated the judgment on the breach-of-contract claim and remanded for further proceedings, but affirmed dismissal of the implied-covenant claim and the rescission counterclaim.
Remand instructions
Vacate the grant of summary judgment to Harris on the first count, the breach-of-contract claim, and remand for further proceedings on that count only. The dismissal of the implied-covenant claim and Provident's rescission counterclaim remains affirmed. Each party bears its own costs on appeal.