Gaulkin, Foley and Collester. The opinion of the court was delivered by Collester, J.A.D.
[88 NJSuper Page 58] Following a heart attack on December 6, 1959, plaintiff Bernard J. Shuman, a physician specializing in pediatrics, applied for and was granted a hospital residency for training in the field of psychiatry. When he was disallowed benefits under an "Extended Professional Disability Policy" issued by defendant he brought suit. He appeals from a summary judgment entered by the Superior Court, Law Division dismissing his action.
The facts in the case are sufficiently set forth in the opinion of the court below, reported at 80 N.J. Super. 310 (Law Div. 1963), and need not be repeated here.
The "Extended" policy, which is the subject of the litigation provides, inter alia:
"If such sickness shall wholly and continuously disable and prevent the Insured from performing any and every duty pertaining to his occupation or profession * * * for twenty four (24) consecutive months, the Company will pay periodically the monthly sickness benefit, as written in the policy schedule, commencing on the first (1st) day of the twenty-fifth (25th) month of such total disability and for the period the Insured shall be wholly and continuously disabled from engaging in any gainful occupation for which the Insured is reasonably fitted or qualified * * * but not to exceed sixty (60) consecutive months as the result of any one sickness." (Emphasis added)
A salient point leading to the conclusion reached by the trial court was the receipt by plaintiff of $12,000 per year during the period of his residency. This amount constituted a special trainee stipend resulting from a grant by the National Institute of Mental Health, a subagency of the United States Government, under a program described as "Grants in Support of Psychiatric Training Programs for General Practitioners and Other Physicians in Practice." The purpose of the program is twofold: to foster the development of postgraduate education and training in psychiatry for physicians who plan to continue in other fields of medicine, and "to provide support at an adequate level" for psychiatric residency training of physicians in practice who intend to become psychiatrists. Administration of the program is the responsibility of the grantee institution, and this includes the selection from available candidates of the persons who are to receive the grant. The maximum stipend under the program is $12,000 per year.
It is conceded that the $12,000 received by Dr. Shuman in each year of his residency was subject to federal income tax, and that he did not pay for tuition, books and laboratory or other fees. To be compared with the $12,000 per annum is
the stipulation that prior to his heart attack Dr. Shuman earned from his practice of pediatrics $20,890.30 in 1957, $22,187.36 in 1958, and $22,152.81 in 1959.
The Law Division held that Dr. Shuman's residency was "any gainful occupation for which the Insured is reasonably fitted or qualified" under the provisions of the extended policy, and granted defendant's motion for summary judgment. We believe that this was error and that the question was one for the jury.
In our view, the period of formal study and training for qualification in psychiatry, under the factual setting here presented, does not necessarily constitute a "gainful occupation." The contrary proposition would bring within the category of "gainful occupation" any course of study subsidized with a living wage paid to the student and related in some manner to his prior field of endeavor. Any formal educational training ultimately benefits the student intellectually and, in most cases, financially, but to term such a period of study a "gainful occupation," even with a substantial stipend attached, runs contrary to both common understanding and accepted usage. Mason v. Loyal Protective Life Insurance Company, 249 Iowa 1167, 91 N.W. 2 d 389, 391 (Sup. Ct. 1958); cf. Aetna Life Ins. Co. of Hartford, Conn. v. Gullett, 262 Ky. 1, 89 S.W. 2 d 1, 3 (Ct. App. 1936).
In reaching this determination we find Mason v. Loyal Protective Life Insurance Company, supra, persuasive. In that case Dr. Mason, a general practitioner, insured against inability to engage in "a gainful occupation for which he is reasonably fitted," was forced to terminate his practice because of "nerve deafness." Shortly thereafter he obtained a residency in radiology, which paid him $2,712 the first year, $3,195 the second year, and $3,550 the third year. The Iowa Supreme Court held proper the denial of a motion for directed verdict made by the insurer, ...