The opinion of the court was delivered by: LECHNER
This is a breach of contract action brought by plaintiff Jeffrey I. Kaufman ("Kaufman") against defendant Provident Life & Casualty Insurance Company ("Provident"). Jurisdiction appears to be appropriate pursuant to 28 U.S.C. § 1332
and the Declaratory Judgment Act, 28 U.S.C. § 2201, et seq.
Employment and Business Background
Kaufman, born 1 May 1945, is forty-seven years old. Kaufman Appendix, Exhibit A ("Kaufman Dep.") at 6. He resides in Englewood, New Jersey. Complaint, P 1. In 1980 Kaufman and Dr. Robert C. Morstein ("Morstein") formed two companies, Eyexam 21, P.A. ("Eyexam 21") and Contact Lens 21 ("Lens 21"). Kaufman 12(G) Statement, P 7. Kaufman and Morstein are both officers and fifty percent owners of the companies. Id.
Kaufman's and Morstein's first Eyexam 21 store is located on Route 4 in Paramus, New Jersey. Kaufman Dep. at 17. Eyexam 21 leases space from Eyelab ("Eyelab"), a vision superstore owned by Robert Hillman and Larry Kohan. Kaufman 12(G) Statement, PP 8, 10. Eyexam 21 was Eyelab's exclusive agent. Kaufman Dept. at 21. Consequently, whenever Eyelab expanded to a new location, Eyexam opened a new store. Id. As a result of the exclusive agency relationship, Eyexam 21 holds the leases to various Eyelabs. Id. In turn, Eyexam 21 subleases space to different optometrists. Id. at 22. Since its formation, Eyexam 21 has had stores at twenty-four Eyelab locations. Id. at 21.
Lens 21, the second company owned by Kaufman and Morstein, is a buying company. Id., P 9. As a buying company, Lens 21 purchases contact lenses and other contact lens materials. Id. It in turn sells these products to Eyexam 21 stores. Id. Lens 21 also acts as the staffing company for Eyexam 21 stores. Id., P 11. Lens 21 further maintains the books and records for Eyexam 21 stores and obtains leases for Eyexam 21 stores. Id.
Kaufman is the President and Chief Executive Officer ("CEO") of Lens 21. Id., P 12. While in these capacities, Kaufman has duties and responsibilities of reviewing sales figures, reviewing profit and loss statements and dealing with different vendors. Kaufman Dep. at 27, 31. Kaufman calls these functions, management responsibilities. Id. at 31.
Before January 1990, Kaufman's management responsibilities also required him to travel about once every three weeks to various facilities. Id. at 29. On his visits Kaufman ensured that the optometrist/tenant in that location was one Kaufman wanted, that the optometrist/tenant's stock of lenses was the type Lens 21 desired, that the optometrist/tenant ran his practice in a professional manner and that the optometrist/tenant had a sufficient number of employees to handle the patient flow. Id. at 28. Morstein and three other people at Lens 21 assisted in performing these traveling functions. Id. When not traveling, Kaufman focused on his other management responsibilities. Id. at 31.
In addition to being the President and CEO of Lens 21, Kaufman was an optometrist until April 1991. Id. at 33, 129, 131. His practice as an optometrist was centered at the Eyelab located in Paramus, New Jersey. Id. As an optometrist, he saw patients. Id. at 33, 35. On average he estimated he practiced optometry twenty-five to thirty hours a week. Id. at 33.
On 23 August 1989, Kaufman applied for a total disability income policy with Provident. Kaufman Dep. at 52; Provident Appendix, Ex. C., at 11. Provident is authorized by the Department of Insurance of the State of New Jersey to issue total disability policies. Complaint, P 2. On 21 November 1989, Provident issued to Kaufman a total disability income policy, number 36-335-6017593 (the "Policy"). Kaufman Dep. at 61. Under the terms and conditions of the Policy, Kaufman will receive total disability benefits if he provides proof that his disability occurred when the Policy was in full force and effect, that his disability lasted beyond the one hundred and eighty day elimination period,
and that he is totally disabled
from his occupation.
Movant's 12(G) statement, P 2. If Kaufman meets these conditions, his benefits accrue for life in the sum of $ 15,000 per month. Id.; Complaint, P 3. At the time Kaufman entered this insurance contract, his occupation was that of President and CEO of Lens 21 and an optometrist.
In January 1990, about a month after receiving the Policy, Kaufman discovered a lump on his neck. Kaufman Dep. at 97; Kaufman 12(G) Statement, P 15. He was initially treated by Gerson Grotberg, M.D. ("Dr. Grotberg"), an internist. Id. Dr. Grotberg ordered a sonogram and an x-ray on Kaufman. Id. Dr. Grotberg referred Kaufman to Edward Meyers, M.D. ("Dr. Meyers"), an otolaryngologist; Dr. Meyers referred Kaufman to Miguel Sanchez, M.D. ("Dr.' Sanchez"), a pathologist at the Englewood Hospital. Id. Dr. Sanchez performed a fine needle aspiration on Kaufman. Id. After this procedure, Dr. Meyers diagnosed Kaufman as suffering from thyroid cancer and recommended surgery. Id.; Movant's 12(G) Statement, P 5. Kaufman consulted with surgeons, Hugh Biller, M.D. and Carl Feind, M.D. ("Dr. Feind") about the recommended surgery. Kaufman 12(G) Statement, P 15.
In February 1990, Dr. Feind performed a partial thyroidectomy and a lymphectomy on Kaufman. Id. The surgery was performed at Columbia Presbyterian Hospital in New York City. Id. The morning after the surgery, Dr. Feind told Kaufman the lump was not malignant. Id. To compensate for the partial loss of the thyroid, Kaufman had to take the artificial thyroid medication, Synthyroid. Id. At the two week post-operative check up, Dr. Feind told Kaufman the lump was malignant and was comprised of two types of cancers, follicular and papillary carcinomas. Id., P 16. These cancers had metastasized at least to his first lymph node. Id.
Dr. Feind recommended further medical treatment to address the problem. The treatment he recommended involved a radiation ablation
and the oral ingestion of radioactive tablets which, when absorbed into the body, destroy the cancerous cells. Id., P 17; Movant's 12(G) Statement, P 8.
Since March 1990, Kaufman has been under the care of Dr. Gonzales and has participated in his cancer therapy program. Kaufman 12(G) Statement, P 19. In conjunction with the cancer therapy program, Dr. Gonzales placed physical restrictions on Kaufman. Id., P 21. After following this program for two years, Kaufman's prognosis is good and he feels well. Id., P 19; Kaufman Dep. at 124, 126.
Kaufman's Alleged Disability
On or about 1 October 1990, Kaufman communicated with his insurance agent, David Farber, who in turn notified Provident of Kaufman's intention to file a claim for total disability benefits. Kaufman 12(G) Statement, P 26. Kaufman alleges he became totally disabled from his occupation on 1 October 1990. Movant's 12(G) Supplement, P 10.
On 17 January 1991, Kaufman filed with Provident a notice of claim (the "Notice of Claim"). In the Notice of Claim, Kaufman set forth his job description, his statement of claim and a statement of his attending physician. Kaufman 12(G) Statement, P 27; Movant's 12(G) Statement, P 13. The Notice of Claim Kaufman submitted was signed and dated 19 October 1990. Kaufman Appendix, Ex. D at 1, 3. In the Notice of Claim Kaufman described his job title as President. Id. at 2. He further described his duties and responsibilities as "those normally associated with President [and] CEO." Id. He further described his duties as involving traveling between stores, determining budgets, determining expenditures and supervising staff. Id. at 4. In the Notice of Claim, Kaufman further indicated that his job involved being an optometrist. Id.
On 1 May 1991, Kaufman filed with Provident a supplemental statement of claim (the "Supplemental Statement"). The Supplemental Statement further described the alleged-total disability. Kaufman 12(G) Statement, P 28. In the Supplemental Statement, Kaufman described how his time was occupied between October 1990 and March 1991. He stated: "A majority of my time is occupied with my cancer treatment program. The cancer program is quite rigorous, involved [and] time consuming. I also do mild exercise and I am in psychotherapy to help me with my cancer." Kaufman Appendix, Ex. E. He stated he managed to go to his business on a limited basis. Id. He was able to practice optometry and examine eyes three to six hours a week. Id. Travel between various stores was, however, eliminated. Id.
By letter, dated 2 May 1991, Provident rejected Kaufman's claim for total disability benefits.
Provident stated: "Based upon our review it does not appear that at this time you are eligible for Total Disability benefits according to the terms of the policy." Kaufman 12(G) Statement, P 29; Kaufman Appendix, Ex. F.
Despite Provident's conclusion, Kaufman alleges he became totally disabled in October 1990. Complaint, P 4. Kaufman alleges he complied with the terms and conditions of the Policy. Complaint, P 5. He alleges he described his disability in the Notice of Claim and supplemental Statement. Id. He alleges he submitted medical documentation in support of his disability. He further alleges he satisfied the one hundred and eighty day elimination period. Id.
Kaufman maintains Provident based its determination on inaccurate facts. Kaufman asserts he answered one question in the Notice of Claim inaccurately. Kaufman maintains he described his occupational duties and responsibilities as "those normally associated with the office of President & CEO. " Movant's Appendix, Ex. D. He asserts this description is inaccurate because it allegedly reflects his occupational duties and responsibilities as of October 1990. Movant's Appendix, Ex. G, P 11; Kaufman ...