Total Disability Insurance Policy
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.
Kaufman, hesitant to consume the radioactive tablets, sought a second opinion. Id. The second opinion was obtained from Nicholas Gonzales, M.D. ("Dr. Gonzales"). Id., P 15. Dr. Gonzales recommended a nutritional cancer therapy program. Id., PP 19, 21. Kaufman pursued the therapy program suggested by Dr. Gonzales.
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.
According to Provident, Kaufman failed to show he was "not able to perform the substantial and material duties of [his] occupation." Kaufman 12(G) Statement, P 33. Provident based this determination on the facts that Kaufman was still going to work, running his business and performing substantial and material duties of his occupation. Id., PP 35, 41, 45. Provident did not analyze these facts by a written formula. Kaufman Appendix, Ex. B., Deposition of Germaine ("Germaine Dep.") at 43. Its determination was not made pursuant to a strict income test or a strict time test. Germaine Dep. at 77, 78. This judgment was based upon the facts submitted in the Notice of Claim and the supplemental statement. Id. at 124.
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 12(G) Statement, P 43. Kaufman asserts he failed to mention he also had duties and responsibilities as a doctor of optometry.
At his deposition, Kaufman attempted to correct what he labels an inaccurate description. Movant's Appendix, Ex. G, P 12. He stated his occupation involved being the President and CEO of Lens 21 and an optometrist for Lens 21. Id. Furthermore, he delineated the hours he worked in his capacities as President
and CEO and as an optometrist. He stated that as President and CEO he worked, before his illness, from nine or nine-thirty to three or three-thirty in the afternoon. Kaufman Dep. at 148. As well at this time, in his optometry job, he worked from three-thirty to nine-thirty in the evening. Id.
Kaufman further delineated the hours he worked at his occupation after the operation and during the initial period of Dr. Gonzales' therapy program. He worked as President and CEO from approximately ten or ten-thirty in the morning until one or one-thirty in the afternoon. Id. at 148-149. Thereafter, he would go home for a few hours and then work as an optometrist a couple of nights a week. Id.
Presently, he no longer provides optometric services. Id. However, he continues to work as President and CEO from ten or ten-thirty in the morning until one or one-thirty in the afternoon four or five days a week. Id. At his deposition Kaufman testified about his present occupation as follows:
Q. Are you still the chief executive officer of Contact Lens 21?
A. Yes, sir.