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August 7, 2000


The opinion of the court was delivered by: Wolin, District Judge.


This matter is before the Court on defendant's motion for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. This case involves the denial of insurance coverage by defendant, Provident Life Insurance Company ("Provident"), in connection with a claim submitted by plaintiff, Kenneth Tarsio ("plaintiff"). The narrow question before the Court is whether defendant exercised "bad faith" in its denial of coverage. The Court has considered the matter, on the papers, pursuant to Rule 78 of the Federal Rules of Civil Procedure. For the reasons stated below, the Court will grant defendant's motion.


For many years, plaintiff worked as president of Rocco Caruso, Inc. ("Rocco Caruso"), formerly his father's construction company. As president, he managed the day-to-day operations of the company. His duties included, inter alia, bidding, soliciting, negotiating new contract, supervising existing projects, planning work crews, and financial decisions.

While at Rocco Caruso, plaintiff purchased two separate disability insurance policies from defendant.*fn1 Together, the two policies provided defendant with over $7000 in monthly benefits so long as plaintiff could not "perform the substantial and material duties of his occupation" due to injury or sickness.*fn2

In June 1996, plaintiff claims he became depressed. He maintains that he could not "concentrate, function or speak with customers." He further maintains that he "had difficulty leaving the house, did not care whether he lived or died, and became visibly emotional (crying and upset) at the slightest problems." By August 1996, plaintiff states he could no longer work due to the depression. At that point, he asserts "he was unable to make decisions and was constantly breaking down emotionally." Because he no longer worked, his employee, Nick Russo ("Russo"), began making the business decisions. At about the same time, Rocco Caruso went out of business. Plaintiff claims that Russo suggested to plaintiff that he close the business due to plaintiff's depression.*fn3

In the beginning of August, Dr. Maggiano, plaintiff's family doctor, diagnosed plaintiff with anxiety and prescribed Xanax. At the end of August, Dr. Beverly Dunn, who several years earlier treated plaintiff for depression, again treated plaintiff. She diagnosed him with major depression and prescribed Prozac. In addition, plaintiff also visited a psychotherapist, Susan Kilduff, once a week. Ms. Kilduff also diagnosed plaintiff with depression. Both Dr. Dunn and Ms. Kilduff concluded that plaintiff should not return to his present job.

In November 1996, plaintiff submitted a claim for disability benefits. Thereafter, Provident commenced an evaluation of his claim. On January 15, 1997, Provident informed plaintiff that, although it did not have a complete file for a full evaluation, it would pay him benefits and reserved their rights pending a complete evaluation.

Several months later, Provident completed its evaluation and denied plaintiff's claim. In coming to this decision, Provident states it reviewed all available relevant material. Specifically, Provident states it reviewed questionnaires completed by Ms. Kilduff and Dr. Dunn. Provident points out that, in the questionnaire, Ms. Kilduff indicated plaintiff responded well to medication and could return to "work" within six months to a year.*fn4

In June 1997, Provident referred plaintiff to a psychiatrist, Dr. David J. Gallina, and a psychologist, Dr. Nancy Burleigh Gallina, for independent examinations. Dr. David Gallina found that plaintiff responded well to medication and his depression was in remission. Further, he suggested that plaintiff may have skewed some of psychological testing by exaggeration and "deliberate distortion of the clinical picture. . . ." Such "distortion," according to the doctor, suggested "the possibility of malingering." From his examination, the doctor concluded that plaintiff could "function in some capacity in the construction business, though perhaps not in the same capacity he formerly had in running his own corporation."

Similarly, after her examination of plaintiff, Dr. Nancy Gallina found plaintiff may have "exaggerated" his responses to testing. Therefore, she suggested that his "profile should be interpreted with caution." Dr. Nancy Gallina, thus, concluded: "It is my opinion, with reasonable certainty, that there is considerable subjective embellishment and exaggeration of symptoms by [plaintiff]. These are probably reflective of incentives to a disability lifestyle which includes work avoidance and disability income."

After its review of this information, Provident denied plaintiff's claim. Provident maintains that it denied the claim "in view of the exaggeration and malingering found in the independent medical exam, in view of the finding that [p]laintiff could return to work, and in view of the improving condition as noted by plaintiff's own attending physician."

After Provident denied the claim, plaintiff's attorney sent Provident a report from Dr. Sheldon Weiser. In his report, Dr. Weiser stated that plaintiff should remain on disability due to his depression and personality disturbance. Provident forwarded the report to Dr. David Gallina and Dr. Nancy Gallina for their review and response. Both found that Dr. Weiser's report did not alter their opinions. Consequently, Provident did not change its determination.

After the denial, plaintiff filed a two-count complaint. In count one, plaintiff alleges that Provident failed to pay benefits to plaintiff under terms of his disability insurance policies. In count two, plaintiff alleges that Provident failed and refused in bad faith, and without reasonable cause, to pay plaintiff's claim under ...

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