N.Y. App. Div., 2d Dept. (Dec. 19, 2012)
The insured, a plastic surgeon, had his medical license suspended on the grounds that his continued practice constituted an imminent danger to the health of the people of this state. Shortly thereafter, the insured filed claims under his disability insurance policies claiming that mental illness and drug addition before the suspension rendered him unable to perform his duties. The insurer denied the claims citing the plaintiff’s continued practice until the day of his license suspension.After his license suspension, the insured was diagnosed with bipolar disorder, and was treating with a psychiatrist and later admitted to an inpatient treatment program for bipolar disorder, impulse control, and amphetamine dependence. After the insurer’s denial of benefits, the insured brought suit and after discovery, the insurer moved for summary judgment. The trial court denied summary judgment finding triable issues of fact relating to whether bipolar disorder impeded the insured’s ability to work.The policies required that the disability result from accident or sickness. The court noted that the general rule is that disability policies provide coverage for factual disabilities, not purely legal disabilities. The court focused on the insureds ability to perform his duties competently, not just his attempt to perform the duties. The appellate court affirmed the trial court’s denial of the insurer’s motion for summary judgment citing to the plaintiff’s evidence from his treating doctors that cited the insured’s disorder as the cause of the conduct for which the insured later lost his medical license. The court held that the insureds disorder and drug addiction were the primary causes of his inability to perform his duties and that the loss of his medical license was secondary. Therefore, the court granted the insureds cross-motion for summary judgment on the breach of contract cause of action.