Nefsky v. Unum Life Ins. Co. of Am.

WILLIAM F. NEFSKY, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.

1:15-cv-2119-WSD

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

February 15, 2017

OPINION AND ORDER

This matter is before the Court on Defendant Unum Life Insurance Company of America's ("Defendant") Motion for Summary Judgment [19].

I. BACKGROUND

A. The Disability Insurance Policy

On June 9, 1979, Defendant issued a disability insurance policy ("Policy") to Plaintiff William F. Nefsky ("Plaintiff"). ([19.4] at 2). The Policy required Defendant to make payments to Plaintiff in any month, before June 9, 2013,¹ in which Plaintiff was "totally disabled" or "residually disabled." (Def. Statement ofUndisputed Material Facts [19.1] ("DSMF") ¶¶ 2, 5).² The Policy defines "totally disabled" and "residually disabled" as follows:

"Total disability" and "totally disabled" mean injury or sickness³ restricts the Insured's ability to perform the material and substantial duties of his regular occupation to an extent that prevents him from engaging in his regular occupation.⁴

"Residual disability" and "residually disabled" mean injury or sickness does not prevent the Insured from engaging in his regular occupation, BUT does restrict his ability to perform the material and substantial duties of his regular occupation: (i) for as long a time as he customarily performed them before the injury or sickness; or (ii) as effectively as he customarily performed them before the injury or sickness.

(DSMF ¶ 5).

The Policy also includes a Lifetime Sickness Benefit Rider (the "Rider"), which is "subject to the terms and conditions of th[e] rider and the rest of th[e] policy." (DSMF ¶¶ 7-8). The Rider provides for continuation of coverage in the event of a total disability based on certain conditions. The Rider states that,beginning on June 9, 2013, Defendant is required to make payments to Plaintiff in any month in which:

1. the Insured is totally disabled; and

2. that total disability:

a. is the result of sickness which began before [June 9, 2008] and while this rider was in effect; and

b. his total disability began before [June 9, 2008] and has been continuous until the month for which this benefit is payable.

(DSMF ¶¶ 9-13).⁵ The Rider provides that:

When used in this rider only: "Total disability" and "totally disabled" mean

1. sickness restricts the Insured's ability to perform the material and substantial duties of his regular occupation to an extent that prevents him from engaging in his regular occupation; and

2. the Insured is receiving medical care from someone other than himself which is appropriate for that sickness.

(DSMF ¶ 11).

B. Plaintiff's Occupation

In 1974, Plaintiff began working for Precious Metals Exchange, a companythat sold gold and silver coins and bars to investors. (DSMF ¶ 14). In 1978, Plaintiff bought Precious Metals Exchange and incorporated it as WFN Enterprises, Inc. ("WFN"). (DSMF ¶ 15). Plaintiff is the president and sole shareholder of WFN. (DSMF ¶ 16). He exercises "complete control" over WFN and has done so continuously since 1978. (DSMF ¶ 17).

In the late 1970s, Plaintiff, through WFN, started buying and selling watches and jewelry. (DSMF ¶ 19). He continues to do so today. Plaintiff also buys and sells china, crystal and silverware. (DSMF ¶¶ 19, 23). Plaintiff often purchases items—especially watches—wholesale from manufacturers. (DSMF ¶ 25). He also purchases items from estates, stores with excess inventory, and stores going out of business. (DSMF ¶ 26; [20] at 63). Watches constitute the largest portion of Plaintiff's inventory. (DSMF ¶ 24; see [20] at 48 ("[P]rimarily, I've worked with watches.")). Plaintiff has taken courses on grading diamonds and color stones, but he is not a certified gemologist. (DSMF ¶¶ 20-21). He describes himself as a "Business Broker." (DSMF ¶ 22; see also [23] at 2).

Plaintiff's inventory is stored in an office space, which he has rented for the last twenty years. (DSMF ¶ 30). The office has a workroom, with good lighting, where Plaintiff processes "small inventory deals." (DSMF ¶ 31). Plaintiff sells most of his inventory on eBay. (DSMF ¶ 33). He also sells items at trade shows,through his company website, and occasionally over the telephone if he is contacted by a former customer. (DSMF ¶¶ 26, 34-36). His products are not sold in a showroom or store. (DSMF ¶ 32). Plaintiff, using a template, drafts descriptions of the items he sells online. (DSMF ¶ 37). It usually takes him about fifteen (15) minutes to draft a description. (DSMF ¶ 38). He composes only one description for an item he buys in bulk. (DSMF ¶ 39). These descriptions are posted on eBay and WFN's website.

In the late 1990s, Plaintiff hired Mike Hoffland ("Hoffland") to maintain Plaintiff's eBay account, to photograph and lists the items to be sold, and to fill any orders received over the internet. (DSMF ¶¶ 40-43).⁶ Hoffland retrieves, inspects, packages and ships WFN items sold online. (DSMF ¶ 44). If Hoffland discovers a defect in the item, he raises the issue with Plaintiff. (DSMF ¶ 45). Daniel Marino has handled WFN's bookkeeping since 1978. (DSMF ¶ 46). He pays WFN's bills and maintains records of the company's purchases and sales. (DSMF ¶ 47).

C. Plaintiff's Disability

On November 8, 2006, Plaintiff suffered a retinal vein occlusion. (DSMF ¶ 48). He was fifty-nine (59) years old at the time. (DSMF ¶ 49). The incidentseverely impaired Plaintiff's vision in his left eye. (DSMF ¶ 48). Plaintiff's reading vision in his left eye is now 20/40 or 20/50. ([20] at 40).⁷ His vision in his right eye is 20/25 or 20/30, which he considers "pretty good." ([20] at 40, 50). The damage to Plaintiff's left eye causes his right eye to "tire out much faster." ([20] at 50). This prevents him from "analyz[ing] items for more than short periods of time" because his vision "blur[s] out in a short period." (DSMF ¶¶ 50, 71; [20] at 50). It has not resulted in other physical limitations. (DSMF ¶ 51). Plaintiff is able to drive, hike, bike, swim, jog, and travel for pleasure. (DSMF ¶ 52).

Plaintiff previously was able to visually evaluate "three-dimensional" products for up to eight hours a day. (DSMF ¶ 72; [20] at 49, 67). With his diminished eye sight, he can only do this kind of evaluation for a maximum of two hours a day. (DSMF ¶ 72; [20] at 47, 50). As a result, he sometimes declines business opportunities that would require him to inspect items for long periods of time. ([20] at 48).⁸ In 2007, Plaintiff lost one watch manufacturer's businessbecause he told them he could not evaluate 1,600 of their watches. (DSMF ¶73). Plaintiff continues to attend trade shows where he still engages in the buying and selling of items. (DSMF ¶¶ 88, 90).⁹ In 2015, he attended a trade show in Las Vegas and six or seven trade shows in Atlanta. (DSMF ¶ 89). Plaintiff is unable to do "complicated," "task oriented" reading for other than short periods of time. ([20] at 47).

Plaintiff continues to purchase watches at wholesale prices. (DSMF ¶ 74). Manufacturers often call him and ask him if he is interested in buying excess inventory. (DSMF ¶ 78). Plaintiff takes fifteen minutes, or less, to decide whether to make the purchase. (DSMF ¶ 79). Plaintiff considers his finances, whether he has "staff to do the fulfillment," and the price at which the items are selling in secondary markets. (DSMF ¶ 80). He typically buys a limited number of watch models in large quantities. (DSMF ¶ 77). Plaintiff also "occasionally help[s] some[one] broker a collection" of watches. (DSMF ¶ 85).

Plaintiff remains a representative for at least two watch manufacturers. (DSMF ¶ 75). He is the exclusive representative for Reactor watches, and alsosells watches manufactured by Wenger. (DSMF ¶ 76). He continues to advertise in two trade magazines. (DSMF ¶ 91). He continues to evaluate and purchase items from estates and jewelry businesses. (DSMF ¶¶ 93, 96). In 2015, he traveled to jewelry stores in North Carolina and Florida, where he evaluated and purchased items from both stores. (DSMF ¶ 95). He sometimes has products "shipped directly from [a jewelry store] and he doesn't even have to physically handle it." (DSMF ¶¶ 92, 94). In 2015, Plaintiff sold approximately 1,500 watches on eBay and listed other items that did not result in a sale. ([22] at 42-43). Plaintiff has a computer at home, uses an iPhone and an iPad, and has three computers on his desk at work. (DSMF ¶¶ 53-54).¹⁰ Plaintiff's business is operational today and has continued, uninterrupted, since the reduction of vision in his left eye. (DSMF ¶¶ 68-69).

D. Plaintiffs' Claims for Disability Benefits

On December 6, 2006, a month after his retinal vein occlusion, Plaintiff submitted a claim for disability benefits under the Policy. (DSMF ¶ 56). Plaintiff, at the time, was working ten to twenty hours per week. (DSMF ¶ 57). Before his vision reduction, he generally worked forty to eighty hours per week. (DSMF¶ 70). Plaintiff claimed he was totally disabled under the Policy. (DSMF ¶ 61). Defendant determined he was residually disabled. (DSMF ¶ 59). Defendant made residual disability payments to Plaintiff from approximately November 8, 2006 through June 9, 2013. (DSMF ¶¶ 63-64).

On August 1, 2013, Plaintiff contacted Defendant and requested disability benefits under the Rider. (DSMF ¶ 65). Plaintiff stated he was "totally disabled" and had been since June 9, 2008. (DSMF ¶ 65). On October 3, 2013, Defendant denied Plaintiff's claim for disability benefits. (DSMF ¶ 66). Defendant concluded that Plaintiff was residually disabled, not totally disabled, and that he was thus ineligible for payments under the Rider. (DSMF ¶ 66).

E. Procedural History

On May 14, 2015, Plaintiff filed his Complaint [1.1] in the State Court of DeKalb County, Georgia. Plaintiff asserts a claim for breach of contract, arguing that Defendant refused to pay him disability benefits to which he is entitled under the Rider. Plaintiff also asserted...