Disability Claims of Professionals Subject to License Revocation: a Survey of the Law of Legal Disability

There is a small but growing body of case law addressing the disability claims of licensed professionals who have lost or surrendered their licenses to practice their professions through disciplinary action related to an addiction or mental illness. Those professionals often claim that they were disabled as a result of the addiction or mental illness which also caused their disciplinary problems. These situations thus bring into play the question as to whether the insured is disabled from practicing his profession because of an illness -- his addiction or mental illness -- or because his license to practice has been revoked. The operative facts are frequently intertwined both from a substantive and a timing perspective.

It is important for the proper evaluation and defense of these actions that every effort be made to sort out these facts, and to distinguish between the onset of a disability and the termination of income because in the case of illness being the cause of the disability, there may be coverage, and in the case of loss of license being the event which causes the termination of income, there probably will not be coverage. Although the case law as it exists generally favors the carriers in denying benefits, the courts' reasoning is not necessarily consistent. Complicating the analysis are cases that introduce arguments based on public policy rather than straight contractual analyses. The authors therefore felt that a survey of the existing case law would be helpful to practitioners in this field whose briefing of the precedents can help mold the law in this developing area.

Consider this hypothetical claim to illustrate the legal issue. A podiatrist purchases a disability insurance policy providing monthly benefits should he become unable to perform the material and substantial duties of his occupation due to sickness or injury. Five years later, he is convicted of medicaid fraud and, after an administrative review, has his license revoked. The podiatrist then files a claim for disability benefits contending that he is "totally disabled" from practicing pediatric medicine.

Under standard disability policies, the revocation of the podiatrist's license would not entitle him to benefits because the podiatrist, while physically able to perform his profession, is not permitted lawfully to do so. He is suffering from a "malady" commonly known as a "legal disability" and "[i]t is a general rule that disability insurance policies ... provide coverage for factual disabilities (i.e., disabilities due to a sickness or injury) and not for legal disabilities." [1] (Emphasis added.)

Had the podiatrist in our example submitted a claim contending that he is "totally disabled" for the sole reason that his license was revoked, the insurance company's "legal disability" defense would likely prevail. In practice, however, the issue is rarely framed so neatly. Typically, the insured claims that the conduct that led to his or her loss of license was caused by a pre-existing factual disability. The remainder of this survey of more recent decisions examines how the "legal disability" defense applies in such situations.

Goomar v. Centennial Life Insurance Co. is perhaps the seminal case in this area. [2] In Goomar, a physician's license to practice medicine was revoked in 1987 following an investigation into allegations that he sexually molested four female patients in the period from 1980 to 1984. [3] Dr. Goomar alleged that he saw astral beings which caused his conduct. Dr. Goomar sought disability benefits due to his claimed psychological impairment.

The district court rejected Dr. Goomar's claim of coverage, holding that "[e]ven assuming that [Dr. Goomar] was seeing astral beings prior to June 1987, that alleged problem did not prevent plaintiff from performing the substantial and material duties of his occupation." Indeed, "there [was) no evidence that plaintiff molested anyone after April 1984." [4] The Ninth Circuit affirmed the district court's grant of summary judgment, holding that the physician had failed to present a genuine issue as to whether his alleged sickness caused the loss of his license."

The controlling fact in Goomar was that "but for" the license revocation, Dr. Goomar could have continued practicing medicine. Dr. Goomar did not offer competent medical evidence that he suffered from a sickness that caused him to be totally disabled and, in fact, the record reflected that Dr. Goomar "practiced" competently for three more years after the incidents of molestation . . . with no apparent disabling effects from his alleged 'sickness'." [5]

The Goomar court also addressed an evidentiary point that can have relevance elsewhere. Dr. Goomar attempted to produce testimony from psychiatrists who first saw him in 1992 and 1993, that he suffered from a disabling condition from 1980 to 1984. The court ruled that "[r]etrospective expert testimony regarding the onset of a mental illness is inadmissible speculation." [6] Moreover, the basis for the expert opinions was Dr. Goomar's own reports about his mental state during this time, leading the Court to conclude that experts could not "accept [Dr. Goomar's] statements at face value because the very nature of [Dr. Goomar's] present condition would render his statements about his past life unreliable and self-serving." [7]

The Goomar court relied heavily on the reasoning of a Vermont Supreme Court decision in Massachusetts Mutual Life Insurance Co. v. Ouellette. [8] Dr. Ouellette was an optometrist who, after having been found guilty of lewd and lascivious conduct with a minor and imprisoned, sought disability benefits due to his alleged disabling mental illness, pedophilia. In denying Dr. Ouellette any recovery, the Vermont Supreme Court found that, although Dr. Ouellette's pedophilia had manifested itself in 1970, he continued practicing optometry for nearly ten years and never sought medical treatment. Dr. Ouellette, like Dr. Goomar, would not have stopped practicing "but for" the initiation of criminal proceedings which resulted in incarceration and surrender of his license. [9] Compare Doe v. Harris, [10] (claimant involuntarily committed after being acquitted for murder by reason of mental illness and diagnosed with paranoid schizophrenia may be disabled); Marion Institution v. Gardner, [11] (claimant committed under statute pertaining to persons with utter lack of power to control sexually deviant behavior is disabled).

The Court also noted that Dr. Ouellette's claim of uncontrollable pedophilia was inconsistent with his failure to avail himself of an insanity defense in his criminal case. Significantly, however, the Court stated that Dr. Ouellette nevertheless "may now show that he was mentally if] at the time of the offense to prove his claim," and then rejected the claim because the evidence failed to support Dr. Ouellette's contention.

The Goomar and Ouellette courts were influenced greatly by the fact that the insured was physically and mentally capable of performing his occupational duties absent the legal restriction placed upon him. [12] This factor also weighed heavily in the more recent Second Circuit decision in Massachusetts v. Mutual Insurance Co. v. Millstein [13] that cited Goomar and Ouellette approvingly.

Millstein involved a lawyer who was a lifelong abuser of various illicit drugs, including cocaine and marijuana, and also suffered from certain behavioral disorders. [14] Millstein alleged that his chemical dependency and behavioral disorders impaired his judgment and caused him to commit the criminal fraud that led to his disbarment. The District Court rejected Millstein's disability claim, holding that "Millstein's loss of earned income was caused by a legal consequence of his behavior (i.e., the loss of his license to practice law) and not a physical or mental disability." [15] The Second Circuit affirmed. [16]

The Millstein Court was persuaded by the fact that "for several years, Millstein's conditions [had] not prevent[ed] him from performing the basic tasks needed to maintain a law practice ... [indeed] he became proficient in several areas of the law in spite of the fact that he was constantly using various forms of illegal drugs... ." Moreover, "Millstein did not seek treatment for his dependency until his license to practice law was already in jeopardy." [17] The Second Circuit further injected, "a rule which would allow a lawyer to steal from his clients, even when such theft occurs in the throes of a drug addiction, and then recover disability benefits for income lost due to suspension resulting from such theft, would be against public policy." [18]

This "public policy" declaration has much potential significance for other litigation because the Court appears to be saying that the insured will not be permitted to obtain the benefits of his disability insurance policy if he caused his own disability problems, including loss of his license, by conduct which is also criminal. This principle has parallels in other areas of the law such as the duty of an insurer to indemnify its insured resulting from the insured's intentional causation of an injury. [19]

Provident Life & Accident Insurance Co. v. Hanis [20] is to the same effect. Harris involved a podiatrist indicted for mail fraud. Shortly after the indictment issued, Dr. Harris allegedly began experiencing psychological difficulties. In January 1996, Dr. Harris' psychiatrist instructed him to stop performing surgery because of his mental condition. Dr. Harris later surrendered his license for two years as part of a plea bargain and applied for disability benefits, describing his impairment as "emotional problems." The District Court denied Dr. Harris' recovery, holding that the specific disability preventing Harris from performing the duties of his occupation is the fact that he surrendered his license." [21]

The Court in Provident Life and Accident Insurance Co. v. Fleischer [22] cited Millstein and Ouellette approvingly in granting the carrier summary judgment, concluding that the insured was legally, not factually disabled. There, Fleischer, an insurance agent and financial planner, demonstrated that he had first suffered his factual disability (bipolar disorder or depression) in January 1994. [23] Although he had been indicted, arrested and jailed in June 1993 (he was released on bond one month later), he did not actually plead guilty to the charges in the indictment until September 1995, approximately 18 months after he submitted his disability claim. [24] "Thus, at first blush, it appeared] to the Court that Fleischer's factual disability arose 18 months before his legal disability... the incarcerations. [25]

However, Fleischer's argument "crumble[d] on closer examination" because his "illegal conduct and the subsequent criminal proceedings arising directly from that conduct occurred before Fleischer's claimed factual disability in January 1994." [26] Moreover, Fleischer's treating physicians stated that his depression resulted from the stress of the criminal proceedings against him, but would end when his legal difficulties ended and when he was released from prison.

Would the insureds in Goomar, Ouellette, Millstein and Harris have fared better had they been able to present competent evidence establishing a pre-existing psychological illness that had brought about the insured's disability? An answer is suggested in Damascus v. Provident Life and Accident Insurance Co. [27] in which the same administrative board that had suspended Dr. Damascus' license for negligence and misconduct had, several years earlier, found that Dr. Damascus suffered from mental illness which interfered with his judgment. [28] Dr. Damascus' case was found to be distinguishable from Goomar in that "in Goomar, plaintiff had not been previously adjudged mentally ill by the board that revoked his license." [29] Nevertheless, the District Court had denied Dr. Damascus recovery on his disability policy.

Significantly, Dr. Damascus failed to make what the District Court characterized as "the obvious argument ... that his mental illness [several years earlier, in 1990-91] caused the gross negligence and unprofessional conduct that ultimately resulted in revocation of his license. [30] Instead, he argued ("mistakenly"?) that the administrative Board had incorporated its earlier decision finding him mentally ill in the charge that led to the Board's revocation order (which it had not), and then claimed, in a conclusory manner, that the Board had lied when it stated that it was not revoking his license for mental illness. [31]

The Ninth Circuit Court of Appeals reversed the grant of summary judgment to Provident, finding that a question of material fact existed as to "whether Damascus' mental illness caused his negligent conduct in 1992-95, which ultimately prompted the Board to revoke his license." [32] In so holding, the Damascus Court distinguished Goomar on the grounds that:

The Ninth Circuit also Placed significant emphasis on the Diagnostic and Statistical Manual & Mental Disorders (DSM), a standard treatise on mental disorders, which ",states that personality disorders of the type afflicting Damascus remain stable or unchanging over time. [34] This fact suggested to the Court that since Dr. Damascus had been diagnosed as mentally incompetent in 1991 "remained timely and therefore relevant in 1994-95 ... [and] further suggests that Damascus may have suffered from this mental affliction during 1992-1995, the period in which he acted negligently in treating his patients. [35]

Although Dr. Damascus prevailed in having the grant of summary judgment reversed, he still must satisfy a difficult burden in order to prevail. First, he has to establish a causal link between his mental illness and the loss of his license. Even if he satisfies that burden, he still has to show that his mental impairment continued up to the date of his legal disability and, indeed, remained on-going. The mere fact that his psychological impairment pre-dated his legal disability would be insignificant if Dr. Damascus was nevertheless capable of engaging in his occupation up to time of his license suspension. Likewise, if his mental disability did not present itself until after the loss of his license, Dr. Damascus should not prevail.

Paul Revere Insurance Co. v. Bavaro [36] addressed these very issues. Bavaro, who suffered from anxiety neurosis and post traumatic stress disorder, became medically disabled and could not work. The insurer began making disability payments. [37] Bavaro subsequently was convicted of wire fraud based on unlawful conduct that had occurred before he became medically disabled and in the course of his occupation as an insurance broker. [38] As a result of such conviction he lost his license. Paul Revere argued that Bavaro's subsequent legal disability based on conduct that occurred before his medical disability terminated Paul Revere's liability for disability benefits because the medical disability was no longer the cause of the insured's inability to Work. [39]

The Bavaro court held that an insured's subsequent legal disability is irrelevant to the insured's eligibility for disability benefits where the trigger for payment of the disability benefits is a medical disability. The Court made clear that the controlling factor is the date the insured first became disabled, regardless of whether the disabling condition is legal or factual:

The Bavaro Court thus held that while the superseding legal disability could not serve to deny Bavaro benefits for his physical disability, Bavaro had the burden of establishing that his physical disability remained. Although not discussed in Bavaro, it would follow that if Bavaro became able to resume the "important duties of his occupation," the fact that he had lost his license in the interim, should be irrelevant.

The reasoning and holding in Bavaro was followed in a recent action involving strikingly similar facts, Weissman v. First Unum Life Insurance Co. [42] Weissman, a stock broker, suffered a devastating brain injury as a result of a motorcycle accident in 1993 and began receiving disability benefits. In 1996, he signed a Consent Order with the Securities and Exchange Commission (SEC) wherein the SEC contended that through stock manipulations, Weissman violated, and aided and abetted the violation of, several federal securities laws. Although Weissman neither admitted nor denied the SEC's findings, he was permanently barred from associating with any broker, dealer, or investment company. [43] Thereafter, the carrier terminated payment of further disability benefits. [44]

The Weissman Court rejected the insurance company's argument that a subsequent legal disability cuts off its liability upon the policy arising out of the prior medical disability. [45] As in Bavaro, the Weissman court held that the insured's "agreement in the SEC Consent Order to be barred from his occupation is a subsequent legal disability that is irrelevant to his continued eligibility for disability benefits." [46] Thus, the insurance company was held liable for payment of the disability benefits under the policy.

The timing of events was also critical in Allmerica Financial Life Insurance & Annuity Co. v. Llewellyn. [47] There, Dr. Llewellyn argued that he was suffering from a "concurrent factual disability," a depression rooted, in part, from the years-long investigation into his work-related fraudulent activities, ultimately leading to the revocation of his chiropractic license. [48] For purposes of its summary judgment motion, Allmerica did not dispute whether Dr. Llewellyn was, in fact, disabled. Allmerica argued only that Dr. Llewellyn became legally disabled before the onset of his factual disability. Thus, it argued that Dr. Llewellyn was not covered by the policy at issue.

In Allmerica, the final order revoking Dr. Llewellyn's license was issued on May 23, 1991. Although he denied being aware of that order until one or two weeks later, Dr. Llewellyn closed his practice on May 24, 1991. In June 1991, Dr. Llewellyn filed for disability benefits, claiming that he was totally disabled "as of May 24, 1991." [49] Since his license had been revoked one day earlier, Dr. Llewellyn "could not recover disability benefits as a chiropractor because, at the onset of his disability, [the chiropractor's) 'regular occupation' was not that of practicing chiropractic medicine." [50]

The Llewellyn Court was guided by the decision of the Eastern District of New York in Brumer v. National Life of Vermont. [51] There Dr. Brumer, a podiatric surgeon, was diagnosed as suffering from a permanent visual impairment two months after his license to practice podiatric medicine, previously suspended, had been reinstated. [52] Nevertheless, he was found to be legally, not factually disabled because immediately prior to the onset of this disability, he was not engaged in the regular duties of a pediatric surgeon.

The District Court in Brumer reasoned that "[i]f the onset of [Dr. Brumer's] disability occurred during the period that his medical license was suspended, he would not be entitled to receive disability payments ... because his occupation at the time the disability arose was not that of a surgeon or even a physician." [53] Since Dr. Brumer had performed no pediatric surgery in the two months following the reinstatement of his license, the Court reasonably found that Dr. Brumer's occupation at the time of illness was not that of a pediatric surgeon. [54]

Another group of cases concerns physicians, most commonly anesthesiologists, who become addicted to opioids (eg., fentanyl, sufentanyl) or other substances to which they regularly have access, and subsequently undergo treatment for their substance abuse. [55] In most instances, the insureds had their hospital admitting privileges revoked and/or their medical license suspended after their drug addiction had been exposed. The insureds then submit a claim for disability benefits, contending that their substance abuse is a disabling condition under the policy at issue. The insurance company usually honors the claims, but then ceases paying benefits, generally arguing that because the insureds have completed rehabilitation and remain substance-free for an extended period, they are no longer disabled. [56] Most of these cases have denied summary judgment to the insurer, finding the existence of a triable issue of fact as to whether the insureds' "risk of relapse into active chemical dependency is itself a disability covered under the policy. . . " [57] The issue is generally framed by the parties' respective experts who, although agreeing that "but for" the risk of relapse, the insureds would be able to return to work, differ markedly as to the level of risk faced by the insureds if they return to the practice of medicine. As one court framed the question, "[a]s the level of risk is pivotal in determining whether [the insured] is totally disabled by his addiction from performing the substantial and material duties as an anesthesiologist, there are genuine issues of material fact as to whether (the insured] is entitled to disability benefits." [58]

The principal exception to these cases is the decision in Levitt v. Unum Life Insurance Co., [59] in which the court determined after a bench trial that a recovering, addicted anesthesiologist was not disabled from practicing anesthesiology. The court rejected the insured's argument that he was afraid to return to the practice of anesthesiology, which would bring him in close and constant contact with the drugs to which he was addicted previously. In so doing, the Levitt court emphasized that, although the risk of relapse in the future was certainly possible, that possibility was not a basis for a determination of disability under the policy. [60] However, the courts in Hinchman and Routon expressly distinguished Levitt.

Finally, there is Ohio National Life Assurance Corp. v. Crampton, [61] and its progeny, a series of cases in which the insureds were deemed factually disabled despite being incarcerated.

In Crampton, the insured was arrested on July 6, 1992, pled guilty to aggravated sexual battery, was incarcerated in January, 1993 and sentenced on March 17, 1993 to 80 years in prison. In November 1992, he filed a claim for disability benefits from the date of his arrest. He stated that the cause of his disability was anxiety and depression. The insurance company first argued that the insured's illness was a direct result of a deliberate act and was, therefore, not covered under the policy and that public policy precludes a criminal from profiting from his own wrongdoings, an argument that had found favor in Millstein and Ouellette. The company also argued that the insured's incarceration was a superseding legal disability which prevented the insured from working.

The Crampton Court ruled that "[t]he preclusive effect of [the insured's] imprisonment on his entitlement to collect benefits hinged on the validity of the underlying disability." [62] According to the Court, ,[i]f [the insured's] alleged disability passes medical muster ... [the insured's] mental sickness, and not his incarceration, will be the true cause of his inability to work. [63] Therefore, the, court held that, regardless of his incarceration, the insured was entitled to benefits, so long as he was genuinely disabled. [64]

Interestingly, the reasoning and holding of the Crampton court subsequently found support in two factually similar cases, both decided under Florida law, Stern, M.D. v. Paul Revere Life Insurance Co. [65] and Alleman v. Provident Companies Inc. [66] The Fourth District Court of Appeal of Florida in Stern considered the matter of a medical doctor who claimed that as of April 1989 he had become totally disabled because of a psychosexual disorder and anxiety depression syndrome. Paul Revere initially honored the claim, but later discontinued disability payments claiming that Stem was not totally disabled because of sickness, but because his license had been revoked in 1990 due to two felony charges of sexual battery. During incarceration and thereafter, Stem's treating physicians determined that in terms of medical and intellectual ability, Stem was able to practice medicine assuming he still had a license. [67] The trial court held that Stern therefore had functional ability to perform his occupation, but because the revocation and incarceration made it illegal for him to practice medicine, he was not totally disabled under the terms of the policy. [68]

The District Court of Appeals reversed, finding that material unresolved issues of fact as to whether the underlying alleged psychological disorder or the intervening legal developments caused Stern to be incapable of practicing medicine. In so finding, the Court criticized the trial court's reliance on Ouellette, Grayboyes, and Goomar, noting that "[i]n each of these cases the courts found it was contrary to the public policy of their states to permit an insured to recover for a disability which was the result of the insured's criminal conduct.[69] The Stern Court found the decision in Crampton "more persuasive," citing approvingly its holding that incarceration could not act as an absolute bar to receipt of disability insurance benefits and that the critical issues were whether the disability is medically bona fide and did it genuinely arise prior to the insured's incarceration.

Disability policies insure against the inability to work due to sickness or injury; the loss of one's license does not fall within either category. The key issue is whether the insured remains capable of performing his or her occupation, but is not permitted to do so because of loss of license. As one court aptly noted, disability policies do "not insure against the inability of an insured profitably to conduct his occupation because of a limited patient base or because potential patients were repelled by adverse publicity about the insured's conduct, character, background, views or affiliations." [70]

An insured may also claim that as of the date of the loss of his or her license, the insured was physically or mentally disabled. If the physical or mental disability post-dates the legal disability, the insurance company should prevail. If the onset of the factual disability came first, the insurer should still prevail if the insured remained capable of practicing his profession despite the claimed disability. Public policy considerations may also overcome the insured's causation proof. Some investigative work is needed to determine the material and substantial duties of the insured's occupational activities in the period immediately preceding the claimed legal or factual disability.

To date, insurance companies have been largely successful in asserting the "legal disability" defense. The carriers have been aided by strong public policy considerations in certain states disfavoring payment of disability claims to insureds where intentional criminal conduct results in their inability to practice their professions. Nevertheless, where the insured can establish, through competent medical evidence, that he or she is truly physically or mentally disabled from carrying on his or her occupation and that such condition pre-dated the revocation of his or her license and that the physical or mental disability is on-going, the insured may overcome the "legal disability" defense, provided that the facts of the insured's conduct are not so egregious as to cause the court nevertheless to invoke public policy to deny benefits.

[1] Goomar v. Centennial Life Ins. Co., 855 F. Supp. 319 (S.D. Cal. 1994), aff'd, 76 F.3d 1059 (9th Cir. 1996), citing 15 George J. Couch, Cyclopedia of Insurance Law, § 53:41 at 76 (2d Ed. 1983) (emphasis in Goomar).

[9] Id. at 135. See also, Grayboyes v. General Am. Life Ins. Co., 1995 U.S. Dist. LEXIS 4233 (dentist who practiced for twenty years despite suffering from frotteurism (touching or rubbing against someone without consent) until license was revoked held not to be disabled); Hammond v. Fidelity and Guar. Life Ins. Co., 965 F.2d 428, 431 (7th Cir. 1992) (denial of disability coverage affirmed where insured filed for sexually aberrant conduct resulting from personality disorder had "ability to complete his everyday responsibilities as manager."). Hunter v. Secretary of Health, Education and Welfare, 329 F. Supp. 43, 45-46 (E.D. Pa. 1971) (disability claimant incarcerated after sex offense able to work despite sexual disorder distinguishing uncontrollable impulse to commit acts from propensity to do so).

[10] 495 F. Supp. 1161, 1168-1169 (S.D.N.Y. 1980).

[12] A "legal disability" need not result from the misconduct of the insured. See, e.g., Dang v. Northwestern Mut. Life Ins. Co., 960 F. Supp. 215 (D. Neb. 1997). There, Dr. Dang, a first year surgical resident was found to be a hepatitis "b" virus carrier. Although Dr. Dang was physically unaffected by the virus, the hospital administration barred him from performing certain types of surgical procedures without patients' informed consent. Id. The Court ruled that Dr. Dang remained physically able to perform his surgical duties and that, had his carrier status not been discovered, he would likely still be performing them. 960 F. Supp. at 218. The informed consent limitation placed on Dr. Dang's activities was held to be neither physical nor mental in nature and, to Dr. Dang's misfortune, was not the type of disability his policy insured against. See also Gates v. Prudential Life Ins. Co., 240 A.D. 444, 270 N.Y.S. 282 (1934). (Plaintiff dairy farmer declared a typhoid carrier and permanently quarantined from all connection with the production or sale of milk and food and was excluded from his own farm. Found not to be entitled to disability benefits since his physical and mental condition were not impaired and but for the discovery of plaintiff's condition, he would still be doing his farmer tasks.)

[14] Attention deficit disorder and conduct disorder.

[17] Id. at 691. This can be a pivotal fact in defending other similar claims.

[18] Id. See also, Massachusetts Mut. Life Ins. Co. v. Ouellette, 617 A.2d at 135, where the court held that" [i]mpressing liability on disability insurance companies in cases like this would be contrary to the public interest in discouraging coverage for an insured's own intentional criminal conduct. Id.

[19] See Allstate Ins. Co. v. Mugavero, 79 N.Y.2d 153, 161, 581 N.Y.S.2d 142, 146-147. In Mugavero, the New York Court of Appeals declined to hold an insurer responsible for indemnifying its insured who had allegedly sodomized children, stating that the ordinary person "would be startled ... by the notion that [an insured] should receive insurance protection for sexually molesting children and thus, in effect, be permitted to transfer the responsibility for his deeds onto the shoulders of other policyholders." 79 N.Y.2d at 161. See also, Public Serv. Mut. Ins. Co. v. Goldfarb, 53 N.Y.2d 392, 400, 442 N.Y.S.2d 422, 427 (1981). In Goldfarb, the New York Court of Appeals held that a finding that a dentist had intended to molest a patient sexually would preclude any liability for the dentist's insurer for indemnification, concluding that to allow indemnity for intentional injuries would "violate the 'fundamental principle that no one shall be permitted to take advantage of his own wrong.'" 53 N.Y.2d at 400, quoting Judge Cardozo's famous holding in Messersmith v. American Fid. Co., 232 N.Y. 161, 133 N.E. 432, 433 (1921).

[20] 1997 U.S. Dist LEXIS 15752 (W.D. Mich. July 23, 1997).

[21] Id. at *10. The Harris Court stated that because it was ruling based upon the language of the policy at issue, it would not address Provident's public policy argument. The Court noted, however, "that many people suffer severe depression because of their criminal difficulties. It seems incongruous that a defendant who gives up his livelihood as part of a plea agreement and encourages a federal court to accept the plea agreement because he is losing income can, in effect, pass on this financial aspect of punishment to his disability insurance provider."

[27] 933 F. Supp. 885 (N.D. Cal. 1996), rev'd without opinion, remanded without opinion, 168 F.3d 498 (9th Cir. 1999), reported in full at 1999 U.S. App. LEXIS 1234 (9th Cir. Jan. 27, 1999).

[30] 933 F. Supp. at 889-890 (emphasis in original).

[33] The Board revoked Dr. Damascus' license effective in August 1995. The conduct precipitating the revocation of his license, wherein he allegedly acted negligently and unprofessionally, occurred during the period from 1992 to 1995. Id. at 9, n.6.

[34] 1999 U.S. App. LEXIS 1234 at *11 (citing DSM at 629 (4th ed. 1994)).

[37] In Bavaro, the disability policy at issue provided that insured was "totally disabled" if "because of" injury or "sickness" he was unable to perform important duties of his occupation.

[39] Id. at 449. The Bavaro Court granted Bavaro partial summary judgment holding that the insurer was not entitled to recover payments made to Bavaro between March 1, 1994 (his last day of work) and May 22, 1995 on the ground that during that time the insurer made disability payments based on Bavaro's submission of medical proof of a mental disability that prevented him from engaging in his occupation. The insurer never sought an independent medical examination nor reserved its right to challenge Bavaro's claim.

[47] 943 F. Supp. 1258 (D. Or. 1996), aff'd, 139 F.3d 664 (9th Cir. 1997).

[48] Id. at 1259. Dr. Llewellyn listed "depression" as the sickness or injury that prevented him from working. He argued that there were several pre-existing causes of his disability (i.e., work-related stresses caused by patient care) which were not related to his allegedly unethical or illegal business practices and, therefore, even if he had retained his license, he would be unable to work because of his mental disability.

[49] Id. at 1259-1260. The policy at issue defined "total disability" as meaning that sickness or injury makes you unable to engage in your regular occupation." "Regular occupation" was defined as the claimant's "occupation when disability begins."

[50] Id. citing Brumer v. National Life of Vermont, 874 F. Supp. 60, 64 (E.D.N.Y. 1995). Accord, Provident Life & Accident Ins. Co. v. Belding ("Belding [a psychiatrist] was not disabled under the policy because it was his legal disqualification from the psychiatric profession and not his mental illness that prevented him from continuing to practice"). In Belding, the only evidence in the record regarding the onset of Belding's disability was the statement of his treating physician that he had become totally disabled in August 1988. However, Belding had lost his license to practice in July 1988.

[51] 874 F. Supp. 60 (E.D.N.Y. 1995), aff'd sub nom. Bremmer v. Paul Revere Life Ins. Co., 133 F.3d 906 (2d Cir. 1998) (summary order). Caveat, the Second Circuit's decision in Brumer consisted of an unpublished order. There is also a nine-page statement which, according to its terms, may not be cited or referred to as precedent in any other action. This restriction does not apply to the District Court decision.

[54] There was ample evidence in the record that Dr. Brumer was receiving substantial income as a landlord and director of several pediatric clinics at which other doctors practiced.

[55] See Kupshik v. John Hancock Mut. Life Ins. Co. and Provident Life & Accident Ins. Co., I:98-CV-3, 4-CAM (N.D. Ga., Atlanta Div., Jan. 6, 2000); Sutherland v. Paul Revere Life Ins. Co., No. 4-96-1005 (App. C., Ill. June 30, 1997); Routon v. Equitable Life Assurance Soc., CV 498-186 (S.D. Ga., Savannah Div., Feb. 11, 2000) ("Although the Court is quite skeptical of the merits of Routon's claim, it concludes that summary judgment is inappropriate," pp. 19-20); Holzer v. MEL Life Assurance Corp., 97 Civ. 5834 (TPG) (S.D.N.Y. Aug. 25, 1999), 19 WL 649004 (motion for reconsideration pending); Hinchman v. General Am. Ins. Co., IP 96-0578-C-B/S (S.D. Ind., Indianapolis Div., April 9, 1998), Levitt v. Unum Life Ins. Co., No. L93-2434, slip Op. (D. Md. July 19, 1994).

[56] Significant in this regard is that the American Society of Anesthesiologists has issued Chemical Dependence Guidelines for Departments of Anesthesiology that recommend that chemically addicted anesthesiologists be given the chance to return to clinical practice following initially successful and continuing treatment of the addiction.

[57] Hinchman v. General Am. Ins. Co., at 10. Note that in Hinchman, Dr. G. Douglas Talbott, one of plaintiff's experts admitted "that most chemically-dependent physicians treated by his center (91 percent) successfully return to medicine." Id. at 16.

[58] Kupshik v. John Hancock Mut. Life Ins. Co., at p. 13. See also Hinchman v. General Am. Ins. Co., at p. 17 ("it is obvious that there is a genuine issue of material fact as to whether Dr. Hinchman's return to the practice of obstetrics poses a risk of relapse that would endanger his health or his life"); Holzer v. MBL Life Assurance Corp., at p. 16 ("[t]he issue for trial . . . is whether, in view of Holzer's treatment and his asserted four-year abstinence, Holzer has reached a point that he can perform the duties of an anesthesiologist without resuming his drug abuse") [emphasis in original].

[59] No. 93-2434 (D. Md. July 21, 1994), slip Op. at 17-18.

[60] Id. Slip Op., at 17 ("Is it possible that he will relapse? Yes, it is possible. Is that sufficient to make the carrier obliged to pay him benefits? It is not.")

[61] 822 F. Supp. 1230 (E.D. Va. 1993), aff'd, 53 F.3d 328 (4th Cir. 1995).

[65] 1999 Fla. App. LEXIS 12719; 24 Fla. Law W.D. 2245, No. 98-2819 (Fla. App. 4 Dist.) (4th Cir. Sept. 29,1999).

[66] 1999 U.S. Dist. LEXIS 17841; 13 Fla. Law W. Fed. D. 76 (M.D. Fla. Nov. 3,1999).

[70] Grayboyes v. General Amer. Life Ins. Co., 1995 U.S. Dist. LEXIS 4233 at *20. In Grayboyes, the Court noted that a person can be both factually and legally disabled, noting that while "a blinded bus driver or a drug addicted pilot" may lose their licenses and be both physically and legal disabled, the same is not true of a "kleptomaniac salesperson with an impulse to steal only certain items and only at his place of work . . . [or a] chef who discovered that he was allergic to certain kinds of foods. . . ." The salesperson and the chef are not, in the opinion of the court, unable to perform their occupation." Id. at *21.

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