In David L. Rothman v. Unum Group, Unum Life Insurance Company of America (Unum), Plaintiff was a Certified Financial Planner who had worked for almost 30 years in a business owned by his father, Rothman Securities, when he developed a drug addiction. He was unable to perform the duties of his regular occupation and received disability benefits from October 12, 2012, until October 2015. On October 1, 2015, Unum terminated Plaintiff’s benefits. Plaintiff’s appeals were denied and he then filed this lawsuit against Unum for breach of contract and bad faith.
In addition to his drug abuse problems, in March 2013, Plaintiff pled guilty to wire fraud and money laundering and was fired by Rothman Securities. In January 2014, he was sentenced to a 4-year prison sentence and in February that same year, his professional license was revoked due to his criminal conviction.
When Unum terminated Plaintiff’s benefits in October 2015, it informed him he no longer met the policy definition of total disability. His psychologist had reported that Plaintiff’s “substance abuse was in remission and he no longer had any occupation-related restrictions or limitations.” The reasons for his inability to work in his profession was due to his license revocation.
The Court analyzed whether or not Plaintiff’s disability was a factual or legal one. A factual disability would be covered by the policy. A legal one would not be.
Plaintiff’s Inability to Work Was Legal, Not Factual, So Not Covered Under the Policy Terms
The United States District Court for the Eastern District of Pennsylvania stated that there was no dispute about whether or not Plaintiff could perform his regular job duties. He could not. But, was this because of his drug addiction disease, a factual reason, or his incarceration and license revocation, a legal reason?
The Court explained that “A factual disability is one caused by injury or illness. A legal disability is an inability to practice the insured’s regular occupation because the law prevents it.” If a covered person “loses his professional license because an illness prevented him from performing his job competently,” he is then entitled to benefits.
In this case, in July 2015, Plaintiff’s treating psychologist found he could perform the duties of his regular occupation. This diagnosis, meaning he was no longer factually disabled, came before the termination of benefits on October 1, 2015. The only reason he could not return to work at that time was that his license had been revoked.
The Court concluded that since Plaintiff’s license was not revoked because he had a drug abuse problem, but because he stole from his clients and his employer, his disability was legal and he was therefore not entitled to disability benefits.
This case was not handled by our firm, but we believe it can be instructive to those who are dealing with a health problem that has affected their ability to do their job and they may have lost, or are in danger of losing, their professional license. For questions about any issues concerning your disability claim, contact one of our disability lawyers at Dell & Schaefer for a free consultation.