Breach of Contract – Disability Benefits

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7^th Circuit Court of Appeals

Case Name: Eric Berg v. New York Life Insurance Company, et al

Case No.: 15-1410

Officials: WOOD, Chief Judge, and POSNER and EASTERBROOK, Circuit Judges

Focus: Breach of Contract – Disability Benefits

Contract provision misinterpreted to include temporal element by court without any language on its face lending support o such a interpretation.

“These hypotheticals show why it would have made no sense to impose a requirement that a physician visit deter‐ mines the time when a disability commenced. Illinois courts do not read insurance policies in such a counter‐intuitive way. The insurers suggest there could be some way for these un‐ fortunate individuals to show cause for the late detection, but this is just another effort to re‐write the policy. There is no show‐cause exception to the “Injury and Sickness” provision; it determines basic eligibility. Show‐cause provisions do exist elsewhere in the policies, in the Notice of Claim and Proof of Disability or Loss provisions. This is further evidence that the provisions’ temporal effect is at least ambiguous, and there‐ fore must be construed against the insurers under Illinois law. Gillen, 830 N.E.2d at 582. If Berg can prove that his essential tremor prevented him from performing his pit broker duties in September 2007, then he was disabled under the policies starting at that time. The facts in the light most favorable to Berg show just that”

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.