3rd Circuit: Termination of Disability Benefits Proper


PHILADELPHIA,  July 11 — The Third Circuit U.S. Court of Appeal found no ambiguity in a residual disability policy’s definition of the  term “occupation” and as a result held that the insurer’s termination of benefits was proper.

Daniel Bowerman, a chiropractor, sued National Life Insurance Co., claiming that benefits were improperly terminated under the  Employee Retirement Security Act.   Bowerman suffered a bike-riding injury to his shoulder, and had been receiving benefits for twenty one  years. After the accident, however, Bowerman continued his chiropractic practice and also worked as a consultant.

In 2011, National Life sent Bowerman a letter to terminate partial disability benefits as of his 55th birthday, and asserted he no longer was disabled as defined in the policy.  The insurer claimed that Bowerman’s full time consulting work for Independence Blue Cross took him outside of the definition of disabled as written in the policy, as he was performing his occupation.

After Bowerman filed suit to overturn the determination, the parties filed cross-motions for summary judgment. The District Court granted summary judgment to National Life, rejecting Bowerman’s argument that the terms of “occupation,” and “insured’s occupation,” were ambiguous.

After Bowerman appealed to the Third Circuit, the Third Circuit Panel of  Circuit Judges Julio M. Fuentes, D. Brooks Smith and Richard L. Nygaard affirmed the summary judgment for National life, ruling that the  “plain language of the [policy] Rider tied the definition of occupation to the Policy.”

In a footnote to the opinion, Circuit Judge Smith noted he would have vacated the District Court’s judgment  for subject matter jurisdiction, because Bowerman’s individual policy was not within the coverage of ERISA, therefore not presenting a federal question.

Daniel S. Bowerman D.C. v. National Life Insurance Co., No. 15-1129, 3rd Cir.; 2016 U.S. App. LEXIS 12503.



Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than three decades, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: