Court OK's insurance company's painful extraction from disabled dentist

Sep. 9—A deal is a deal, right? Well, at least until one of the parties decides they don't like the deal and goes to court.

That was the case with Dr. Brian Caraba, a Chicago-area dentist who became disabled with hip and back issues.

Not to worry, though, because the good dentist had disability insurance with the Paul Revere Insurance company that paid benefits for "more than a year" to Caraba.

Then the company discovered that the disabled doctor, while not practicing dentistry, held part-time teaching positions and earned other income working for two professional dental associations.

The insurance company terminated Caraba's benefits because it concluded that he had a "gainful occupation," meaning he did not suffer from a "total disability."

Caraba sued, but a federal appeals court ruled recently that the insurance company followed the rules as written in the policy and was within its legal rights to terminate Caraba's benefits.

Caraba's argument was clear — because of his health issues, he is unable to work as a dentist. Isn't that total ability for a professional like himself?

It certainly could be.

But his insurance contract states that "total disability" because of injury or sickness is defined by a three-part test:

* The insured is "unable to perform to the important duties of (his) occupation."

* The insured is "not engaged in any other gainful employment."

* The insured is "receiving physician's care."

Caraba was definitely employed, but was his employment "gainful"? He argued that the insurance company "incorrectly concluded that his part-time teaching and professional association work constituted 'gainful occupation.'"

One of the interesting aspects of a court decision like this is the extent to which the judges interpret the issues.

First, they noted the contract language is, according to legal precedent, "presumed to speak for the intention of the parties" and bars courts from "artificially" creating ambiguity "where none exists."

That being the case, what does "gainful employment" mean? That depends on the type of policy Caraba purchased.

An "occupational" disability policy pays if the insured is unable "to perform his regular job." A "general" disability policy pays if the insured is "unable to perform any job" for which he is qualified.

Caraba purchased a "general" disability policy, meaning "he was required to show that he could not make a reasonable living from any job for which he was qualified, not just his prior occupation as a dentist."

"A claimant need not be utterly helpless to be considered disabled under a general disability policy," wrote appeals court Justice Candace Jackson-Akiwumi.

So was his employment "gainful," meaning Caraba could "earn a reasonably substantial income"? The court noted that Caraba earned about $140,000 a year as a dentist, nearly $70,000 of which came from teaching and consulting.

That income fell to about $67,000 and $70,000 after ceasing his dental practice.

The court noted that Caraba's "post-disability income was still higher than the median wage of Illinois," and that reflects "gainful employment."

"Caraba asked that we inject ambiguity into a policy term where none is present and then construe that term in a light most favorable to him," Jackson-Akiwumi wrote.

No can do under the law, the court ruled: Dentist loses and insurance company wins.

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