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Berg v. New York Life Ins. Co.

831 F.3d 426 (7th Cir. 2016)

Words & Phrases

Life And Disability Insurance: Exclusions

Trial Judge

Milton Shadur

Appellate Judge



Definition of disability does not mean that a disability cannot commence until a physician is seen.

Fact Summary

Eric Berg brought this breach of contract action when New York Life, through its administrator Unum, refused to pay him disability benefits. At bottom, this case turns on the meaning of one phrase: "requires and receives regular care by a Physician." Does the clause contain a temporal element? The insurers say yes, and the district court agreed, granting them summary judgment. But it certainly says nothing about timing on its face, and we can find no other sign that such a requirement was meant to be engrafted onto the phrase. Applying the basic principle that the language must be construed against the insurers, we reverse the judgment of the district court.

Born in 1959, Eric Berg was a long-time pit broker at the Chicago Mercantile Exchange. In 1991 and 1994, Berg bought two disability-income insurance policies underwritten by New York Life. In 2005, he started to experience a tremor in his arms and hands. The tremor interfered with his ability to write quickly and legibly, and in September 2007, the tremor forced him to leave his job. In February 2010, a neurologist diagnosed Berg with an "essential tremor," and Berg applied for total disability benefits.

Although New York Life and Unum approved Berg's claim on July 2, 2010, they designated his disability onset date as February 3, 2010, rather than September 2007. Then, in April 2012, Unum discontinued Berg's total-disability benefits. It asserted that he was eligible only for residual-disability benefits because when he applied, his regular occupation was that of an "unemployed person." Berg sued, seeking benefits dating from September 2007 and a designation of "total disability" for the purpose of future benefits. The district court granted summary judgment to the defendants. Berg appealed