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Fiorentini v. Paul Revere Life Insurance Co.

United States Court of Appeals, Seventh Circuit

June 21, 2018

Henry Fiorentini, Plaintiff-Appellant,
v.
Paul Revere Life Insurance Company, a Massachusetts Corporation, et al., Defendants-Appellees.

          Argued April 11, 2018

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:15-cv-03292 - Charles R. Norgle, Judge.

          Before Bauer, Sykes, and Barrett, Circuit Judges.

          Barrett, Circuit Judge.

         Henry Fiorentini is the owner and president of Panatech, Inc., a small technology company. When cancer treatment left him unable to perform his job, he received total disability benefits under a policy he held with the Paul Revere Life Insurance Company. Five years later, after Fiorentini was back at work and exercising full control of the company, Paul Revere notified him that he no longer qualified for the benefits. Fiorentini argued that he still satisfied the policy's requirements for total disability, because even though he could perform most of his job duties, he was unable to do what it takes to generate new business. Paul Revere rejected that argument, and Fiorentini sued it for breach of contract. We agree with the district court that Fiorentini does not qualify for total disability coverage under his policy.

         I.

         In 1982, Henry Fiorentini founded Panatech Computer Management, Inc., a small information-technology company that specializes in providing customized software to small businesses. In 1998, he was diagnosed with invasive basal cell carcinoma of the right ear. After minor surgeries failed to remove the cancer, Fiorentini had his right ear amputated in 2008. Several more surgeries and radiation followed, leaving him with permanent hearing loss, fatigue, migraines, dry mouth, tinnitus (a constant ringing sound), and an inability to localize sound. To compensate for the amputation, Fiorentini received a prosthetic ear that is virtually indistinguishable from his left ear.

         After the surgery, Fiorentini submitted a claim for "total disability" benefits under an occupational disability insurance policy he had purchased from the Paul Revere Life Insurance Company. The policy defines the key terms for total disability coverage as follows:

"Total Disability" means that because of Injury or Sickness … You are unable to perform the important duties of Your Occupation.
"Your Occupation" means the occupation in which You are regularly engaged at the time You become Disabled.

         Fiorentini listed his occupation as "President & Owner" of Panatech and said that his occupation entailed four "important duties": sales (6-8 hours per week), consulting/meetings (7-10 hours per week), programming (15-25 hours per week), and administrative work (2-3 hours per week). Concluding that Fiorentini was unable to perform these duties, Paul Revere approved his claim and began paying total disability benefits in February 2009.

         Five years later, Paul Revere notified Fiorentini that he no longer met the total disability requirements of his policy. He had been cancer-free since 2009 and was working regularly again. He continued to suffer side effects from the surgery and worked fewer hours than he had before. Nonetheless, he was now well enough that he was exercising full control over Panatech.

         While it found him ineligible for total disability benefits, Paul Revere invited Fiorentini to apply for "residual disability" benefits under his policy. Coverage under that provision would have required Fiorentini to show that he was either unable to perform "one or more of the important duties" of his occupation or could only perform his important job duties for "80% of the time normally required to perform them" and that he earned at least 20% less than he did pre-disability. Fiorentini did not submit that information; instead, he let his policy lapse and sued Paul Revere, seeking damages for breach of contract, statutory penalties ...


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