The opinion of the court was delivered by: Lowell A. Reed, Jr., Senior District Judge.
Plaintiff Andrew S. Prousi ("Prousi") has brought this action
for breach of contract seeking to recover for the refusal of
defendant UNUM Life Insurance Company of America ("UNUM") to
approve an application by Prousi to purchase an additional
disability income policy under a "Future Insurance Option Rider"
("FIOR"). Presently before the Court are cross motions for
summary judgment (Document Nos. 12 & 13). The parties agree that
there are no issues of fact and that the resolution of this case
turns on questions of law now before the Court. Jurisdiction is
proper pursuant to 28 U.S.C. § 1332 as the parties are diverse
and the amount in controversy exceeds $75,000.00, exclusive
interest and costs. It is undisputed that Pennsylvania law
applies. For the reasons stated below, summary judgement will be
granted in favor of UNUM and against Prousi.
Prior to the summer of 1992, Prousi was self-employed as a
dentist in Montgomery County, Pennsylvania. On May 8, 1992,
Prousi fell from a ladder and injured his spine. In July, 1992,
Prousi became unable to practice dentistry due to his spinal
At the time of the accident, Prousi had a disability insurance
policy with UNUM which provided that if Prousi, due to sickness
or injury, became unable to perform the material and substantial
duties of his regular occupation, that he would be entitled to
receive a regular disability benefit. UNUM does not contest that
Prousi has been continuously disabled since July 1992. Upon
Prousi's claim for disability benefits, UNUM paid Prousi all
monthly disability benefits in the base amount of $4,500.00, plus
additional benefits in the amount of $392.85, for a current
monthly disability benefit from UNUM in the amount of $4,892.85.
The policy also contains a FIOR rider, for which Prousi paid a
separate, additional premium and which provides, inter alia:
During each Standard Option Period, you may apply for
an additional disability income insurance policy. We
will issue the new policy on a Standard Option Date
subject to the following terms:
(6) We will not issue an amount which, with all
policies in force, would exceed our disability
income limits for new applicants on the effective
date of this rider or on the Option Date, whichever
is higher. The limits are set by our normal
underwriting procedures and apply to your average
earned income. . . .
(11) We will not issue a policy while the insured
is disabled except as provided in the section
entitled Option During Disability.
While you are disabled, you may apply for one
additional policy during which the first Standard
Option Period. The new policy will be subject to the
same terms as a Standard Purchase Option except:
(1) the amount of the new policy may not exceed the
Option Amount. . . .
(Defendant UNUM Life Insurance Company of America's Memorandum of
Law In Support of Its Motion for Summary Judgment ("Def.Exh."),
Exh. D). The Option Amount is defined by reference to the benefit
amount specified in the policy, i.e., five hundred dollars.
(Exhibits to Plaintiff's Motion for Summary Judgment
("Plt.Exh."), Exh. D). At the time Prousi became disabled he was
42 years old. ...