A chiropractor who suffered an injury that prevented him from continuing to practice could collect total disability benefits even though he worked part time as a nurse, the Massachusetts Appeals Court has ruled.

The insurance policy provided coverage for a disability preventing a policyholder from performing the duties of his or her “occupation.” The plaintiff policyholder had listed “chiropractor” as his occupation on the application.

The insurer argued that the term “occupation” referred to the work the plaintiff was engaged in at the time of the disability, not necessarily the occupation listed on the application, and thus the plaintiff was not totally disabled for the purpose of the policy.

But the Appeals Court disagreed, finding the coverage provision ambiguous.

“[A]n ambiguous provision must be construed in favor of the insured,” Judge Gary S. Katzmann wrote for the court. “Thus, we conclude that the policy for which [the plaintiff] contracted should be interpreted as insuring him in the specified occupation of ‘chiropractor.’ That he was able to work as a nurse for the period in question does not preclude him from collecting total disability benefits.”

The 13-page decision is McLaughlin v. Berkshire Life Insurance Company of America.

‘Enormously helpful’

Plaintiff’s counsel Roy A. Bourgeois of Bourgeois White in Worcester said the decision underscores the concept that ambiguities in a policy will be construed against the carrier and in favor of the insured.

“This is particularly important in disability policies because consumers can become so terribly dependent on them at the most difficult times of their lives,” he said.

Bourgeois added that the insurance company’s argument that the definition of “occupation” changed from what it was at the time of the application would penalize anyone who tries to adapt to a disability by engaging in an alternative occupation.

“That makes no sense,” he said. “Why would you give benefits to a person who gives up working entirely in the face of disability, but deny them to somebody who wants to work and tries a new and different job?”

Mala M. Rafik of Rosenfeld, Rafik & Sullivan in Boston represents claimants in disability coverage cases. She said the ruling will be “enormously helpful” to those who seek to continue working, even if they can no longer perform the duties of their occupation.

Rafik said many of her own cases involve insurers attempting to define “occupation” as broadly as possible so as to limit liability under contracts for total disability benefits.

“The more broadly an individual’s occupation can be defined, the easier it is [for the insurer] to claim that someone is not totally disabled, or to place them in the partial disability category,” she said, emphasizing that people in specialized occupations purchase disability policies under the assumption that the income they would have received from the profession they spent much time and money training for will be protected, even if they try to accommodate their symptoms by finding other work.

“[Insurers’] broad readings, I believe, and clearly the Appeals Court agrees, contradict the intent of the parties when entering into the contract,” she said.

Rafik predicted, however, that insurance companies will continue to push for the broadest possible reading of “occupation,” so it is critical for policyholders to be consistent in every communication with an insurer as to the nature of their occupation, particularly if the occupation evolves after the purchase of a policy.

Edward J. McDonough Jr. of Egan, Flanagan & Cohen in Springfield, who represented the insurer in McLaughlin, declined to comment. The defendant is considering further appellate review.

Change of occupation

In 1987, plaintiff Clifford McLaughlin, a chiropractor, purchased a total disability policy from defendant Berkshire Life Insurance Co. of America. The policy provided $3,000 a month in disability benefits.

On his application, in the section marked “occupation,” McLaughlin identified his job title as “sole practitioner” and his “exact duties” as chiropractor.

When the plaintiff applied to change his policy’s elimination period in 1993, he again specified that his occupation was chiropractor.

In 2002, the plaintiff began experiencing pain in his left thumb. As it worsened, he scaled back his chiropractic practice and began studying to become a licensed practical nurse as a “back-up plan.”

In 2005, having received his degree, he started to work as a nurse in addition to continuing his chiropractic practice part time. He went on paying premiums under his policy with Berkshire without changing his occupational classification.

By March 2007, the condition of the plaintiff’s left thumb deteriorated and he began to feel pronounced pain in his right thumb. A month later, a hand surgeon diagnosed him with basal joint arthritis.

The plaintiff continued his chiropractic work until June 2007, when he hurt his right thumb while performing a spine adjustment and determined that he could not go on practicing. He submitted claim forms to Berkshire the next day.

The following February, after the insurer failed to affirm or deny his claim, the plaintiff filed suit in Superior Court seeking a declaration that he was entitled to benefits under the policy and alleging breach of contract and violations of G.L.c. 176D and 93A.

Meanwhile, the plaintiff continued to work part time as a nurse until August. After thumb surgery, he did not return to work.

In March 2009, after the 180-day elimination period under the plaintiff’s policy, Berkshire began making total disability payments to the plaintiff.

Judge Bruce R. Henry granted summary judgment to the insurer in January 2010, finding that while the plaintiff was disabled from performing his duties as a chiropractor from June 2007, when he stopped practicing, to Aug. 27, 2008, when he could no longer work as a nurse, he was not totally disabled during that period for the purposes of his disability policy.

The plaintiff appealed.

Ambiguous provision

The Appeals Court found that the plaintiff should have been considered totally disabled during the 14-month period in question.

In so finding, the court rejected the insurer’s argument that the term “occupation” refers to the occupation a policyholder is carrying out at the time of injury and that reading the policy to define “occupation” as the occupation at the time of application would effectively read out of the policy the “non-cancellation” provision, which anticipates the possibility of a change in occupation. Under that provision, Berkshire guarantees continued coverage as long as premiums are paid as required, even if the policyholder changes occupations.

“We agree that with respect to some policies, [this would be] a correct articulation of coverage,” Katzmann said. “There are some policies, for example, that explicitly define ‘occupation’ in a particular way or expressly provide that in determining whether an insured can collect total disability, the relevant occupation is that which the policyholder is performing at the time he is disabled.”

However, such policy language is not present in McLaughlin, the court found.

“Even if we accept as reasonable Berkshire’s interpretation that the ‘non-cancellation’ provision of the policy means that an insured’s occupation should be determined at the time of disability because the insured could change occupation without penalty, we do not find such an interpretation to be the only fair reading of the policy,” Katzmann said. “Indeed, absent the type of policy language analyzed above, a fair understanding of the policy here is that McLaughlin contracted for coverage of the specific occupation of ‘chiropractor.’”

Such a conclusion is consistent with the principle that occupational disability policies can be designed to protect an insured’s investment in a particular set of skills, the judge said.

Additionally, because reasonable people could interpret the policy differently, it is ambiguous and must thus be construed in favor of the insured, Katzmann said.