Cox v. Provident Life & Accident Insurance Co., 878 F.3d 504

Cox purchased two individual disability insurance policies from Provident that pay lifetime benefits if disability is caused by injury (accident) but limit benefits to age 65 if caused by sickness; if both contribute, the greater benefit period applies.
In December 2010, age 60, Cox fell into a hole and injured his left knee; MRIs and multiple arthroscopic surgeries followed, revealing a torn medial meniscus and later severe (grade four) chondromalacia/osteoarthritis in both knees.
Provident initially paid total disability benefits, then in March 2014 reclassified Cox’s ongoing disability as caused by degenerative arthritis (sickness) based on a peer review by Dr. Lahey and stopped lifetime payments at age 65.
Cox sued in diversity for breach of contract and tortious (bad-faith) breach of contract seeking damages and punitive damages; the district court granted summary judgment for Provident on both claims.
The Fifth Circuit reversed summary judgment on the breach-of-contract claim, finding a disputed issue of fact about causation (treating physician Shelton testified the fall ‘‘caused or contributed’’ to Cox’s disability), but affirmed summary judgment on the tortious-breach (punitive damages) claim because Provident had an ‘‘arguable reason’’ to deny lifetime benefits based on Lahey’s review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Cox’s disability was caused by injury (entitling him to lifetime benefits) or by sickness	Cox: treating physician Shelton testified the 2010 fall "caused or contributed" to his disability; disputed expert opinions create a jury issue	Provident: peer reviewer Lahey concluded degenerative arthritis, not the fall, is the source of current disability	Reversed summary judgment on breach-of-contract: factual dispute (battle of experts) for jury
Whether Provident breached the Policies by stopping lifetime benefits	Cox: insurer improperly reclassified cause and ceased lifetime payments	Provident: acted reasonably based on Lahey’s medical review and records	Reversed/ remanded on breach claim (issue for jury)
Whether Cox presented evidence of bad faith to support tortious-breach and punitive damages	Cox: argues insurer acted tortiously (but presented no evidence of malice or gross negligence)	Provident: had an arguable reason to deny lifetime benefits (supported by Lahey’s reports)	Affirmed summary judgment for Provident on tortious-breach/punitive damages (no genuine issue)
Whether presence of conflicting expert opinions precludes summary judgment on causation	Cox: conflicts between treating physician and insurer experts create triable issue	Provident: urged court to credit its expert and resolve on summary judgment	Court: expert conflict is for jury; summary judgment improper on causation/breach-of-contract

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard; credibility determinations for jury)
Pittman v. Gilmore, 556 F.2d 1259 (5th Cir. 1977) (trier of fact resolves conflicts between experts)
Universal Life Ins. Co. v. Veasley, 610 So. 2d 290 (Miss. 1992) (elements for tortious breach of an insurance contract/punitive damages)
Guy v. Commonwealth Life Ins. Co., 894 F.2d 1407 (5th Cir. 1990) (definition of "arguable reason" for insurer denial)
Broussard v. State Farm Fire & Cas. Co., 523 F.3d 618 (5th Cir. 2008) (whether insurer had arguable reason is an issue of law)
Blue Cross & Blue Shield of Miss., Inc. v. Campbell, 466 So. 2d 833 (Miss. 1984) (insurer with justifiable reasons shields punitive damages claim)