## Facts

- Connecticut General issued Sun Oil a group long-term disability policy effective January 1, 1970, providing benefits equal to 50% of base monthly earnings up to $5,000.
- The policy included coordination-of-benefits clauses reducing contract benefits by “other income benefits,” including workers’ compensation and 50% of the employee’s primary Social Security benefits, and capping the combined total of benefits at 75% of base monthly earnings.
- William F. Cody, a Sun Oil employee, elected coverage and paid part of the premium through payroll deductions, but never received the master policy; Sun Oil distributed an employee booklet describing benefits.
- Cody testified that, based on the booklet, he believed he would receive 75% of his base pay if he became disabled.
- Cody was seriously injured in a work-related trucking accident and became totally disabled.
- A jury found Cody totally disabled for the relevant period, but the trial judge treated damages as turning solely on legal interpretation and enforceability of the coordination provisions.
- Applying the coordination clauses, the judge concluded workers’ compensation and Social Security fully offset contract benefits, resulting in zero payable benefits, and entered judgment for the insurer.

## Issues

1. Whether coordination-of-benefits clauses in a group disability policy are unenforceable as contrary to Massachusetts public policy, particularly as reflected in Mass. Gen. Laws ch. 175, § 110E.
2. Whether § 110E’s public-policy limitations prevent enforcement of coordination clauses in a group disability contract that took effect before the statute’s enactment.
3. Whether the trial judge was required to submit damages to the jury where the amount depended only on contract interpretation and enforceability of the coordination clauses.

## Decision

- The Supreme Judicial Court affirmed judgment for Connecticut General.
- The court held that coordination-of-benefits clauses do not violate Massachusetts public policy unless the insurer used misleading marketing practices or the policy as a whole lacks substantial economic value.
- The court concluded § 110E did not bar enforcement of the coordination clauses in this pre-statute contract.
- The court held the judge properly withheld damages from the jury because any damages depended only on legal questions of contract interpretation and clause enforceability.

## Legal Principles

- Coordination-of-benefits provisions in group disability insurance are not per se void on public-policy grounds.
- Such provisions are unenforceable only if (1) the insurer engaged in misleading marketing practices, or (2) the contract, viewed as a whole, is unrealistically limited or so limited in scope as to have no substantial economic value.
- For group disability contracts predating Mass. Gen. Laws ch. 175, § 110E, the statute’s public-policy concerns may inform review but do not automatically invalidate coordination clauses.
- Contract interpretation and enforceability determinations that mathematically control damages present questions of law for the court, permitting the judge to decide damages without jury submission.
- Going forward, coordination-of-benefits clauses in group disability policies will be examined against the public policy that insurance contracts not be misleading and not be limited so severely as to lack substantial economic value.

## Conclusion

Massachusetts permits coordination-of-benefits clauses in group long-term disability policies, and the insurer owed no benefits where enforceable coordination terms fully offset payments with workers’ compensation and Social Security, absent proof of misleading marketing or coverage without substantial economic value.


Cody v. Conn. Gen. Life Ins. Co., 439 N.E.2d 234 (Mass. 1982)