## Facts

- Dr. Stanley Heller, an Illinois physician specializing in invasive cardiology, sought to consolidate multiple disability policies into a single policy.
- Equitable issued Heller a disability income policy in April 1983 providing $7,000 per month after a 90-day elimination period upon “total disability,” plus a rider providing an additional $1,200 per month for one year during total disability.
- The policy defined total disability as inability, due to sickness or injury, to engage in the insured’s “regular occupation,” and required the insured to be under the “regular care and attendance of a physician.”
- On his application, Heller stated he had no other disability coverage, based on his intention to cancel existing policies after Equitable’s coverage became effective.
- Heller developed carpal tunnel syndrome that, by March 1984, prevented him from performing invasive cardiology.
- Heller submitted a disability claim; Equitable paid benefits after the elimination period but stopped payments in May 1985.
- Equitable asserted Heller was no longer totally disabled because he declined carpal tunnel surgery recommended by some physicians, contending this meant he was not under “regular care and attendance” and prolonged disability.
- Heller maintained he remained unable to perform his specialty occupation and that the policy did not require surgery as a condition of continued benefits.
- The district court entered declaratory relief for Heller and awarded benefits at $5,880 per month for a stated period and continuing while totally disabled, but reduced total benefits and denied certain costs and attorneys’ fees.
- Equitable appealed the coverage determination; Heller cross-appealed the benefit reduction and denial of costs and fees.

## Issues

1. Whether an insured remains “totally disabled” and under the “regular care and attendance of a physician” when he declines recommended surgery but continues physician supervision and conservative treatment.
2. Whether the application statement regarding other disability coverage affected coverage or benefits under the policy.
3. Whether the district court correctly calculated the monthly benefit amount and the period and components of benefits owed under the policy and rider.
4. Whether Heller was entitled to taxable costs and attorneys’ fees under Illinois law based on Equitable’s cessation of payments.

## Decision

- The court affirmed that Heller was entitled to disability benefits under the policy’s total-disability and regular-care provisions for the disputed period.
- The court rejected the insurer’s position that refusal of surgery, by itself, terminated total disability status or failed the “regular care and attendance” requirement.
- The court affirmed in part and reversed in part the district court’s rulings on benefits and expenses, and remanded for further proceedings to correct aspects of the benefit and cost determinations.
- The court applied its appellate practice that arguments not presented to the district court are waived on appeal.

## Legal Principles

- Disability-policy terms are enforced as written; a court will not add a requirement that the insured undergo invasive surgery unless the policy clearly imposes that condition.
- “Regular care and attendance of a physician” generally requires ongoing medical supervision and treatment, not acceptance of every recommended procedure.
- “Total disability” tied to the insured’s “regular occupation” may be measured by inability to perform a specialized occupation, not by capacity to perform other work within the broader profession.
- Ambiguities in insurance contracts are construed against the insurer as drafter, particularly where the insurer seeks to impose substantial additional conditions on coverage.
- Under Illinois law, attorneys’ fees and certain costs depend on whether the insurer’s refusal to pay was vexatious and unreasonable; courts distinguish an incorrect coverage position from bad-faith refusal.

## Conclusion

The Seventh Circuit held that the insurer could not terminate disability benefits solely because the insured declined recommended surgery where the policy did not clearly require it and the insured remained under physician care and unable to perform his specialty occupation; the court otherwise affirmed in part, reversed in part, and remanded to correct aspects of the benefits and cost determinations.


Heller v. Equitable Life Assurance Soc’y of the U.S., 833 F.2d 1253 (7th Cir. 1987)