MANHATTAN (CN) - Professional basketball referees who bought insurance policies with different terms than promised may have a case for breach of contract, the 2nd Circuit ruled Monday.
National Basketball Association referee Ronald Dunn suffered a career-ending knee injury at age 58 in 2002. A similar injury befell his 55-year-old colleague Donald Vaden the next year. Both men said they expected that the supplemental disability insurance that they bought from Massachusetts Casualty Insurance Company would cover them every month until they turned 65.
Steven Lucas, a sales representative for the insurer's administrator Sun Life of Canada, had allegedly assured them: "It covers you in your own occupation. If you can't do your job you're disabled."
Summarizing the case for the unanimous three-judge panel, Judge Richard Wesley noted that Lucas emphasized that point throughout his presentation pitching the supplemental coverage to the two men.
"[Lucas] stressed repeatedly that one of the supplemental insurance's key advantages was that it covered policy-holders unable to perform their 'own occupation' - here, NBA referee - until they were sixty-five years old, regardless of the extent of disability," the 18-page opinion states.
But the contract actually defined "total disability" as inability to perform "any gainful occupation," according to the ruling.
Neither Dunn nor Vaden had read those terms when they signed up.
In 2010, the men sued the companies for breach of contract in Connecticut.
U.S. District Judge Janet Arterton dismissed the case roughly two years later as untimely and noted that the contract's unambiguous language defined injury as inability to secure any employment, not just refereeing.
The Manhattan-based 2nd Circuit reversed Monday.
Dunn and Vaden's "failure to read the policy does not defeat their reasonable expectations," the opinion states.
A Pennsylvania law governing the contract favored the refs on this point, the court found.
"Contrary to the holding of the district court, nothing in Pennsylvania precedent suggests that plaintiffs must allege fraud or misrepresentation before the reasonable expectations of the insured can be applied - in fact, it suggests the opposite," Wesley wrote.
The appellate judges also disagreed that the statute of limitations had been breached. On this point, the trial court had incorrectly applied Connecticut law, rather than the laws of Pennsylvania, according to the opinion.
U.S. District Judge Janet Arterton must hold further proceedings on remand.
Attorneys for both parties have not returned requests for comment.