Barnes v Unum Life Insurance of America

Barnes v. Unum Life Ins. Co. of Am., No. 1:19-CV-138, 2020 WL 10221073, at *1 (E.D. Tenn. Nov. 24, 2020)

Our client worked as the CEO of a medical clinic, overseeing over 100 employees and “meet[ing] the day to day demands of 12 physicians and 4 nurse practitioners.” Barnes v. Unum Life Ins. Co. of Am., No. 1:19-CV-138, 2020 WL 10221073, at 1 (E.D. Tenn. Nov. 24, 2020).

Our client also served as a consultant for two other companies; all his work was sedentary. Id.

Unum Life Insurance provided long-term disability coverage to our client through his employer.  Unum’s policy provided benefits for the first 24 months of disability if he was “unable to perform the material and substantial duties of [his] regular occupation and [is] not working in [his] regular occupation or any other occupation” or “unable to perform one or more of the material and substantial duties of [his] regular occupation, and [he has] a 20% or more loss in [his] indexed monthly earnings while working in [his] regular occupation or any other occupation.” Id.

If our client remained disabled after 24 months, he could get continued benefits if he was “unable to perform the duties of any gainful occupation for which [he is] reasonably fitted by education, training, or experience.” Id.  The policy also defined a “gainful occupation” as one “that is or can be expected to provide [him] with an income within 12 months of [his] return to work, that exceeds” either “80% of [his] indexed monthly earnings, if [he is] working” or “60% of [his] indexed monthly earnings, if [he is] not working.” Id. The policy also limited benefits to 24 months if disability is caused by a mental health condition. Id.

Our client filed a claim for disability benefits with Unum due to orthopedic problems as well as other health conditions, including cancer. Unum initially approved our client’s claim for benefits, but stated they wanted our client to obtain an MRI to track the progress of his orthopedic problems. Id. at 2.

Our client was scheduled for an MRI but was told not to attend by his neurosurgeon; because of our client’s cancer diagnosis the doctor recommended that our client not be exposed to the radiation. Id.

After our client was unable to have the MRI, Unum denied his claim.  Our client requested a reconsideration, but Unum refused to change its decision. We then filed a timely appeal, submitting several important pieces of evidence including evidence about our client’s mental health, “a functional capacity evaluation (‘FCE’), a letter from the Social Security Administration granting benefits, documents showing that Plaintiff had been granted benefits under another disability plan, a form listing restrictions and limitations provided by Plaintiff’s general practitioner…” and other documents. Id.

Unum again denied that claim, stating our client was “no longer limited from performing the material and substantial duties of his regular occupation and no longer [met] the definition of disability.” Id. We then filed suit against Unum Life Insurance Company, asserting our client’s long-term disability benefits were wrongly terminated.

Courts in ERISA cases review denied claims either under a de novo or a deferential “arbitrary and capricious” or “abuse of discretion” standard of review.  Under a de novo standard of review, “[t]he administrator’s decision is accorded no deference or presumption of correctness.” Id., citing Hoover v. Provident Life & Acc. Ins. Co., 290 F.3d 801, 809 (6th Cir. 2002). A court’s “review is limited to the record before the administrator and the court must determine whether the administrator properly interpreted the plan and whether the insured was entitled to benefits under the plan.” Barnes, 2020 WL 10221073, at 2. The court went on to explain, “[t]he purpose of the de novo review ‘is to determine whether the administrator made a correct decision.’” Id. Under a de novo review, the insured has the burden of proving by the preponderance of evidence that he or she is entitled to benefits.” Id., citing O’Neill v. Unum Life Ins. Co. of Am., No. 18–1382, 2018 WL 7959523, at *3 (6th Cir. Nov. 19, 2018).

The de novo standard applies as the default rule in ERISA cases, but can be changed if the plan “gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S.  101, 115 (1989.) If the plan does contain such language, then the more deferential standard of review applies.  The more deferential standard is called the “arbitrary and capricious” or “abuse of discretion” standard of review, under which courts give the benefit of the doubt to the decision by the insurance company, usually affirming their decision if it is reasonable; however, less deference is given to the insurance company’s decision when the insurance company is operating under a conflict of interest.

Unum agreed that our client’s plan did not afford Unum the discretionary authority to determine benefit eligibility, so a de novo review was applied by the court. Barnes, 2020 WL 10221073, at 2. 

The court first addressed Unum’s argument that the evidence in the record lacked objective evidence, which can be grounds to affirm an insurance company’s denial of benefits.  The court explained that Unum’s argument was “groundless” because we had submitted on behalf of our client MRI’s, X-rays and an FCE. Id. at 3. The court noted that the evidence we submitted provided objective evidence of a long list of orthopedic problems.  Id.  The court acknowledged that an updated MRI could have been helpful, Unum “requiring one against the advice of Plaintiff’s doctor is unnecessary especially since other evidence is in the claim file.” Id.

After finding our client had submitted sufficient objective evidence of a condition, the court next turned to the question whether our client had submitted sufficient evidence that “he cannot ‘perform one or more of the material and substantial duties of [his] regular occupation ….’ ” Id. at 4.

To support our client’s argument that his condition precluded him from performing the duties of his occupation, we submitted the FCE mentioned above.  The court noted that our client gave consistent effort during the FCE, and that the FCE report included a long list of specific restrictions that would preclude sedentary work and that and our client, “could not safely and dependably perform any gainful employment.” Id. at 4.

The court considered Unum’s arguments that the FCE was unreliable and that our client was exaggerating because his heart rate did not go high enough during the FCE. Unum also pointed to some internal inconsistencies in the FCE report, such as that our client is right-handed, yet his right hand was weaker on testing. Id. Further, the court noted that Unum attempted to attack the credibility of the FCE examiner based on additional information. Id.

The court first rejected Unum’s arguments about the credibility of the FCE examiner because “the information that [Unum] now discusses is not in the administrative and does not appear to be a basis for the denial.” Id. The court then explains that the evidence Unum attempted to rely on would not be considered “[b]ecause the Court’s review is limited to the administrative record, the information does not affect its decision.” Id., citing Kalish v. Liberty Mut./Liberty Life Assur. Co. of Bos., 419 F.3d 501, 511 (6th Cir. 2005) (“The administrative record in an ERISA case includes all documentation submitted during the administrative appeals process because this information was necessarily considered by the plan administrator in evaluating the merits of the claimant’s appeal.”)

The court then turned to Unum’s arguments about the findings within the FCE and found those arguments “unpersuasive.” Barnes, 2020 WL 10221073, at 4.  The court noted that minor inconsistencies do, “not take away from the other findings of the FCE, such as Plaintiff’s ability to lift objects or ability to sit and stand.” Id.  The court further found “no basis to support [Unum’s] argument other than anecdotal statements” that the lack of strength in our client’s dominant hand was evidence of inconsistencies sufficient to undermine the findings of the FCE report.  Id.  Ultimately, the court explained that since Unum’s “arguments are unpersuasive, the Court will accept the FCE as objective evidence of Plaintiff’s ability to work.” Id.

The court next noted that the court could also rely on subjective evidence in reviewing an administrator’s decision, giving it weight in accordance to how much it is supported by medical tests and other objective findings that underlie it. Id. at 5.  The court noted that our client had reported constant pain, but that Unum had apparently rejected that when their file reviewers stated his pain medications had not increased.  Id. But the court next noted that we had pointed out that during the time period leading up to his disability, our client’s pain medications had doubled.  Id. 

The court then summarized that our client’s MRI’s and X-rays showed he had the orthopedic medical problems he had stated caused his disability, that the FCE provided an objective test of his ability to work, and his prescriptions showed he suffered an increasing amount of pain. Id. On the other side, Unum had “not provided any other objective evidence to contradict Plaintiff’s evidence.” Id. 

The court next turned to an analysis of our the opinions of our client’s own doctors as well as the healthcare professionals who provided opinions for Unum.  Id. at 5-9.  The court began its analysis by first noting that, “[i]n general, one medical doctor’s opinion is not more valid than another’s.” Id. at 5, citing Kalish v. Liberty Mut./Liberty Life Assur. Co. of Bos., 419 F.3d 501, 510 (6th Cir. 2005).  The court also noted that, “[a] treating physician’s opinion does not receive any special treatment, and there is no ‘heightened burden of explanation on administrators when they reject a treating physician’s opinion.’” Barnes, 2020 WL 10221073, at 5, citing Kalish, 419 F. 3d at 508, in turn quoting Black & Decker Disability Plan v. Nord, 538 U.S. 822, 831 (2003)).

However, the court went on to explain, that “this general statement that one medical doctor’s opinion is of the same value as another has caveats. According to the Sixth Circuit, ‘when a plan administrator’s explanation is based on the work of a doctor in its employ, we must view the explanation with some skepticism.’”  Barnes, 2020 WL 10221073, at 5, citing Kalish, at 507, in turn quoting Moon v. Unum Provident Corp., 405 F.3d 373, 381–82 (6th Cir. 2005)). 

The court also noted that whether or not a doctor physically examined a claimant is a factor to take into account, and that a doctor’s opinion from one who only reviews medical records may be given less weight. Barnes, 2020 WL 10221073, at 5, citing to Moon, supra. The court quoted, “we find that the failure to conduct a physical examination … may, in some cases, raise questions about the thoroughness and accuracy of the benefits determination.”). Barnes, 2020 WL 10221073, at 5, citing to Moon, supra and Calvert v. Firstar Finance, Inc., 409 F.3d 286, 295 (6th Cir. 2005).  But, the court also noted, relying on a file review alone does not “require the conclusion that [a plan administrator] acted improperly.” Barnes, 2020 WL 10221073, at 5, citing to Kalish, 419 F.3d at 508 and Holt v. Life Ins. Co. of N. Am., 2015 WL 1243529, at 5 (E.D. Tenn. Mar. 18, 2015).

Further, the court noted that when an insurance company’s decision relies on a file-reviewing doctor’s credibility determination “then the plan administrator’s opinion does not receive as much weight, especially when the plan administrator has the right to examine the claimant.” Barnes, 2020 WL 10221073, at 5, citing to Smith v. Cont’l Cas. Co., 450 F.3d 253, 263–64 (6th Cir.2006) and Holt, supra.  

The court then noted that six doctors and two other health professionals who supported our client’s disability all had treated or examined him, while the five doctors/medical professionals relied on by Unum only conducted file reviews. Barnes, 2020 WL 10221073, at 6.  Further, Unum had the right under the policy to have our client examined but chose not to. Id. 

In its concluding analysis, the court determined that our client met his burden and showed he was disabled under the two applicable definitions of disability under the policy (the first requiring disability from his own occupation for 24 months and the second requiring disability from any gainful occupation after that). Id. at 10.

The court then addressed the conflicting opinions between our client’s doctors supporting disability and Unum’s file-reviewers supporting a decision to deny.  The court again noted that courts can give less weight to the opinions of doctors who never examined the claimant. Id., citing Kalish, 419 F. 3d at 508-510.  Thus, explained the court, the opinions of our client’s treating doctors, along with the objective evidence submitted were more persuasive. Id. at 10   

The court returned to Unum’s arguments that there were inconsistencies with the FCE and the opinions of the treating doctors, which the court characterized as essentially challenging the credibility of the FCE. Citing to Smith v. Cont’l Cas. Co., 450 F.3d 253, 263–64 (6th Cir. 2006), the court explained, “Sixth Circuit law is clear that a file reviewer’s credibility determination doesn’t go very far. … If credibility is a question, a plan administrator should examine the claimant, not simply deny benefits.” Barnes, 2020 WL 10221073, at 11.

The court concluded its analysis of the evidence by explaining how our client’s complaints of pain were well supported by the record, by his medications, and by its consistency with the objective medical findings, therefore his pain should properly be taken into account. Id.  

Unum’s final argument to avoid paying benefits was the assertion that since Unum had denied our client his ongoing benefits before he could complete the first 24 months of benefits under the own occupation standard, the court should only award the rest of the first 24 months of benefits, and remand to Unum to consider whether he was entitled to more benefits. Id. The court responded to the argument this way: “The Court sees no need. Plaintiff has shown that he cannot perform sedentary jobs at all and that his condition likely will never improve. Further, “[p]lan administrators should not be given two bites at the proverbial apple where the claimant is clearly entitled to disability benefits.” Id., quoting from Cooper v. Life Ins. Co. of N. Am., 486 F.3d 157, 172–73 (6th Cir. 2007).

Unum also brought a counter claim against us, believing that our client owed Unum payments from his Social Security Administration benefits. However, while our client received benefits from the SSA and Unum, he spent the amount given to him by Unum. Because of this, Unum could not recoup payments. Barnes, 2020 WL 10221073, at 12-13.  Specifically, under the Supreme Court case Montanile v. Bd. of Trustees of Nat. Elevator Indus.  Health Benefit Plan, 577 U.S. 136 (2016), a fiduciary like Unum must identify specifically funds in the possession of someone like our client.  If the person has spent the money, or as the Supreme Court explains it, if the person “dissipated” the entire fund on “non traceable items, that complete dissipation eliminated the lien” there are no identifiable funds for Unum to get a lien on. Barnes, 2020 WL 10221073, at 13. Therefore, Unum could not recover the money they claim they overpaid for the months our client had been paid his full LTD benefits and for which he was later awarded social security benefits. Id. The Court, relying on Montanile, denied Unum’s counter claim.