Federal District Court Overturns Unum’s Decision To Terminate Long Term Disability Benefits

On March 25, 2014, the Federal District Court sitting in Orange County, California reached the conclusion that Unum Life Insurance Company of America had wrongfully terminated the long term disability benefits of one of Kantor & Kantor’s clients. Attorneys Brent Dorian Brehm and Corinne Chandler handled the trial against Unum. They were able to prove that (1) the evidence showed that Plaintiff remained disabled, (2) that Unum violated the Plan’s terms by terminating benefits based on hypothetical future work capacity, (3) that Unum violated the Plan’s terms by terminating benefits based on part-time work capacity,(4) that Unum was incorrect in arguing that Plaintiff failed to satisfy the Plan’s Evidence of Continuing Disability Provision, and (5) that Unum’s decision to terminate Plaintiff’s long term disability benefits on the basis that Plaintiff is no longer disabled was in error and must be overturned.

This Employee Retirement Income Security Act (“ERISA”) case involved a dispute over the continuation of long term disability (“LTD”) benefits. Those benefits are provided under the SPIB Insurance Agency Inc./Sun Pacific Insurance Brokers, Inc. Plan (the “Plan”). The insurer of the Plan is Defendant, Unum Life Insurance Company of America (“Unum”). Unum also served as the Claim Administrator, creating a structural conflict of interest. The parties agreed that the appropriate standard of review for the trial was the de novo standard. Plaintiff, through Kantor & Kantor, requested the Court to find that Unum wrongfully terminated her LTD benefits because she remains disabled from “any occupation.” Plaintiff also requested the Court to find that Unum failed to properly calculate her monthly benefit.

Since 2007, our client has undergone three significant back surgeries in an effort to alleviate her severe back pain. The first surgery occurred on August 7, 2007 and was not a success. Two additional spine surgeries also did not relieve her disabling back pain. Unable to work, our client made a disability claim to Unum and the Social Security Administration. Both found her to be disabled from her sedentary occupation as an Administrative Assistant (aka Secretary).

Over a year after our client’s last surgery, Unum reached the conclusion that “claimant would only be able to perform approximately 4 hours of sitting in an 8 hour day….” According to Unum, four hours of sitting falls into the “frequent” category (34-66%). Unum recognizes one must be able to sit at least six (6) hours a day to be capable to perform a sedentary job. Six hours of sitting falls into the “constant” category (67%-100%). Hence, Unum’s vocational consultant reached the conclusion that our client’s ability to sit frequently “would not allow for capacity for sedentary work” Multiple legal cases have reached the same conclusion.

As a result of this finding, Unum advised our client: “Based on the facts of your claim, as well as our clinical review, we do not anticipate a change in your medical status and therefore, have made the decision to extend our approval of your benefits through February 20, 2030”

A MRI taken on October 3, 2011 confirmed that the degenerative disease in our client’s spine had not changed. Inexplicably, however, Unum determined that our client was able to perform full-time work. Unum’s justification for its change of position was patently erroneous. As explained by Unum’s internal paper only medical reviewer Dr. Robert J. Clinton: “My reasoning is that the insured’s back pain has been stable….” According to Unum, because our client’s condition had not deteriorated further, she was no longer disabled. This is exactly the logic the Ninth Circuit has said is unreasonable under the more deferential abuse of discretion review.

Unum hoped to find support for its unreasonable conclusion by sending our client to a medical examination. The medical examiner, Dr. Kamran Hakimian, came to the conclusion that our client would be able to work a sedentary job on a part-time basis – provided she was allowed a 10 minute break every hour.

Based on this examination, Unum asked its legal department if it could advance six weeks of benefits and terminate the claim. Unum also inquired whether the claim could be terminated if the claimant had part-time work capacity. Unum’s Vice President and Managing Counsel, John LoBosco, responded “While the prior policy the employer had with Unum permitted benefits to end if the claimant was able to work part-time and was not, the 2007 policy does not contain that provision. In the absence of that provision, an advance pay and close in these circumstances would require claimant’s agreement.” Despite this advice from its legal department, Unum did not ask our client if she agreed with this proposal. Rather, two days later, Unum advance paid and terminated our client’s benefits based on hypothetical future work capacity.

As part of her appeal of the termination of benefits, Kantor & Kantor sent our client to undergo objective testing of her functional capacity. The testing showed that she had even more severe limitations than assessed by Unum. She was limited to occasional sitting (1-33%) with a continuous duration of less than 30 minutes. This is far less than necessary for sedentary work.

The functional capacity evaluation also included validity factors verifying that our client “gave maximum effort with testing.” Perhaps most telling: “The client’s heart rate rose significantly corresponding with reports of pain during activities.”

On appeal, Unum again determined that our client was limited to “frequent” sitting capacity. Irrationally, Unum then concluded this allowed for sedentary work. This is contrary to the law and Unum’s own definitions. Thus, Kantor & Kantor filed a lawsuit in Federal Court asking the Court to overturn Unum’s wrongful termination of her benefits. Following the trial, the Court granted judgment in our client’s favor.

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