The casenote of the month is from the Disability E-News Alert! a monthly newsletter describing new disability insurance developments. For subscription information, e-mail Mark DeBofsky or visit www.disabilityenewsalert.com .
Burton v. Unum Life Ins.Co. of America, 2010 U.S.Dist.LEXIS 58267 (W.D.Tex. June 14, 2010)(Issue: Under the Care of a Doctor). Charles Burton, an attorney who had enjoyed an extraordinary career in both private practice and government service, began suffering from depression in 2004 following a divorce. Although a psychiatrist began treating him for depression, and noted concern about a bipolar disorder and began prescribing Depakote, Burton was resistant to treatment and notified the psychiatrist that he was discontinuing mood-stabilizing medication. Burton also ceased treatment in 2004. In 2005, Burton began a new job; however, he failed to perform and resigned in March 2007. In 2008, Burton applied for long-term disability with Unum claiming disability due to bipolar disorder and identifying two current treating doctors.
Unum denied the claim asserting a lack of evidence Burton had ceased working on account of his psychiatric condition. The only records near the time Burton stopped working were those of his internist; however, she made no mention of psychiatric issues in her records. Although Unum conceded that Burton was currently disabled due to bipolar disorder, due to the absence of evidence that he ceased working due to his condition, Unum found the claim unsupported.
Burton also filed for Social Security disability benefits; and the SSA approved the claim finding him disabled as of his last day of work. The entire Social Security claim file was supplied to Unum as part of a pre-suit appeal that pointed out the absence of medication or treatment as of the alleged onset date was a symptom of his condition and that Unum should follow the SSA determination. Unum again disagreed. Although Unum claimed it gave significant weight to SSA's determination, it maintained Burton was not disabled under the terms of the policy because he was not being treated at the time of his alleged onset of disability nor advised to cease working on account of his medical condition. Unum also maintained its policy contained a "regular care" provision that the Social Security Administration does not have. Under a deferential standard of review, the court agreed.
The court determined the review by the Social Security physician whose report supported the disability and onset determination was not conclusive; and Unum had the authority to rely on its own in-house psychiatrists. While Unum's claim manual requires giving great deference to a Social Security determination, the court agreed that even though non-compliance with treatment is a symptom of bipolar disorder, the overall conclusion reached by Unum was reasonable. The court ruled it was appropriate to rely on Unum's in-house physicians and the failure to be in treatment torpedoed the claim. The court also rejected Burton's conflict claim, finding that although Unum does have a history of biased claims administration, there was no evidence the conflict infected the determination reached. The court explained:
The circumstances and the record do not suggest any real likelihood the structural conflict affected the benefits decision in this case, especially because the decision is justified on a purely objective ground: Burton was not under the care of a physician for his bipolar disorder during any of the time he worked for Baker Botts or immediately thereafter, and the Policy undisputedly requires the opposite. The fact Unum relied on the opinions of in-house physicians for the disability determination therefore carries little weight, as there was substantial reason for the denial of Burton's claim simply based on his lack of compliance with the clear terms of the Policy. However, Unum should consider itself warned that if this case had turned on the determinations of its in-house physicians as to whether Burton was "impaired" in March 2007, or if the opinions of the in-house physicians had in fact conflicted with an opinion (even a retroactive opinion) of one of Burton's treating physicians, Unum's conflict of interest might well have weighed far more heavily in the Court's abuse of discretion analysis, and might even have tipped the scales against Unum. *32-*33.
The court also found that Unum had adopted new practices to ameliorate its past misbehavior.
Thus, the court concluded Unum's determination was not arbitrary and capricious although the court did bemoan that "it is obvious Burton has a mental illness and should have remained on medication for that illness. The SSA, considering the exact same evidence as Unum, held Burton was totally disabled as of March 2007. Unum has ignored this finding and denied Burton's claim." The court added that it "laments the unfortunate result of this case and the fact Unum has escaped payment to a man who is clearly mentally ill by rigidly and aggressively enforcing the terms of its Policy against him, even though his non-compliance may arguably have been a symptom of his illness." The court asserted that the "fix" is in the marketplace, not in the courts.
Discussion: Sadly, it appears the court was unaware of Radford Trust v. First Unum, 321 F.Supp.2d 226 (D.Mass. 2004), a case also involving an attorney suffering from bipolar disorder. There, the court looked at the attorney's billing records and other contemporaneous documentation from the Plaintiff's law firm as corroborative evidence of a marked decline in performance due to psychiatric symptoms even though he had not seen a doctor until several months after he ceased working and was not receiving treatment while employed. The court soundly rejected Unum's argument that the insured had to be under the care of a doctor when last employed, and held that a subsequent opinion could relate back to the date last insured. The court explained, "Obviously, a doctor's diagnosis of schizophrenia would be highly probative that disability began at least on the date of diagnosis, but there was nothing in the Policy to suggest that it was impossible to prove disability before the date of diagnosis, or that unless a visit to a physician occurred before active employment terminated, an employee was ineligible for benefits." 321 F.Supp.2d at 245. The court further explained, "It is not uncommon for a disability to lead to the cessation of active employment, and unfortunately, it is far from unheard of for a company, in good faith or otherwise, to fire an employee when he becomes disabled. The availability of benefits under the Policy cannot turn on the accident of whether the insured was fortunate enough to get to see a doctor before employment terminated." Id. Accord, Kaplan v. Northwestern Mutual Life Insur.Co., 115 Wn. App. 791; 65 P.3d 16, 2003 Wash.App.LEXIS 270 (2/24/03)(published in part), where the court found the "under the care of a physician" clause ambiguous since it is not clear whether the insured needed to be under the care of a doctor at the time the disability arose or when the claim was brought. Thus, particularly in mental impairment claims, so long as a current treating physician certifies disability retroactive to a particular date, the insurer cannot deny benefits in reliance of the "under the care of a physician" clause. Also see, O'Connell v. Unum Provident, 2006 U.S.Dist.LEXIS 51038 (D.N.J. 7/25/2006).
Thus, instead of bemoaning that its hands were tied, the court should have ruled for the Plaintiff since Unum is obviously a repeat offender on precisely this issue.
This note appeared in the Disability E-News Alert! For subscription information, please go to www.disabilityenewsalert.com .