Sanders v. Unum Life Ins.Co. of America

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 .

Sanders v. Unum Life Ins.Co. of America, 2007 U.S.Dist.LEXIS 35818 (N.D.Ill. 5/14/2007)(Issue: Regulatory Settlement Agreement).  After Unum denied the plaintiff’s claim for disability benefits, she filed suit in the district court.  However, when Mary Sanders was invited to participate in a reassessment of her claim pursuant to the Unum Provident Regulatory Settlement Agreement, she agreed to stay the litigation in order to seek reassessment.  Unfortunately, Unum claimed that Sanders failed to meet the deadline for returning the necessary forms and refused to perform a reassessment.  Sanders then moved in the district court for an order compelling Unum to proceed with reassessment.

Although the court found that a common-law evidentiary principle known as the “mailbox rule” rendered timely Sanders’s return of the reassessment forms (citing Kuchar v. The AT&T Pension Benefit Plan-Midwest Program, 2007 U.S. Dist. LEXIS 18141 (N.D.Ill.) and Barry v. Videojet Systems International, Inc., 1995 U.S. Dist. LEXIS 13421 (N.D.Ill.)), the court determined that the lawsuit, as framed by the pleadings, was to enforce ERISA rights.  Therefore, while the court speculated that “[p]erhaps plaintiff can seek enforcement of the RSA in this court through some third party beneficiary theory, [  ] that is not part of the pleadings and it has not been explored.” *3.  Thus, the court denied the motion to compel, although the court did comment,

Defendant's refusal to honor the reassessment request appears, nevertheless, to be a transparent effort to avoid its obligations under the RSA. In circumstances requiring defendant to pay a hefty fine and transform its procedures, it is indeed troubling that defendant should take such an arbitrary position with respect to what may well be a meritorious claim. But others are in a position to compel compliance with the RSA. We suggest to plaintiff that she furnish a copy of this opinion to the Regulatory Compliance Unit, the Department of Labor, the Lead Regulators and the Illinois Insurance Department. In the meantime, we will continue to wait.

Discussion:      Within days of the issuance of this ruling, Unum agreed to reassess the claim.

This note appeared in the Disability E-News Alert! For subscription information, please go to www.disabilityenewsalert.com .