Struggle over ‘mental illness’ exclusions

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Struggle over 'mental illness' exclusions

Chicago Daily Law Bulletin
March 31, 2008

by MARK D. DEBOFSKY

Fitts v. Unum Life Ins.Co. of America, 2008 U.S.App.LEXIS 6451 (D.C. Cir. March 28). This case, which concerns the issue of whether bipolar mental illness falls within Unum's 1995 policy limitation relating to mental disorders, has had a long history. The first ruling, Fitts v. Federal National Mortgage Assn., 191 F. Supp. 2d 67 (D. D.C. 2002), held that bipolar mental illness would not fall within the mental impairment limitations of a UNUM long-term disability policy because the policy definition failed to specifically include that illness, and substantial evidence supported a conclusion that bipolar mental illness is organic. That opinion was later vacated (2002 U.S. Dist. LEXIS 26212 (D.D.C. May 10, 2002)), but a subsequent ruling again found the definition of ''mental illness'' ambiguous, leading to application of the doctrine of contra proferentem to construe the ambiguity in favor of the insured - Fitts v. Unum Life Insur.Co. of America, 2006 U.S. Dist. LEXIS 9235 (D.D.C. Feb. 23, 2006). Ultimately, in Fitts v. Unum Life Ins.Co. of America, 2007 U.S.Dist.LEXIS 33397 (D.D.C. May 7, 2007), the court awarded partial summary judgment to the plaintiff, finding as a matter of law that Fitts was entitled to benefits under the policy. The saga will continue, since this ruling vacated the district court's judgment and remanded the case.

The policy at issue here defines ''mental illness'' as ''mental, nervous or emotional diseases or disorders of any type'' and limited the payment of benefits to a maximum duration of 24 months if the diagnosis was deemed to fall within that definition. Fitts maintained that bipolar disorder is a physical illness, not a mental illness; ultimately, the district court agreed. The Court of Appeals reversed, framing the issue as follows:

''In reaching this conclusion, the court thought there was 'no dispute over the possible causes and manifestations of bipolar disorder. Both parties' doctors acknowledge that bipolar disorder is characterized by a combination of physical, psychological, and social factors, and they generally agree as to what those factors are.' Id. The courts of appeals disagree whether a court may rely on a cause-based interpretation of illness to find ambiguity in an ERISA-covered plan. The Fifth Circuit believes that permitting a cause-based interpretation would eliminate the distinction between mental and physical disorders. Lynd v. Reliance Standard Life Ins. Co., 94 F.3d 979, 984 (5th Cir. 1996). The Eighth Circuit holds that it is improper to consider the cause of a mood disorder because a layperson classifies an illness by its symptoms, not its causes. Brewer v. Lincoln Nat'l Life Ins. Co., 921 F.2d 150, 154 (8th Cir. 1990). The Seventh, Ninth, and Eleventh Circuits hold that a cause-based interpretation is permissible. Phillips v. Lincoln Nat'l Life Ins. Co., 978 F.2d 302, 310-11 (7th Cir. 1992); Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 541 (9th Cir. 1990); Billings v. Unum Life Ins. Co. of Am.,459 F.3d 1088, 1090 (11th Cir. 2006).''

The court concluded there was disagreement in the record both as to the cause of bipolar illness in general and as to whether Fitts's disorder had a physical cause. Because the matter was decided on summary judgment, the court of appeals ruled it was improper for the district court to have decided the issue as a matter of law.

A concurrence highlighted additional issues. First, the concurring judge faulted the district court's holding that no bipolar disorder may constitute a mental disorder under the policy. Second, it was never conclusively determined what caused Fitts's disorder. Third, it remained unclear whether Fitts' disorder was caused in part by physical factors. The court elaborated:

''Unum admits that some neurological disorders with physical causes and behavioral symptoms - such as Alzheimer's disease or vascular dementia - are not mental illnesses as defined by its policy. If it is determined that Fitts' bipolar disorder does have a physical cause, then, at the very least, the District Court must determine whether the causal nexus between physical factors and behavior symptoms for Fitts' bipolar disorder are more similar to the neurological disorders fully covered by Unum, or to traditional mental illnesses that are subject to the policy limitation.''

This ruling illustrates how difficult it has been for courts to deal with exclusions such as this in disability policies. As the court explained, there are two schools of thought at to how ''mental illness'' in a disability insurance policy is to be viewed. One school, exemplified by Billings v. Unum Life Insur.Co. of America, 459 F.3d 1088 (11th Cir. 2006), looks to the cause of the disorder, while other cases such as the ones cited above and those catalogued in Parker v. SunLife Assurance Co. of Canada , 2005 U.S. Dist.LEXIS 15436 (M.D.Fla. July 29, 2005), take a symptom based approach and would subject any condition whose symptoms are behavioral and are treated by mental health professionals to the policy limitation. Yet another approach is simply to see whether the condition at issue is listed in the compendium utilized by the mental health profession - the Diagnostic and Statistical Manual of Mental Disorders IV (DSM IV) (American Psychiatric Association 2000). See, Fuller v. J.P. Morgan Chase & Co. , 423 F.3d 104 (2d Cir. 2005). Many insurance policies have been rewritten to define ''mental illness'' in this manner, precisely to avoid having to litigate cases such as Fitts. As neurobiology advances, though, there will be increasing pressure to altogether eliminate policy limitations relating to mental disorders as being contrary to what scientists are learning about the causes of such conditions.

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