Freeland v. Unum Life Ins.Co. of America, 2013 U.S.Dist.LEXIS 116931 (W.D.Wisc. August 19, 2013)(Issue: Risk of Disability)(opinion_and_order.pdf). A key focus of the court’s ruling was on the Unum Regulatory Settlement Agreement of 2004, which required Unum to consider the co-morbidity of multiple impairments and give significant weight to Social Security determinations. Based on those guidelines, and taking Unum’s inherent conflict of interest into consideration, the court found that Unum’s second benefit termination was arbitrary and capricious. Ultimately, however, the court also focused on the policy limitation applicable to psychiatric illness and upheld Unum’s finding that the limitation was applicable, thus restricting Freeland to a maximum of 24 months of benefits. The court explained:

On this record, there appears a distinct possibility that Unum might have found a disability that was contributed to by both psychological and physical factors if all of Freeland’s co-morbidities had been analyzed together. Unfortunately for Freeland, this mistake also appears to have been harmless — whether Unum defined the disability as purely psychological, or part-physical and part-psychological, it would have been at least reasonable in labeling it a disability “due to mental illness” since there is overwhelming evidence supporting Unum’s determination that Freeland was not rendered incapable of work but for his psychological illness. Indeed, the plain language of the phrase “disabilit[y] due to mental illness” describes a condition that rises to the level of a disability because of the psychological illness.

The court relied heavily on Sheehan v. Metropolitan Life Ins. Co., 368 F. Supp. 2d 228 (S.D.N.Y. 2005), a case that determined “where comorbidity exists between coronary artery disease and [] neurosis, entitlement to disability payments under the Plan exists only if the cardiac condition by itself would constitute a total disability.” Id. at 264 (internal quotation marks omitted). Nonetheless, the court utterly rejected Unum’s main rationale that Freeland’s condition improved after he ceased working since the occupation Freeland performed was so highly stressful, that it was “a major, if not the single most significant, source of stress in his life, and an increasingly potent source of stress at that…as well as a significant contributing factor to his illness.” Hence, the court ruled:

Since Unum had already determined that Freeland’s psychological illness was disabling in 2008, it was inappropriate to require him to return to the same job simply because his symptoms receded after he left work. To a large extent, the fact that Freeland got better upon leaving work should have confirmed the accuracy of Unum’s original determination, work as a major contributor to his psychological illness.

The court also pointed to this matter’s similarity to Evans v. Unumprovident Corp., 434 F.3d 866 (6th Cir. 2006), which similarly rejected an argument that the avoidance of stress was “prophylactic” and could not be considered disabling. The court remarked that “[t]he major difference between Evans and this case is that rather than discounting the possible impact of work-related stress on a relapse of plaintiff’s PTSD and anxiety, here defendant did not even address the issue.” Thus, the court awarded benefits, interest, and attorneys’ fees.

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Update on ERISA-governed insurance benefit claims:  NACLE

Update on ERISA-governed insurance benefit claims: NACLE

ERISA law is constantly changing; and with each new ruling, the scope and context of how issues relating to disability, life and health benefits are resolved by the courts is constantly evolving.  In June of 2021, Mark DeBofsky recorded a continuing legal education program for the National Academy of Continuing Legal Education (NACLE) providing an update on ERISA-governed insurance claims.