Disability Benefit Claims Law Blog : Disability Benefits Lawyer & Attorney : Dell & Schaefer : Disability Insurance Claims Law Blog

Ronnie Hogan sued Provident Life & Accident Insurance Company (Provident) and Unum Group Corp. (Unum) asserting claims under Florida law that the insurance companies had failed to attempt in good faith to settle his claim. Hogan also accused the insurance companies of making misrepresentations that would have made a settlement less favorable for him. He accused them of exercising general business practices that involved mishandling claims, breaching their fiduciary duty, common law fraud, negligence and even conspiracy to commit statutory violations. Provident and Unum asked the judge to dismiss Hogan's case based on a failure to state his claim or at least to pass judgment based on the pleadings presented by the two sides.

Click here to continue reading Unum's claim handling exposes them to a multi-million dollar bad faith disability lawsuit

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Many long-term disability cases revolve around the issue of what constitutes the ability or inability to work in any gainful employment for which you “are reasonably fitted by education, training or experience.” The following case is another example.

In July of 2001, Linda Gardner stopped working as an operating room nurse. She had been diagnosed with avascular necrosis (AVN) in both of her knees, explaining the severe pain she had been suffering from. One of the symptoms of AV is its progressive nature. Temporary or permanent loss of blood supply to affected bones destroys the bone tissue and causes collapse. The resulting pain in an affected joint can limit movement severely.

Click here to continue reading Appellat Court Reverses Unum's Denial Of Disability Benefits To A Registered Nurse ("RN") And Trial Court Victory

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An opinion issued by the United States District Court for the Middle District of Pennsylvania in November 2009 highlights the challenges an attorney faces when a complaint for denial of disability insurance benefits involves parties from different jurisdictions. An attorney must be very knowledgeable regarding insurance contract law in their state, because the laws of the state in which the contract is signed are the laws that will apply unless preempted by ERISA.

The case we are going to consider involves Edward J. Zaloga, a doctor of osteopathy. He filed his complaint originally in the Court of Common Pleas for Lackawanna County, Penn. in December 24, 2008. Because the claim exceeded the value of $75,000 and neither Provident Life & Accident Insurance Company (Provident Life) nor Unum Group (Unum) had corporate offices in Pennsylvania, jurisdiction over the case resided with the U.S. District Court.

Click here to continue reading Unum's Attempts To Dismiss A Physician's Bad Faith Disability Lawsuit Are Denied By Pennsylvania Federal Court

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Individuals who pay for disability insurance premiums hope to be able to rely on the disability benefits if they are ever unable to work for any extended period of time. However, many times these employees’ claims are denied without any reasonable basis for denial. As in the case below, it is often abusive claims handling tactics by disability insurance companies that leads to disabled individuals being denied their benefits and forced to try and support their families in any way that they can.

Click here to continue reading New York Federal Court Exposes Unum's Disability Claims Handling Tactics

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The Second Circuit U.S. Court of Appeals has denied First Unum Life Insurance Co.'s request to reconsider a decision in which it found the company arbitrarily denied long-term disability benefits to a tax attorney with colon cancer.  First Unum, a unit of Unum Group (NYSE: UNM), filed the petition for rehearing with the New York-based federal appeals court in January, saying that the court "misapprehended key facts and law" (BestWire, Jan. 9, 2009). Attempts to speak with Unum Group to see if First Unum plans to appeal to the U.S. Supreme Court were not immediately successful.  According to the December 2008 decision, written by Circuit Judge John M. Walker Jr. for a three-judge panel, First Unum operated under a conflict of interest because it was both the claims administrator and payor of benefits.

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A federal jury in Boston found that Unum, the nation’s largest disability insurer, had committed fraud in some cases by requiring customers to apply for Social Security benefits even though it knew they were not eligible.

But the verdict, based on a sample of six claims, contained enough ambiguity to leave both sides declaring victory in the case, filed on behalf of the Social Security Administration. In a verdict returned Wednesday, the jury found that two of the disability claims had been fraudulent and two others had showed no evidence of fraud. The jury was unable to reach a decision on the other two cases.

Both sides had agreed to present a small sample to the jury to keep the lawsuit from bogging down in complexity. Unum processed almost 400,000 disability claims in 2007, and paid out more than $4 billion in benefits.

In the next phase, the two sides will seek a decision on what the sample reveals about Unum’s overall behavior, and the extent to which it harmed the Social Security program.

Jim Sabourin, a spokesman for Unum, said the finding that only two of the six claims involved fraud showed that the lawsuit was without merit.

“The jury rejected the claim that there was any systemic problem with the way Unum adjudicates its claims,” Mr. Sabourin said. He said Unum intended to appeal the part of the verdict that had found fraud.  Gregory Dell, a disability insurance attorney representing claimants nationwide,  commented that "it is unconsciable that UNUM continues to deny fraud after a jury has found them guilty".  Unum and most of the other long-term disability insurance companies routinely make claimants apply for social security disability when the disability carrier knows that claimant is not eligible.   

A spokesman for the Social Security Administration, Mark Hinkle, said the agency was monitoring the lawsuit but would not comment on it.

The lawsuit was filed under a federal whistle-blower statute that allows private citizens to sue on behalf of government programs if they believe they have evidence of fraud. The lawsuit is being tried in United States District Court in Boston.

The lawsuit is one of two federal cases contending that Unum and another disability insurer, Cigna, are forcing able-bodied people to repeatedly apply for Social Security disability benefits, under the threat that if they do not, their insurance payments will be cut. The Social Security Administration defines “disabled” more stringently than the insurance companies generally do, and many people who qualify for disability insurance benefits do not qualify for Social Security.

The lawsuits assert that sending claimants into the Social Security system allows Unum and Cigna to reduce their claims reserves, which in turn raises the insurers’ profitability.

Unum and Cigna say that referring claimants to Social Security is a standard practice in the industry and that there is nothing wrong with it.

The lawsuits assert that the referrals are clogging Social Security with questionable applications, and forcing taxpayers to pay needless processing costs. People whose applications are rejected are entitled to a review of their cases by an administrative law judge, and the administrative courts have a huge backlog.

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Pamela A. Ray, an attorney, was insured under a UNUM disability policy. A Denver trial court ruled recently ruled in her favor that working in a large office building was a material duty of a disability claimant’s occupation as an attorney specializing in major real estate, oil and gas and mining transactions. The court determined that UNUM Life insurance Company of America’s denial of benefits was arbitrary and capricious.

On appeal the 10^th Circuit reversed and remanded with instructions for the District Court to apply the de novo standard of review and to consider new evidence. In affirming the Circuit court ruled that the District court did not err in finding that working in a large office building environment was material duty of the plaintiff’s occupation. The majority noted that working from home was not an effective alternative and that her practice was not easily transferable to another firm. Even if the plaintiff could find equivalent work it would most likely be located in a large office building environment, therefore she is totally disabled.

Pamela A. Ray v. UNUM Life Insurance Company of America, Nos. 05-1284, 05-1420, 10^th Cir,; 2007 U.S. App. LEXIS 7234)

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Larry Mack claimed that he is totally disabled from his occupation as a marriage and family therapist due to diabetes. He sued his disability insurer, Unum Life Insurance Company, after being denied his claim for long-term disability benefits. Unum argued that Mr. Mack is not entitled to long-term benefits because he did not receive “appropriate care” as required by his policy. Mr. Mack admitted to not seeking help from his internal medicine doctor for long periods of time but argued that during these months he was “self-treating” his diabetes by taking Glucophage daily and by monitoring his diet.

The court said such “self-treatment” does not meet the policy requirement that the claimant be under medical treatment in order to receive benefits. The court reasoned that Mr. Mack failed to abide by the standard of care his internal medicine doctor prescribed for diabetic patients, U.S. Judge Linnea R. Johnson granted partial summary judgment to Unum.

Larry B. Mack v. Unum Life Insurance Company of America, No. 06-80308, S.D. Fla.; 2007 U.S. Dist.

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Nancy Mikrut, a pediatric nurse practitioner for Danbury Health Systems, was insured under the company’s group disability plan administered by Unum Life Insurance Company of America. In 1999, Ms. Mikrut was injured in an automobile accident and was unable to return to work due to severe back pain. In January 2000, Ms. Mikrut was diagnosed with spinal stenosis and filed for long-term disability benefits. After an intradiscal electrothermal therapy, Ms. Mikrut has a second surgery in March 2001.

After 24 months of benefits, Unum re-evaluated Ms. Mikrut’s claim. Without meeting her, a Unum medical consultant found Ms. Mikrut capable of full-time sedentary work. In August 2002, Ms. Mikrut’s treating physician told Unum that she was disabled from any occupation in which she had to bend, lift, pull, sit, or stand for periods of time. Unum terminated Ms. Mikrut’s benefits and she filed suit, seeking benefits under the Employee Retirement Income Security Act.

U.S. Judge Stefan R. Underhill of the District of Connecticut found that Unum failed to account for subjective complaints of pain and the treating physician’s opinions before terminating Ms. Mikrut’s benefits. The judge ruled that Unum did not adequately consider an award of benefits by the Social Security Administration. Judge Underhill held that Ms. Mikrut is eligible for continued long-term disability benefits under the plan since she is unable to perform the duties of any gainful occupation. While Unum is not required to credit treating physician’s opinion over other evidence, Judge Underhill stated that Unum cannot “arbitrarily refuse to credit a claimant’s reliable evidence, including the opinions of treating physicians.”

Nancy P. Mikrut v. Unum Life Insurance Company of America, No. 3:03cv1714, D. Conn.; 2006 U.S. Dist.

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