Mr. R had worked as a shop floor supervisor before his chronic back pain, which resulted from a slip and fall that herniated several disks in his back, and resulted in three failed back surgeries, caused him to file for long-term disability under his Sun Life Assurance Company of Canada group long-term disability insurance policy. Like most group long-term disability policies, Mr. R’s Sun Life policy paid disability benefits for the first 24 months if he was disabled from his own occupation as a shop floor supervisor.
Sun Life Approves Long-term Disability Claim For the Own Occupation Period
Mr. R never fully recovered following his third back surgery and continued to experience severe and chronic back and radicular pain. Shortly after filing for long-term disability, Sun Life approved his claim and began paying his monthly disability benefits. Mr. R’s treating orthopedic physician opined that Mr. R was unable to work, and that he did not anticipate him returning to work. Mr. R was treating with his physician on a monthly basis. His physician would note that Mr. R was becoming more symptomatic with frequent reports of pain. He also noted memory and concentration problems.
Nine Months After Finding Insured Totally Disabled From His Own Occupation, Sun Life Refers Him to Return to Work Readiness Review
Within nine months of finding Mr. R totally disabled as a shop floor supervisor, and being advised that Mr. R would likely never be capable of returning to work, Sun Life referred Mr. R to a Return to Work Readiness Review. The Sun Life consultant determined that the "medical information is not supporting of work capacities… [but] once the medical information is supportive of work function, voc would be interested in revisiting the Insured’s appropriateness for [right to work] interventions." Four months after the Readiness Review, Sun Life ordered that Mr. R attend an independent medical examination. The independent medical physician concluded that Mr. R was definitely not capable of returning to his own occupation, however, following the implantation of a stimulator, he would "most likely be able to work in a limited capacity." He also noted that Mr. R was exhibiting appropriate pain behaviors and that there was no evidence of symptom magnification. Following the IME, Sun Life requested that orthopedic physician, Dr. Howard Taylor, conduct a paper review of Mr. R’s file. Dr. Taylor is an orthopedic physician who works almost exclusively on behalf of long-term disability insurance companies. Dr. Taylor has conducted paper reviews on behalf of Metropolitan Life Insurance Company and Unum Life Insurance Company. Dr. Taylor purportedly reviewed the IME Report, and a surveillance report based on video surveillance conducted of Mr. R. Dr. Taylor noted that the surveillance showed Mr. R "walking a short distance with a limp, driving, pumping gas and wheeling a trash container in from the curb." Dr. Taylor concluded that based on his review of the medical records and surveillance report, Mr. R’s back pain was no longer a major issue and his fushion had healed, but that his major issue now was the pain in his leg which would preclude sustained weight bearing.
Sun Life Conducts a Vocational Review and Denies the Long-term Disability Claim
After Dr. Taylor’s review Sun Life performed a vocational review to support its predetermined conclusions that Mr. R was capable of returning some form of gainful occupation. It’s efforts were rewarded when its vocational consultant determined that sedentary occupations existed that would involve occasional standing and walking, and typically provide the opportunity to intermittently change positions during the work day. Based on Dr. Taylor’s review of the records, its nine days of surveillance and the vocational review, Sun Life denied Mr. R’s disability benefits beyond the 24 month own occupation period. It accordingly denied the continuing waiver of premium benefits on Mr. R’s life insurance policy. Mr. R administratively appealed the denial by Sun Life, but was again denied.
Federal Court Finds That Sun Life’s Significant Investment of Both Time and Money to Conduct Surveillance Raises Questions About Conflict of Interest
Mr. R sued Sun Life in Federal Court claiming entitlement to his long-term disability benefits pursuant to ERISA. The federal court judge took issue with Sun Life’s substantial reliance on the nine days of the video surveillance, which revealed no inconsistencies with what Mr. R had expressed concerning his functional limitations. The federal court noted that Sun Life paid its private investigators over $8,000 for them to conduct nine days of video surveillance, which shows that he, at times, walked short distances with a limp around his yard, drove his car, and pumped gas. The court noted that Sun Life’s own physician consultant conceded that the activities were consistent with his reported activity level, and further noted that none of the surveillance supported that Mr. R could work eight hours days. The court concluded that Sun Life’s significant investment in both time and money to conduct surveillance raised questions of Sun Life’s conflict of interest, and what was more telling was that after nine days of surveillance, Sun Life came away with no "smoking gun." Because the court found that Sun Life had abused its discretion in relying upon immaterial surveillance, and the conclusory opinions of a consulting physician, the court entered a judgment in favor of Mr. R and ordered Sun Life to continue reviewing and paying Mr. R’s claim in accordance with the terms of the long-term disability policy.