New York Court Recognizes Unum Insurance Company’s History of Biased Claims Administration and Permits Discovery Into a Potential Conflict of Interest

One important aspect of ERISA cases that makes them different from other types of lawsuits and litigation, is that once the administrative appeal process closes and an ERISA lawsuit is filed, the “administrative record” can no longer be added to, or supplemented. This is because in an ERISA matter, the judge is only allowed to consider the evidence that was available to the claims administrator at the time the decision was made to deny disability benefits. There are limited circumstances, however, when the parties will be permitted to conduct discovery and the judge will consider information outside of the administrative record. One such circumstance is when there is an alleged conflict of interest due to the fact that the claims administrator both determines whether a claim is payable and pays the claims.

Unum operated under a Conflict of Interest

Recently, in a New York ERISA lawsuit filed against First Unum Life Insurance Company (Unum), the Court was required to reach a decision about whether, and to what extent, discovery would be permitted and if it was appropriate to supplement the administrative record. In her lawsuit, the Plaintiff challenged the benefit determination of Unum, the ERISA claims administrator. She alleged that Unum was operating under a conflict of interest that “tainted” its claims determination. This suit was not handled by our law firm.

The Court in this matter acknowledged that, across the country, the standard for permitting discovery varies greatly in that where some courts permit open discovery, some only permit limited discovery on conflict of interest issues and other permit no discovery at all. The judge in this case sided with an analysis of this issue which established that discovery relating to a conflict of interest should be permitted in order to evaluate whether a denial of benefits was arbitrary and capricious.

Court emphasized Unum’s known history of biased claims administration

As justification for its decision, the Court presents the following which basically slams Unum’s known history of bad claims practice. First, the Court states that it is undisputed that Unum is operating under a structural conflict. It goes on to recognize that the Supreme Court has instructed that when an insurance company administrator has a “history of biased claims administration”, there becomes “a higher likelihood that [the conflict] affected the benefits decision.” The Court states that Unum has such a history and that the Second Circuit has noted “a well-documented history of abusive tactics” by Unum. The Court cites several past cases where Unum was found to have utilized deceptive and abusive tactics and operated under a conflict of interest.

“…well-documented history of abused claims processing…”

It first cites to the case McCauley v. First Unum Life Ins. Co., wherein the Court concluded that: 1) First Unum operated under a conflict of interest because it was both the claims administrator and payor of benefits; 2) First Unum’s reliance on one medical report in support of its denial to the detriment of a more detailed contrary report without further investigation was unreasonable; 3) First Unum deceptively indicated to McCauley that the medical professional assigned to review his records was a medical doctor when the individual was in fact a nurse, failed to obtain a physician’s recommendation, and mischaracterized its rationale for continuing to deny benefits; 4) First Unum has a well-documented history of abusive claims processing; and 5) observations 2, 3 and 4, above, collectively lead to the conclusion that First Unum was in fact affected by its conflict of interest. This Court awarded judgment in McCauley’s favor, awarded payment of retroactive benefits and future benefits, as well as attorney’s fees and costs.

“…disturbing pattern of erroneous and arbitrary benefits denial, bad faith contract misinterpretations, and other unscrupulous tactics…”

The Court also cited the case Radford Trust v. First Unum Life Ins. Co. of America. In Radford, the Court stated: “First Unum’s conduct in denying Doe’s claim was entirely inconsistent with the company’s public responsibilities and with its obligations under the Policy. This is not the first time that First Unum has sought to avoid its contractual responsibilities, and an examination of cases involving First Unum and Unum Life Insurance Company of America, which like First Unum is an insuring subsidiary of Unum Provident Corporation, reveals a disturbing pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations, and other unscrupulous tactics. These cases suggest that segments that have run in recent years on “60 Minutes” and “Dateline”, alleging that Unum Provident “regularly declines disability claims as a way of boosting profits,” may have been accurate. See Edward D. Murphy, Unum Corp. Retirees Feeling a “Sense of Loss,” Portland Press Herald, Apr. 29, 2003, at 1C. This Court cannot tell whether First Unum and other Unum Provident companies are considered pariahs in the industry, or whether their ability to retain customers is a result of low prices, market inefficiency, or other factors. In either case, employers have a duty to select insurers for their employees with care, and to avoid hiring insurers with reputations for shoddy and hostile claims administration, although it may well be that suits based on violation of this duty are preempted under ERISA.”

The Court determined it could not “take for granted” that Unum had “mended its ways”

The Court in the instant matter goes on to state that, “[a]lthough First Unum may well have improved or even fully corrected its practices, as it contends – and for which there is some evidence… – the Court cannot take for granted First Unum’s claim to have mended its ways. The company’s regrettable history and Glenn’s command to weigh conflicts of interests as a factor dictate that discovery into First Unum’s conflict of interest be permitted here.

Although the issue at hand, whether or not the Court will allow discovery on the conflict of interest and permit parties to supplement the administrative record, is not one that may interest the typical claimant, what we can learn from this case is that 1) the Courts have a well-placed distrust for Unum Provident disability insurance companies, which may serve to benefit claimants in the unfortunate situation they need to file an ERISA lawsuit against Unum; and 2) if you are denied long term disability benefits through Unum, or if your benefits have been terminated, you should immediately retain an experienced disability attorney with great experience with ERISA, to fully investigate Unum’s denial decision and claim handling practices. Don’t allow yourself to fall victim to Unum’s unfair and unscrupulous claims handling procedures.

If you have questions regarding your claim for disability benefits with UNUM, or if your disability claim has been denied with any disability company, then feel free to call Disability Attorneys Dell & Schaefer for a free consultation.

DISABILITY INSURANCE COMPANY INFORMATION
Videos, Questions, Resolved Cases, Lawsuit Summaries & Company Reviews

disability insurance companies complaints

View videos, articles, resolved cases and claimant reviews about your specific disability insurance company.

Leave a comment or ask us a question

FAQ

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, GoToMeeting.com sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

Reviews

Bruce R. (Arizona)

Steve Dell has done an exceptional job with my disability application process. The firm is extremely well managed. They have acquired an incredible amount of experience over many years. I recommend them for disability insurance claims without reservation. 

Don (Florida)

I called this firm a few months ago completely disparaged due to a company cutting off disability benefits at a time that nearly caused me to lose everything.

Attorney Alex Palmera and Danielle worked hard to reach an amicable settlement and my case was settled a few months later. This is a good firm and the specific expertise in disability claims saved me countless hours of hassle at a time when an already fragile state existed.

Thank you Mr. Palamara and Danielle.

Sandra B. (Arkansas)

I have nothing but good things to say about how my buyout was handled with my disability claim. The level of professionalism was amazing. All of my questions and concerns were answered either by Danielle L. or Alex P. in such a timely manner and with such care I would recommend them in a heartbeat to anyone needing to approach their provider with buyout options.

They did a fantastic job communicating between the provider and me, always keeping my best interest at heart and always answering my many many questions. They really did take most of the stress out of this whole situation. I would give them a 10 out of 10 for every step of this crazy journey. Thank you so much for helping me through this.

Brenda R. (New York)

I needed assistance with an appeal for a LTD claim that was initially denied. Stephen understood what needed to happen to win the appeal and he did win the appeal for me.

Michael C. (Virginia)

Greg Dell and his assistant Anneli have been extremely responsive and helpful, not only our initial consultations, but in follow-ups 1 and 2 years later with the insurance company to ensure that they comply with their agreements (which they did), as well as a separate and only slightly-related inquiry about our health insurance. I always hear back from them very quickly, which is rare and greatly appreciated.

Jeff P. (Oklahoma)

After a very long and frustrating ordeal to keep my LTD payments coming I decided to seek assistance from and attorney. After much research and asking those in the legal profession Dell & Schaefer seemed to be the top choice. I reached out and Alex Palamara was the attorney assigned to my case. All I can say is the experience was outstanding. Both Alex and his Paralegal, Danielle Lauria were excellent to work with. They were very kind, concerned, understanding of my frustrations and treated me with the utmost respect. Communication was excellent with regular updates and telling me what I could expect in each stage of the process.

Alex was also very straight forward with what to expect and no pie in the sky promises or expectations were made. In the end we won our case and I believe it was solely due to their experience and knowledge of not only the laws but the insurance companies as a whole. I would highly recommend them and am very grateful for the help they afforded to me.

Chad B. (Illinois)

I originally spoke with 3 other long term disability lawyers about my case before contacting Dell and Schaefer. None of those law firms would take it. They said the chances of me winning was not good. After finding Dell and Schaefer online I spoke with one of the attorneys that has since left. He did take my case but later it was picked up by Rachel Alters. Rachel is amazing and a very intelligent attorney. She not only won my case but also was able to get my back pay for 6 months.

I also cannot say enough about Sonia Nogueira. Sonia was always quick to answer any of my questions. I would usually hear back from her within hours of sending her a email. I do not know where I would be if I hadn’t contacted them. My family and I cannot thank them enough. Don’t let an insurance company tell you they are not responsible for paying you. I paid them for 20 years monthly and they looked for any reason they could not to have to pay me when I needed my benefit. Thank you Rachel and Sonia for all you guys do.

Paul L. (New York)

Words can only scratch the surface regarding my experience working with Attorneys Dell & Schaefer. It’s a very emotional experience making the decision to utilize disability insurance. The unknowns were/are scary. From the very first phone call, the support staff was/are very professional and reassuring. I have been working with Attorney Steven Dell for approximately 10 years. He is confident, reassuring, listens to and addresses all my concern, and is extremely dilligent in understanding my specific policies for how they impact me. It is very reassuring that Steven handles and deals with the insurance company on my behalf. Attorney Dell’s team, and specifically Merlin, Attorney Dell’s assistant, is simply fantastic. Her professionalism and attention to detail have made all my communications with the office seamless.

Simply put, my experience with Dell & Schaefer made the emotional rollercoaster experience of my neck surgery seem like a walk in the park.

Thank You, Thank You, Thank You, to both Attorney Steven Dell and to Merlin for how you have helped me over these past 10 years.

Dilligence, Reassurance, Professionalism at every step, Confidence, Results.

With 10 years experience with working with Dell & Schaefer, taking that step to call Attorneys Dell & Schaefer was one of the best professional and personal decisions I have ever made.

You want to know what you can do – the below comment about posting your first name and last name initial on our website. Put up my full name, phone number, and email address. I will gladly speak to anyone about your office and tell them my story and how instrumental Steven and Merlin have been in my life over the past 10 years.

Speak With An Attorney Now

Request a free legal consultation: Call 800-682-8331 or Email Us