Swintek-Hallinan v. UNUM Life Ins. Co. of Am., 2005 U.S. Dist. Lexis 13458 (US District Court Minnesota 7/6/05)
In March of 1984, Insured, a legal secretary for Winthrop and Weinstine P.A., was involved in an automobile accident which caused her to sustain severe cervical and lumbar back injuries. For over two decades, Insured has been treating with various physicians, in hopes of eliminating or reducing her chronic back pain. However, when an assortment of treatments including: two surgeries, significant physical therapy, and numerous medications proved futile, Insured admitted defeat and applied for long-term disability benefits.
Despite a plethora of objective medical evidence documenting the Insured’s disability, UNUM Life Insurance Company of America (hereinafter “UNUM”), denied Insured’s claim for long-term disability benefits. After expending an exorbitant amount of time and energy into filing two appeals, the Insured was ultimately left with no benefits and a debilitating condition which prevents her from working. Having no other alternative, Insured brought the instant suit to seek recovery of her long-term disability benefits.
The Court held that in light of the substantial medical records documenting the Insured’s disability and UNUM’s failure to put forth a reasonable explanation, other than, Insured is not disabled because her treating physician did not list any restrictions for Insured, UNUM abused its discretion when it denied Insured’s claim for long-term disability benefits.
In arriving at its conclusion, the Court began with a determination of whether the long-term disability plan issued to Insured provided UNUM with discretionary authority. Concluding that discretionary authority to determine benefit eligibility was given to UNUM, the Court recognized that it must review UNUM’s decision to deny benefits under an abuse of discretion standard. The traditional abuse of discretion standard holds that UNUM’s decision to deny benefits will stand if a reasonable person could have reached a similar decision. Woo v. Deluxe Corp., 144 F.3d 1157, 1162 (8th Cir. 1998). In determining whether a decision to deny benefits is reasonable a court should consider both the quantity and quality of the evidence and must determine whether the decision is supported by substantial evidence, which is more than a scintilla, but less than a preponderance. However, the Court goes on to recognize an exception, whereby the Court’s review can be less deferential to the administrator. The less deferential exception arises when the claimant presents material, probative evidence demonstrating that (1) a clear conflict of interest or a serious procedural irregularity existed, which (2) caused a serious breach of the plan administrator’s fiduciary duty. If the two prongs are satisfied, a court will review an administrator’s decision under an abuse of discretion standard, however, it will also decrease the deference given to the administrator in proportion to the seriousness of the conflict of interest or procedural irregularity.