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Russell v. Unum Life Insurance Co. of America

August 22, 2006

CAROLYN RUSSELL PLAINTIFF
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA DEFENDANT



The opinion of the court was delivered by: Garnett Thomas Eisele United States District Judge

ORDER ON CROSS MOTIONS FOR JUDGMENT ON THE RECORD

This case arises under the Employment Retirement Income Security Act ("ERISA"). Plaintiff appeals the denial of benefits under the Long Term Disability Insurance Plan (hereinafter "LTD Plan"). Presently before the Court is Plaintiff's Motion for Judgment on the Administrative Record and Defendant's Motion for Summary Judgment. As Defendant's Motion requests judgment in its favor based upon a review of the administrative record, the Court will consider Defendant's Motion for Summary Judgment as, instead, a Motion for Judgment on the Administrative Record.

I. Background

Plaintiff Carolyn Russell was employed by Baptist Health as a phlebotomist. Ms. Russell was eligible for long-term disability benefits under the Baptist Medical Systems Long-Term Disability Plan ("the Plan") underwritten by Defendant Unum Life Insurance Company of America ("Unum").

Ms. Russell submitted a long-term disability claim on May 1, 2003 stating that she had been unable to work since May 9, 2002 as a result of intractable epilepsy and insomnia. In her claim, Ms. Russell described her condition as epilepsy, numbness in both arms, and insomnia. She stated that she was physically unable to perform her occupational duties because her hands and body were not steady. (AR117). Unum denied Ms. Russell's claim by letter dated August 20, 2003. Ms. Russell submitted a letter of appeal on October 16, 2003. Unum denied the appeal on February 24, 2004. Ms. Russell requested a reconsideration of the denial on April 8, 2004. Unum upheld the denial of the claim on June 1, 2004.

One of Ms. Russell's treating physicians, Dr. Alonzo Burba, a neurologist with Arkansas Neurodiagnostic Center, stated in his treating physician's statement that Ms. Russell suffered from seizures and insomnia and that she was restricted from driving. At Dr. Burba's recommendation, Ms. Russell underwent an MRI on July 24, 2001. The MRI of her brain was found to be unremarkable with no signal abnormality. (AR414). An EEG and EMG of Ms. Russell were taken on August 1, 2001. Dr. Burba noted the abnormal EEG was characterized by some sharply contoured activity arising from the right central parietal region of the brain which would represent an interictal finding in a focal onset epileptiform disorder, but is non-specific. (AR415). The EMG tested within normal limits. (AR416).

Dr. Beth Milligan of Lakewood Family Medicine submitted a letter to Plaintiff's counsel on December 2, 2004 stating that Dr. Burba had diagnosed Ms. Russell with epilepsy and that she was being treated for hypertension and severe depression with medication. (AR387). Dr. Milligan noted that Ms. Russell's medications cause sedation and make her feel fatigued and opined that Ms. Russell "will be unable to ever hold any meaningful labor." For further information on Ms. Russell's seizure disorder, Dr. Milligan references Dr. Burba's notes.

Ms. Russell saw Dr. Willis Courtney of Arkansas Neurology & Epilepsy Diagnostic Testing Center on September 9, 2002. Dr. Courtney assessed her with intractable epilepsy, episodic altered mental status, and bilateral hand and leg numbness, and conducted six ambulatory EEG studies from September 9-14, 2002. Four of these studies resulted in an unremarkable record, and two were suggestive of a structural lesion in the left hemisphere with the possibility of an epileptogenic focus. (AR190-92). However, Dr. Courtney noted that Ms. Russell did not experience any clinical events during these readings. (AR188-89).

II. Standard of Review

District courts review an ERISA plan administrator's decision to terminate benefits de novo,unless the benefits plan vests the administrator with the discretionary authority to determine benefits eligibility or to interpret the terms of the plan. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 957-58 (1989). Where the plan administrator has such discretionary powers, courts review a denial-of-benefits claim with a deferential eye, overturning the administrator's decision only if it was "arbitrary and capricious". See, e.g., Lickteig v. Business Men's Assur. Co. of America, 61 F.3d 579, 583 (8th Cir. 1995).

The parties do not dispute that the benefits plan here gives Defendant Unum the discretionary authority to determine eligibility of benefits and to interpret plans. However, Plaintiff argues that the Court should apply a de novo standard of review because of Unum's conflict of interest and bias, as demonstrated by its reliance on its medical consultant without seeking an independent medical examination.

"A claimant must offer evidence that 'gives rise to serious doubts as to whether the result reached was the product of an arbitrary decision or the plan administrator's whim' for us to apply the less deferential standard. To invoke this standard, any alleged procedural irregularity must be so egregious that it might create a "total lack of faith in the integrity of the decision making process." Hillery v. Metropolitan Life Ins. Co., 453 F.3d 1087, 1090 (8th Cir. 2006) (quotations removed).

In support of the alleged procedural irregularity, Plaintiff submitted the Report of the Targeted Multistate Market Conduct Examination ("Multistate Report"), which outlines a number of concerns that the state examiners had with the claims handling processes of certain insurance companies, including Defendant Unum, and how such practices might cause valid claims to be denied.*fn1 The Multistate Report, in and of itself, provides no evidence supporting a finding that Ms. Russell was denied long-term disability benefits due to a conflict of interest or procedural irregularity. Some courts have found that the Multistate Report alone provided a sufficient basis for additional discovery into the issue of a conflict of interest or procedural irregularity. See, e.g., Samedy v. First UNUM Life Ins. Co. of America, 2006 WL 624889 (E.D.N.Y. March 10, 2006) ("While defendant correctly asserts that neither the Nee declaration nor the report are relevant to the issue of whether the specific denial of benefits to plaintiff was influenced by a conflict of interest, they provide a minimally sufficient basis to grant plaintiff limited discovery. Under limited circumstances, a plaintiff is permitted to look outside the four corners of the administrative record for this information regarding a conflict of interest because 'direct evidence of a conflict is rarely likely to appear in any plan administrator's decision.'").

Plaintiff's allegation and the Multistate Report may raise questions about Defendant Unum's investigation of Ms. Russell's disability claim, but the Court finds no grounds for applying the less deferential standard of review. Accordingly, the Court concludes that Unum's denial of benefits ...


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