Moseley v. Unum Life Ins. Co. of Am.

659 F.Supp.3d 89

Susan J. MOSELEY v. UNUM LIFE INSURANCE COMPANY OF AMERICA and Unum Group

CIVIL ACTION NO. 22-40079-RGS

United States District Court, D. Massachusetts

Signed March 2, 2023

Jonathan M. Feigenbaum, Boston, MA, for Susan J. Moseley.

Joseph M. Hamilton, Mirick, O'Connell, DeMallie & Lougee LLP, Worcester, MA, for UNUM Life Insurance Company of America, Unum Group.

MEMORANDUM AND ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

STEARNS, UNITED STATES DISTRICT JUDGE

In August of 2020, defendants Unum Life Insurance Company of America and Unum Group (collectively, Unum) ceased providing disability benefits to plaintiff Susan Moseley pursuant to the mental illness limitation of her long-term disability policy. Moseley challenges this decision, arguing that Unum abused its discretion by finding that the basis for her disability is psychological rather than physical. Unum now moves for summary judgment, which in the ERISA context "is simply a vehicle for deciding the issue." Kamerer v. Unum Life Ins. Co. of Am., 334 F. Supp. 3d 411, 420 (D. Mass. 2018), quoting Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir. 2005). For the following reasons, the court will deny Unum's motion and enter judgment for Moseley.

DISCUSSION

Where, as here, "the underlying plan affords the insurer discretion to determine eligibility for benefits, a federal court reviews an insurer's termination decision under a deferential arbitrary and capricious standard." Ovist v. Unum Life Ins. Co. of Am., 14 F.4th 106, 117 (1st Cir. 2021) (cleaned up). The touchstone of the arbitrary and capricious standard is reasonableness. See Ortega-Candelaria v. Johnson & Johnson, 755 F.3d 13, 20 (1st Cir. 2014). The question is not which side the court believes is right, but "whether the [administrator] had substantial evidentiary grounds for a reasonable decision in its favor." Id. (alteration in original), quoting Matías-Correa v. Pfizer, Inc., 345 F.3d 7, 12 (1st Cir. 2003).

Here, the court need not get into the substance of Unum's determination because Unum's failure to provide Moseley with an independent medical examination (IME) upon request constituted procedural error and rendered Unum's benefits determination inherently arbitrary and capricious. See Lavery v. Restoration Hardware Long Term Disability Benefits Plan, 937 F.3d 71, 78 (1st Cir. 2019) (recognizing that procedural unreasonableness is an "important factor to consider in deciding whether to set aside a discretionary decision"). The court accordingly will remand for Unum to allow an IME and reassess Moseley's disability claim. See Spanos v. TJX Companies, Inc., 220 F. Supp. 2d 67, 73 (D. Mass. 2002) ("It has been held that 'if significant procedural errors exist, the appropriate remedy is to remand the case to the plan administrator to remedy the defects.' "), quoting Dabertin v. HCR Manor Care, Inc., 177 F. Supp. 2d 829, 844-847 (N.D. Ill. 2001).

a. The failure to provide Moseley with an IME upon request was error.

Unum's Regulatory Settlement Agreement (RSA) with several states, including Massachusetts, unambiguously states that "[a]n IME . . . should be sought whenever . . . [t]he claimant or the AP requests an IME, either directly or through the claimant's representative." See A.R. (Vol. III) at 621 [Dkt # 11-3]; see also A.R. (Vol. III) at 621-622 ("An independent medical examination . . . of the claimant should be sought whenever there is lack of agreement [with an attending physician] and the opinion of the Company's medical professionals involved in the claim file is the primary basis for the denial or termination of benefits . . . ."). When Moseley requested an IME, however, Unum denied the request, reasoning that "a current IME would not assess your client's functional capacity from more than a year and a half ago when she was still receiving benefits and the policy was still in force." A.R. (Vol. X) at 4012 [Dkt # 11-10].

Even assuming the RSA allows Unum to deny an express IME request from a claimant (the court is not convinced that it does), the denial of Moseley's request cannot be considered anything but erroneous given the inadequacy of Unum's purported rationale. The parties did not dispute functional capacity - they agreed that Moseley was (and continuously had been for two years) disabled. The issue instead was the basis for that functional capacity, i.e., whether her disability arose from a psychological condition or a physical condition.¹

b. Unum's decision was procedurally unreasonable in light of the error.

Having found error, the court must assess whether it rendered Unum's decision arbitrary and capricious. The First Circuit has framed the inquiry as, "To what extent has [Unum] conducted itself as a true fiduciary...