Opinion
01 C 3922
May 10, 2002
On or about June 6, 1998, plaintiff was involved in a car accident from which he suffered personal injuries and for which he received disability benefits pursuant to the terms of the Guinness America Plan ("the Guinness Plan"), which is an ERISA plan. In connection with this accident, criminal charges were brought against plaintiff, who negotiated a plea agreement in which he pled guilty to the charge of DUI 0.08 pursuant to 625 ILCS 5/11-501(a)(1). Plaintiff received disability benefits on a monthly basis from defendant Unum Life Insurance Company of America ("Unum") until approximately August 22, 2000, when Unum informed plaintiff that it would stop making payments on his disability claim. Unum, in deciding to stop the payments, relied on a provision from the Guinness Plan stating that plaintiffs plan "does not cover any disabilities caused by, contributed to or resulting from . . . commission of a crime for which [plaintiff has] been convicted under State or Federal law." Plaintiff then brought this action against Unum (and the Guinness plan pursuant to 29 U.S.C. § 1132 (d)), seeking a declaration that plaintiff's disability did not result from the commission of a crime for which he has been convicted under state or federal law, an amount equal to his monthly payments from August 22, 2000, until resolution of this case plus interest, and attorney's fees. Unum has filed a counterclaim seeking to recoup payments already made to plaintiff Both parties have filed motions for summary judgment, which I am granting for Unum and denying for plaintiff for the reasons stated below.
At issue is Unum's application of its policy provision stating that the plan "does not cover any disabilities caused by, contributed to or resulting from . . . commission of a crime for which [plaintiff has] been convicted under State or Federal law." Plaintiff contends that Unum discontinued the benefits by applying only the first half of the provision, namely the half referring to "the commission of a crime," and that conviction was not the actual basis for Unum's decision. Plaintiff argues that Unum did not argue that his guilty plea was the equivalent of a conviction until this action began, and this demonstrates the arbitrary and capricious nature of Unum's decision to discontinue the benefits. Unum maintains that the reasons for the decision have always been the same and that its interpretation of the provision at issue is reasonable and thus should be upheld. When an ERISA plan confers upon the plan administrator the power of discretionary judgment, a court can set aside such judgment only if it was arbitrary and capricious. Herzberger v. Standard Ins. Co., 205 F.3d 327 (7th Cir. 2000).
Although Unum's correspondence with plaintiff does not contain the explicit assertion that plaintiff has been convicted of a crime under state or federal law, by treating plaintiffs guilty plea as proof that plaintiff committed a crime, it can be inferred from Unum's statements to plaintiff that it considered his guilty plea to be the equivalent of a conviction. It is unlikely that any plan administrator would determine that an individual committed a crime in the absence of conclusive proof, which would be a conviction or its equivalent. Hence, plaintiffs argument that Unum never considered his guilty plea as equivalent to a conviction is unconvincing. Further, even if it were shown that Unum's interpretation of "conviction" to include guilty pleas was incorrect (which it has not), this would not be sufficient to overturn Unum's decision, for its interpretation of the word "conviction" would have to be "downright unreasonable," which it is not. Morton v. Smith, 91 F.3d 867, 870 (7th Cir. 1996). A reasonable reading of the provision in question is that the exclusion should not apply unless the recipient's guilt has been clearly established, which is why it uses the language of conviction. Plaintiff pled guilty to the crime of DUI 0.08, thus admitting his guilt, which serves the same purpose as a conviction in the application of the provision at issue. Even though the case was eventually dismissed after plaintiffs payment of a fine, attendance at various programs, and court supervision, this does not change the fact that plaintiff pled guilty to the charge, which provided Unum with proof of his guilt sufficient to justify application of the exclusion provision. Because Unum's interpretation and application of the provision was not arbitrary or capricious, its motion for summary judgment is granted.
The remaining question is whether Unum is entitled to recover overpayments made to plaintiff. It is undisputed that between December 3, 1998, and August 22, 1999, Unum paid plaintiff $26,560 in disability benefits, which Unum seeks to recoup. Plaintiff argues that Unum's counterclaim is barred by the Voluntary Payment Doctrine, which provides that voluntary payments made by the payor with knowledge of the facts cannot be recovered by the payor absent fraud, coercion, mistake of fact, or solely because the payment was illegal. Smith v. Prime Cable of Chicago, 276 Ill. App.3d 843, 874-48 (1st Dist. 1995). Unum argues that while it was aware of the exclusion clause at the time it began to issue payments, it was not aware of plaintiffs guilty plea and thus, the payments were made under a mistake of fact. However, in the medical records considered by Unum prior to approving plaintiffs claim, the attending physician stated that plaintiffs blood alcohol level was 0.189 and plaintiffs neuropsychological evaluation, which Unum also examined during its investigation, states that plaintiff "reported that he had been drinking heavily at the time of the accident" and was "willing to attend Alcohol Anonymous meetings." There is adequate indication in plaintiffs medical records that DUI charges may have resulted from this accident, and if Unum had investigated this possibility, it would have discovered plaintiffs guilty plea, which was made on October 15, 1998, over a month prior to Unum's first payment to plaintiff. Thus, I am denying Unum's counterclaim for overpayments.
For the reasons stated above, summary judgment is granted for Unum and denied for plaintiff. Unum's counterclaim to recover overpayments is denied.