Opinion
CIVIL ACTION No. 03-2321
May 20, 2004
MEMORANDUM AND ORDER
The plaintiff in this ERISA case is a 54 year old woman who was employed as an accounting supervisor in the claims department of Independence Blue Cross at the time of her claimed disability on January 29, 1999. Ms. McLaughlin sought long term disability status because of diabetic neuropathy, fibromyalgia, and complicated migraines, as well as an eye condition that prevents her from reading a computer screen. Defendants argue that UNUM (the claims administrator, which it contends has the requisite independence for purposes of deferential review) did not receive her completed application for benefits until July 7, 2000. Her claim was denied by letters dated July 27, 2000 and August 4, 2000. Ms. McLaughlin appealed this decision on August 17, 2000 and appellate review upheld the denial on October 9, 2000. This suit followed. Defendants filed a motion for summary judgment or for judgment through a non-jury determination to which Plaintiff responded. The non-jury proceeding was held on February 17, 2004. Upon consideration of the administrative record produced by Defendants and the arguments of counsel, judgment is entered in favor of Plaintiff and against Defendants.
Defendants contend that Plaintiff did not meet the "elimination period" of the Plan. Under the Plan, an individual must be continuously disabled and unable to work for an initial period of 180 days. No benefit is payable during the elimination period. Defendants argue that Plaintiff could work during the first six months.
Defendants' position is belied by the report of a doctor who examined Plaintiff on May 12, 1999, in connection with her claim for short term disability. Richard S. Dillon, M.D. concluded that:
I do not believe this lady could return to the job she did previously. She is limited physically to sedentary work. A capacity form has been completed to this effect. Based on her history, she would not be able to do a job which requires reading and also would not be able to do one which requires organization of thought, as she did not demonstrate the capacity to do so in her history. There are also psychiatric factors which may be limiting.
Report of Dr. Dillon at 6. The capacity form indicated Plaintiff could not work full time, could not work part time, could not return to her former job with no restrictions, and could not return to work with restrictions. In UNUM's denial letter to Plaintiff of August 4, 2000, it stated that "[o]n 5/12/99 5/28/99, you saw Dr. Dillon who indicated some of your diagnoses were related to obesity. He stated you were unable to lift greater than 10 lbs. and should avoid overhead reaching, bending and squatting." This highly selective summarization of Dr. Dillon's evinces arbitrary and capricious action by the plan administrator. See Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3d Cir. 2000).
Although some medical evidence in the claims file supports the denial of benefits, I note that several referenced medical reports did not appear to be in the copy of the claims file submitted by Defendants. On balance, I believe that UNUM's denial of benefits cannot be sustained based on the record.
Where the plan administrator has discretion to interpret the Plan, a decision will be overturned only if it is clearly not supported by the evidence in the record or the administrator failed to comply with the required procedures. Orvosh v. Program of Group Ins. for Salaried Employees of Volkswagen of Am., Inc., 222 F.3d 123, 129 (3d Cir. 2000). A heightened standard of review applies when a plan is "unfunded" (that is, funded by the employer on a claim-by-claim basis) and when a plan is administered by an outside administrator "that does not have strong incentives to keep employees satisfied by granting meritorious claims." Skretbedt v. E.I. Dupont De Nemours and Co., 268 F.3d 167, 174 (3d Cir. 2001). "[0]nce a claimant makes a prima facie showing of disability through physicians' reports . . . and if the insurer wishes to call into question the scientific basis of those reports . . ., then the burden will lie with the insurer to support the basis of its objection." Lasser v. Reliance Standard Life Ins. Co., 344 F.3d 381, 391 (3d Cir. 2003) (interpreting the meaning of "material duties of [insured's] regular occupation"). The insurer has not met its burden here. An appropriate order follows.
ORDER AND JUDGMENT
AND NOW, this day of May, 2004, following a non-jury determination,IT IS HEREBY ORDERED that Judgment is entered IN FAVOR OF PLAINTIFF and AGAINST DEFENDANTS.