Court: District Court, District of Columbia; May 10, 2019; Federal District Court
Ms. Lyman's claim for Long Term Disability (LTD) benefits was received by Unum on March 23, 2016, but should have been submitted by February 27, 2016, according to the policy's Notice of Proof of Loss. As a result, Unum denied her claim and closed it. Unum later revised its denial letters, first acknowledging receipt of the claim on June 20, 2015, and correcting the deadline to February 27, 2015, then further adjusting the receipt date to June 16, 2015, with a new deadline of March 21, 2015.
While her LTD claim was pending, Ms. Lyman appealed a prior Short Term Disability (STD) denial on March 23, 2016. Her attorney argued that Unum incorrectly terminated her claim based on a lack of coverage. On June 27, 2016, Unum acknowledged the STD claim had been incorrectly denied due to lack of coverage but upheld the denial because it was filed late. Unum stated that the claim had not been submitted within the required timeframes, leading to a new basis for denial and the provision of new appeal rights.
The timeline of Ms. Lyman's claims revealed that her last date of work was June 24, 2014, and her STD benefits were denied because she was no longer covered after her resignation on that date. Unum had received various statements from her physician and employer, confirming her resignation and last work date, but ultimately denied her claims due to the late submission of her STD claim. An appeal review for the STD claim was initiated after the determination of her LTD claim.
Your client's claim for Short Term Disability benefits was submitted after the policy deadlines. The claim form was submitted on July 15, 2015, stating her last work date as June 24, 2014, while the Employer's Statement indicated June 25, 2014. The policy requires Notice and Proof of Loss to be submitted within 30 days of the disability onset, with a final claim submission deadline of 90 days after the elimination period, which is 30 days for disability. Consequently, the claim should have been filed by October 23, 2014, but Unum received it on June 16, 2015, making it untimely and disqualifying it for benefit payment.
On December 14, 2016, Ms. Lyman appealed Unum's decision regarding her Long Term Disability (LTD) and waiver of premium benefits. In her affidavit, she detailed significant medical issues, including chronic headaches, arthritis, bulging discs, and clinical depression, which hindered her ability to teach and file a claim. She described her deteriorating condition and the overwhelming impact of her depression, which led to her resignation and inability to engage in daily activities. Additionally, she recounted previous adverse experiences with Unum that further complicated her claim filing process, indicating that she faced challenges in understanding the application process and lacked support during her medical crises.
MTA provided policy numbers, but Unum stated that coverage ended upon the individual’s resignation. Despite MTA's belief that there was still time to submit claims, forms were completed with union assistance. Unum denied the Short-Term Disability (STD) claim, asserting that the claimant was not covered at the time of resignation. Unum also treated the appeal of the Long-Term Disability (LTD) claim as an extension of the STD appeal. On December 15, 2016, Unum upheld both claim denials, citing untimeliness and unreasonable explanations for delays in filing.
Unum's denial letter detailed the medical documentation submitted, including an Attending Physician's Statement (APS) from Dr. Witts indicating chronic headaches, with no recommendation for the claimant to stop working. Another APS from Dr. Hammer noted diagnoses of Major Depressive Disorder and other conditions, also stating no recommendation to stop working. The letter highlighted the claimant's late filing and examined her reasons for the delay, such as a belief that her condition would improve. Unum deemed these reasons unreasonable.
The letter referenced the claimant's affidavit, mentioning a prior negative experience with Unum in 2004 and difficulties filling out forms, but Unum found no claims from that year and noted that a claim from 2009 was closed due to lack of follow-up from the claimant. Unum concluded that the claimant, a teacher, should have been capable of completing the necessary paperwork and reiterated that she failed to provide a reasonable justification for the delays in filing her STD and LTD claims. Additionally, Unum addressed claims that her medical condition hindered her ability to file a timely appeal.
Unum reviewed Ms. Lyman's medical files and outlined key points influencing its appellate decision. Dr. Hammer's notes from December 2013 indicated Ms. Lyman's stress over her teaching license renewal and concerns regarding her Master's degree completion. By December 2, 2014, Dr. Hammer noted that Ms. Lyman was not receiving unemployment benefits, with an earlier statement from October 21, 2016, confirming her unemployment claim was denied in March 2015. This suggests she applied for benefits before December 2014.
Unum determined that between her last work date of June 24, 2014, and the claims filing deadlines, Ms. Lyman was aware of new licensing requirements necessary for continued teaching, which she ultimately failed to meet, leading to her resignation. Despite claiming her medical condition hindered timely filing, there was no evidence of a leave of absence, and her actions indicated capability to apply for unemployment and seek other employment. Notably, she traveled to Illinois to assist family members, which contradicted her assertion of incapacity.
Unum concluded that Ms. Lyman's claims were filed late and stated it was not obligated to rule on her disability claim or evaluate any potential prejudice from the late filing, as Massachusetts law does not require such an analysis. Ms. Lyman referenced Unum's internal policies regarding timely claims submission, but Unum argued that she cited provisions applicable to different types of policies than those she held. The company's policies emphasize the need for timely claims and outline conditions under which late filings may affect claim evaluation.
The Claims Manual specifies that certain jurisdictions, including Massachusetts, do not require a prejudice analysis for claims. For Group Life and All VB Products (excluding VB HSBR), claims filed within 1 year and 90 days from the date of loss are considered timely, while late claims may be evaluated based on the relevant jurisdiction's standards. For VB Disability Claims, claimants also have 1 year and 90 days to submit initial proof of claim, with timely claims applicable for the previous year and 90 days if coverage was active; however, claims for periods prior to that timeframe are considered late. Nancy Lyman, who is not asserting that she was insured under a Group Life or VB policy, references these provisions for comparison.
In the procedural history, Lyman filed a complaint on August 17, 2017, against Unum and the MTA, alleging enforcement of Plan terms and unpaid benefits. The MTA was dismissed from the case on December 5, 2017. The court allowed limited discovery, focusing on the information available to Unum during its decision-making process. Lyman seeks to include Unum's internal claims procedures to ensure fair interpretation of the Proof of Loss Provision but does not aim to introduce new evidence regarding her medical condition or occupation not considered by Unum during its evaluation.
On October 1, 2018, Lyman filed a Motion for Judgment on the Record, while Unum filed a Motion for Summary Judgment on the same day. Following full briefing, a hearing was held on December 12, 2018, after which Unum sought to introduce new authority, which Lyman opposed. The court decided to consider both the new authority and Lyman's response in its summary judgment deliberations.
In terms of the standard of review, summary judgment in ERISA cases is assessed based solely on the administrative record before the plan administrator, with summary judgment serving as a means to resolve the issue rather than as a preliminary screening for trial.
In Summersgill v. E.I. Dupont De Nemours Co., the court operates under an appellate standard, assessing the reasonableness of an administrative determination based solely on the administrative record, without favoring the non-moving party with inferences. The case confirms that when an employee benefits plan grants discretion to the insurer, the court reviews claims deferentially, upholding the insurer's decision unless it is arbitrary, capricious, or constitutes an abuse of discretion. Here, Unum has been granted the authority to determine benefit eligibility and interpret the plan terms, mandating that the court evaluate whether Unum's decisions are reasonable and supported by substantial evidence.
The court emphasizes that it will not substitute its judgment for that of the plan administrator and that the presence of contrary evidence does not automatically render the decision arbitrary. The claimant, Ms. Lyman, bears the burden of demonstrating that Unum's decision was unreasonable, which she failed to do. Lyman contends that Unum's strict interpretation of the plan is unreasonable and contrary to its internal guidance for claims representatives, but this argument did not meet the burden of proof required to establish a violation of ERISA.
Ms. Lyman contends that Unum's decision should be overturned for two main reasons: first, she asserts that she has demonstrated it was "not possible" for her to file her claim within the required timeframe due to Unum's misrepresentations regarding her eligibility and the severity of her medical condition; second, she claims Unum cannot prove it was prejudiced by her late filing. The court will evaluate these arguments sequentially.
Regarding Unum's interpretation of the plan provision, the language explicitly necessitates proof that it was not possible for Ms. Lyman to file a timely claim. The provision stipulates that claims should be reported within 30 days of disability and that written proof must be submitted within 90 days after the elimination period, extendable to one year only if it is impossible to provide proof within the initial timeframe. Ms. Lyman argues that Unum's interpretation disregards the "possibility" language and focuses solely on her legal capacity to file. However, the undisputed facts indicate that Unum considered the possibility language and conducted a thorough analysis. Unum concluded that Ms. Lyman could have filed her claim on time but failed to do so, a determination deemed not arbitrary or capricious. Unum found her rationale for the delay—believing she could return to work and feeling intimidated by the claims process—unreasonable, especially given her actions during the relevant period, which included applying for unemployment and engaging in other activities that contradicted her claims of inability to file.
Ms. Lyman also argues that Unum's interpretation has not been consistent with its internal guidelines and previous decisions. The reasonableness of an interpretation is assessed based on whether it renders plan language meaningless, conflicts with the clear language of the plan, or lacks consistency in application, as articulated in relevant case law.
Unum's potential inconsistency in denying Ms. Lyman's claims could indicate an abuse of discretion if it deviated from its internal guidelines or past interpretations of the relevant Provision. Plan administrators exercise discretion by establishing internal guidance, which, when acknowledged by courts, does not limit their discretion beyond their own definitions. Ms. Lyman contends that Unum's interpretation of the Provision differs from its treatment of similar claims, where claimants were granted an additional year to file without a possibility assessment. However, Unum's policy states that each claim must be evaluated on its individual merits. Ms. Lyman's claims were assessed according to guidelines pertinent to her policies, and there was no abuse of discretion noted.
The analysis of timeliness varies by jurisdiction; Massachusetts does not require a prejudice analysis for late applications, which applied to Ms. Lyman's case. Unum's letters to other claimants regarding untimely applications were irrelevant to her situation, as they involved a necessity for a prejudice assessment not applicable in her jurisdiction.
Ms. Lyman further argues that Unum abused its discretion by believing it was possible for her to file on time, citing claims of being misinformed about her coverage and difficulties in obtaining documentation. Unum contests these assertions, with evidence suggesting no communications occurred before June 2015 and that Ms. Lyman later acquired necessary documentation through a different source. The dispute over the communications does not present a genuine issue of material fact; thus, summary judgment is deemed appropriate for this ERISA matter.
Review of the administrative record before the ERISA plan administrator reveals no disputed facts for judicial resolution, as established in Orndorf v. Paul Revere Life Ins. Co. The court's focus is typically limited to the administrative record, requiring substantial justification to deviate from that norm, as noted in Stephanie C. v. Blue Cross Blue Shield of Mass. HMO Blue, Inc. A motion for summary judgment in administrative law is primarily a means to present the case for judicial review rather than to resolve factual disputes. The essence of the case is that an up-or-down decision is made based on the administrative record, regardless of the form of the motions.
Unum's denial of Ms. Lyman's claims for late submission was deemed reasonable despite her claims of misrepresentation from March 2015. Ms. Lyman's appeal outlined her attempts to clarify her coverage status with Unum and the Massachusetts Teacher’s Union, asserting that Unum indicated she was no longer covered when she resigned. She requested written confirmation of the denial and directions to appeal but claimed that these processes contributed to delays without providing new information.
Ms. Lyman's STD benefits claim was due by October 23, 2014, and any conversations after this date could not justify the untimely filing. Therefore, Unum's denial of her STD benefits as late was reasonable. The timeline for the LTD benefits claim was less straightforward, with proof of loss due by March 22, 2015. Any potential impossibility in filing caused by Unum's representations is relevant only if those occurred before this deadline. Ms. Lyman's affidavit indicates that she sought policy copies from the MTA around March 11 or 12, 2015, suggesting some ongoing communication during that time.
Vincent and the individual sought to obtain disability benefit application documents from Unum following a resignation but were informed that coverage had ceased. Ms. Lyman received the necessary documents from MTA but submitted them late, and she did not claim reliance on Unum’s alleged conversation regarding her delayed application. Unum's records showed no prior contact supporting Ms. Lyman's assertion that she ceased communication with them in March 2015. Even if the conversation occurred, it did not account for her submission delays. Ms. Lyman contended that her medical condition hindered her timely filing within the 90-day period, but the court found Unum's decision, based on a comprehensive review of her medical records, to be justified. Unum documented Ms. Lyman's medical conditions, including chronic headache and major depressive disorder, yet concluded that her late filing reasons were unreasonable and did not warrant an extension. Unum acknowledged the additional medical records provided during the appeals but maintained that difficulty with forms did not justify the late submissions.
Ms. Lyman, a teacher, failed to file her claim forms within the required 90 days following the end of the elimination period outlined in her insurance policies. Unum recognized her argument that her medical condition hindered timely filing but ultimately rejected it. Their decision was based on a review of her medical records, which included details about her activities and plans rather than focusing solely on her medical diagnoses or symptoms. Notably, a July 23, 2014, note from Dr. Hammer indicated that Ms. Lyman had left her job due to licensing issues and stress related to teaching ESL, while also exploring other job opportunities and providing assistance to her injured relatives in Illinois. Unum pointed out that she was not on a leave of absence and had applied for unemployment benefits prior to December 2, 2014. Furthermore, her ability to travel and assist her family contradicted her claim of being incapable of filing her claims on time. Although it was acknowledged that Unum did not fully evaluate her medical and vocational circumstances in relation to her disability, they stated that this oversight did not violate ERISA regulations since Ms. Lyman's claims were filed late. Massachusetts law does not require Unum to demonstrate prejudice due to the late filing. Consequently, Unum concluded that Ms. Lyman's reasons for the delay were unreasonable and lacking sufficient evidence, resulting in the appropriate denial of her short-term and long-term disability claims.
The existence of contrary evidence does not render Unum's decision an abuse of discretion, as the record shows Unum adequately evaluated all relevant evidence without selectively omitting facts. Citing case law, the document emphasizes that a plan administrator must not ignore contrary evidence or rely solely on supportive evidence. Although Ms. Lyman's medical condition posed challenges, Unum reasonably concluded that she could file a claim on time, having considered her arguments and the totality of the evidence. Ms. Lyman's belief that her condition would improve does not justify her late filing, as compliance with filing obligations is required under the ERISA plan. Furthermore, Unum's Claims Manual indicates that Massachusetts does not necessitate a prejudice analysis for late filings, which is supported by Unum's briefing. The Massachusetts statute referenced by Ms. Lyman, which requires demonstration of prejudice for denying coverage due to late notice, does not apply in ERISA cases, as established by district court rulings.
The plan administrator is not required to demonstrate prejudice from the late filing of a claim before refusing to consider it. Courts in Massachusetts have consistently declined to apply the notice-prejudice rule in ERISA cases, supporting the decision not to evaluate claims based on late filings. The court specifically distinguishes between liability insurance and ERISA plans, referencing cases such as Edwards v. Briggs & Stratton Ret. Plan, which established that prejudice analysis applies only to liability insurance and not to ERISA appeals. The Massachusetts statute limiting the notice-prejudice rule to liability insurers further supports this position. Consequently, Unum's choice not to conduct a prejudice analysis is upheld.
Ms. Lyman's motion for judgment is denied, while Unum's motion for summary judgment is granted, with the relevant date for her STD benefits denial noted as June 24, 2014. Unum denied Ms. Lyman's LTD benefits due to late filing, contradicting claims of denial based on policy coverage. The court clarifies that Ms. Lyman did not challenge the differing treatment of policy types and acknowledges Unum's assertion that her policy differs from others in the claims manual. The manual's Late Notice provision applies to various types of claims, some governed by ERISA and some not, and Unum's decision aligns with its internal guidance for Ms. Lyman's specific policy type.
Unum's letter denying Ms. Lyman's appeal highlighted her statement from October 21, 2016, indicating her dissatisfaction with Unum dating back to 2004, when she felt unsupported in applying for short-term disability (STD) benefits despite two surgeries and cancer. Unum’s review revealed no claims from 2004 but noted a claim initiated in 2009 that was closed due to a lack of required forms from Ms. Lyman. The court stated it would not consider Ms. Lyman's speculations regarding record keeping or call documentation by Unum, as these claims are merely speculative and not substantiated at the summary judgment stage. The court emphasized that the burden of proof lies with Ms. Lyman to demonstrate error in this case. Following a hearing, both parties referenced new First Circuit case law, specifically Fortier v. Hartford Life, which addressed the exhaustion requirement in ERISA appeals and stated that state law notice-prejudice rules do not apply to ERISA cases. Ms. Lyman argued for limitations on the Fortier ruling regarding its applicability to ERISA appeals, but the court found no reason to alter the established understanding that state law prejudice requirements do not apply within the ERISA context.
