discretion under the policy necessary for this court to invoke the
`arbitrary and capricious' standard of review.'" Id. 944 F. Supp. at 577.
The court therefore reviewed UNUM's determination denying the plaintiff's
claim for disability benefits de novo.
Holding that UNUM lacked discretionary authority to determine
eligibility, the court in Williamson v. Unum Life Ins. Co. of America,
943 F. Supp. 1226 (C.D.Cal. 1996), appeal dismissed, 160 F.3d 1247 (9th
Cir. 1998), distinguished the Ninth Circuit's decision in Snow,
87 F.3d 327, stating that "the Policy at issue here does not specify that
the proof must be satisfactory, much less that the proof must be
satisfactory to UNUM." Id. 943 F. Supp. at 1229. Regardless of whether
the plan could have been construed as impliedly requiring that the proof
meet some threshold of sufficiency, the court stated, the plan did not
clearly give UNUM discretion, and a de novo standard of review therefore
applied. Id. See also Lund, 19 F. Supp.2d 1254, 1258 (noting that "the
term `proof' [in UNUM's plan] is not modified by any term indicating that
the eligibility determination might be subjective, such as
`satisfactory,' `due,' or `proper'"); Kinstler 1997 WL 401813 at *8 n. 4
(distinguishing Donato and Miller because the plans in those cases
specifically stated that the proof had to be satisfactory to the insurance
company, as opposed to simply "satisfactory"); Hamner, 1997 WL 257515 at
*3 n. 3 (same).
Likewise, the plan in the case at bar requires only the submission of
"proof," The word "proof" is accompanied by no modifier, "satisfactory" or
otherwise. Even assuming, as a matter of common sense, that the word
"proof" implies that the evidence submitted must at some level at least tend
to establish that the claimant meets the criteria for receiving benefits,
there is no indication that UNUM has discretion to decide whether it
considers the proof submitted to be satisfactory.
It is also worth noting that many of the district court cases finding
that proof-of-claim requirements confer discretion upon the administrator
are from the Seventh Circult, which held in Patterson v. Caterpillar,
Inc., 70 F.3d 503 (7th Cir. 1995), that a plan's statement that benefits
would be payable only upon receipt of "due proof" of disability was
sufficient to warrant application of the arbitrary-and-capricious
standard. The district courts in these cases believed that their
decisions were mandated by, or at least consistent with, Patterson. See,
e.g., Lefebvre v. Ivex Pkg. Corp., No. 97 C 4411, 1998 WL 325258 *5
(N.D.Ill. June 11, 1998); Perlman v. Swiss Bank Corp. Comprehensive
Disability Protection Plan, 979 F. Supp. 726, 729 (N.D, Ill. 1997);
Infantino, 980 F. Supp. at 266; Bollenbacher, 926 F. Supp. at 786. In
fact, one district court from the Seventh Circuit, though stating that it
found compelled under Patterson to find that to requirement of proof of
disability is sufficient, by itself, to grant discretion to the
administrator to determine eligibility for benefits, nevertheless
criticized the law in the Seventh Circuit, where, the court said,
"incrementally and perhaps without conscious design, we appear to have
arrived at such a minimalist conception of what is necessary to confer
discretion that almost no claim for benefits under an ERISA plan will be
reviewed de novo by our district courts," since "[v]irtually all such
plans necessarily link a claimant's eligibility for benefits to the
submission of some form of proof — of illness, disability,
accident, etc." Vander Pas v. UNUM Life Ins. Co. of America,
7 F. Supp.2d 1011, 1015-16 (E.D.Wis. 1998) (footnote omitted). Clearly,
then, at least one of those district courts would have reached a
different result had it not felt bound to follow Patterson and thus the
weight of authority would be even more lopsided in favor of applying the
de novo standard. At any rate, the Patterson decision is not binding in
this circuit, and I decline to follow it. I agree with the court in
Vander Pas that "the effect of the Patterson and Donato holdings [within
the Seventh Circuit] comes close to the `wholesale importation of the
arbitrary and capricious standard into ERISA,' which the Supreme Court
found `unwarranted.'" Id. 7 F. Supp.2d at 1016 (quoting Bruch, 489 U.S.
at 109, 109 S.Ct. 948).
B. Proof of Disability
On August 15, 1995, Frankie Puthoff, a Senior Risk Specialist at UNUM,
sent a letter to plaintiff's attorney. The letter noted that the policy
provided that a person insured under the policy would initially be
considered disabled if he could not "perform each of the material duties of
his regular occupation," but that after benefits had been paid for
twenty-four months, the insured would not be considered disabled unless he
could not "perform each of the material duties of any gainful occupation
for which he is reasonably fitted by training, education, or experience."
Puthoff stated that this twenty-four-month period had expired for plaintiff
on July 1, 1995, and that based on the medical information that UNUM had on
file, coupled with plaintiff's current activities (such as playing golf),
UNUM had concluded that plaintiff's condition did not prevent him from
returning to work in an office or other environment where he would have
access to a restroom. The letter stated that plaintiff therefore no longer
was considered disabled, and that UNUM was terminating his benefits.
Plaintiff contends that the medical evidence shows conclusively that he
is completely disabled. He alleges that his condition prevents him from
being able to commit to being at a specific place at a specific time, and
also prevents him from traveling long distances without a narcotic
medication, which impairs his ability to work or drive. He also alleges
that he suffers from constant abdominal cramping, has frequent bowel
movements, and occasional loss of bowel control.
In support of his motion for summary judgment, plaintiff has submitted
evidence that was never presented to or considered by UNUM at the time that
it decided to terminate plaintiff's benefits. In particular, plaintiff has
submitted affidavits by two physicians: Howard D. Merzel, M.D., who is
plaintiff's treating physician; and Robert N. Korufield, M.D., who examined
plaintiff in February 1997 at Provident's request. Plaintiff has also
submitted a notice from the Social Security Administration ("SSA") dated
January 28, 1998, informing plaintiff that he had been found to meet the
medical requirements to receive Social Security disability benefits, and
that the evidence obtained by SSA first showed a disabling condition on
July 8, 1995. UNUM objects to all this evidence, contending that the
affidavits and SSA notice are inadmissible because they are outside the
The courts have not been entirely uniform with respect to the question of
whether a court conducting a de novo review of an administrator's decision
may consider evidence outside the administrative record. Compare, e.g.,
Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176,
1184-85 (3d Cir. 1991) (district court exercising de novo review over ERISA
determination is not limited to evidence before the administrator), with
Perry v. Simplicity Engineering, 900 F.2d 963, 966-67 (6th Cir. 1990)
(court should conduct de novo review of administrator's decision to deny
benefits based only on record before administrator).
The Second Circuit addressed this issue in DeFelice v. American Int'l
Life Assurance Co. of New York, 112 F.3d 61 (2d Cir. 1997). In DeFelice,
the defendant insurance company had refused to pay accidental-death
benefits after the plaintiff's husband died, because the company concluded
that the decedent had died of a heart attack, not — as claimed by the
plaintiff — from choking. An appeals committee composed entirely of
employees of the defendant ruled in the defendant's favor.
On appeal from a judgment in favor of the plaintiff following a jury
trial, the Second Circuit held that the district court properly admitted
evidence that had not been before the appeals committee because the case
involved a conflicted administrator. Where a conflict exists at the
administrative level, the court said, "courts must exercise fully their
power to review de novo and to be substitute administrators." Id. 112 F.3d
at 66. Describing the appeals committee as "hardly a neutral decisionmaking
body," the court held that
where the district court reviews an administrative
decision under a plan that does not grant . . . .
discretion, the review is de novo and is limited to the
record in front of the claims administrator unless the
district court finds good cause to consider additional
evidence. A demonstrated conflict of interest in the
body is an example of "good cause" warranting the
introduction of additional evidence. Moreover, . . .
the plaintiff need not demonstrate that the conflict
caused her actual prejudice in order for the court to
consider the conflict to be "good cause."
Id. 112 F.3d at 66-67.
In the case at bar, UNUM is conflicted in exactly the same way as the
appeals committee in DeFelice. As the claims administrator, UNUM has an
obvious interest in not paying benefits, and the Second Circuit's ruling
in DeFelice therefore justifies this court's consideration of the new
evidence submitted by plaintiff. See Grady v. Paul Revere Life Ins. Co.,
10 F. Supp.2d 100, 112 (D.R.I. 1998) ("defendant's obvious conflict of
interest in the present case offers precisely the type of `good cause'
found by the Second Circuit in DeFelice").
The burden of proving entitlement to coverage for an insurance benefit
rests with the claimant. Abnathya v. Hoffmann-LaRoche, Inc., 2 F.3d 40,
47-8 (3d Cir.1993); George v. First Unum, No. 93 Civ. 2916, 1996 WL 701018
*2 (S.D.N.Y. Dec. 5, 1996). Although the medical evidence submitted by
plaintiff is certainly adequate to defeat defendant's motion for summary
judgment, I cannot find on the record before me that plaintiff has carried
his burden for purposes of his own summary judgment motion.
As stated, plaintiff has submitted affidavits containing the opinions of
two physicians who have examined or treated plaintiff, both of whom opine
that plaintiff is totally and permanently disabled. Plaintiff has also
submitted the SSA notice, which is admissible though not conclusive in this
context, see Gentile v. John Hancock Mut. Life Ins. Co., 951 F. Supp. 284,
288 (D.Mass. 1997), as well as his own affidavit in which he describes his
condition and the effect that it has on his daily activities.
The evidence submitted by UNUM, on the other hand, is largely anecdotal,
consisting primarily of documentary and eyewitness evidence indicating that
during the period in which he was receiving benefits, plaintiff continued
to perform some office work and engage in outdoor recreational activities
such as golf. When weighed against the expert opinion evidence submitted by
plaintiff, this evidence is far from compelling and requires denial of
UNUM's motion for summary judgment. Nevertheless, the record is not
sufficiently clear for the court at this point to rule as a matter of law
that plaintiffs condition prevents him from "perform[ing] each of the
material duties of any gainful occupation for which he is reasonably fitted
by training, education, or experience." "Summary judgment is not
appropriate when a genuine issue of material fact exists regarding the
plaintiffs status as disabled." Cate v. CNA Ins. Cos., 965 F. Supp. 1039,
1044 (M.D.Tenn. 1997). Accordingly, both sides' motions for summary
judgment must be denied. See Postma v. Paul Revere Life Ins. Co., No. 95 C
6575, 1998 WL 641335 *10-11 (N.D.Ill. Sept. 10, 1998) (on summary
judgment, court could not make credibility determinations necessary to
resolve disputed factual issue of whether plaintiff could perform duties of
her job as computer consultant); Cannon v. Vanguard Group, Inc., No. CIV.
A. 96-5495, 1998 WL 310663 *5 (E.D.Pa. June 11, 1998) (denying plaintiff's
motion for summary judgment because there were issues of fact as to whether
plaintiff was "totally disabled" within meaning of plan); Morris v. Paul
Revere Ins. Group, 986 F. Supp. 872, 884 (D.N.J. 1997) (denying plaintiff's
motion for summary judgment because defendant had offered evidence
sufficient to create material issue of fact regarding whether plaintiff
could perform "important duties" of his job); Attar v. Unum Life Ins. Co.
of Amerian, No. CA 3-96-CV-0367-R, 1997 WL 446439 *6 (N.D.Tex. July 19,
1997) (whether plaintiff was physically disabled, entitling him to
benefits, remained a disputed issue of material fact that could not be
resolved on summary judgment); Brown v. Washington Nat'l Ins. Co.,
942 F. Supp. 1078, 1080 (E.D.La. 1996) (genuine issue of fact remained
regarding plaintiff's status as "disabled" within meaning of insurance
policy); Scothorn v. Connecticut Gen'l Life Ins. Co., No. C 95-20437, 1996
WL 341110, *4 (N.D.Cal. June 13, 1996) (record was not sufficient for court
to determine whether plaintiff was disabled under terms of disability
plan); Brasher v. Prudential Ins. Co. of America, 771 F. Supp. 280, 283
(W.D.Ark. 1991) (evidence presented by plain-. tiff that her deceased
husband had been so disabled prior to death as to be unable to pursue
gainful employment was sufficient to defeat defendant's motion for summary
judgment on issue of disability).
The question remains, then, what course to pursue at this point.
Although some courts, upon finding that genuine issues of material fact
exist regarding whether a plaintiff is disabled, have remanded to the
plan administrator for reconsideration based upon additional evidence,
see, e.g., Perlman, 979 F. Supp. at 731; Cate, 965 F. Supp. at 1046, I do
not believe that this would be the wisest course of action here. For one
thing, remand is more appropriate when the court applies the
arbitrary-and-capricious standard of review, since under that standard
the court must give some deference to the administrator's findings. See
Casey v. Uddeholm Corp., 32 F.3d 1094, 1099 n. 3 (7th Cir. 1994) (on de
novo review, district court need not remand to administrator, but can
resolve disputed factual issues in bench trial).
Moreover, even when the arbitrary-and-capricious standard applies,
remand is unnecessary if it would be a "useless gesture." Miller, 72 F.3d
at 1071; accord Schleibaum v. Kmart Corp., 153 F.3d 496, 503 (7th Cir.
1998), petition for cert. filed, 119 S.Ct. 872, ___ U.S. ___, ___ L.Ed. ___
(1999); Welsh v. Burlington Northern, Inc., 54 F.3d 1331, 1340 (8th Cir.
1995). Here, although it may not be an absolute certainty that, upon
remand, UNUM would again conclude that plaintiff is not disabled, that
result appears highly likely. The affidavits of Drs. Merzel and Kornfield
that plaintiff has submitted in this case, though "new" in the sense that
they were prepared for purposes of this litigation and were not previously
submitted to UNUM, nonetheless contain little that is new or different in
the way of medical information or opinions. They are largely based on
medical reports that date back to, or have not significantly changed from,
the time of the onset of plaintiff's alleged disability. The only changed
circumstance supporting UNUM's decision to discontinue plaintiff's benefits
appears to be that under the terms of the policy, a different definition of
"disabled" applied after plaintiff had been receiving benefits for
twenty-four months, not that his medical condition has improved. It
therefore seems very unlikely that UNUM would alter its conclusion if
plaintiff's application for continued benefits were remanded to UNUM. Were
UNUM to reaffirm its conclusion that plaintiff is not entitled to
benefits, the case would return to me, who, as the finder of fact, would
give no deference to UNUM's decision. To remand under these circumstances,
then, would probably accomplish nothing more than to waste the, time and
effort of everyone involved. Accordingly, the parties' motions for summary
judgment will be denied, and this case will be set down for trial. See
Postma, 1998 WL 641335 *11 (trial necessary on whether plaintiff was
disabled); Cannon, 1998 WL 310663 *5-6 "(parties should be prepared to have
case listed for trial of issue of whether plaintiff was totally disabled);
Zinn, 979 F. Supp. at 1156 (case would proceed to trial on issue of
disability); Attar, 1997 WL 446439 *13 (identifying "[w]hether the
Plaintiff is physically disabled as defined by the Shearson Lehman plan" as
an issue for trial); Fritts v. Purina Mills, Inc., 892 F. Supp. 130, 136
(W.D.Va. 1995) (court would conduct bench trial to resolve question of
whether plaintiff's condition prevented him from being gainfully
Plaintiff's motion for summary judgment (Item 51) is granted with respect
to his claim that his renewal commissions, group annuity commissions, and
service and persistency fees should have been included in the calculaton of
his Basic Monthly Earnings. In all other respects, plaintiff's motion for
summary judgment is denied.
Defendant Provident Mutual Life Insurance Company's motion for summary
judgnent (Item 36) is granted, and the complaint is dismissed as to
Provident Mutual Life Insurance Company.
Defendant UNUM Life Insurance Company of America's motion for summary
judgment (Item 39) is denied.
Plaintiff and UNUM are directed to report in writing to the court within
thirty (30) days of the date of entry of this Decision and Order on whether
they have been able to agree on the amount of unpaid benefits through
August 15, 1995, based on the recalculation of the amount that plaintiff
should have received pursuant to my rulings in this Decision and Order. If
the parties are unable to agree on that amount, the court will schedule a
prompt inquest on damages.
The parties are further directed to contact Magistrate Judge Jonathan W.
Feldman within ten (10) days of entry of this Decision and Order to set up
a conference before him to set a final discovery schedule and to resolve
any remaining discovery issues.
IT IS SO ORDERED.