Lanpher v. Unum Life Insurance Company of America

Filing 41

MEMORANDUM OPINION AND ORDER 1) Granting in part and denying in part defendant's 15 Motion for Summary Judgment. a) Defendant's motion is granted with respect to any claims arising prior to M ay 1, 2007. b) Defendant's motion is denied with respect to any claims arising on or after May 1, 2007. (2) Denying plaintiff's 25 Motion for Partial Summary Judgment(Written Opinion) Signed by Chief Judge John R. Tunheim on September 2, 2015. (DML)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
RICHARD LANPHER,

Civil No. 14-2560 (JRT/HB)
Plaintiff,
MEMORANDUM OPINION
AND ORDER ON SUMMARY
JUDGMENT MOTIONS

v.
UNUM LIFE INSURANCE
COMPANY OF AMERICA,
Defendant.

Mark M. Nolan, NOLAN THOMPSON & LEIGHTON, 5001 American
Boulevard West, Suite 595, Bloomington, MN 55437, for plaintiff.
Molly R. Hamilton Cawley and Terrance J. Wagener, MESSERLI &
KRAMER P.A., 100 South Fifth Street, Suite 1400, Minneapolis, MN
55402, for defendant.

This is a disability benefits action brought by Richard Lanpher against Unum Life
Insurance Company (“Unum”). Lanpher obtained a private disability insurance policy
(“the Policy” or “the Unum Policy”) through Unum in 1994 and first claimed benefits
under the Policy in May 2008, approximately six months after he was forced to leave his
job at Merrill Lynch due to severe depression. Unum paid Lanpher residual disability
benefits at a rate of 50% from May 1, 2007 to October 1, 2007, and full disability benefits
from October 1, 2007 to June 23, 2008. Lanpher requested a recalculation of benefits
dating back to 2002, which Unum denied. Lanpher now seeks full contract benefits from
2002 to the present, plus interest. This matter is before the Court on the parties’ cross
motions for summary judgment. The Court concludes that the Unum Policy is not an
employee welfare benefit plan under the Employee Retirement Income Security Act of
29

1974 (“ERISA”). Because the Court finds that Lanpher failed to provide a timely notice
of claim between 2002 and 2007, the Court will grant in part Unum’s motion for
summary judgment.

The Court will deny Lanpher’s motion for partial summary

judgment.

BACKGROUND
I.

LANPHER’S MEDICAL HISTORY
Richard Lanpher was a financial advisor for Merrill Lynch from 1983 through

December 2007. (Aff. of Mark M. Nolan (“Nolan Aff.”), Ex. D (Summ. J. Log (“Partial
Admin. R.”)) at 0111,1 Feb. 2, 2015, Docket No. 28; Aff. of Richard Lanpher (“Lanpher
Aff.”) ¶ 2, Feb. 2, 2015, Docket No. 29.) In 1987, Lanpher began seeing Dr. James J.
D’Aurora, Ph.D./L.P., for depression. (Partial Admin. R. at 4089, 4093.) Dr. D’Aurora
continued to handle Lanpher’s care for many years, and in 2001, he concluded that
Lanpher appeared to move into a clinical depression, for which Lanpher sought
medication.

(Id. at 4089.)

Lanpher’s treating physician prescribed antidepressants

beginning in November 2001. (Supplemental Aff. of Richard Lanpher (“Supplemental
Lanpher Aff.”) ¶ 3, Feb. 2, 2015, Docket No. 30.)
Lanpher’s depression interfered with his ability to work and function in the course
of performing daily activities. (Id. ¶ 2.) “By 2004, [Lanpher] had so much trouble just
getting out of bed that [he] would work from home, and was put on probation at Merrill
Lynch twice for absenteeism.” (Id.) In late 2004, Lanpher observed that his medication
1

The Court will cite to the Administrative Record using the bates pagination. Because
the first eighteen digits of each page number are identical (UA-CL-NL4230196-00), in the
interest of brevity the Court will use only the digits that appear after the shared eighteen digits.
For example, “UA-CL-NL4230196-000111” will be cited as “0111.”
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was no longer working and sought further treatment. (Partial Admin. R. at 4089.)
Eventually, Dr. D’Aurora determined that Lanpher had major depression, which led to
him “experiencing the ‘rapid cycling’ and mania of the bi polar disorder.” (Id.)
In 2007, Lanpher’s depression reached a point where he was no longer capable of
working.

He took a leave of absence from Merrill Lynch and was terminated on

December 17, 2007. (Id. at 0111, 0442-0443.) At that time, Lanpher had both a basic
long-term disability benefits plan and a supplemental long-term disability benefits plan
through his employment with Merrill Lynch. (Lanpher Aff. ¶ 3.) After his employment
with Merrill Lynch ended, Lanpher sought disability benefits through both of those plans.
Lanpher v. Met. Life Ins. Co., 50 F. Supp. 3d 1122 (D. Minn. 2014).

II.

THE UNUM INSURANCE POLICY
In addition to the basic and supplemental long-term disability benefit plans,

Lanpher also separately purchased a private disability insurance policy through Unum in
1994. (Partial Admin. R. at 0064-0073.) The Unum Policy is the subject of this action.
A Unum representative visited Merrill Lynch to promote the Policy in 1994. (Lanpher
Aff. ¶ 7.) The goal of Unum’s presentation was to encourage Merrill Lynch’s financial
advisors to recommend the policy to their clients. (Id.) Lanpher decided after the
presentation that he was interested in purchasing the policy for himself. (Id.) Unum’s
presenter informed him that if two or more employees purchased policies through Unum,
Unum would offer them a group discount. (Id.) Subsequently, Lanpher and two other
Merrill Lynch employees purchased the Policy from Unum. (Id.; see also Aff. of Richard
Fairbanks (“Fairbanks Aff.”) ¶ 5, Feb. 2, 2015, Docket No. 31.)
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Although the Policy was a private insurance plan, Merrill Lynch orchestrated
some aspects of the Policy’s administration. For example, Merrill Lynch facilitated the
employees’ premium payments, in exchange for which Unum offered the three
employees a 15% discount on their premiums through a FlexBill benefit arrangement.
(Aff. of Linda M. Doyle (“Doyle Aff.”), Ex. A at 3, Dec. 12, 2014, Docket No. 18.) The
FlexBill account for Lanpher and his two co-workers who purchased the Policy was
entitled “Merrill Lynch Life,” (Aff. of Lisa M. Fagan (“Fagan Aff.”), Ex. A (excerpts
from Unum’s FlexBill file for Merrill Lynch Life’s Special Bill #34870G1) at 4-5,
Dec. 12, 2014, Docket No. 19), and the arrangement was that “the bills for the entire
flexbill group” were all sent to Merrill Lynch, (id. at 3). Merrill Lynch passed the bills
on to the employees, and each individual employee paid his own premium directly to
Unum. (Lanpher Aff. ¶¶ 9, 11; Fairbanks Aff. ¶ 8.) Under the 15% FlexBill discount,
Lanpher paid an annual premium of $3,897.72 for the duration of the relevant time
period. (Doyle Aff., Ex. A at 3.)
In March 2008, approximately three months after his termination from Merrill
Lynch, Lanpher was hospitalized at the Mayo Clinic for depression. (See, e.g., Partial
Admin R. at 0487, 1523.) Shortly after that point, in May 2008, he sought long-term
disability benefits under the Unum Policy. (Id. at 0111-0113.) On the claim form,
Lanpher listed December 17, 2007 as his last day worked, but he indicated that his
depression began in 2002. (Id. at 0113.) He also explained that he had reduced his work
hours prior to his termination as a result of his depression. (Id. at 0111.) Lanpher did
not, however, make a residual or total benefits claim prior to May 21, 2008.
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Along with his claim form, Lanpher submitted medical records from Dr. D’Aurora
and Dr. Kim, (id. at 4093), as well as from the Mayo Clinic and Dr. Robert Roddy, a
psychiatrist Lanpher began seeing in 2005, (id. at 0486-0487, 1523). Based on Lanpher’s
claim and medical documentation, Unum’s initial review concluded that Lanpher’s date
of disability was March 25, 2008. (Id. at 0498.) Pursuant to this determination, they sent
Lanpher a check for $15,200.00 on August 26, 2008. (Id. at 3982.)
On December 3, 2008, Unum informed Lanpher that they had revised their initial
review after receiving additional information from Dr. D’Aurora. Based on the revised
date of disability, Unum concluded that Lanpher was “residually disabled from May 1,
2007 to October 1, 2007 and totally disabled from October 1, 2007 to present.” (Id.) In
November 2008, Unum sent Lanpher a check for $7,853.33, representing the residual
disability benefits, and another check for $66,900.26, representing his total disability
benefits under the revised disability determination. (Id. at 3983.) Additionally, Unum
paid Lanpher $21,000 through the College Benefit Rider for Lanpher’s three children.
(Id. at 3984.)
Just over three years later, on December 28, 2011, Lanpher contacted Unum to
request that they recalculate his benefits to reflect an earlier date of disability. (Doyle
Aff., Ex. A at 23-24.) At that time, Lanpher asserted that he was entitled to residual
benefits from 1999 to 2001, and total disability benefits from 2001 to the present. (Id. at
23.) Unum responded on March 23, 2012 that they had not received any new medical
information since they last adjusted his date of disability on December 3, 2008. (Id. at
26.)

The letter from Unum observes that they received correspondence from Dr.
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D’Aurora dated January 19, 2011, which reiterated his earlier position that Lanpher
began suffering debilitating symptoms in 2004 but did not provide any new information.
(Id.) Without new information supporting a recalculation, Unum informed Lanpher that
they would not reassess his benefits. (Id. at 27.) The letter advised Lanpher that, if he
did not agree with the decision, he “must submit a written appeal,” which “must be
received by [Unum] within 180 days of the date [Lanpher] receive[d] this letter even if
[he] submitted additional information to [the disability benefits specialist] for
reconsideration.” (Id.) The letter ends by explaining, “If we do not receive your written
appeal within 180 days of the date you receive this letter, our claim determination will be
final.” (Id. at 29.)
On May 3, 2013 – well after the 180 appeal window had expired – Lanpher sent
Unum a fax “requesting reconsideration of [its] March 23, 2012 denial letter for
individual disability benefits prior to May[] 1, 2007.” (Id. at 30.) Unum responded that
Lanpher’s case had been closed due to the expiration of the appeal period. (Id. at 34-35.)
The letter explained that Lanpher’s “late notice and filing of claim has prejudiced
[Unum’s] ability to evaluate [Lanpher’s] claim back to 1999 or 2002.” (Id. at 34.) The
letter further explained that although Unum’s claim determination was final, Lanpher had
“a right to bring a civil suit under section 502(a) of the Employee Retirement Income
Security Act of 1974” if he disagreed with Unum’s decision. (Id. at 35.)
On April 21, 2014, Unum received a letter from Lanpher’s attorney, Mark Nolan,
requesting an appeal review on the grounds that Dr. D’Aurora’s communication with
Unum in late November 2012 constituted an appeal of the March 23, 2012 determination.
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(Id. at 38.) Unum denied Nolan’s appeal review request, explaining that Dr. D’Aurora’s
November 2012 communication was insufficient to constitute an appeal by Lanpher for
two reasons. First, Dr. D’Aurora was solely clarifying an earlier discussion from 2008
and not purporting to offer any new information.

(Id.)

Second, even if his

communication had constituted a notice of appeal, it was received in late November –
roughly eight months after the March 23 determination – and was therefore outside the
180-day appeal window. (Id.)

III.

PROCEDURAL HISTORY
On July 1, 2014, Lanpher filed this action. (Compl., July 1, 2014, Docket No. 1.)

At that time, the Court had taken summary judgment motions under advisement in
Lanpher’s action against Merrill Lynch and MetLife for benefits under the basic and
supplemental long-term disability insurance plans.

In his complaint against Unum,

Lanpher alleges that Unum “has wrongfully and in breach of its insuring contract, denied
benefits due Mr. Lanpher under the [Policy].” (Id. ¶ 8.) Lanpher goes on to claim that
“the denial of the Plaintiff’s claim by the Defendant lacked reasonable basis and
Defendant acted in reckless disregard of Plaintiff’s rights in denying Plaintiff’s claim.”
(Id. ¶ 9.) He seeks “[f]ull contract benefits from 2002 to the present and continuing,”
along with “[i]nterest on said benefits.” (Id. at 2.)
On December 12, 2014, Unum moved for summary judgment. (Def.’s Mot. for
Summ. J., Dec. 12, 2014, Docket No. 15.) Unum argues that Lanpher’s claim is timebarred and that he is not entitled to additional benefits under the Policy because his notice
of claim, proof of loss, and notice of appeal were all untimely. In response, Lanpher filed
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a motion for partial summary judgment on February 2, 2015, seeking a ruling that his
claim was timely and not governed by ERISA, as well as a finding that Unum was not
prejudiced by any delay in submitting a notice of claim. (Pl.’s Mot. for Partial Summ. J.,
Feb. 2, 2015, Docket No. 25.) This matter is now before the Court on both motions for
summary judgment.

DISCUSSION
I.

STANDARD OF REVIEW
Summary judgment is appropriate where there are no genuine issues of material

fact and the moving party can demonstrate that it is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the suit,
and a dispute is genuine if the evidence is such that it could lead a reasonable jury to
return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A court considering a motion for summary judgment must view the facts in the
light most favorable to the non-moving party and give that party the benefit of all
reasonable inferences to be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).

Summary judgment is appropriate if the

nonmoving party “fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “To defeat a motion
for summary judgment, a party may not rest upon allegations, but must produce probative
evidence sufficient to demonstrate a genuine issue [of material fact] for trial.” Davenport

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v. Univ. of Ark. Bd. of Trs., 553 F.3d 1110, 1113 (8th Cir. 2009) (citing Anderson, 477
U.S. at 247-49).

II.

EMPLOYEE WELFARE BENEFIT PLANS UNDER ERISA
Unum argues that the Policy is an employee welfare benefit plan governed by

ERISA. In Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982), the Eleventh
Circuit identified four key factors courts apply to determine whether ERISA governs a
policy: “a ‘plan, fund, or program’ under ERISA is established if from the surrounding
circumstances a reasonable person can ascertain [1] the intended benefits, [2] a class of
beneficiaries, [3] the source of financing, and [4] procedures for receiving benefits.” 688
F.2d at 1373. The Eighth Circuit has embraced the Donovan factors for determining
whether an insurance policy constitutes a plan under ERISA. E.g., Nw. Airlines, Inc. v.
Fed. Ins. Co., 32 F.3d 349, 354 (8th Cir. 1994); Harris v. Ark. Book Co., 794 F.2d 358,
360 (8th Cir. 1986).
Each of the Donovan factors is clearly ascertainable here. As to the first, a
reasonable person would be able to ascertain that the intended benefit under the Policy is
long-term disability coverage. As to the second, the intended beneficiaries of the Policy
are the Merrill Lynch employees that are policyholders. As to the third, the source of
financing is the employees’ premium payments; Merrill Lynch paid no part of the
employees’ contributions to the Policy. As to the fourth, the Policy clearly details the
procedures for receiving benefits.
Despite the fact that the Donovan factors are met here, there is little tying Merrill
Lynch to the Policy. The Donovan factors are designed to evaluate whether a benefit
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scheme constitutes “an employee benefit plan, fund or program” as those terms are used
in ERISA, but the satisfaction of the four-factor test does not mean that a plan, fund, or
program is necessarily established or maintained by an employer.

Rather, “[t]he

existence of a plan is [one] prerequisite to jurisdiction under ERISA.” Harris, 794 F.2d
at 360. “An employer’s decision to extend benefits does not constitute, in and of itself,
the establishment of an ERISA plan.” Kulinski v. Medtronic Bio-Medicus, Inc., 21 F.3d
254, 256 (8th Cir. 1994). The Court must also consider whether an employer conducts
activities that constitute the establishment or maintenance of an employee welfare benefit
plan.
When assessing whether a plan falls within the jurisdiction of ERISA, “[t]he
pivotal inquiry is whether the plan requires the establishment of a separate, ongoing
administrative scheme to administer the plan’s benefits.

Simple or mechanical

determinations do not necessarily require the establishment of such an administrative
scheme.” Id. at 257. Where an employer has no “‘ongoing administrative program to
meet [its] obligation’” under a policy, ERISA does not govern the plan. Eide v. Grey Fox
Tech. Servs. Corp., 329 F.3d 600, 605 (8th Cir. 2003) (quoting Fort Halifax Packing Co.,
Inc. v. Coyne, 482 U.S. 1, 12 (1987)). The Court looks, for example, to considerations
such as “an employer’s need to create an administrative system may arise where the
employer, to determine the employees’ eligibility for and level of benefits, must analyze
each employee’s particular circumstances in light of the appropriate criteria.” Kulinski,
21 F.3d at 257; see also Plante v. Foster Klima & Co., LLC, No. 03-3553, 2004 WL
2222318, at *5 (D. Minn. Sept. 30, 2004) (finding no ERISA plan where an employer’s
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actions involved no discretion and no separate administrative scheme was required to
support the employer’s fulfillment of their obligations). It is these “types of discretionary
decisions, such as evaluating eligibility criteria or determining benefit levels, that are
indications of a true ERISA plan.” Wright Elec., Inc. v. Minn. State Bd. of Elec., No. 001457, 2002 WL 511453, at *5 (D. Minn. Mar. 31, 2002).
In this case, nothing suggests that Merrill Lynch maintained a separate
administrative scheme or exercised discretion over eligibility or benefits levels for the
Unum Policy. Merrill Lynch did not invite Unum to offer a policy to employees or even
conduct a presentation about the Unum Policy. Unum requested the opportunity to make
a presentation about the Policy so that Merrill Lynch employees could inform clients
about the Policy, and Merrill Lynch acquiesced. Merrill Lynch does not appear to have
played any role in the Policy application process, as the employees submitted their
applications directly to Unum.

Nor did Merrill Lynch have any control over the

employees’ benefit levels.
Unum argues that the FlexBill system required administrative action by Merrill
Lynch, but there is no evidence that the FlexBill arrangement required Merrill Lynch to
exercise discretion over any aspect of the Policy. Merrill Lynch merely received the bills
from Unum, to which Unum had already applied a 15% discount, and then passed the
premium bills on directly to the employees without taking any other administrative
actions. Indeed, after one of the other employees in the FlexBill group requested that
Unum send his premium bills directly to his home, Unum sent a letter explaining that the
bills for the whole FlexBill group must go to a single address, but the address need not be
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Merrill Lynch’s business address if one of the employees preferred to receive all of the
bills. (Fagan Aff., Ex. A at 3.) Nothing in the record indicates that Merrill Lynch
undertook any financial obligations with respect to the Policy, received any material
benefit from Unum for facilitating premium bills, or engaged in any practices beyond
automatic forwarding of bills immediately to employees. Such limited involvement
“hardly constitutes the operation of a benefit plan” by Merrill Lynch. Fort Halifax, 482
U.S. at 12.
Unum urges the Court to follow Johnston v. Paul Revere Life Insurance Co., 241
F.3d 623 (8th Cir. 2001), and find the establishment of an ERISA plan where the
employer’s only role was facilitating premium payments for which the employees were
ultimately charged. In Johnston, as in this case, the employer arranged for insurance
agents to meet with employees and explain the terms of the plan. Id. at 626. Unlike this
case, the employees in Johnston had the option for the insurer to bill the employees
directly or to bill the employer, and the plaintiff chose to have the employer billed for the
premiums. Id. The employer then passed the full cost on to the employees at the end of
the tax year by adding the total individual premiums to the employees’ W-2 forms. Id.
In both Johnston and this case, the plaintiffs were personally responsible for the cost of
the premiums. Based on the arrangement in Johnston, the court found “that a reasonable
person could conclude that [the employer] did establish a plan within the meaning of
ERISA that offered disability benefits to its employees.” Id. at 629.
There are, however, important differences between this case and Johnston that
help illustrate why the Unum Policy is not an ERISA plan. From the beginning, the
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employer’s involvement in the plan differs between the two cases. In this case, Unum
contacted Merrill Lynch, and Merrill Lynch agreed to allow a Unum representative to
give a presentation – not for the employees’ own benefit, but with the aim of encouraging
Merrill Lynch’s financial planners to advise clients to sign up for the Unum Policy. In
Johnston, on the other hand, the employer sought a new long term disability insurance
provider for its employees and reached out to an insurance agent for Paul Revere. Id. at
626. After employees signed up for the policy in Johnston, the employer was much more
active than Merrill Lynch, working with the insurance agent to handle policy paperwork
and instituting a policy whereby the employer would pay premiums up front and then
adjust the employees’ tax forms to account for those costs. Id. The court reasoned that
“by maintaining the policy forms, by processing the paperwork in conjunction with [the
insurance agent], and by facilitating the payment of premiums, the plan embodied a set of
administrative practices.” Id. Merrill Lynch was far less involved in the administration
of the Unum Policy, and the Court concludes that its activities did not reach the threshold
of establishing or maintaining an ERISA employee welfare benefit plan.

III.

LIMITATIONS PERIOD
Because the Unum Policy is not governed by ERISA, the Court will treat the

Policy as a traditional disability insurance policy. Long term disability insurance policies
are governed by Chapter 62A of the Minnesota Statutes. Matthew v. Unum Life Ins. Co.
of Am., 639 F.3d 857, 866 (8th Cir. 2011). Under Minnesota law, “[n]o action at law or in
equity . . . shall be brought after the expiration of three years after the time written proof

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of loss is required to be furnished.” Minn. Stat. § 62A.04, subd. 2(11). The statute
establishes the proof of loss requirements as follows:
Written proof of loss must be furnished to the insurer . . . in case of claim
for loss for which this policy provides any periodic payment contingent
upon continuing loss within 90 days after the termination of the period for
which the insurer is liable and in case of claim for any other loss within 90
days after the date of such loss.
Minn Stat. § 62A.04, subd. 2(7). This comports with the Unum Policy, which requires
that “(Proof of Loss) must be furnished to us within 90 days after each month for which a
benefit is payable.” (Doyle Aff., Ex. A at 7.)
Although the documentation in the record is somewhat sparse with respect to
whether Lanpher’s disability remains ongoing for the purposes of disability insurance
coverage, the Court finds that there is sufficient evidence that Lanpher’s depression has
continued within the last three years. (E.g., Partial Admin. R. at 4089 (“My experience
of Mr. Lanpher was that he was not able to work and function . . . as early as 2001,
definitely in 2004 and since then.”).) Therefore, the Court concludes that Lanpher’s
continuous disability remains ongoing and his action is not barred by the statute of
limitations in Minnesota Statute § 62A.04.

IV.

NOTICE OF CLAIMS
Even though Lanpher’s federal action is not precluded by the Minnesota statutory

limitation period, the Court concludes that Lanpher’s breach of contract claim is barred in
part for failure to comply with the Policy’s notice requirements. Under Minnesota law,
“[l]ate notice defeats coverage only if there is prejudice to the insurer or notice is actually
a condition precedent to coverage.” Winthrop & Weinstine, P.A. v. Travelers Cas. & Sur.
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Co., 187 F.3d 871, 874 (8th Cir. 1999). The burden of demonstrating prejudice is on the
insurer. Id. (citing Reliance Ins. Co. v. St. Paul Ins. Cos., 239 N.W.2d 922, 925 (Minn.
1976)). “However, an ‘extraordinary length of time between an event and notification
[can] be prejudicial in itself.’” Roth v. Nw. Mut. Life Ins. Co., No. 12-452, 2014 WL
1281603, at *4 (D. Minn. Mar. 28, 2014) (quoting Reliance Ins. Co., 239 N.W.2d at 925).
In Roth, the court found a delay of six and one-half years to be prejudicial to the
insurer. Id. Other courts have similarly found a delay of several years to be prejudicial
because it prevents the insurer from “undertak[ing] any contemporaneous investigation to
determine the extent of [the insured]’s disability.” Id. For example, in Dawson v.
Northwestern Mutual Life Insurance Co., No. 10-2641, 2011 WL 4842543 (D. Minn.
Oct. 12, 2011), the court found that a delay of seven years barred the insured’s untimely
claim. The court rejected the plaintiff’s argument that the delay was not prejudicial
because his medical records were fully available to the insurer and the insurer could still
require a medical examination or depose the plaintiff about his medical condition. Id. at
*2-*3.

The court was persuaded that the insurer’s “inability to conduct a

contemporaneous claim investigation or to interview [the insured] and other witnesses
when their memories were fresh” constituted prejudice. Id. at *3 (internal quotation
marks omitted); accord Broughton v. Unum Life Ins. Co. of Am., No. 06-4015, 2007 WL
39432, at *6 (D.S.D. Jan. 5, 2007) (precluding as untimely a disability insurance claim
when filed more than three years after notice was required by the policy).
In this case, the Unum Policy required that an insured must provide Unum with
“Notice of Claim within 30 days after the Elimination Period begins, or as soon as
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reasonably possible.” (Doyle Aff., Ex. A at 7.) “‘Elimination Period’ means the number
of days stated on page 3 [90 days] preceding the date benefits become payable . . . during
which you are totally or residually disabled. The Elimination Period begins on the
first day that you are totally or residually disabled.” (Id. at 4 (emphasis added).)
Lanpher alleges that he became disabled in 2002, but he did not provide Unum with any
notice of claim until May of 2008. (Partial Admin. R. at 0111-0112.) Even if Lanpher’s
disability did not begin until the end of 2002, his notice of claim and proof of loss were
filed more than five years after he alleges that his disability began and notice was due
under the Policy. Just as in Dawson, Lanpher has offered no reason for the delay in filing
his claim. Lanpher’s medical records are available to Unum, as are Lanpher’s coworkers and Lanpher himself, just as they were in Dawson and in Roth. The Court finds,
however, just as in Dawson and in Roth, that Unum’s inability to perform a
contemporaneous investigation of Lanpher’s claims from 2002 to 2007 was prejudicial to
the insurer.2
Each case must be evaluated on its merits with respect to whether a delay in filing
a benefits claim was prejudicial. Ryan v. ITT Life Ins. Corp., 450 N.W.2d 126, 130
(Minn. 1990); Roth, 2014 WL 1281603, at *4. In this case, the Court concludes that a
2

Lanpher argues that the notice and proof of loss provisions are not properly understood
to be “conditions precedent” to recovery under the Policy. Irrespective of whether those are
“conditions precedent” as a matter of contract law, Lanpher had an obligation to put Unum on
notice of his disability within a reasonable time of the disability’s onset. The Court is not
holding Lanpher to a strict timeline of the thirty days required by the Policy, but the timing of his
notice must be reasonable, and a delay of five years inhibits the insurer’s ability to investigate
the claims. Therefore, even assuming without deciding that these notice and proof of loss
provisions were not “conditions precedent” to coverage, Lanpher’s claims between 2002 and
2007 are barred for failure to provide timely notice of the claims, as the multiple-year delay was
prejudicial to Unum.
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delay of more than five years prejudiced the insurer’s ability to conduct a
contemporaneous and thorough investigation of Lanpher’s claim between 2002 and 2007.
Therefore, the Court will grant in part Unum’s motion for summary judgment, as to
Lanpher’s disability claims prior to May 1, 2007.3 This does not affect Lanpher’s ability
to pursue disability claims arising after he provided notice to Unum in May 2008; after
that point, Unum was aware of Lanpher’s disability and had the means to conduct a
contemporaneous investigation of those claims.
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
1.

Unum’s Motion for Summary Judgment [Docket No. 15] is GRANTED in

part and DENIED in part as follows:
a.

Unum’s motion is GRANTED with respect to any claims arising

prior to May 1, 2007.
b.

Unum’s motion is DENIED with respect to any claims arising on or

after May 1, 2007.
2.

Lanpher’s Motion for Partial Summary Judgment [Docket No. 25] is

DENIED.
DATED: September 2, 2015
at Minneapolis, Minnesota.

3

____s/
____
JOHN R. TUNHEIM
Chief Judge
United States District Court

May 1, 2007 was the earliest date for which Unum was able to confirm a disability
determination, based upon their investigation of Lanpher’s May 2008 claim.
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