Lafferty v. UNUM Group

Filing 38

MEMORANDUM and ORDER granting 30 Motion for Summary Judgment and the dft shall pay pltf all outstanding long term disability benefits due re policy #596672;and denying 18 dft's Motion for Summary Judgment ; Clerk of Court is directed to CLOSE caseSigned by Honorable James M. Munley on 2/29/12 (sm, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT LAFFERTY,

:
No. 3:10cv2465
Plaintiff
:
:
(Judge Munley)
v.
:
:
UNUM LIFE INSURANCE
:
COMPANY OF AMERICA,
:
Defendant
:
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM
Before the court for disposition are cross motions for summary
judgment in this case wherein Plaintiff Robert Lafferty seeks long term
disability benefits under his employer’s plan pursuant to the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.
Defendant Unum Life Insurance Company of America both insured and
administered the plan. The issue we must decide is whether defendant
abused its discretion in denying the benefits. The parties have briefed their
respective positions and, the motions are ripe for decision.
Background
The general background facts are undisputed. Defendant issued to
plaintiff’s employer a group insurance policy including coverage for long
term disability. Plaintiff sought long term disability benefits under the policy
alleging a disabling cardiac disorder. Defendant denied the benefits on the
basis that plaintiff’s cardiac disorder was a pre-existing condition and thus

not covered under the policy.1 After exhausting his administrative
remedies, plaintiff instituted the instant action alleging that he is indeed
entitled to the long term disability benefits. Plaintiff’s complaint seeks the
following relief: 1) an order that defendant pay him long term disability
benefits; 2) prejudgment interest on the award until the date of the
judgment; 3) attorney’s fees and costs; and 4) other and further relief as
the court deems just and proper. (Doc. 1, Compl. Ad Damnum Clause, foll.
¶ 21). At the close of discovery both parties moved for summary
judgment. They both argue that the administrative record supports their
respective positions. After a careful review, we find that the plaintiff should
be awarded benefits.
Jurisdiction
As this case is brought pursuant to 29 U.S.C. § 1132(a)(1)(B), we
have jurisdiction under 28 U.S.C. § 1331 (“The district courts shall have
original jurisdiction of all civil actions arising under the Constitution, laws, or
treaties of the United States.)”2

Plaintiff also made a claim for disability benefits based upon a back
disorder. Defendant denied the claim for benefits. That claim, however, is
not advanced in the instant case and we will not discuss it further. The
issue involved is “whether Plaintiff’s congestive heart failure was a preexisting condition.” (Doc. 31, Pl. Mem. in Supp. Mot. for Summ. Judg. at
7). “The evidence of record demonstrates that the Plaintiff is totally
disabled from his job as an engineering director because of the
implantation of the ICD as the Plaintiff would not be able to be in close
proximity to electrical machinery.” (Doc. 32, Pl.’s Statement of Mat. Facts ¶
20).
1

In pertinent part, the text of 29 U.S.C. § 1132(a)(1)(B), involving
ERISA claims, is as follows:
Ҥ 1132. Civil enforcement
2

2

Summary judgment standard of review
Granting summary judgment is proper if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of law. See
Knabe v. Boury, 114 F.3d 407, 410 n.4 (3d Cir. 1997) (citing FED. R. CIV. P.
56(c)). “[T]his standard provides that the mere existence of some alleged
factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is that there be
no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247-48 (1986) (emphasis in original).
In considering a motion for summary judgment, the court must
examine the facts in the light most favorable to the party opposing the
motion. Int’l Raw Materials, Ltd. v. Stauffer Chem. Co., 898 F.2d 946, 949
(3d Cir. 1990). The burden is on the moving party to demonstrate that the
evidence is such that a reasonable jury could not return a verdict for the
non-moving party. Anderson, 477 U.S. at 248 (1986). A fact is material
when it might affect the outcome of the suit under the governing law. Id.
Where the non-moving party will bear the burden of proof at trial, the party

(a) Persons empowered to bring a civil action. A civil action may be
brought-(1) by a participant or beneficiary-...
(B) to recover benefits due to him under the terms of his plan, to enforce
his rights under the terms of the plan, or to clarify his rights to future
benefits under the terms of the plan[.]”

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moving for summary judgment may meet its burden by showing that the
evidentiary materials of record, if reduced to admissible evidence, would be
insufficient to carry the non-movant's burden of proof at trial. Celotex v.
Catrett, 477 U.S. 317, 322 (1986). Once the moving party satisfies its
burden, the burden shifts to the non-moving party, who must go beyond its
pleadings, and designate specific facts by the use of affidavits, depositions,
admissions, or answers to interrogatories showing that there is a genuine
issue for trial. Id. at 324.
ERISA standard of review
In reviewing decisions of ERISA plan administrators or fiduciaries we
apply a deferential abuse of discretion standard of review.3 Estate of
Schwing v. The Lilly Health Plan, 562 F.3d 522, 525 (3d Cir. 2009) (citing
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115-16 (2008)). If the entity
deciding to grant or deny benefits has any conflict of interest, we consider
that conflict as one of several factors in determining whether the
administrator or the fiduciary abused its discretion. Id.
An abuse of discretion has occurred where the plan administrator’s
decision is “without reason, unsupported by substantial evidence or
erroneous as a matter of law.” Doroshow v. Hartford Life and Accident Ins.
Co., 574 F.3d 230, 234 (3d Cir. 2009). “This scope of review is narrow
and the court is not free to substitute its own judgment for that of [the plan
administrator] in determining eligibility for plan benefits.” Id. (internal
quotation marks and citation omitted).
The Third Circuit Court of Appeals has used the phrases “abuse of
discretion” and “arbitrary and capricious” interchangeably in describing the
standard of review. Howley v. Mellon Fin. Corp., 625 F.3d 788, 793 n.6 (3d
Cir. 2010). We will use the phrase “abuse of discretion.”
3

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Discussion
The issue before the court is whether the defendant abused its
discretion in denying long term disability benefits to plaintiff on the basis
that his alleged disability amounted to a “pre-existing” condition, and thus
was not covered by the plan. The parties agree that the disability
insurance plan is an employee benefit plan within the meaning of, and
governed by, ERISA. The parties do not dispute most of the pertinent
facts.

Plaintiff served in a management position at Bon Secours

Community Hospital (“Bon Secours”). Bon Secours had a long term
disability benefit plan insured and administered by the defendant.
Generally, the plan provides that a management employee is “disabled”
when he is “limited from performing the material and substantial duties of
[his] own job due to [his] sickness or injury.” (Doc. 21, Def. Appx. at 200)
(emphasis removed).4 Plaintiff worked the required number of hours per

Specifically the plan provides:

4

HOW DOES UNUM DEFINE DISABILITY?
All management of Bon Secours Health
System, Inc. in active employment in the United
States with the Employer, excluding employees
covered under the 1199 Collective Bargaining
Agreement and Executives
You are disabled when Unum determines that
- you are limited from performing the material and
substantial duties of your own job due to your
sickness or injury, and
- you have a 20% or more loss in your indexed
monthly earnings due to the same sickness or
injury.
(Doc. 21, Def. Appx. at 200).
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week in his management position to be covered by the plan. (Pl.’s
Statement of Material Facts (“Pl. SOF”) ¶ 6; Def. Answer to Pl. SOF ¶ 6).
The policy excludes pre-existing conditions from coverage. (Pl. SOF ¶ 7).
If an employee received treatment for a condition within three months of
the policy taking effect, then it is considered a pre-existing condition and
long term disability coverage is not available. This three month period
before the effective date of the policy is called the “look-back period.” 5
(Doc. 21, Def. App. at 208).
In September 2009, doctors diagnosed plaintiff with congestive heart
failure and in December, they performed surgery to install an implantable
cardioverted defibrillator (“ICD”) or pacemaker. (Doc. 32, Pl. SOF ¶ 16;
and Doc. 33, Def. Answer to Pl. SOF ¶ 16). Plaintiff asserts that this heart
condition and the pacemaker render him disabled from working under the
plan. He thus made a claim for long term disability benefits. The claim
was initially denied and plaintiff appealed to defendant’s appeals unit. The

It is not clear exactly when plaintiff starting working for Bon Secours
so as to start the look back period. It is either November 2008 when
plaintiff was hired by Bon Secours for a special project, or January 2009
when he was hired full-time. Regardless, of which date is used, however,
defendant would have denied the benefits for the same reason. Therefore,
we need not decide which date is the official start date.
Also, plaintiff evidently worked for Bon Secours before November
2008 and was laid off and eventually re-hired. He asserts that he was told
by his employer that the disability insurance coverage would “bridge the
gap” between when he was laid off until he was rehired. Therefore, the
look back period would not apply or the look back period would run from
some other date, the date he was originally hired. This issue, however, is
not raised in this case.
5

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appeals unit issued a decision in October 2010, denying the appeal on the
basis that the heart condition amounted to a pre-existing condition under
the plan. (Doc. 29, Def. App., Appeals Decision, 1322-27). Plaintiff then
filed the instant suit asserting that “[t]he evidence in the Claims file
demonstrates that the Plaintiff’s congestive heart failure and consequent
need for an ICD was not a pre-existing condition and, therefore, UNUM’s to
deny the Plaintiff’s long term disability benefits was arbitrary and
capricious.” (Doc. 30, Pl.’s Mot. for Sum. Judg. ¶ 8).
The policy at issue defines pre-existing condition, in pertinent part,
as:
“You have a pre-existing condition when you apply for coverage
when you first become eligible if
- you received medical treatment, consultation, care or services including
diagnostic measures, or took prescribed drugs or medicines in the 3
months just prior to your effective date of coverage[.]”
(Def. App. at 208).
The original denial of benefits indicated that plaintiff had a preexisting condition because during the look-back period, he had been
treated for “hypertension and hypercholesterolemia. The use of aspirin
was also evident during this time period. The medication management
evident during the look-back period, combined with a known history of
[coronary artery disease “CAD”] is consistent with the management of
CAD.” (Doc. 28, Def. App. at 1198). Similarly, the defendant’s appeals
unit concluded that: “While [plaintiff] was not treated for heart failure during
the look back periods, treatment of hypertension and [high cholesterol] in a
patient who has a history of coronary bypass surgery and the use of aspirin

7

for its antiplatelet effect, he was clearly receiving treatment for underlying
coronary disease.” [sic] (Id. at 1324). We find that this decision is an abuse
of discretion, that is, it is absent reason and it is not supported by
substantial evidence. In making this decision we acknowledge that the
defendant has an inherent conflict of interest in that it acted as both the
claims administrator and insurer of the subject plan.6 Additionally, all of the
analysis that it relied upon in reaching its decision was provided by those
working for or hired by the defendant to make such an analysis.
Bearing these factors in mind, the facts simply do not support the
defendant’s decision. During the look-back period, plaintiff was taking high
cholesterol medicine and hypertension medication. Additionally, he had
evidently been taking daily aspirin since heart surgery in 1999. These are
the facts that are repeatedly relied upon in defendant’s various reviews of
plaintiff’s claim to justify denial of this claim.
Plaintiff, however, does not assert that he is disabled from high
cholesterol, hypertension or the effects of the heart surgery he had in 1999.
Rather, he asserts he became disabled by September 2009, approximately
nine months after the effective date of his coverage. At that time plaintiff’s
doctor diagnosed him with congestive heart failure. Upon his doctor’s
recommendation plaintiff had a pacemaker implanted. Nothing in the
administrative record suggests that plaintiff was treated for congestive
heart failure in the three-month look-back period. In fact, the doctor
reviewing the records for the defendant indicates that plaintiff was not
treated for congestive heart failure during the look-back period. (Doc. 29,

Defendant concedes this conflict. (Doc. 37, Def. Mem. In Opp’n at

6

14).
8

Def. App. at 1324).
It is helpful to analyze several cases from the Third Circuit Court of
Appeals to explain our conclusion. The first is McLeod v. Hartford Life and
Accident Ins. Co., 372 F.3d 618 (3d Cir. 2004). In McLeod, the plaintiff
sought long term disability benefits under an ERISA plan after she was
diagnosed with multiple sclerosis (“MS”). Id. at 621. The plan excluded
pre-existing conditions. Id. Just as in the case before the court, the ERISA
plan in McLeod contained a look-back provision to determine if a condition
was pre-existing. If during that look-back period the employee was treated
for the ailment, then coverage was not available. Id. During the look-back
period, the plaintiff had consulted with her doctor regarding numbness in
her left arm. She received treatment for the numbness, but was not
diagnosed with, nor was it suggested that she suffered from, MS. Months
later, plaintiff was diagnosed with MS and physicians concluded that some
of the symptoms she had during the look-back period, namely the
numbness in her arm, had been due to the disease. Id. 621-22. The
diagnosis came four months after the effective date of coverage for long
term disability insurance. Id. at 622. The insurance company denied
benefits on the basis that when she had seen the doctor for numbness in
her arm, she received medical care for symptoms relating to the MS. Id.
The Third Circuit concluded that a denial of benefits was
inappropriate. Although, the plaintiff in McLeod had been treated for
various ailments for the years before she was diagnosed with MS, no tests
performed during that time linked the symptoms she had with MS. Thus,
she could not be said to have been treated for MS, and the insurance
company’s denial of benefits was arbitrary and capricious. Id. at 628. In

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reaching this conclusion, the court noted that “ERISA was enacted to
promote the interests of employees and their beneficiaries in employee
benefit plans and to protect contractually defined benefits.” Id. at 624
(internal citations and quotation marks omitted).

The court then reasoned

that if the insurance company’s arguments were accepted then “any time a
policy holder seeks medical care of any kind during the look-back period,
the ‘symptom’ that prompted him to seek the care could potentially be
deemed a symptom of a pre-existing condition, as long as it was later
deemed consistent with symptoms generally associated with the condition
eventually diagnosed.” Id. at 625. Such a ruling would inappropriately
expand the definition of “pre-existing.” Id. at 627-28.
Another case that provides us with guidance is Lawson v. Fortis Ins.
Co., 301 F.3d 159 (3d Cir. 2002). In Lawson, two days prior to the effective
date of her health insurance policy the plaintiff, a child, was treated for a
respiratory tract infection. Id. at 160. After the effective date of the policy,
the “respiratory tract infection” was discovered to actually be leukemia. Id.
The plaintiff sought benefits under the health insurance policy for the
leukemia, but the insurance company denied benefits on the basis that it
was a pre-existing condition that for which the plaintiff had been treated
before the effective date of the policy. Id. The court found that the
decision made by the insurance company was inappropriate. Prior to the
effective date of the insurance policy, the plaintiff had been diagnosed with,
and treated for, a respiratory tract infection, not leukemia regardless of
whether it was later determined that she actually had leukemia. Id. at 166
In support of its position, defendant cites Doroshow v. Hartford Life
and Acc. Ins. Co., 574 F.3d 230 (3d Cir. 2009). The plaintiff in Doroshow

10

was diagnosed with amyotrophic lateral sclerosis (“ALS”) and sought longterm disability benefits from his insurance plan which was governed by
ERISA. Id. at 231-32. The court addressed whether the ALS was a preexisting condition so as to bar benefits. The plan described a pre-existing
condition as one for which treatment or advice was rendered within twelve
months look-back period prior to the effective date of the insurance. Id.
The court focused on whether the plaintiff had obtained “advice” regarding
the disease within the appropriate time frame.

During the look-back

period, the plaintiff had visited his primary care physician, who diagnosed
him with motor neuron disease. At that time, however, the doctor did not
believe that he suffered from ALS. Id. at 232. Based upon a family history
of the disease and symptoms he had been experiencing, plaintiff had
previously during the look-back period discussed the disease with medical
professionals and been tested regarding the disease. Id.
The court focused on whether the plaintiff had received “advice”
during the period regarding ALS. Id. at 234-35. The court found, that
although, plaintiff had not been diagnosed with ALS during the look-back
period he had been provided “advice” based upon the fact that plaintiff had
shown signs of the disease, had tests performed to determine whether he
had it and two doctors had previously considered ALS as a potential
diagnosis. Thus the insurance company was reasonable in concluding that
benefits were not warranted because he had received “advice” on the
condition during the look-back period rendering the disease a pre-existing
condition. Id. at 235.
Citing McLeod and Lawson, the plaintiff in Doroshow argued that
“ruling out” a condition did not constitute “advice” on that condition. Id. at

11

235-36. The court rejected this argument. The Third Circuit indicated that
McLeod supported the conclusion that “seeking medical care for a
symptom of a pre-existing condition can serve as a basis for denying
coverage when there is some ‘intent to treat or uncover the particular
ailment which causes the symptoms (even absent a timely diagnosis),
rather than some nebulous or unspecified medical problem.’” Id. at 235
(quoting McLeod, 372 F.3d at 628). The Court found that Lawson, stood
for the proposition that a misdiagnosis or an unsuspected condition
manifesting non-specific symptoms, during the look-back period does not
create a pre-existing condition. The insured had been treated for a
respiratory tract infection, when in fact, she suffered from leukemia. As
leukemia was not even considered as a possible diagnosis, it was not a
pre-existing condition. Id. at 236.7
McLeod, Lawson and Doroshow, generally inform this court’s
decision, but none of them are on point directly. In all these cases, the
insureds had some symptom for which they sought treatment. Here,
plaintiff was asymptomatic, and received treatment for disorders that could
lead to a condition, coronary artery disease, which could lead to the
allegedly disabling condition of congestive heart failure and the placement
of the pacemaker. The defendant concluded that treating these underlying
disorders rendered defendant’s heart failure/placement of the pacemaker a
pre-existing condition. We find this decision is an abuse of discretion.
Unum Medical Consultant Peter G. Kouros, Doctor of Osteopathic

Notably, Circuit Judge Rendell wrote a vigorous dissent indicating
that the majority opinion in Doroshow disregarded the precedent of McLeod
and Lawson. Doroshow, 574 F.3d at 236-38 (Rendell, J., dissenting).
7

12

Medicine, reviewed the medical records and the social security record for
the defendant. (Doc. 28, 1190-95). The question presented to Dr. Kouros
by Unum was: “Did the claimed disabling illness congestive heart
failure/coronary artery disease/injury in fact exist during the look back
period?” (Id. at 1193).
Dr. Kouros answered the question, by first indicating that congestive
heart failure and coronary artery disease are two separate conditions. He
explained as follows:
Congestive heart failure is a condition where the
heart is unable to pump sufficient blood to the
body’s other organs. Different conditions can cause
congestive heart failure. The most common causes
include coronary artery disease and hypertension. .
. . There is no clear and convincing evidence of
congestive heart failure during the look-back period.
This is based on a lack of symptoms or diagnostics
consistent with this diagnosis. . . .
The condition of coronary artery disease (CAD) can
be defined as a narrowing of the arteries that supply
the heart. This condition was known to be present
as of at least 1998 when the [plaintiff] underwent a
4-vessel bypass. The treatment of CAD focuses on
the reduction of risk of further events and
progression. This is accomplished by controlling
hypertension, reducing cholesterol, adding Aspirin
to reduce the risk of heart attack, and discontinuing
smoking. . . . The medical records in the lookback period reflect management of the conditions
associated with CAD[.]
(Id. at 1193)
Thus, the treatment plaintiff received during the look-back period was
for management of the conditions associated with CAD. (Id.)
Costas Lambrew, M.D., also conducted a review of plaintiff’s medical
records for the defendant. Dr. Lambrew found that although plaintiff had
coronary artery bypass graft (“CABG”) surgery in 1999, “[f]rom a cardiac
standpoint, he had been stable since then and had not seen a cardiologist
in the last ten years.” (Id.) Prior to the heart failure, during the look-back
13

period, plaintiff had been on medicine for high cholesterol and
hypertension. He was also taking aspirin for stroke and heart attack
prevention. (Id. at 1298). “While he was not treated for heart failure
during the look back periods, treatment of hypertension and hyperlipidemia
in a patient who is post CABG, and use of [aspirin] for its antiplatelet effect,
is clearly indicated as treatment for underlying coronary disease.” (Id. at
1301). As noted, however, Dr. Lambrew concedes that plaintiff was not
treated for heart failure during the look-back period, and treatment of
coronary artery disease is done to prevent the development of heart failure.
(Id. at 1315-1316).
The issue, therefore, is whether treating disorders that could lead to
another disorder is actually treating the second disorder. In other words, is
taking steps to prevent a disorder the equivalent of treating that disorder.
We find that it is not and that the defendant’s denial of benefits was an
abuse of discretion.
Plaintiff’s doctors did not diagnose him with heart failure during the
look-back period. No evidence indicates that they suggested during the
look-back period that he have a pacemaker installed. The record does not
indicate that plaintiff’s doctors performed any diagnostic tests with regard to
his heart condition. He had no coronary symptoms during the look-back
period. He may have had the an undiagnosed heart problem during the
look-back period. However, the plan does not define “pre-existing” in terms
of whether evidence exists that plaintiff had the condition during the lookback period, but whether he was treated for the condition during the lookback period.
With regard to treating symptoms, McLeod found that
14

considering treatment for symptoms of a not-yetdiagnosed condition as equivalent to treatment of
the underlying condition ultimately diagnosed might
open the door for insurance companies to deny
coverage for any condition the symptoms of which
were treated during the exclusionary period. To
permit such a backward-looking reinterpretation of
symptoms to support claims denials would so
greatly expand the definition of preexisting condition
as to make that term meaningless: any prior
symptom not inconsistent with the ultimate
diagnosis would provide a basis for denial.
McLeod, 372 F.3d at 627-28 (internal quotation marks and citation
omitted).
Likewise, considering treatment of conditions that might lead to other
conditions would expand the definition of pre-existing condition so as to
make the term meaningless. Any advice or treatment by a doctor that
might be use as a preventive measure could be seen as treatment of a
later diagnosed condition and provide the basis for denial. For example, if
a doctor told a patient to quit smoking, exercise more or lose weight for the
health of his heart, and that patient suffered heart failure, the fact that the
doctor had advised him to quit smoking, exercise more or lose weight could
be construed as treatment for the heart failure. The term “pre-existing
condition” would be so far expanded as to be meaningless.
Conclusion
For the reasons set forth above, that the defendant abused its
discretion in denying long term disability benefits to the plaintiff.
Accordingly, plaintiff’s motion for summary judgment will be granted, and
the defendant will be ordered to provide long term disability payments to
the plaintiff. The defendant’s motion for summary judgment will be denied.
An appropriate order follows.

15

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT LAFFERTY,

:
No. 3:10cv2465
Plaintiff
:
:
(Judge Munley)
v.
:
:
UNUM LIFE INSURANCE
:
COMPANY OF AMERICA,
:
Defendant
:
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER
AND NOW, to wit, this 29TH day of February 2012, it is hereby
ORDERED as follows:
1) Plaintiff’s motion for summary judgment (Doc. 30) is hereby
GRANTED, and the defendant shall pay plaintiff all outstanding long
term disability benefits due under policy number 596672;
2) Defendant’s motion for summary judgment (Doc. 18) is DENIED;
and
3) The Clerk of Court is directed to close this case.

BY THE COURT:
s/James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court

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