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