November 19th, 2013

Our client’s husband died after falling and hitting his head on their back patio.  The trauma caused a subdural hematoma which became mortal in less than four hours.  The death certificate classified the death as “accidental.”  The “immediate cause” of death was listed as “subdural hemorrhaging from blunt force injury to head” and a “contributing condition” was listed as “thrombocytopenia.”

Client submitted a claim to UNUM Insurance Company for benefits under an accidental death policy.  UNUM denied the claim based on a limitation in the policy that excludes coverage for accidental losses “caused by, contributed to by,  or resulting from diseases of the body.”  The disease cited by UNUM was thrombocytopenia, which was most likely a consequence of decedent’s recent bone marrow transplant performed as treatment for his carcinoma.   Thrombocytopenia is a condition that results in excessive bleeding, which UNUM asserted substantially contributed to the subdural bleeding resulting in death.

Stennett & Casino obtained a statement from the medical examiner’s office that supported their client’s position.  In effect, the medical examiner stated that though decedent’s condition of thrombocytopenia may have contributed to the bleeding there was no evidence with which one could say that decedent would have survived the fall in the absence of the thrombocytopenia.  Despite this evidence UNUM continued its denials.  Stennett & Casino filed suit on behalf of their client which resulted in a settlement of the claim.

October 9th, 2013

The 9th Circuit Federal Court of Appeals, in the case of Stephan v. Unum Life Insurance Company, 697 F.3d 917 (9th Cir. 2012) overturned a trial court’s finding that the public record did not demonstrate that UNUM had a history of “biased claims administration.”  The Stephen Court specifically stated

“Numerous courts, including ours, have commented on Unum’s history “’of erroneous and arbitrary benefits denials, bad faith contract misinterpretations, and other unscrupulous tactics.’”  Indeed, in Saffon, we attributed the trend of state prohibitions on discretionary provisions in insurance contracts to ‘the cupidity of one particular insurer, Unum-Provident Corp., which boosted its profits by repeatedly denying benefits claims it knew to be valid.  Unum-Provident’s internal memos revealed that the company’s senior officers relied on ERISA’s deferential standard of review to avoid detection and liability.’”

The Stephan court also cited Professor Langbein’s article entitled, “Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA” 101 Nw. U. L. Rev. 1315, 1317-21 (2007) and the CSA (California Settlement Agreement) with UNUM in which the State of California found UNUM violating California’s Fair Claims Practices Act.

The importance of this finding that UNUM has a history of biased claims handling is that under ERISA, courts dealing with claims for benefits under an employee benefit plan (where the insurer is granted discretionary authority) must consider an insurer’s conflict of interest when weighing the evidence.  One of the elements reflective of one’s conflict of interest is an insurer’s history of biased claims administration.  (MetLife v. Glenn, 554 U.S. 105, 117 (2008)).  It is very difficult to establish that an insurer has a history of biased claims administration.  Claimant’s counsels spend an enormous amount of time and effort in trying to do so; however, their efforts are resisted not only by the insurance companies by also by the courts in their limiting of the availability of formal discovery in ERISA cases.

Claimants with lawsuits against UNUM now have the benefit of the Ninth Circuit declaring that the public record does indeed support a finding that UNUM has a history of biased claims administration.  This should require the courts to place a greater importance on UNUM’S inherent conflict of interest that exists because UNUM, as the insurer and claims administrator, makes the decision on who receives benefits under the Plan and pays those benefits out of their own pockets.

May 27th, 2011

A Los Angeles Superior Court jury awarded plaintiff Laura Kieffer 4.2 million in damages in her civil lawsuit against Paul Revere Life Insurance Company and Unum Group.  The award represented $600,000 in past and future disability benefits, $600,000 in emotion distress and $3 million in punitive damages.

Ms. Kieffer was a dental hygenist in 1988 when she purchased an individual disability policy from Paul Revere.  Beginning in 1996 she developed several disabling medical conditions, including carpel tunnel syndrome and cervical pain radiating into her upper extremities, preventing her from being able to perform the repetitive motions and fine hand manipulations necessary for her job.

In March, 2008 after 12 years of paying disability benefits Unum Group terminated her disability benefits.  Unum ignored the recommendations of Kieffer’s treating physician who supported her disability and deliberately chose not to wait for the results of an MRI test which would have supported her claim.  Unum relied solely on a report of a physician it had examine Ms. Kieffer, which was riddled with mistakes.  Unum’s doctor spent only 10 minutes with Ms. Kieffer, not even looking at her right hand, which was the main issue.

The jurors heard about Unum’s settlement with the California Insurance Commissioner in which it promised not to continued claims handling practices which the Commissioner found to be unfair.  The jury found that Unum’s continuing use of these unfair practices with Ms. Kieffer were intentional, supporting the award of punitive damages.

January 24th, 2011

On November 9, 2010, the United States District Court for the Southern District of Ohio held in the case of Mennucci v. Hartford Life & Accident Insurance Company that Hartford abused its discretion in terminating Ms. Mennucci’s disability benefits. Ms. Mennucci underwent spinal fusion surgery for cervical neck pain that radiated into her right arm. Hartford initially paid short term and long term disability benefits to Mennucci. However, when she failed to fully recover from her surgery and complained of continuing neck pain radiating into her right shoulder Hartford Insurance terminated her benefits based on a medical record review by Dr. Richard Kaplan.

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January 7th, 2011

Courts across the country have struggled with whether an accidental death insurance policy covers the death of a drunk driver.  Some courts have ruled that intoxicated drivers knowingly increase the risk of being involved in a fatal accident to the point that their death becomes foreseeable and thus, not accidental.  Other courts disagree, citing the fact that there is less than a 1% chance of an intoxicated driver being involved in a fatal accident.
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