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Lyman v. Unum Group

United States District Court, D. Massachusetts

May 10, 2019

NANCY LYMAN, Plaintiff,
v.
UNUM GROUP and UNUM LIFE INSURANCE COMPANY, Defendants.

          MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

          Judith Gail Dein, United States Magistrate Judge.

         I. INTRODUCTION

         This matter is before the court on cross-motions for summary judgment by the plaintiff Nancy Lyman (“Ms. Lyman” or the “plaintiff”) and defendants Unum Group and Unum Life Insurance Company (collectively, “Unum” or the “defendants”). Ms. Lyman worked as a public school teacher in the Revere Public Schools and for years paid premiums on short term and long term disability insurance policies managed by Unum. After leaving teaching, Ms. Lyman applied for both long term and short term disability coverage under her policies. Unum denied both claims as untimely. Ms. Lyman administratively appealed those decisions, and the denials were upheld. Ms. Lyman then filed for relief from this court.

         Both the plaintiff and the defendants now move for judgment as a matter of law. Ms. Lyman argues that Unum inconsistently interpreted the language in her policies in denying her claim as late. Alternatively, she argues that Unum’s determination was unreasonable because under the language of the insurance policies, if it was impossible for her to file within the allotted time, she should have been given an extra year to file her claims and Unum should have only denied her claims as late if Unum was prejudiced by the late filing. Ms. Lyman argues that it was impossible to file on time because of misrepresentations that Unum made to her and because of her medical condition. Unum, on the other hand, argues that it made a reasonable assessment under the language of the policies that it was possible for Ms. Lyman to file on time and that she did not. For the reasons herein, the court rules that Unum did not abuse its discretion in denying Ms. Lyman’s claims. Unum appropriately interpreted its own policies, made a reasoned decision based on sufficient evidence, and was not required to show prejudice. Thus, Ms. Lyman’s Motion for Judgment on the Record (Docket No. 47) is DENIED and Unum’s Motion for Summary Judgment (Docket No. 44) is ALLOWED.

         II. STATEMENT OF FACTS [[1]]

         A. The Policies

         Nancy Lyman was a teacher in the Revere Public Schools and resigned from that position on June 24, 2014. (See PF ¶ 11). Ms. Lyman, through the Revere Public Schools, had disability insurance coverage governed by a plan (the “Plan”) issued by Unum to the Massachusetts Teachers Association (“MTA”). (PF ¶ 2; DF ¶¶ 1-2). The Plan provides two policies under which Ms. Lyman was covered: the first provides short-term disability (“STD”) benefits and the second provides long-term disability (“LTD”) benefits.[2] (DF ¶ 1; PF ¶ 4). The policies are governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). (AR III: CL-STD-922; AR I: LTD-POL-37).

         The Plan includes a provision, applicable to both the STD and LTD policies, which provides deadlines for the filing of claims (“the Provision”). The Provision reads as follows:

         When do you notify Unum of a Claim?:

We encourage you to notify us of your claim as soon as possible, so that a claim decision can be made in a timely manner. Written notice of a claim should be sent within 30 days after the date your disability begins. However, you must send Unum written proof of your claim no later than 90 days after your elimination period. If it is not possible to give proof within 90 days it must be given no later than 1 year after the time proof is otherwise required except in the absence of legal capacity.

(PF ¶ 8; DF ¶ 3; AR III: CL-STD-927). The elimination period for an STD claim is 30 days and for an LTD claim is 180 days. (DF ¶¶ 4-5; PF ¶¶ 9-10).

         Ms. Lyman claims she has been disabled since the last day of her job, June 24, 2014. (DF ¶ 6; PR ¶ 6). Calculating from that date of disability, the parties agree that the applicable timetables for filing an STD and LTD claim under the Plan are as follows. Ms. Lyman’s claim for STD benefits was due by October 23, 2014 (90 days after the end of the 30 day STD elimination period), unless it was not possible for her to do so or unless she lacked legal capacity. The proof of loss for the LTD claim was due by March 22, 2015 (90 days after the end of the 180 day LTD elimination period), unless it was not possible for her to do so or unless she lacked legal capacity. As addressed in detail below, Ms. Lyman filed for STD and LTD benefits, at the earliest, in June of 2015.[3] (DF ¶ 7; PF ¶ 13; AR II: CL-STD-17-19; AR VI: CL-LTD-1015).

         The parties’ principle disagreement, and the question for the court on summary judgment, is whether Unum abused its discretion in denying Ms. Lyman an extra year to file her claims under the “possibility” language of the Provision. If it was possible for Ms. Lyman to file her claim in the allotted amount of time, her claims were late. If it was not possible for her to do so, she is afforded an extra year under the language in the Provision and her claims were timely.

         Importantly, the plain language of the STD and LTD plans grant Unum discretion in interpreting the language in its policies. The Plan provides that “[w]hen making a benefit determination under the policy, Unum has discretionary authority to determine your eligibility for benefits and to interpret the terms and provisions of the policy.” (AR II: CL-STD-167). The Plan further elaborates:

The Plan, acting through the Plan Administrator, delegates to Unum and its affiliate Unum Group discretionary authority to make benefit determinations under the Plan. Unum and Unum Group may act directly or through their employees and agents or further delegate their authority through contracts, letters or other documentation or procedures to other affiliates, persons or entities. Benefit determinations include determining eligibility for benefits and the amount of any benefits, resolving factual disputes, and interpreting and enforcing the provisions of the Plan. All benefit determinations must be reasonable and based on the terms of the Plan and the facts and circumstances of each claim.

(AR II: CL-STD-199-200). As discussed herein, this language gives Unum discretion to interpret language in the Plan, including the Provision and its “possibility” language.

         B. Potential Misrepresentations by Unum

         Ms. Lyman claims that one of the reasons why it was impossible to file her claim on time was because Unum misrepresented to her over the phone that she was not eligible for benefits. Ms. Lyman claims, through affidavits submitted in both this case and in her administrative appeal, that in March of 2015, she, along with her best friend, Vincent Giordano, contacted Unum and the MTA to discuss her disability and desire to file claims for STD and LTD benefits under the Plan. (PF ¶ 19; AR III: CL-STD-820; Lyman Affidavit ¶¶ 15-16). Unum disputes this fact. (DR ¶ 19 (“. . . as set forth in the Affidavit of Deborah Teter, there were no communications with Ms. Lyman or a representative of Ms. Lyman prior to June 2015”)).[4] Ms. Lyman claims, and Unum disputes, that during this conversation Unum informed her that “she was not eligible for coverage . . . .” (PF ¶¶ 19, 23; DR ¶ 19). Further, Ms. Lyman claims that Unum “refused to provide her with the requisite documentation to apply for benefits,” although she admits that she received the forms from MTA. (PF ¶¶ 23-24). As detailed below, these disagreements do not rise to the level of disputed material facts, and do not preclude the resolution of this case by way of summary judgment motions.

         C. Ms. Lyman’s Application for STD Benefits

         On June 16, 2015, Unum received an Attending Physician Statement regarding Ms. Lyman’s STD claim. (DF ¶ 7; PF ¶ 13; AR II: CL-STD-17-19). Therein, Dr. Witts represented that Ms. Lyman has a diagnosis of “chronic headache” and also suffers from difficulties with “sleep/ memory/ concentration/ reading/ writing[.]” (AR II: CL-STD-17). Ms. Lyman posits that her STD claim was filed in June 2015. (PF ¶ 25 (“Finally, in June 2015, Ms. Lyman filed a claim for STD benefits with Unum.”)).[5] While this Court will accept June 2015 as the filing date for STD benefits, the record is not that clear. For example, it was not until July 15, 2015 that Unum received Ms. Lyman’s Individual Statement dated July 14, 2015. (DF ¶ 8; PF ¶ 16; AR II: STD-25-28). On July 24, 2015, Dr. Witts submitted a second Attending Physician Statement, this time diagnosing Ms. Lyman with orthostatic hypertension, HTN, cervical disc disease and chronic headaches. (PF ¶ 14; AR II: CL-STD-116-17). On August 6, 2015, another doctor, Dr. Hammer, submitted a letter regarding Ms. Lyman’s psychiatric state, writing that “[i]n [her] opinion, Ms. Lyman has been psychiatrically and medically disabled since late 2013/early 2014.” (PF ¶ 17; AR II: CL-STD-100). On August 14, 2015, Unum received the Employer’s Statement for Ms. Lyman’s claim. (DF ¶ 9; PR ¶ 9; AR II: CL-STD-77-79). On August 29, 2015, Ms. Lyman’s doctor submitted additional medical records. (PF ¶ 14; AR II: CL-STD-130-40).

         On October 1, 2015, Unum denied Ms. Lyman’s STD claim. (DF ¶ 12; PF ¶ 31; AR II: 150-52). Unum denied the claim on the grounds that Ms. Lyman was not covered under the STD policy as of the date of her disability. (Id.). Unum stated in relevant part:

We understand you resigned from your employment as of June 24, 2014. Your employer confirmed you did not request, nor are you currently on an approved leave of absence. In order for your disability coverage to continue, you would have to have been on an approved leave of absence through your employer. Since you have not been on an approved leave of absence, your disability coverage ended as of June 24, 2014, the day you resigned, and we are unable to support your request for disability benefits.

(AR II: STD-150-52).

         D. Ms. Lyman’s Application for LTD Benefits

         On February 9, 2016, Ms. Lyman’s attorney requested an application for LTD benefits. (DF ¶ 10; PF ¶ 32; AR II: STD-231). The next day, on February 10, 2016, Unum opened a claim profile under the LTD policy for Ms. Lyman. (DF ¶ 11; PF ¶ 33[6]; AR IV: CL-LTD-04-06). Ms. Lyman posits that this is when she filed her LTD claim. (Lyman Memo in Support (Docket No. 48) at 3). On June 14, 2016, Unum denied Ms. Lyman’s claim for LTD benefits. (PF ¶ 42; DF ¶ 13; AR V: CL-LTD-987-91). As described below, while Unum has consistently taken the position that Ms. Lyman’s application for LTD benefits was untimely, it has offered various dates for when the application was made, including June 16, 2015, June 20, 2015 and March 23, 2016, and when the application was due, including February 27, 2016, February 27, 2015 and March 21, 2015. As noted above, without the possibility extension, this court calculates that Ms. Lyman’s LTD benefits application was due by March 22, 2015.

         In its June 14, 2016 denial letter, Unum represented that its decision to deny LTD benefits was because “[t]he policy allows a certain period of time in which the claim must be received. We received the claim on March 23, 2016, which was not within the required time frame.” (AR V: CL-LTD-988). Under a subheading titled “[I]nformation That Supports Our Decision,” Unum provided the following:

The information in the claim file indicates Nancy Lyman initially stopped working on June 02, 2014 due to your diagnosis of depression, social phobia, headaches, insomnia and chronic pain. We received her completed claim on March 23, 2016.
In our telephone call on April 27, 2016, Ms. Lyman indicated that she had not filed a claim because she was not anticipating being out of work for this length of time.
We received her completed claim on March 23, 2016. According to the Notice of Proof of Loss provisions in the policy (outlined below), her claim should have been received no later than February 27, 2016. Because we did not receive Ms. Lyman’s claim by this date, we are unable to give consideration to her claim and benefits will not be payable. Her claim has been closed.

(Id.).

         Unum revised the letter denying Ms. Lyman LTD benefits twice. (PF ¶ 43). On June 23, 2016, Unum sent a letter to Ms. Lyman’s attorney noting several changes to the decision, including the following:

• Unum had received Ms. Lyman’s completed claim on June 20, 2015 and not on March 23, 2016.
• According to the Provision, Unum stated it should have received the claim no later than February 27, 2015 as opposed to February 27, 2016.

(AR VI: CL-LTD-1015). Unum then sent another letter on June 27, 2016 once again correcting the dates included in their reasoning for the LTD benefits denial. Unum’s corrected letter reads:

We received her completed claim on June 16, 2015. According to the Notice and Proof of Loss provisions in your policy (outlined below) the claim should have been received no later than March 21, 2015. Because we did not receive your claim by this date, we are unable to give consideration to the claim and benefits will not be payable.

(Id. at CL-LTD-1024) (emphasis omitted).

         E. Appeals

         While the LTD claim was pending, on March 23, 2016, Ms. Lyman appealed the STD decision. (DF ¶ 14; PF ¶ 39; AR II: CL-STD-441-42; AR III: CL-STD-633). In the appeal letter, Ms. Lyman’s attorney wrote, in part:

Unum terminated Ms. Lyman’s claim on the basis that she was not insured under the terms of the Plan when she ceased work. This is incorrect, and is directly contradicted by the information contained in Unum’s file, including without limitation, confirmation from Ms. Lyman’s employer as to her date of disability and her last date worked.

(AR II: CL-STD-441).

         In a letter dated June 27, 2016, the same day Unum sent the second amended denial letter for Ms. Lyman’s LTD claim, Unum rendered a decision on Ms. Lyman’s appeal of STD benefits. (AR III: CL-STD-753-58). Unum informed Ms. Lyman’s attorney that the STD claim had been incorrectly denied for lack of coverage, but it was still denied because, like Ms. Lyman’s LTD claim, it was not filed on time. (DF ¶ 15; PR ¶ 15; AR III: CL-STD-754). Unum provided that:

It was determined that your client did not submit her claim within the required timeframes as specified by the policy.
Because a new basis for denial is being cited, you and your client will be provided new appeal rights.
... your client’s claim was initially denied by the Benefits Center citing her coverage ended on June 24, 2014. The appeal review did not address the coverage issue or if your client satisfied the definition of disability. During the appeal review, Unum recognized that your client’s claim was submitted late. Outlined below are Unum’s findings as it relates to the late filing.
The Short Term Disability file reflects an Attending Physician’s Statement was received on June 16, 2015.
On July 15, 2015, your client submitted an Employee Statement, completed by her on July 14, 2015. She provided a last ...

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