Donna LaVertu v. UNUM Life Insurance Company of America
8:13-cv-00332
C.D. Cal.Mar 25, 2014Background
- ERISA LTD plan provides 60% of pre-disability earnings, with $6,000 monthly maximum, and defines eligibility for full-time employees.
- LaVertu, a sedentary administrative assistant, received LTD benefits beginning February 8, 2008, after disabling back pathology; benefits were terminated effective March 21, 2012.
- Unum terminated LTD benefits and later upheld the termination on appeal, asserting Plaintiff could perform her regular occupation.
- Plaintiff challenged the termination, the computation of benefits, and sought retroactive and forward-going reinstatement, submitting extrinsic evidence for review.
- Bench trial occurred March 11, 2014; court granted Plaintiff’s request to overturn Unum’s termination but denied extrinsic evidence and found actual earnings used for benefit calculation.
- Court concluded Unum misapplied plan terms by considering part-time/any-occupation capacity and by denying continuing disability without proper basis; benefits reinstated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What standard governs review of Unum’s denial? | LaVertu argues de novo review is proper. | Unum may be reviewed under a deferential standard due to conflict of interest. | De novo review applies. |
| Was Plaintiff still disabled under the plan after 2011? | Plaintiff remains disabled; medical evidence supports ongoing disability. | Evidence supports termination due to regained ability to perform regular occupation. | Plaintiff remains disabled; termination overturned. |
| May termination be based on part-time or hypothetical future work capacity under the Plan? | Plan does not permit termination based on part-time or hypothetical future work. | Termination could follow if Plaintiff could work part-time or in another occupation. | Termination based on part-time/any-occupation capacity is improper; violated plan terms. |
| Should extrinsic evidence be considered in de novo review? | Extrinsic evidence should be allowed to inform disability status. | Extrinsic evidence should be limited to administrative record. | Extrinsic evidence denial upheld. |
| Was the benefit calculation correct? | Calculation may reflect improperly defined pre-disability earnings. | Benefits calculated from actual earnings were correct under the Plan. | Court found calculation consistent with plan terms; however, outcome requires reinstatement of benefits. |
Key Cases Cited
- Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863 (9th Cir. 2008) (long-term payments suggest disability unless improvement shown)
- Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955 (9th Cir. 2006) (court reviews conflict-of-interest and procedural-failure concerns)
- Tackett v. Apfel, 180 F.3d 1094 (9th Cir. 1999) (sedentary work definition and sit requirements for capacity)
- Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir. 2012) (administrators may not rely on pretextual or new rationales not in the administrative record)
- Muniz v. Amec Construction Mgmt., Inc., 623 F.3d 1290 (9th Cir. 2010) (allowance of extrinsic evidence in de novo ERISA review when necessary for review)