952 F.3d 1233
10th Cir.2020Background:
- Unum issued a long-term disability policy to Brenda Sandoval that defined "disability" in two alternative ways and required the insured to remain "under the regular care of a physician."
- Sandoval had two cervical surgeries for neck/arm pain, initially received benefits, then Unum terminated benefits after record reviews by two non-examining consulting physicians.
- Sandoval sought reconsideration with new surgeon statements, a functional capacity evaluation, and a vocational assessment; Unum obtained an internist review and again denied benefits.
- Sandoval sued for common-law bad-faith tort, statutory unreasonable-denial tort (Colo. Rev. Stat. § 10-3-1115–1116), and breach of contract; the district court granted Unum partial summary judgment on the tort claims and a jury returned a verdict for Sandoval on breach of contract.
- On appeal, the Tenth Circuit affirmed summary judgment for Unum on the tort claims (holding Unum’s investigation reasonable) and affirmed denial of Unum’s JMOL on the contract claim because a jury could reasonably find Sandoval disabled under the policy’s second definition.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Whether Unum’s investigation and denial were unreasonable (common-law and statutory torts) | Unum ignored treating surgeon, relied on non-examining reviewers, and disregarded objective evidence; expert says investigation was unreasonable | Unum followed industry practice: attempted contact with treating surgeon, reviewed records, interviewed insured, and obtained multiple physician reviews | Held: Investigation was reasonable as a matter of law; summary judgment for Unum affirmed |
| 2) Whether reliance on non-examining physicians (and an internist) was improper | Non-examining reviewers are inadequate; internist lacked relevant specialty and ignored objective findings | Consulting physicians reasonably reviewed records; industry standards do not require in-person exams; internist credibly explained conclusions | Held: Reliance on these reviews was reasonable; no material factual dispute created |
| 3) Whether Sandoval met the policy’s disability definitions (esp. 20% earnings-loss test) | Sandoval alleged inability to perform material duties and >20% indexed earnings loss while working in any occupation | Unum argued she performed other work (cosmetology) so first definition not met | Held: Court need not decide first definition; jury could reasonably find she met the second (20%+ earnings loss) — Unum waived challenge to second-definition on appeal |
| 4) Whether Sandoval remained "under the regular care of a physician" as required by policy | She remained under treating physician’s care; surgeon had not discharged her and could see her as needed | Unum argued she had stopped seeing her surgeon for ~year so not under regular care | Held: Jury reasonably could find she remained under regular care given policy language and surgeon’s testimony; JMOL denied |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary-judgment standard)
- Universal Underwriters Ins. Co. v. Winton, 818 F.3d 1103 (10th Cir. 2016) (district-court summary-judgment standard application)
- Goodson v. Am. Standard Ins. Co. of Wis., 89 P.3d 409 (Colo. 2004) (industry-standards guide insurer-bad-faith inquiry)
- Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985) (elements for common-law insurer bad-faith tort)
- Zolman v. Pinnacol Assurance, 261 P.3d 490 (Colo. App. 2011) (expert affidavit must link opinion to industry standards to create fact issue)
- Heller v. Equitable Life Assur. Soc’y of U.S., 833 F.2d 1253 (7th Cir. 1987) (interpretation of "regular care and attendance of a physician")