Terri Truitt v. Unum Life Ins Co. of America
729 F.3d 497
| 5th Cir. | 2013Background
- Terri Truitt, a former law partner, received long-term disability benefits from Unum for back/leg/foot pain beginning in 2003; Unum periodically reviewed and continued payments while seeking updated medical information.
- Medical exams, surveillance videos, and an FCE produced mixed evidence: treating physicians reported significant pain/limitations, while IMEs, surveillance, and an FCE showed inconsistencies and functioning above claimed limits.
- A former companion, Andrew Thomas, provided Unum >600 pages of emails, eTickets, and itineraries (2005–2007) suggesting extensive domestic and international travel, physical activity, and some legal work while Truitt claimed disability.
- Unum suspended, investigated, and in October 2009 terminated benefits and sought reimbursement of ~ $1 million in overpayments, relying on emails, surveillance, and expert opinions; Truitt appealed and provided rebuttal evidence (affidavit, experts contesting email reliability).
- The district court held that substantial evidence supported Unum’s termination but found Unum procedurally unreasonable for relying on Thomas’s emails without adequately considering their source, and therefore granted judgment for Truitt and denied Unum’s reimbursement claim.
- The Fifth Circuit reversed: it held Unum did not abuse its discretion in terminating benefits, rejected an administrative duty to investigate or to affirmatively vet evidence sources, and vacated/remanded the fraud/reimbursement ruling for application of federal common law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Unum abused its discretion in terminating benefits (abuse-of-discretion standard) | Truitt: Unum arbitrarily relied on emails from a biased, criminal source (Thomas) without investigating or weighing source reliability; administrative process procedurally unreasonable | Unum: Substantial evidence (emails, surveillance, IMEs, vocational reviews) supported termination; no duty to investigate or to vet source—the claimant must discredit evidence | Held: No abuse of discretion. Record contained concrete supporting evidence; Unum followed a probing administrative process and reasonably weighed evidence |
| Whether a conflicted administrator must reasonably investigate evidence or its source | Truitt: Conflict magnifies duty; Unum should have investigated/authenticated Thomas’s emails and source bias | Unum: No such affirmative duty under Fifth Circuit precedent; claimant must rebut evidence | Held: No duty to investigate or to specially vet evidence source. Vega controls—burden on claimant to discredit evidence; procedural-unreasonableness is only a factor in weighing conflict |
| Effect of Unum’s structural conflict and alleged history of biased claims handling | Truitt: Conflict + Unum’s alleged prior biased practices justify tiebreaking against Unum | Unum: Implemented improved claims-handling practices; case-specific record shows careful review, reducing weight of conflict | Held: Unum had structural conflict but district court over-weighted it. Given substantial supporting evidence and Unum’s procedures, conflict did not render decision arbitrary |
| Whether state (Texas) or federal common law governs Unum’s counterclaim to recover alleged overpayments/fraud | Truitt/district court applied Texas fraud law (requiring reliance) to deny Unum’s counterclaim | Unum: Federal common law governs remedies under ERISA and does not require Texas reliance element | Held: Federal common law governs; district court erred applying Texas law. Fraud/recovery ruling vacated and remanded for further proceedings under federal common law |
Key Cases Cited
- Anderson v. Cytec Indus., Inc., 619 F.3d 505 (5th Cir. 2010) (standard of appellate review for ERISA abuse-of-discretion determinations)
- Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287 (5th Cir. 1999) (en banc) (conflicted administrator is not under a duty to reasonably investigate; burden to assemble/rebut evidence lies with claimant)
- Glenn v. Metropolitan Life Ins. Co., 554 U.S. 105 (2008) (structural conflict is one factor in abuse-of-discretion review; procedural unreasonableness affects weight given the conflict)
- Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211 (5th Cir. 1999) (abuse-of-discretion defined as arbitrary or capricious decision)
- Pierre v. Connecticut General Life Ins. Co., 932 F.2d 1552 (5th Cir. 1991) (hearsay alone cannot support denial unless it meets indicia of reliability)
- Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240 (5th Cir. 2009) (deference to plan administrators with discretionary authority)
- Bombardier Aerospace Emp. Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354 F.3d 348 (5th Cir. 2003) (gaps in ERISA remedial text are filled by federal common law)