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Court Sides with Plaintiff in Unum Claim Denial Lawsuit
By Mike Holter
Unum Insurance has a long history of improper claim denials against policyholders that file legitimate disability insurance claims. Luckily, the court system is siding with victims suing Unum and its subsidiaries to get the benefits they deserve. The latest example comes from an Arizona Plaintiff who sued First Unum Life Insurance Company and her Morgan Stanley Long Term Disability Plan for improperly terminating her long-term disability benefits.
Plaintiff Leah A. Bilyeu was employed by Discover Financial Services from 1987 through April 2004 before being forced to quit due to several medical conditions that prevented her from performing the duties of any occupation, her Unum lawsuit alleges. These conditions included Behcet's disease -- a rare condition that causes chronic inflammation of the body's blood vessels -- fatigue and anxiety. Bilyeu filed a long-term disability claim through her Morgan Stanley Long Term Disability Plan in April 2004. Unum is the Plan's claim administrator, and also the insurer and payor of Plan benefits. According to her Unum claim denial lawsuit, Unum approved the claim in October 2004, but limited it to 24 months -- the standard limitation applied to disabilities arising out of mental illness. Bilyeu disputed the limitation, and had her treating physician send an expert medical opinion to Unum explaining that Bilyeu's inability to work due to fatigue was caused by her Behcet's disease, not her anxiety. Unum refused to listen to the expert medical opinion, replying that its own in-house doctor reviewed her case and came to the conclusion that "Bilyeu's fatigue in large part arises from her anxiety and depression, since her Behcet's is not very active." Unum's doctor further concluded that Bilyeu "should have full-time sedentary work capacity," the Unum claim denial lawsuit says.
It's important to note that several Unum employees who worked as claims adjusters and in-house physicians for the insurer have come forward over the years to say Unum set monthly claim-denial quotas and rewarded employees who denied claims, resulting in legitimate claims being denied.
Bilyeu's long-term disability benefits were terminated in December 2006, and she filed an appeal with Unum within the necessary time period, which the Unum lawsuit alleges the company failed to acknowledge receipt of and did not reply to. Bilyeu, in turn, filed an Unum claim denial lawsuit against the insurer claiming wrongful termination of her long-term disability benefits under ERISA. Unum countered that she had not fully exhausted all of her administrative remedies as required under ERISA, and also demanded restitution of benefits it allegedly overpaid to Bilyeu.
A district court initially sided with Unum, but Bilyeu successfully appealed the decision. In June 2012, the Ninth Circuit Court of Appeals overturned the lower court's decision, ruling that the administrative exhaustion requirement should have been excused because Bilyeu acted reasonably in light of Unum's ambiguous communications and failure to engage in a meaningful dialogue. The high court also denied Unum's counterclaim for reimbursement of overpaid benefits.
The high court concluded that the district court "abused its discretion" and vacated the judgment, allowing Bilyeu to proceed with her claim denial lawsuit against Unum. The messy legal battle Bilyeu has had to undergo with Unum is just another example of the great lengths the insurer will go to in order to not pay disability benefits to honest policyholders.
If you filed a claim for disability benefits through Unum, UnumProvident, Unum Group or one of its subsidiaries or affiliates, an Unum disability insurance claim lawyer who specializes in these types of cases can provide a free consultation about your legal options for getting the compensation you deserve -- and paid for. You may have a case to file an Unum disability insurance lawsuit, UnumProvident claim denial lawsuit, or Unum class action lawsuit.