Marselle v. Unum – Kentucky District Court Finds Unum Made A Reasoned Determination

Jonni Marselle sued Unum in state court alleging breach of contract after it denied her long-term disability (LTD) claim, but Unum removed the case to federal court since the policy qualified as an ERISA plan. The court denied Marselle’s motion to reverse the denial, finding Unum’s decision was the product of a reasoned, well-documented process even though it relied on a file review rather than an in-person exam.

Jonni Marselle was covered for long-term disability benefits under a group plan provided to Humana, Marselle’s former employer. Marselle was a consultant with Humana. The position was sedentary as it required her to constantly sit, occasionally stand, and occasionally walk. She mostly did computer work. Her disabilities included immunodeficiency, serious back pain, sinus infections, depression and anxiety.

Unum denied Marselle’s LTD claim. When I first read the Court’s decision, I thought the claimant filed a lawsuit pro se, or without an attorney. That’s because the claimant sued Unum in state court, alleging breach of contract and fiduciary duties.

Unum, of course, removed the case to federal court. That’s because the subject insurance policy qualifies as an employee-benefit plan under ERISA.

Marselle filed a “Motion for Judgement” to reverse the administrative decision, arguing that Unum’s denials were arbitrary and capricious.

The Court noted, “Although the Court is sympathetic to Marselle’s apparently serious symptoms and conditions, the principal question raised here is whether Unum thoroughly considered these maladies and made a reasoned determination.

The Court explained the Standard of Review and how this type of claim is evaluated in Kentucky and the Sixth Circuit. Understanding these principals is critical for anyone filing a disability claim in that area.

First, the court states “the Court focuses on ‘whether [the] ultimate decision denying benefits’—and not ‘discrete acts by the plan administrator’—were ‘arbitrary and capricious’.” This is a difficult concept for many claimants to understand.

Second, “The Court must uphold a decision if it ‘is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.’”

In other words, “Even if the record is ‘sufficient to support a finding of disability,’ the insurer’s denial is
‘neither arbitrary nor capricious’ so long as ‘there is a reasonable explanation for the administrator’s decision.’” The determination does not need to be “lock solid”; it just needs to be reasonable.

Third, “the Court’s review is ‘limited to the administrative record’ as it was ‘presented to the plan administrator at the time he or she determined the employee’s eligibility.’”

Marselle’s first argued that Unum’s conflict of interest )in both determining whether she is eligible for benefits and pays benefits out of its own pocket) influenced its decision. The Court found that Marselle did not provide sufficient proof that the conflict influenced Unum’s denial.

Second, Marselle took issue with Unum’s focus on her plans to move to another state. The Court found that Marselle’s relocation plans did not play a major role in Unum’s final denial.

Third, Marselle took issue with the fact that Unum did not order a physical exam in its review of the disability claim. However, the Court noted that the policy only stated that Unum may require a claimant to undergo an examination. An in-person exam is not required. The Court found that a record review instead of an in-person exam is just one more fact to consider and is insufficient to show arbitrary decision-making on its own. The Court noted that the Sixth Circuit has found fault with “file-only” reviews in situations (a) where the file reviewer concludes that the claimant is not credible without having actually examined him or her” and (b) in instances where “the plan administrator, without any reasoning, credits the file reviewer’s opinion over that of a treating physician.” The Court found that neither of these circumstances existed here.

Fourth, Marselle argued that the two new file reviewers on the appeal ignored evidence of Marselle’s limitations and “cherry-picked” helpful evidence. However, the Court found Unum “fully reviewed Marselle’s file, fairly represented unfavorable information, and offered a reasoned explanation to support its decision.”

After reviewing all of the arguments, the Court denied Marselle’s Motion for Judgment.

Here is a copy of the decision: Marselle v. Unum