Moseley v. Unum – Unum Should Have Ordered IME

Unum stopped paying Susan Moseley’s long-term disability (LTD) benefits under her policy’s mental illness limitation, but the court found that Unum’s failure to order an independent medical examination before terminating her claim was itself an abuse of discretion — regardless of the underlying dispute over her Lyme disease diagnosis. The court remanded the case, ordering Unum to conduct the IME and reassess her claim.

Court Applies a Deferential Arbitrary and Capricious Standard of Review

The underlying policy provided Unum with discretion to determine a claimant’s eligibility for benefits. Where there is such a “discretionary clause“, a federal court reviews an insurer’s termination decision under a deferential arbitrary and capricious standard.

The Court stated, “The touchstone of the arbitrary and capricious standard is reasonableness.”

The Court further stated:

“The question is not which side the court believes is right, but ‘whether the [administrator] had substantial evidentiary grounds for a reasonable decision in its favor.’”

Unum’s Failure To Order an IME Upon Request Was Error

The Court held that it did not really need to get into the substance of Unum’s determination “because Unum’s failure to provide Moseley with an independent medical examination (IME) upon request constituted procedural error and rendered Unum’s benefits determination inherently arbitrary and capricious.”

The Court cited authority that an independent medical examination of a claimant should be sought whenever there is lack of agreement with an attending physician and the opinion of the Company’s medical professionals involved in the claim file is the primary basis for the denial or termination of benefits.

Editorial note: This is particularly noteworthy in this claim because Unum has a tendency to use its own “in house” medical professionals in reviewing claims. Thus, an IME is a lot more relevant in a Unum claim.

The Court Held That Unum’s Decision Was Procedurally Unreasonable In Light of the Error

Even though there was error, the Court had to determine whether the error rendered Unum’s decision “arbitrary and capricious”.

The Court answered this question in the affirmative:

“The court cannot say that Unum acted as a true fiduciary in reviewing Moseley’s claim. Unum’s adverse determination hinged, at least in part, on the alleged lack of objective medical evidence to support a diagnosis of Lyme disease. For example, Unum noted that laboratory tests from 2015 had come back negative for Lyme disease and that Moseley did not appear to have experienced any of the classic physical manifestations of Lyme disease, such as joint swelling, facial palsy, meningitis, or cranial neuritis. An IME could have remedied these alleged deficiencies – an independent examiner presumably would have performed additional laboratory testing and made findings directly addressing Moseley’s physical condition. As the only plausible reason the court can think of to deny Moseley an IME under these circumstances would be a desire (as the ultimate benefit payor) to prevent her from having the opportunity to supplement the record to bolster her claim, the court finds Unum’s decision arbitrary and capricious.”

Remedy Was a Remand For an IME and Reassessment of the Disability Claim

The Court remanded the case, instructing Unum to conduct the IME and reassess whether a mental illness limitation applies to Moseley’s disability claim.

Here is a PDF copy of the Moseley v. Unum District Court Decision, issued March 2, 2023.