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Ruben Gonzales v. the Unum Life Insurance

March 22, 2012


The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge


Now before the Court are cross-motions for summary judgment to determine the appropriate standard of review on Plaintiff Ruben Gonzales' disability insurance claims pursuant to the Employee Retirement Income Security Act ("ERISA"). These motions were fully briefed in March 2011 before they were transferred to the undersigned. The Court found them suitable for decision on the briefs. Civ. Local R. 7.1(d)(1). For the reasons stated below, the Court GRANTS IN PART AND DENIES IN PART Plaintiff's motion and holds that the de novo standard of review applies to the short-term disability policy, and GRANTS the motion filed by Defendants Unum Life Insurance Company of America, Provident Life and Accident Insurance Company, and Starwood Hotels and Resorts Long Term Disability Plan and Workplace Disability Plan that the abuse of discretion standard applies to the long-term disability policy.


The parties agree that the de novo standard of review applies to the short-term disability (STD) policy; consequently, the Court describes only those facts pertaining to Gonzales' claim for long-term disability benefits (LTD).*fn1 The parties have not asked the Court to apply the standard of review to the facts, thus, a truncated version of facts suffices.

Gonzales worked as a team manager and leader selling timeshares for Starwood Hotels in Hawaii. He earned $550,000 in 2005 and over $395,000 in 2006. Starwood covered its employees with a group long-term disability policy from Unum Insurance Company. If benefits had been paid, Gonzales would have received a monthly benefit of $21,078.28 for the eighteen months following the expiration of his short-term disability benefits.

A. Gonzales' Claims for Benefits

In June 2007, when Gonzales was 67 years old, he had a second heart operation to treat blocked arteries. (Gonzales had been treated for the same problem in 2005, thus, insurers deemed it to be a pre-existing medical condition.) On June 20, Gonzales called Unum, and the agent's intake form states that the condition was "blocked arteries." AR Ex. C at 29. Unum acknowledged Gonzales' claim for benefits, asked his doctors to complete a medical form, and asked Gonzales to provide a written statement. Id. at 89 (referring to STD benefits as "Voluntary Workplace Benefit").

On the written form, Gonzales listed his medical condition as "dizziness, anxiety, and fatigue[]." Id. at 95. Unum telephoned Gonzales on June 26, and Gonzales stated that he did not intend to return to work yet because his doctors were trying to determine "why he continues to be fatigued and have dizziness" after the stent operation.*fn2 AR Ex. C at 86.

On July 3, 2007, Unum acknowledged the receipt of Gonzales' written long-term disability claim and began the initial evaluation. Id. at 98. Unum obtained the relevant medical records from the treating physicians. E.g., id. at 123-24, 131-32, 209-11 (a May 2007 physician's notes "complaints of intermittent dizziness and mild vision blurriness" as well as "marked fatigue"). The records sent to Unum included Dr. Peter Sacks' diagnosis on July 11, 2007 of very early Parkinson's Disease.*fn3 Id. at 223-24. Dr. Sacks referred Gonzales to a neurologist to confirm whether his symptoms (paucity of facial expression, dizziness, anxiety, unsteady gait, confusion, and difficulty doing his work) were, in fact, indications that he had Parkinson's Disease. Id.

Parkinson's Disease is an "age dependent neurodegenerative disorder characterized clinically by resting tremor, rigidity, bradykinesia, gait dysfunction, and postural instability."*fn4 Robert Campbell, M.D., Campbell's Psychiatric Dictionary at 728 (9th ed. 2009). Patients often suffer cognitive dysfunction including impaired memory and slowness of thought. Id. at 729. In addition, the patient's "executive functions" are disrupted which negatively impacts the ability to make decisions, to plan and organize, to be flexible in response to changing conditions, and to monitor and inhibit inappropriate action. Id. at 357. "Dementia develops in 20-40% of cases." Id. at 729. "Depression occurs in 4-70%, with sleep disturbances, loss of self-esteem, anxiety, and suicidal thoughts." Id. (italics omitted).

Gonzales was examined by a neurologist, Dr. Houser, on July 12, 2007. AR Ex. C at 225-228. She confirmed the clinical diagnosis of "mild and very early possible parkinsonism." Id. at 228-29. Dr. Houser prescribed medications to treat the symptoms, but explained that the "disease could not be diagnosed with any biomarkers or neuroimaging." Id. at 229.

Through the next several months, Unum processed the long-term disability claim and amassed a file exceeding 1,000 pages. See id. at 1-1144. Each of Gonzales' treating physicians diagnosed Parkinson's Disease, while Unum maintained there was no evidence of a disability. Id. at 92-93, 225-29 (Dr. Houser), 296-97 (Dr. Sacks), 461 & 660-62 (Dr. Johnson) (noting that Gonzales will be permanently disabled).

On January 15, 2008, Unum denied Gonzales' claim for long-term benefits. AR Ex. C at 739-43. Unum denied the claim based on the opinion by a doctor of internal medicine, who had conducted a paper review of the medical records and spoken to Drs. Sacks and Johnson (Gonzales' primary care physician). Unum's expert questioned the accuracy of the neurologist Dr. Houser's diagnosis. Id. at 740.

B. Unum's Appeal Process

Gonzales retained counsel, and on March 31, 2008, appealed the denial of benefits. Id. at 768. Gonzales provided more recent medical reports, but Unum denied the appeal after in-house and independent doctors reviewed the file and rejected the opinions of the treating doctors. E.g., id. at 823-29 (neurologist Dr. Dove diagnoses Parkinson's Disease as well as anxiety, depression, and mild cognitive impairment in July 2008); id. at 865-7 (consultant Dr. Topper, a neurologist); id. at 921-22 (Unum's in-house Dr. Caruso, a psychiatrist); id. at 955 (Unum denial, dated Oct. 30, 2008).

Upon receiving Unum's decision, Gonzales' counsel requested permission to submit additional information from Randy Stotland, PhD, who had recently tested and assessed Gonzales' brain functions to determine if the disease had impacted his executive functions. Unum agreed to consider the new evidence. A dispute then arose between Gonzales' counsel and Unum. Unum contended that it needed Dr. Stotland's raw data while Gonzales requested the names and resumes of the doctors that would review Dr. Stotland's report as well as an opportunity to respond. The impasse was unresolved.

Several months passed until Gonzales filed this suit in March 2009. The first cause of action alleged Defendants violated ERISA. The second cause of action was based upon State law; however, the Court determined that it was preempted by ERISA. Doc. No. 42.

In their pending motions, the parties dispute, first, whether the insurance policy should be recognized as a plan document that can grant discretion to the plan administrator, and second, whether Unum forfeited its right to rely on that discretion by failing to make a final ...

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