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McKay v. Reliance Standard Life Insurance Co.

September 28, 2007


The opinion of the court was delivered by: Curtis L. Collier Chief United States District Judge


Plaintiff Paul McKay ("Plaintiff") filed this action requesting this Court determine whether Defendant Reliance Standard Life Insurance Company's ("Reliance") or Defendants Unumprovident Corporation and Unum Life Insurance Company's ("Unum") (collectively "Defendants") insurance policy governs his claim for long term disability ("LTD") benefits and to award past due benefits as well as ongoing benefits under that policy pursuant to the terms and conditions of the Employment Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA") (Court File No.1).

In compliance with the scheduling order issued by the Court (Court File No. 9), Plaintiff filed a motion for judgment on the ERISA record (Court File No. 26) as well as a brief in support (Court File No. 27). Reliance and Unum both filed response briefs in opposition (Court File Nos. 29 & 30), which sought judgment for Defendants, and Plaintiff filed a reply (Court File No. 31). The Court heard oral argument from the parties on October 15, 2007.

After considering the parties' briefs and the applicable law, and for the reasons discussed below, the Court will DENY Plaintiff's motion for judgment on the ERISA record (Court File No. 26) and DISMISS Plaintiff's claim against Unum and REMAND Plaintiff's claim against Reliance for further investigation.


Plaintiff was employed as general legal counsel by U.S. Xpress Enterprises, Inc. ("U.S. Xpress") in September 1999 (Court File No. 27).*fn1 Prior to Plaintiff's employment at U.S. Xpress, he fell and injured his neck in 1989. He underwent surgery on his neck in June 2003. After a period of recovery, he returned to work, but asserts "his job performance was poor and he missed a lot of work due to pain." (id. at p. 2).

In December 2003, Plaintiff reported to his supervisor that he was suffering from the flu and worked from home much of that month. UACL01278, 01505. Plaintiff's last day in the office was December 31, 2003.*fn2 Plaintiff intended to work from home after that time. It is unclear whether Plaintiff actually worked from home from January 1 until January 19, 2004, the date Plaintiff was terminated but allowed to resign. However, it is undisputed that U.S. Xpress paid Plaintiff his full salary up until January 16, 2004. UACL01505.

Plaintiff asserts he is disabled "due to chronic neck pain, which radiates into his arms, as well as the effects of medication necessary to combat the pain." (Court File No. 27 at p. 6). The original cause of his pain is the degeneration of his cervical spine. He had surgery to correct this problem, but it appears the surgery was not effective as he continues to suffer from pain. A "transitional syndrome" caused joint pain above and below the site of the surgery. AR0325. Plaintiff undergoes cervical steroid injections for pain relief. AR0407. He alleges this pain makes it difficult, if not impossible, for him to perform sedentary activities such as working at a computer. These activities made up the bulk of his work as a contract attorney. He alleges he tried to continue working after the surgery, but the pain remained. "Between" December 31, 2003 and January 16, 2004, he contends he was unable to actually perform his occupation. However, Plaintiff does not cite any support in the Reliance administrative record to this effect. Only one medical review was performed in relation to both of Plaintiff's claims--a doctor who reviewed Plaintiff's claim at Unum's request determined he would not be able to perform his occupation due to pain and the effects of the medication. UACL01268.

Plaintiff applied for and received Social Security disability benefits in August 2005. AR0171. His date of disability for Social Security purposes is December 17, 2003. AR0175.

Plaintiff asserts U.S. Xpress provided him with "continuous" long-term disability insurance as an employee benefit. Unum provided a long-term disability insurance policy to U.S. Xpress for eligible employees beginning January 2002. (Court File No. 30); UACL01136-01176.*fn3 It provided disability benefits to insured employees according to the terms of the policy. U.S. Xpress switched insurance companies at the end of 2003. The Unum policy was effective until December 31, 2003 at 12:00 a.m. that night and Reliance began insuring U.S. Xpress's group long-term disability plan effective January 1, 2004 (Court File Nos. 29 & 30). Plaintiff alleges he became disabled while U.S. Xpress was changing carriers. Plaintiff applied for long-term disability benefits with Unum in June 2005 and with Reliance in February 2006 (Court File No. 27); AR0425.*fn4 Both insurance companies administratively denied Plaintiff's claim for different reasons.*fn5 Plaintiff was represented by legal counsel throughout the pendency of his claims. UACL00013.

Unum does not dispute Plaintiff was insured under its policy number 562112 ("Unum policy") from its effective date until its cancellation date, December 31, 2003. UACL01191, 01481. In other words, U.S. Xpress paid the premiums on behalf of Plaintiff and no enrollment was required. UACL01191. After its review process, Unum determined Plaintiff failed to meet its policy's definition of "disability" in that he did not suffer from the required loss of earnings (Court File No. 30). The definition of "disability" in the Unum policy contains two requirements: (1) the employee must be limited from performing the material and substantial duties of his regular occupation due to sickness or injury ("medical prong"), and (2) the employee must have a 20% or more loss in his indexed monthly earnings due to the same sickness or injury ("financial prong"). UACL01150.*fn6 Unum denied Plaintiff's claim based on his failure to meet the financial prong of the definition as there is no dispute that Plaintiff was paid his full salary until January 16, 2004 and the last day the Unum policy was effective was December 31, 2003.

Reliance Standard Life Insurance Company ("Reliance") provided two policies to U.S. Xpress--policy number LSC 109631 ("basic policy") and policy number LTD 109638 ("executive policy"). AR0427.*fn7 The primary difference between the two policies is an employee has to elect coverage and pay his own premiums under the basic policy while U.S. Xpress pays the premiums under the executive policy and an eligible employee is covered without an election. AR0009, 0746. Both policies include a provision for continuation of coverage for employees who were covered under the previous Unum policy. AR0013, 0750. Reliance denied Plaintiff's claim under the basic policy since there was no evidence he had paid premiums or elected coverage.*fn8

Based upon both carriers' denial of liability for Plaintiff's claim, he filed the instant action on December 20, 2006 requesting the Court to: (1) determine which carrier is responsible for his long-term disability claim, and (2) award past due, as well as ongoing, disability benefits under the appropriate policy pursuant to the terms and conditions of the ...

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