ERISA-Fifth Circuit Rules That Insurer Was Not Arbitrary or Capricious In Denying Claim For LTD Benefits

In Truitt v. Unum Life Insurance Company of America, No. 12-50142 (5th Cir. 2013), the plaintiff, Terri Truitt (“Truitt”), claimed that her lower-back, leg, and foot pain prevented her from working as an attorney. The defendant, Unum Life Insurance Company of America (“Unum”), awarded Truitt long-term disability benefits. Years later, a former companion of Truitt provided Unum with emails indicating that, while claiming to be disabled, Truitt engaged in activities, such as traveling abroad, that were inconsistent with her asserted disability. Based, in part, on these emails, Unum denied Truitt’s claims prospectively, and sought more than $1 million in reimbursements for benefits paid. The district court found that there was substantial evidence to support Unum’s denial of benefits. Nonetheless, the district court held, among other things, that the denial was procedurally unreasonable, and therefore an abuse of discretion, because Unum did not fulfill its duty to “consider the source” of the emails. Unum appeals.

In analyzing the case, the Fifth Circuit Court of Appeals (the “Court”) said that, in evaluating whether a plan administrator wrongfully has denied benefits under ERISA, this court never has imposed a duty to investigate the source of evidence. Instead, the burden is on the claimant to discredit evidence relied only the plan administrator. Accordingly, the Court ruled that Unum did not act arbitrarily and capriciously in denying claims prospectively. It reversed the district court’s decision, and rendered judgment for Unum. The Court further remanded the case back to the district court on Unum’s claim of $1 million in reimbursements for amounts previously paid.

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