Crespo v. Unum Life Ins. Co. of America

• Decision Date: 18 December 2003
• Docket Number: No. 03 C 2813.,03 C 2813.
• Citation: 294 F.Supp.2d 980
• Parties: Wendy CRESPO, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.
• Court: U.S. District Court — Northern District of Illinois

294 F.Supp.2d 980

Wendy CRESPO, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.

No. 03 C 2813.

United States District Court, N.D. Illinois, Eastern Division.

December 18, 2003.

COPYRIGHT MATERIAL OMITTED

Mark D. DeBofsky, Daley, DeBofsky & Bryant, Chicago, IL, for Plaintiff.

Michael J. Smith, Michael J. Smith & Associates, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

DENLOW, United States Magistrate Judge.

I. INTRODUCTION

Wendy Crespo ("Crespo" or "Plaintiff") seeks judicial review of the final decision of Unum Life Insurance Company of America ("Unum" or "Defendant"), denying her long term disability insurance benefits under a group policy issued to her employer, with its employees as beneficiaries. This matter comes before the Court on crossmotions for summary judgment and presents the issue of whether Unum was arbitrary and capricious in denying Crespo's claim for long term disability benefits. For the reasons stated herein, the Court finds that Unum's decision to deny Crespo's claim was arbitrary and capricious because its assessment of her claim was neither full nor fair. The Court therefore grants Crespo's motion for summary judgment and denies Unum's motion for summary judgment.

II. BACKGROUND FACTS

A. THE PLAINTIFF: WENDY CRESPO

Crespo, a resident of Evanston, Illinois,¹ was employed from September 27, 1999, to October 30, 2001, as a "Case Law, Senior Editor" by LEXIS-NEXIS, a division of Reed-Elsevier, Inc. R. 274, 366. In her position, Crespo created summaries of legal opinions found on the LEXIS-NEXIS database. R. 336. Crespo's position at LEXIS-NEXIS was classified as sedentary, requiring occasional lifting of up to ten pounds, frequent reaching and handling, typing, and sitting up to two-thirds of the time. R. 100. Qualifications for the position included: a J.D. degree, experience as a Case Law Editor, excellent writing skills, and proficiency in computer-based word processing. R. 366.

B. PROCEDURAL HISTORY

As an employment benefit, Crespo was insured under a long term disability insurance policy underwritten by Unum. R. 318-55. On October 30, 2001, Crespo ceased working at LEXIS-NEXIS. R. 456. Crespo claims that she is disabled and unable to return to work as a result of severe pain and fatigue caused by fibromyalgia.² Crespo filed her application for short term and long term disability benefits in December 2001. R. 50. On March 22, 2002, Unum approved and began paying short term disability benefits to Crespo. Payments were made for Crespo's six month eligibility period from October 31, 2001, to May 5, 2002, minus a one-week elimination period. R. 454-56.

After interviewing Crespo over the telephone, assembling Crespo's medical records, and performing a review of Crespo's file, Unum denied her application for long term disability benefits on July 1, 2002. R. 404-08, 434-36. Crespo appealed Unum's decision on September 17, 2002. R. 86-92. On November 21, 2002, Unum affirmed the denial of benefits. R. 69-74, 381-84. Crespo submitted her final appeal to Unum on December 12, 2002. R. 15-60. On December 26, 2002, Unum denied Crespo's final appeal. R. 373-75.

Crespo filed the instant lawsuit on April 25, 2003. The case is before the Court on cross-motions for summary judgment. The record before the Court consists of the Unum administrative record compiled by Unum in reviewing Crespo's claim. R. 1-493. On February 28, 2003, the Social Security Administration approved Crespo's claim for disability insurance benefits commencing October 30, 2001. Compl., Ex. B. This decision was rendered after Unum's final decision and will not be considered by the Court in regards to the merits of Crespo's claim. See Perlman v. Swiss Bank Corp. Comprehensive Plan, 195 F.3d 975, 982 (7th Cir.1999) (limiting deferential judicial review under ERISA to the information submitted to a plan's administrator). The receipt of social security benefits, however, does reduce Crespo's measure of damages under the Policy.

C. THE UNUM DISABILITY POLICY

The Unum Disability Policy ("the Policy") consists of thirteen sections. R. 318-55. Pertinent sections of the Policy include the following: three different Long Term Disability sections, one Certificate Section, and one section concerning ERISA law. Id.

The Unum Policy provides for the payment of long term disability benefits as a result of "total disability," stating:

— You are disabled when Unum determines that:

— you are limited from performing the material and substantial duties of your regular occupation due to your sickness or injury; and

— you have a 20% or more loss in your indexed monthly earnings due to the same sickness or injury.

After 24 months of payments, you are disabled when Unum determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.

R. 343 (italicized emphasis added; bolded emphasis in original to indicate terms defined in the Policy's glossary). Long term disability benefits under the Unum Policy are paid upon the expiration of the 180 day elimination period. R. 353.

The Certificate Section of the Policy grants to Unum the discretion to make benefit determinations and to interpret the terms and provisions of the policy:

The policy is delivered in and is governed by the laws of the governing jurisdiction and to the extent applicable by the Employee Retirement Income Security Act of 1974 (ERISA) and any amendments. When making a benefit determination under the policy, Unum has discretionary authority to determine your eligibility for benefits and to interpret the terms and provisions of the policy.

R. 347 (emphasis added). The ERISA section of the Policy expressly vests in Unum the broadest discretion permissible under ERISA:

DISCRETIONARY ACTS

In exercising its discretionary powers under the Plan, the Plan Administrator, and any designee (which shall include Unum as a claims fiduciary) will have the broadest discretion permissible under ERISA and any other applicable laws, and its decisions will constitute final review of your claim by the Plan. Benefits under this Plan will be paid only if the Plan Administrator or its designee (including Unum), decides in its discretion that the applicant is entitled to them.

R. 323 (emphasis added).

D. CRESPO'S MEDICAL CONDITION AND TREATMENT RECORDS

Between March 2001 and December 2002, Crespo sought treatment for various health problems, including fibromyalgia widespread pain, sleep disorders, and allergies. As a result, Crespo was treated or examined by a number of doctors, a chiropractor, an acupuncturist, a psychologist, and a physical therapist. All the medical records from those who treated or examined Crespo were provided to Unum in the course of its claim review. R. 1-493.

1. Dr. Larry Kage, Treating Physician in Michigan

On April 16, 2001, Larry Kage, M.D., completed an application for leave from work for Crespo, pursuant to the Family and Medical Leave Act of 1993. R. 52-53. Dr. Kage diagnosed Crespo with fibromyalgia, overuse tendinitis, and myositis, commencing on March 30, 2001. R. 53. Dr. Kage opined that Crespo was not "unable to perform work of any kind" but was "unable to perform any one or more of the essential functions of [her] job." R. 52. He stated that Crespo would have to take off work intermittently or work less than a full schedule because of her fibromyalgia and other conditions. R. 53.

2. Dr. Gerald Natzke, Treating Physician in Michigan

On June 1, 2001, Crespo visited Gerald Natzke, D.O., for an evaluation of her fibromyalgia and chronic fatigue. R. 49. Based on his review of the basic function and accountabilities to perform her job at that time, he found that she suffered from a cognitive dysfunction that would render her "slower to task and at times incapable of making complex decisions." Id. He advised LEXIS-NEXIS that there were specific qualifications within her job duties that "she cannot perform." Id. He continued to treat her for fatigue and fibromyalgia through August 30, 2001. R. 150-53.

3. Dr. Clark Headrick, Michigan Sleep Study

On June 5, 2001, Crespo underwent a sleep study in Flint, Michigan. R. 197-98. After the study, Clark Headrick, D.O., reported that Crespo demonstrated no obstructive sleep apnea but did have a periodic limb movement disorder. Id. Dr. Headrick stated that Crespo's poor sleep quality during the test may have been attributable to the unfamiliar lab setting, but the doctor could not rule out the possibility of insomnia. Id. Dr. Headrick noted that Crespo had periodic limb movement disorder and a history of fibromyalgia. Id.

4. Dr. David Edelberg, Primary Treating Physician in Chicago

David Edelberg, M.D., first examined Crespo on October 2, 2001. R. 247. He is Crespo's current primary treating physician. R. 36-42. Dr. Edelberg advocates the combination of traditional medications and medical treatment with alternative medicine, such as chiropractic treatment, traditional Chinese medicine, massage therapy, homeopathy, and herbal supplements. R. 18-24.

On October 19, 2001, Dr. Edelberg executed a Family Medical Leave Act certification in which he recommended a medical leave of absence because of the severe pain Crespo was experiencing. R. 54-55. After receiving test results, conducting an examination, and performing a musculoskeletal test that showed "18 of 18 trigger points [were] tender with 4.4 kg of digital pressure," he diagnosed Crespo with fibromyalgia. R. 367. On October 30, 2001, Dr. Edelberg diagnosed Crespo as suffering from fibromyalgia, profound fatigue, and a sleep disorder. R. 480. Dr. Edelberg listed symptoms of diffuse wide-spread muscular pain, unrefreshing sleep, and severe fatigue. Id. He opined: "Because of profound fatigue and diffuse pain which is not well controlled with medications, [Crespo] is unable to perform any occupation." Id. Dr. Edelberg...