Fought v. Unum Life Ins. Co. of America
| Decision Date | 06 February 2004 |
| Docket Number | No. 02-2176.,02-2176. |
| Citation | 357 F.3d 1173 |
| Parties | Shirley O. FOUGHT, Plaintiff-Appellant, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Robert P. Warburton (Ray M. Vargas, II, with him on the briefs), Sheehan, Sheehan & Stelzner, P.A., Albuquerque, NM, for Plaintiff-Appellant.
Kathryn D. Lucero (Kerri L. Peck, with her on the brief), Foster, Johnson, McDonald, Lucero, Koinis, LLP, Albuquerque, NM, for Defendant-Appellee.
Before TACHA, McKAY, and HENRY, Circuit Judges.
Shirley O. Fought challenges the decision by UNUM's claims administrator to deny long-term disability benefits under her employer's group disability plan. A severe staph infection that followed elective heart surgery hospitalized and disabled Ms. Fought. UNUM's plan administrator denied coverage by concluding that Ms. Fought suffered from a pre-existing coronary artery condition that "caused," "contributed to," or "resulted" in Ms. Fought's disability, citing language in the plan. After exhausting the company's internal appeals process, Ms. Fought brought a civil suit under 29 U.S.C. § 1132(a)(1)(B), alleging that she was entitled to disability benefits under the plan. UNUM admitted to a conflict of interest, as both payor and administrator of the plan. The magistrate judge denied discovery regarding the extent of UNUM's conflict of interest. The district court then granted summary judgment in favor of UNUM.
Exercising jurisdiction under 28 U.S.C. § 1291, we hold that the district court did not apply the appropriate standard of review when it considered the plan administrator's denial of benefits to Ms. Fought. Applying the correct standard of review, we reverse the grant of summary judgment in favor of UNUM and remand to the district court for further proceedings.
On May 18, 1998, Ms. Fought enrolled in her employer's group long-term disability plan, which was issued by UNUM with an effective date of June 1, 1998. The policy, under a provision entitled "What disabilities are not covered under your plan?" states: "Your plan does not cover any disabilities caused by, contributed to by, or resulting from your ... pre-existing condition." Aple's Supp.App. at 341-42.
The policy does not define the terms "caused by, contributed to by, or resulting from." The policy provides the following details regarding a pre-existing condition:
You have a pre-existing condition when you apply for coverage when you first become eligible if:
- you received medical treatment, consultation, care or services including diagnostic measure or took prescribed drugs or medicines in the 3 months just prior to your effective date of coverage; or you had symptoms for which an ordinarily prudent person would have consulted a health care provider in the 3 months just prior to your effective date of coverage; and
- the disability begins in the first 12 months after your effective date of coverage.
Prior to her enrollment in the plan, Ms. Fought had been diagnosed and treated for coronary artery disease. In August 1998, approximately three months after her enrollment in the plan, Ms. Fought underwent angioplasty. On March 8, 1999, she was admitted for unstable angina syndrome, and on March 15, 1999, she underwent an elective coronary artery revascularization surgery. During surgery, the doctors discovered that Ms. Fought's sternum was narrow and osteoporotic, requiring a special procedure to close the surgical wound. Her doctors noted that "her postoperative course was anticipated to be quite challenging[,] given the concerns about the wound." Aplt's App. at 79. She was discharged six days after surgery on March 22, 1999. "At the time of [her] discharge, there [was] no evidence of infection," and "her wounds were healing well." Id. at 83; 166.
Three weeks later, the incision from Ms. Fought's wound became "dehisced," or split open. On April 8, 1999, she was readmitted for care of her dehisced sternal wound and a possible infection. Aple's Supp.App. at 97.
At this time, her wound cultures tested positive for a "few" Klebsiella pheumonia bacteria. She was placed on antibiotics and given intensive wound care to prevent infection. After a hospital stay of five days, and a "dramatic improvement in the appearance of the wound," she was sent to a skilled nursing facility. Aplt's App. at 85. At the time, the "wound appearance looked satisfactory." Id. at 85. She was discharged from the facility on April 19, 1999.
On May 7, 1999, Ms. Fought complained of right-side chest pain. She was readmitted to the hospital on May 11,1999, with a white blood cell count of 12,000 and a low grade fever. Two exposed sternal wires were detected. Her sternal wound and blood cultures were positive for both Klebsiella pneumonia and methicillin-resistant Staphylococcus aureus in the sternal wound and methicillin-resistant Staphylococcus aureus in the blood stream. Id. at 139.
Ms. Fought was placed in the Intensive Care Unit. Over the next two months, she underwent various operative procedures, was intubated, and received hemodynamic monitoring, nutritional support, and sedation. One surgery involved extensive sternal wound reconstruction and required Ms. Fought to be placed on a ventilator. She was discharged on July 15, 1999, when she was transferred to another facility for intensive wound care.
On September 13, 1999, UNUM denied coverage under the long-term disability plan, having determined that Ms. Fought's pre-existing condition "caused, contributed to, or resulted in the condition(s) for which [she was] claiming disability." Aplt's App. at 33-34 (). Ms. Fought submitted a formal request to have her claim reopened, see id. at 143 (), as well as letters from three doctors certifying that the staph infection was neither a pre-existing condition nor related to her pre-existing coronary artery disease. Id. at 156 (Note from Dr. Robert T. Ferraro, dated Oct. 19, 1999) ( ) (emphasis added); id. at 154 (Note from Dr. Robert Dubroff, dated Oct. 22, 1999) ( ) (emphasis added); id. at 155 (Note from Dr. Neil T. Chen, undated) ("[Ms.] Fought's chest & abdominal wounds/infection is [sic] not a preexisting condition.") (emphasis in original). UNUM's medical department reviewed Dr. Ferraro's letter,1 but the company declined to reverse its previous decision, stating that although "the staph infection itself was not present during the pre-existing condition period (3/1/98-5/31/98), it was the result of surgery that was performed for a cardiac condition that was present, diagnosed and treated during that time frame." Id. at 147-48 ().
Ms. Fought then retained legal counsel, who contacted UNUM's Long-Term Disability Quality Review Section, and informed the company that Ms. Fought was appealing the denial of coverage. See id. at 159. After a review, UNUM again denied coverage, stating that "the staph infection was the result of surgery performed for a cardiac condition that was caused by, contributed to by, or resulted from the cardiac condition that was present, diagnosed and treated during the pre-existing period." Id. at 150 (Letter from John J. Schifano, Senior Benefit Analyst, dated Dec. 2, 1999).
Finally, Ms. Fought contacted the New Mexico Public Relations Commission, which corresponded with UNUM concerning Ms. Fought's situation. Responding to the state agency's inquiry, UNUM explained that the staph infection was the result of coronary bypass surgery, which was performed to treat her pre-existing condition. "She would not have had to have the surgery, later developing an infection, if she did not have the cardiac conditions which were present and treated for during the pre-existing period." Id. at 158 ().
In August 2001, Ms. Fought filed suit in federal district court alleging UNUM violated 29 U.S.C. § 1132 in denying her claim for benefits. UNUM admitted that it operated under a conflict of interest, id. at 12 (), because it both administers claims and is the pay or of those claims. Ms. Fought requested discovery to allow inquiry into the extent of UNUM's conflict of interest. The magistrate judge denied this request.
UNUM moved for summary judgment. The district court, acknowledging the conflict of interest, proceeded to interpret the contract language "caused by, contributed to by, or resulting from" as meaning "related to" and "foreseeable complication of" a pre-existing condition. The district court ruled that the "staph infection [was] related to the coronary artery disease as a foreseeable complication of treatment." Aplt's App. at 14. On that basis, the district court granted UNUM's motion for summary judgment, concluding that UNUM's decisions to deny Ms. Fought long-term disability benefits were not arbitrary or capricious, and ordered Ms. Fought to pay UNUM's costs.
Ms. Fought now appeals.
UNUM's long-term disability plan is governed by the Employee Retirement and Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. "ERISA was enacted to promote the interests of employees and their beneficiaries in employee benefit plans, and to protect contractually defined...
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