Raithaus v. Unum Life Ins. Co. of America, CIV. 03-00186ACKKSC.
| Decision Date | 16 July 2004 |
| Docket Number | No. CIV. 03-00186ACKKSC.,CIV. 03-00186ACKKSC. |
| Citation | 335 F.Supp.2d 1098 |
| Parties | Lawrence R. RAITHAUS, M.D., Plaintiff v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant. |
| Court | U.S. District Court — District of Hawaii |
David F. Simons, The Law Offices of David F. Simons, Honolulu, HI, for Lawrence R. Raithaus, M.D., plaintiff.
John R. Lacy, Randy L.M. Baldemor, Emily Reber Porter, Goodsill Anderson Quinn & Stifel LLLP, Honolulu, HI, for UNUM Life Insurance Company of America, defendant.
ORDER GRANTING PLAINTIFF'S MOTION TO SUPPLEMENT ADMINISTRATIVE RECORD; GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; AND DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff Lawrence Raithaus, M.D. ("Plaintiff" or "Dr. Raithaus") filed this action under the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(1)(B) ("ERISA") against Defendant UNUM Life Insurance Company of America ("Defendant" or "UNUM"). The Complaint claims that Defendant wrongfully denied Plaintiff's long-term disability benefits. The parties have cross-moved for summary judgment as to Plaintiff's claim for disability benefits. Plaintiff has also filed a motion to strike a surveillance videotape (U/A 1257) from the relevant administrative record or in the alternative to supplement the record with a declaration that addresses the videotape.
The following facts have been culled from the parties' briefs and/or the administrative record.1
Plaintiff became certified in family practice in 1979 but has practiced as a urologist since he was certified as such in 1981. (U/A 835). Starting in May 1996, Plaintiff worked as a urologist for the Kauai Medical Center ("KMC"). During the time of his employment with KMC, Plaintiff was the only urologist on the island of Kauai.
On August 26, 2000, after more than a year of warnings regarding charting deficiencies, illegible notes, disorganization, and other forms of unprofessional conduct, KMC's Executive Committee informed Plaintiff by letter that they had decided to terminate his employment, pending his appeal of the termination. On August 30, 2000, one day prior to his injury, Dr. Lee Evslin, CEO of KMC, issued a letter to Plaintiff indicating that he was suspended and would be terminated unless he agreed in writing to comply with 21 new conditions for his continued employment. (U/A 298-303). By letters dated September 5 and 6, 2000, KMC informed Plaintiff that due to his refusal to comply with substance abuse testing, KMC's Executive and Quality Assurance Committees had voted to rescind the August 30, 2000 letter and were recommending Plaintiff's termination. (U/A 311, 312). On or around September 8, 2000, Plaintiff received notice that he had been terminated from his position at KMC and had the right to appeal the decision. (U/A 316).2
At the time he stopped working, Plaintiff was earning $16,677 per month. Plaintiff's compensation included membership in UNUM's long-term disability insurance plan (the "Plan"). The UNUM policy covered 60%, up to $10,000 per month, of Plaintiff's income if he became disabled under the Plan. Plaintiff also had an individual disability policy with New England Financial ("NEF") that covered him for an additional $1,500 per month if he became disabled.3 Plaintiff has claimed and the record evidence indicates that the NEF individual policy has the same "regular occupation" language as the UNUM group policy at issue in this case. After filing suit against NEF for denial of his claim, Plaintiff and NEF agreed to a settlement. (Plaintiff's Concise Statement in Opposition to Defendant's Motion for Summary Judgment, ¶ 10 (citing Lawrence R. Raithaus, M.D. v. New England Mutual Life Insurance Company, CV 02-100, U.S.D.C. District of Hawaii, Gillmor, J.)).4
For physician-participants, the Plan defines "disability" as follows:
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....
LIMITED means what you cannot or are unable to do.
MATERIAL AND SUBSTANTIAL DUTIES means duties that:
-are normally required for the performance of your regular occupation; and
-cannot be reasonably omitted or modified.
REGULAR OCCUPATION means the occupation you are routinely performing when your disability begins.
(U/A 209)(emphasis in the original).
When the policy was sold to KMC, an UNUM representative wrote a letter "Re: Kauai Medical Group — `Specialty Definition for Doctors'," explaining the policy as follows:5
If a heart surgeon changed his occupation to a general practitioner due to a disability and the inability to continue surgical procedures, subsequent to policy onset, this individual would no longer be performing the duties of his previous occupation....
Even if a contract does not have a specialty definition, a surgeon can still receive benefits if they are now performing the duties of a general practitioner, this is because we pay benefits not based on the title of an occupation but on the material duties of an occupation.
In your example, a heart surgeon was no longer able to perform surgery and therefore moved to a general practitioner non-surgical position. With this change in duties, the individual also experienced an income drop of $150,000 originally to $75,000 under the general practitioner position.
We would pay a benefit in this example because there was an income loss due to the inability to perform the duties of the surgical occupation. We consider a heart surgeon and a general practitioner to be separate occupations and the salary and the job duties are also different. The specialty definition would not make a difference in this case.
(U/A 1046)(emphasis added).6
Regarding how long UNUM will continue to send payments to a claimant, the Plan states the following:
We will stop sending you payments and your claim will end on the earliest of the following:
Physicians, CEO, Vice Presidents and Mid Level Providers
-when you are able to work in your regular occupation on a part-time basis but you choose not to;
-the end of the maximum period of payment;
-the date you are no longer disabled under the terms of the plan;
-the date your disability earnings exceed the amount allowable under the plan; or
-the date you die....
PART-TIME BASIS means the ability to work and earn between 20% and 80% of your indexed monthly earnings.
(U/A 218) (emphasis in the original).
Plaintiff has a long history of back problems including degenerative disc disease throughout his lower back and he has undergone two lower back surgeries.
On August 31, 2000, while performing surgery, Plaintiff sustained what he claims was a disabling lower back injury. Defendant disputes the seriousness of the alleged injury Plaintiff sustained, and argues that Plaintiff is not "disabled" under the Plan. Plaintiff had an emergency room physician treat him on September 1, 2000 and obtained pain medication from another doctor. Due to the injury, Plaintiff did not return to work immediately. During the week following his injury, Plaintiff was formally suspended and then terminated from his position at KMC, pursuant to the written warnings of termination he had received just prior to his injury.
In November 2000, UNUM received Plaintiff's initial claim for long-term disability benefits. (U/A 661-662). On the claim form Plaintiff stated that his occupation was "Urological Surgeon." Plaintiff indicated that he was unable to work due to "low back pain with radiation to right leg."
UNUM began paying benefits to Plaintiff "under a Reservation of Rights" in November 2000. See First Amended Complaint, p. 6, ¶¶ 27; Answer to First Amended Complaint, p. 6, ¶ 28. Plaintiff claims that Defendant ceased paying these benefits in April 2001, but Defendant denies this allegation. See First Amended Complaint, p. 6, ¶¶ 29; Answer to First Amended Complaint, p. 7, ¶ 30.7
UNUM obtained a January 8, 2001 Diagnostic Imaging report stating that there was "very little change" between Plaintiff's May 11, 2000 MRI (pre-injury) and his September 7, 2000 MRI (post injury). (U/A 439-440).
On March 5, 2001 UNUM Senior Customer Care Specialist Annie Paik received Plaintiff's personnel file from KMC. (U/A 252). From the file, (Defendant's Concise Statement in Support of its Motion for Summary Judgment, ¶ 9, citing U/A 286, 288-290, 294-295, 298-304, 515, 661-662, and 316).
On March 20, 2001, UNUM Field Representative Ed Ruiz interviewed Plaintiff. (U/A 1172-1180). According to Mr. Ruiz' report "80 percent of Dr. Raithaus' duties consisted of treating patients in the clinic and conducting hospital consultations" while "[t]he other 20 percent of Dr. Raithaus' duties involved the performance of surgery...." (U/A 1174).
On March 10, 2001, Dr. Leonard Cupo conducted an independent medical evaluation ("IME") of Plaintiff. Dr. Cupo's April 13, 2001 report included the following:
The employee has a long history of low back problems dating back to 1978. By his report, he has had two surgical procedures ... he reported residual right lower extremity pain, which he managed on his own with rest, medication and a home exercise program including swimming. He developed low back pain in January 2000...The employee...
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