Christoff v. Unum Life Insurance Company of America

Background

Michael J. Christoff alleged that Unum Life Insurance Company of America terminated his long-term disability benefits under a group employee-benefit plan insured by Unum. The opinion states that Christoff became disabled because of severe fibromyalgia in November 2001 and received benefits for more than fifteen years. Unum determined that he was no longer disabled effective November 22, 2016, and upheld that decision on appeal on June 15, 2017.

Christoff asserted claims under the Employee Retirement Income Security Act of 1974, commonly called ERISA. Count I sought benefits and clarification of his rights under the plan. Count II alleged that Unum breached fiduciary duties by manipulating the claim-review process and sought equitable “surcharge” or make-whole relief for attorney fees and replacement health-care coverage costs.

Unum’s Motion for Judgment on the Pleadings

Unum moved for judgment on the pleadings as to Count II, arguing that the fiduciary-duty claim improperly duplicated Count I. Unum also argued that the requested equitable relief was actually an attempt to obtain monetary damages for the denial of benefits.

The court applied the standard used for a motion to dismiss for failure to state a claim. It explained that ERISA plaintiffs may plead alternative theories under the provisions governing benefits claims and fiduciary-duty claims, so long as they do not obtain duplicate recoveries. The court also relied on precedent stating that, at the pleading stage, it can be difficult to determine whether claims are duplicative or instead present distinct theories and remedies.

The court concluded that Christoff’s claims rested on distinct legal theories: Count I alleged an improper denial of benefits under the plan, while Count II alleged a breach of fiduciary duty in the way Unum handled the claim. The court also found that the counts sought distinct relief: benefits under Count I and separate make-whole remedies under Count II. It therefore declined to dismiss Count II as duplicative.

Review Standard

Christoff objected to the magistrate judge’s recommendation that the court apply abuse-of-discretion review rather than fresh, independent review. He argued that the document granting Unum discretionary authority was not part of the policy, was ambiguous, and did not clearly delegate that authority.

The court conducted its own review of the record and arguments. It overruled Christoff’s objections, agreed that the policy clearly granted Unum discretionary authority, and adopted the magistrate judge’s report and recommendation. The court therefore ruled that the abuse-of-discretion standard applies to the case.

Order

The court denied Unum’s Motion for Judgment on the Pleadings. It overruled Christoff’s objections, adopted Magistrate Judge Katherine M. Menendez’s February 12, 2018 Report and Recommendation, and denied Christoff’s Motion in Support of De Novo Standard of Review. The opinion addressed the sufficiency and treatment of the pleaded claims; it did not decide whether Unum was ultimately right to terminate Christoff’s benefits.