Smith v. Unum Life Insurance Company of America

Background

Unum Life Insurance Company of America was the insurer and claims administrator for Timothy Smith’s employee benefits plan, which included group disability insurance. Unum initially approved Smith’s disability claim and paid benefits for two years, then terminated the benefits on March 30, 2018. Smith appealed through the plan’s administrative process, but Unum denied the appeal on October 23, 2018.

Smith, through his lawyer, sent Unum a demand letter seeking $120,000 to settle the dispute. On January 10, 2019, the parties agreed to settle for $50,000. Smith later attempted to disavow the settlement and seek a larger amount.

Smith filed a lawsuit claiming that Unum’s failure to provide benefits breached the plan. Unum moved to enforce the settlement. On March 11, 2020, the court adopted a magistrate judge’s report and recommendation and granted Unum’s motion to enforce the settlement agreement. The court had determined that the settlement was a binding contract requiring Smith to release his long-term disability-benefit claims in exchange for $50,000.

Motion for Final Judgment

Smith later sent letters to the court stating that he did not want to settle and wanted a trial. He remained represented by counsel, who opposed Unum’s motion for final judgment. Unum provided a $50,000 check payable to Smith and mailed it to his lawyer. The lawyer received the check and later returned it to Unum.

Smith did not dispute that the court had found an enforceable settlement or that Unum had sent the check. He instead repeated his argument that he had not agreed to settle and asked the court to reconsider its earlier order. The court declined to change that order because Smith repeated arguments previously made and identified no compelling circumstances—such as fraud, mistake, or changed conditions—justifying reconsideration.

Ruling

The court held that Unum had fulfilled its obligation under the settlement agreement by sending the $50,000 check to Smith’s counsel. Smith’s refusal to accept or cash the check did not change that conclusion. Because the settlement resolved Smith’s claims and no issues remained, Judge Michael J. Davis granted Unum’s Motion for Final Judgment. The order states: “Defendant’s Motion for Final Judgment” was “GRANTED,” and “this action is DISMISSED with prejudice.” The court also stated that entering judgment allowed Smith to appeal to the Eighth Circuit.