Fichtl v. First UNUM Life Insurance Company

Background

Richard Fichtl sued First UNUM Life Insurance Company under the Employee Retirement Income Security Act (ERISA), challenging Unum’s termination of benefits under two NewYork-Presbyterian Hospital-sponsored plans: a long-term-disability plan and a life-insurance plan with a disability-based premium waiver.

Unum initially approved Fichtl for long-term-disability benefits beginning July 3, 2018, based on depression and other medical conditions. It also approved his life-insurance premium waiver. In March 2020, Unum terminated both benefits, concluding that Fichtl could perform the duties of his occupation. Unum relied in part on activities such as walking to local places, gardening, driving, running errands, participating in family activities, and trading stocks, as well as reviews of his medical records by Unum’s physicians.

Fichtl appealed and submitted opinions from four treating physicians. Those doctors described continuing nausea, vomiting, abdominal pain, kidney disease, ankle pain, fatigue, and cognitive or concentration problems. They stated that he could not perform the physical and mental demands of his occupation on a sustained basis. Unum’s reviewing doctors reached the opposite conclusion.

The parties filed cross-motions for judgment on the administrative record. They agreed that the court would act as the factfinder in a trial conducted on the papers.

Standards of review

For the long-term-disability plan, the court applied de novo review, meaning it independently decided whether Fichtl was entitled to benefits rather than deferring to Unum’s decision. The plan’s use of the word “determines” did not clearly give Unum discretionary authority.

For the life-insurance plan, the court applied deferential review because that plan expressly gave Unum discretionary authority to make benefit determinations. Under that standard, the court could overturn Unum’s decision if it was without reason, unsupported by substantial evidence, or legally wrong.

Long-term-disability benefits

The court found that Fichtl’s treating physicians were more persuasive than Unum’s file reviewers. The treating physicians had examined and treated Fichtl over time, while Unum’s reviewers did not appear to have examined him. The court also found the treating physicians’ expertise more closely related to Fichtl’s reported abdominal, cognitive, kidney, and pain-related conditions.

The court credited Fichtl’s reports that he experienced nausea nearly every day, vomited multiple times a week, could not stand or walk for significant periods, and had concentration problems. It concluded that occasional daily activities did not establish that he could perform the sustained physical and cognitive duties of his occupation as an Operations Director.

The court held that Fichtl was limited from performing the material and substantial duties of his regular occupation because of his continuing nausea, pain, and concentration problems. The court therefore concluded that he was entitled to reinstatement of the long-term-disability benefits he should have received from the March 3, 2020 termination through the end of the plan’s initial 24-month payment period.

The court did not decide whether Fichtl qualified for benefits after that period. The plan used a different definition after 24 months: whether he could perform any gainful occupation for which he was reasonably fitted by education, training, or experience. Because Unum had not evaluated Fichtl under that definition, the court remanded the post-24-month issue to Unum for a prompt initial decision.

Life-insurance premium waiver

Unum terminated the premium waiver solely because its long-term-disability department had determined that Fichtl was not unable to perform his occupational duties. Because the court found that the underlying long-term-disability determination was wrong, it concluded that Unum’s stated reason for ending the premium waiver was “without reason.”

The court therefore ordered reinstatement of the life-insurance premium waiver for the period from the March 3, 2020 termination through the end of the initial 24-month payment period. The waiver could continue after that period if Unum determines on remand that Fichtl meets the plan’s later definition of disability.

Disposition

The court granted Fichtl’s motion for judgment on the administrative record and denied Unum’s motion for judgment on the administrative record. Judgment was to be entered for Fichtl to the extent described in the opinion, with the remaining post-24-month issue remanded to Unum. The court also stated that Fichtl could file a motion for attorney’s fees and costs under ERISA within 28 days.