Court Uses High Court Decision to Resolve Disability Dispute

May 1, 2009 ( - Insurer Unum has lost a decade-long disability benefits dispute after the 8th U.S. Circuit Court of Appeals decided a U.S. Supreme Court decision redefined the abuse of discretion standard of review.

The appellate court agreed with Sandra J. Chronister that the high court’s decision in Metropolitan Life Insurance Company v. Glenn on how much the conflict of a dual role of a plan administrator that is also a payer of benefits should be considered when reviewing the administrator’s denial of benefits (see Supreme Court Considers Conflict for Plan Administrators That are Also Payers ) meant that Unum must be held to a less-deferential standard of review.

The court said it would also consider Unum’s history of arbitrarily denying claims and Unum’s failure to follow its own claims-handling procedures with respect to considering the determination of the Social Security Administration that Chronister was disabled and therefore entitled to Social Security Disability Insurance in determining whether Unum abused its discretion in denying Chronister’s claim. “Weighing all the evidence, as Glenn requires, the Court is left with the firm impression that Unum’s decision to deny Chronister’s remanded claim was an abuse of the discretion given to Unum under the terms of the plan,”   the opinion said.

Chronister’s suit had been appealed and remanded before, causing the action to linger for more than a decade, so she urged the appellate court not to remand the case for further proceedings. The court reversed the judgment of the district court and remanded for the entry of judgment in Chronister’s favor.

The case in Chronister v. Unum Life Insurance Company of America is here .