Your ERISA Watch -Court Finds the “Trout in the Milk”

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Host v. First Unum Life Ins. Co., No. CV 18-11504-DPW, __ F. Supp. 3d __, 2021 WL 5040354 (D. Mass. Oct. 28, 2021) (Judge Douglas P. Woodlock).


Disability benefit rulings in ERISA cases are often very dry affairs. The cases are highly factual, and most cases consist of a battle between the claimant’s doctors and the insurance company’s doctors over the claimant’s precise restrictions and limitations.

Not this case, however. This case involved a major bank firing one of its highly compensated employees for pretextual reasons and an insurance company’s choice to take that decision on face value to avoid paying benefits. Almost ten years of litigation followed against the insurer and the bank, culminating in this ruling, which slammed the insurer for its “indolence,” found in favor of the claimant, and cited Henry David Thoreau all at the same time.

The plaintiff, Brian Host, was an executive for Deutsche Bank; his job was Head of Global Communication Technology Corporate Finance in the Technology Investment Banking Group.  As part of his job, he traveled extensively. Unfortunately, on one of these trips, in October of 2009, he ruptured and herniated discs in his lower back and tore the labrum in his right hip. Host returned to work but found traveling and sitting gave him excruciating pain. As a result, he stopped traveling for work and started working from home. In January of 2010, Host had major surgery, and in February of 2010, Deutsche Bank informed Host it was terminating him.

Just prior to his termination, Host filed a claim for long-term disability benefits with Unum. Unum denied his claim, contending that his termination and loss of income was not because of his disability.

Host filed suit against Deutsche Bank in 2011 and against Unum in 2013. Host’s action against Unum was stayed while his Deutsche Bank case proceeded; that case settled in 2015. In 2016 the district court remanded the Unum case for “a more thorough inquiry” into the relationship between Host’s injury and his income loss. On remand, Unum denied Host’s claim again in 2018, contending that “it was not given access to the information it…needed to re-evaluate the claim.” Unum did not respond to Host’s appeal, and he thus filed suit again in 2018.

The parties submitted cross-motions for summary judgment. The court ruled that the abuse of discretion standard of review applied, and thus, “The question before me then is whether Unum’s decision to continue to deny benefits is reasonable and supported by substantial evidence on the record as a whole.”

The answer to this question was a resounding no. The court found that Unum “undertook a lackluster pro forma attempt to obtain information from Deutsche Bank — an attempt that proved fruitless due to Unum’s lack of diligence.” The court noted Unum’s complaints about Host’s cooperativeness, but ultimately found the burden was on Unum to obtain “additional information from Deutsche Bank to make an informed decision, yet it did not take productive steps to do so, despite reasonable options available and no clear reasons for not pursuing these options.” The court found that (1) much of the information Unum said it needed was already in the record, (2) the additional information was not confidential under Host’s settlement agreement with Deutsche Bank, and (3) Unum could have served a subpoena to obtain the information, as the court had suggested, but never did.

Not only did Unum fall short in its information gathering, it also arrived at the wrong conclusion. The court found that Unum relied on “questionable and conclusory assertions, rebutted by available evidence from Deutsche Bank internal communications[,] that Mr. Host was not terminated because of his injury.” Indeed, the court noted “[t]here is no documentation to show that Deutsche Bank was considering terminating Mr. Host before he was injured,” yet ten days after his injury, “Deutsche Bank executives began seriously discussing terminating him, which they fairly quickly decided to do.” As a result, the court easily found that Unum’s denial decision was arbitrary and capricious.

Having found that Unum abused its discretion, the court chose not to remand, noting that the case had already been remanded once and Host had been seeking benefits for ten years. Instead, the court found that the evidence supporting Host’s disability claim was “extensive and persuasive. The sophistication of top executives at a large bank should not prevent an injured employee from receiving the insurance benefits to which he is entitled.” The court conceded that the evidence was circumstantial, but, quoting Thoreau, it amounted to the proverbial “trout in the milk.” Indeed, the court stated that “the record before me discloses a robust school of trout to be found there. It is clear beyond a fair preponderance that Mr. Host was laid off because of his injury and I so find.”

The court therefore granted Host’s summary judgment motion, denied Unum’s, and indicated that, pursuant to a future motion, it would award attorney’s fees to Host, who was represented by ERISA Watch subscribers Mala Rafik and Sarah Burns.

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