Ninth Circuit Affirms Judgment in Favor of Unum in Lawsuit Challenging Denial of ERISA Disability Benefit Claim

In Perez v. Unum Life Insurance Company of America, No. 22-16652, 2023 WL 7675458 (9th Cir. Nov. 15, 2023), the Ninth Circuit Court of Appeals affirmed the district court’s judgment in favor of Defendant-Appellee Unum Life Insurance Company in a lawsuit challenging its termination of Plaintiff’s long-term disability benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”). Reviewing the district court’s findings for clear error, and interpreting Unum’s insurance policy de novo, the court found no basis to overturn the judgment in favor of Unum.

In a short unpublished memorandum decision, the court set forth three reasons for its decision. First, the court rejected Plaintiff’s argument that the district court adopted new rationales presented for the first time in litigation, which is impermissible on a de novo review of a benefit claim denial. See Collier v. Lincoln Life Assurance Co. of Bos., 53 F.4th 1180, 1188 (9th Cir. 2022) (holding that a district court applying de novo review errs under ERISA when it adopts rationales not relied on during the administrative process). The court found that the district court relied on reasoning set forth in Unum’s denial letters and simply responded to Plaintiff’s litigation arguments. In other words, Plaintiff was not “sandbagged” in the litigation.

Second, the court rejected Plaintiff’s argument that the “station in life” requirement in the definition of disability should be interpreted to require that he be able to perform alternative occupations that pay at least 80% of pre-disability earnings. The court declined to consider a settlement agreement Plaintiff proffered that involved a different insurance company as well as Unum’s policy language that permits a claimant who is partially disabled to earn up to 80% of their pre-disability earnings. The court explained that the settlement agreement is a private agreement between other parties and does not reflect a California legal requirement for how much alternative occupations must pay. Further, Plaintiff did not have a partial disability claim. Unum’s policy did incorporate an 80% threshold for the first 24 months of disability, but it did not do so in the definition of disability after 24 months.

Lastly, the court found that Unum’s policy does not bar consideration of alternative occupations that require minimal on-the-job training. It is sufficient for a claimant to have the overall qualifications and skills to perform a job even though there may be some training required as would be expected for any new hire. Plaintiff did not provide any evidence rebutting Unum’s conclusion that he would be familiar with the material duties of alternative occupations. For these reasons, the court affirmed the judgment of the district court.