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Kouzmanoff v. Unum Life Insurance Co. of America

United States District Court, D. Colorado

March 15, 2019

Marc Kouzmanoff, Plaintiff,
Unum Life Insurance Company of America, Thompson Reuters Holdings, Inc., Defendants.



         This consolidated matter alleges failure to pay disability benefits and arises under the Employee Retirement Income Security Act (“ERISA”) and other employer obligations. Plaintiff Marc Kouzmanoff is a former sales representative for Thompson Reuters Holdings, Inc. (“Thompson Reuters”). He developed diabetes in 2001 and, in 2016, applied for disability benefits pursuant to short-term and long-term plans (“STD Policy” and “LTD Policy”) administered by Unum Life Insurance Company of America (“Unum”), asserting that performing the duties of his employment involved a high risk of injury or mortality due to his inability to control his blood sugar. Unum denied both benefit types, and Kouzmanoff filed separate actions against Thompson Reuters and Unum that have since been consolidated. (ECF No. 23.)[1]Kouzmanoff's pleadings square against Unum for breach of fiduciary duty under ERISA and Thompson Reuters for breach of contract and pursuant to the Colorado Wage Act.

         Before the Court is the administrative record in the Unum case (AR, ECF Nos. 69, 69-1, 75) and Thompson Reuters's Motion for Partial Summary Judgment (PSJ-Motion, ECF No. 78), [2]both of which are fully briefed. No. party has moved to supplement the administrative record, or objected to the authenticity or veracity of any part thereof. These matters are ripe for review.

         I. BACKGROUND

         Kouzmanoff, born on October 6, 1951, worked for Thomson Reuters for 30 years-from July 10, 1986 to October 6, 2016. (AR 5, 134.) As a “Field Account Manager, ” he communicated with and drove to Colorado businesses to present, demonstrate, and sell Thomson Reuters's legal, tax, and accounting products. (Id. at 444.)[3] The essential functions of the job included consistently achieving business objectives and sales revenue targets, working in a highly competitive environment under a quota system, managing relationships with high-end firms and corporations, working within urgent timelines, and travelling (sometimes overnight). (Id. at 166.) According to Kouzmanoff, he often worked 18-hour days but started voluntarily reducing his hours in either 2014 or 2015. (Id. at 346.)

         A. Relevant Disability Benefit Policies

         This case centers on two separate benefit plans: the STD Policy and LTD Policy. The STD Policy-which is not a plan under ERISA-is self-funded by Thompson Reuters and “replaces a portion of [a claimant's] income in the event a sickness or injury prevents [him] from working for a period of time.” (Statement[4] ¶ 1-2, ECF No. 86-1 (citing STD Policy, ECF No. 47-1, at 1).) However, the STD Policy does not provide benefits regarding a disability “caused by, contributed by, or resulting from [an] occupational sickness or injury.” (STD Policy at 3.) Under the STD Policy, qualifying claimants are entitled to benefits of 100% of weekly earnings for the first six weeks of disability and 80% of weekly earnings for the following 19 weeks. (STD Policy at 5.) Pursuant to an elimination period, a claimant must be continuously disabled for seven days in order to be eligible for benefits. (STD Policy at 3.)

         The STD Policy is administered by Unum: “When making a benefit determination under the [STD] Policy, U[num] has the exclusive and final discretionary authority to determine your eligibility for benefits and to interpret and enforce the terms and provisions of the [STD] Policy.” (STD Policy at 8; see also Am. Compl. ¶ 4, ECF No. 55.) Whether or not Unum or Thompson Reuters is more appropriately dubbed its “administrator” in name, [5] Thompson Reuters pays Unum to administer the STD Policy (Statement ¶ 12) and the parties agree that Unum is its administrator. (Statement ¶ 2; ECF No. 85, at 2.) But while Unum administers the STD Policy, Thompson Reuters retained the exclusive right to discontinue it at any time: “Thompson Reuters reserves the right to modify, amend, suspend, or terminate, in whole or in part, any of the provisions of this Policy at any time for any reason or for no reason.” (STD Policy at 1.) “[C]overage under the Policy ends . . . the date the Policy is cancelled[, ]” but “if the Policy is cancelled, the cancellation will not affect a payable claim.” (Id. at 2.)

         Kouzmanoff was also a beneficiary of the LTD Policy, of which Thompson Reuters was policyholder and Unum benefits provider. (AR 45; Unum Answer ¶ 2, ECF No. 13.) Like the STD Policy, the LTD Policy provides financial protection in the event of disability, but over a longer term. (AR 46.) Its elimination period is the later of 180 days or the end of short-term benefits under the STD Policy. (Id. at 47-48.) The LTD Policy offers employees several coverage options. Relevant here, benefits could include up to 66.6667% of monthly earnings-to a maximum benefit of $15, 000 per month-for up to 42 months, minus any deductible sources of income. (Id. at 7, 11, 48, 61.)

         Both policies set forth the relevant definitions and procedures governing a claimant's path to benefits. Under both, an employee is “disabled, ” and therefore entitled to benefits, [6] when Unum determines that he is “limited from performing the material and substantial duties of [his] regular occupation due to [a] sickness or injury; and [the employee] ha[s] ¶ 20% or more loss in [ ] earnings due to that same sickness or injury.” (Statement ¶ 5; AR 60.)

         Both policies require the same information as proof of claim. A claimant must show (1) that he is under the regular care of a physician; (2) appropriate documentation of his weekly earnings; (3) the date his disability began; (4) the cause of his disability; (5) the extent of his disability, including restrictions and limitations preventing him from performing his regular occupation; and (6) the name and address of any hospital, institution or other treatment source, including all attending physicians' names and addresses. (AR 50; STD Policy at 7.)[7]

         The policies provide appeal processes. Pursuant to the STD Policy, after making a negative determination, Unum provides a notice of denial in writing, giving the specific reason(s) for the denial; the policy provision(s) on which the denial is based; an explanation of a right to appeal; and the claim review procedure. (STD Policy at 8.) The LTD Policy provides that, after denying a claim, Unum will provide that same information and, additionally, any material or information necessary to complete the claim and why such information is necessary; disclose any internal rule, guidelines, protocol or similar criterion relied on in making the adverse determination; and describe a claimant's right to obtain information about those procedures and the right to bring a lawsuit under Section 502(a) of ERISA following an adverse determination from Unum on appeal. (AR 82-83.) In support of a LTD Policy appeal, the claimant may submit new information, and Unum affords no deference to the prior determination. (Id. at 83.) Moreover, Unum reviews appeals via different personnel than who made the initial determination. (Id. at 83-84.)

         B. Kouzmanoff's Diabetes and Unum's Denial of STD and LTD Policy Benefits

         In 2001, Kouzmanoff developed type-1 diabetes. (Unum Answer ¶ 31.) He has since treated with several physicians. Dr. Ken Cohen, M.D., reports that Kouzmanoff had worsening control of his diabetes from 2011 onward. (Id. ¶¶ 32-33.) On July 21, 2015, Kouzmanoff visited Dr. Cohen “to discuss DM [8] issues and worsening stress.” (AR 111.) Per the medical notes from that day, Dr. Cohen suggested that Kouzmanoff change his work schedule, continue to work with diabetes education, and improve his insulin and carbohydrate management. (Id.) Kouzmanoff was to schedule a one-on-one evaluation at the Diabetes Center to improve his management and also to consider retiring in the coming fall, as his wife was encouraging him to do. (Id.) The notes explain that Kouzmanoff had frequent hypoglycemia, was sleeping poorly and constantly fatigued, and had suboptimal insulin management due to lack of standardized diet and over-treating. (Id.) The report further states that “[w]ith respect to his severe work stresses, he is planning on retiring at the end of the year, but is unwilling to consider a reduced work week, or an earlier retirement.” (Id. at 112.)[9] Dr. Cohen's office forwarded these notes to Unum on April 18, 2016. (Id. at 114.)

         On February 23, 2016, Kouzmanoff returned to see Dr. Cohen, who recorded:

#1. Type 1 diabetes - unfortunately [Kouzmanoff's] control continues to be poor, and hopefully working with endocrinology this might finally improve, although he has failed multiple attempts at improved control working with both myself and our diabetes educators. . . .
#4. Severe work-related stress - this clearly has an impact on his ability to control his diabetes and I agree with going on disability until his retirement in 8 months. . . .
Control had been slowly improving with use of his CGM and hypos averaging about once weekly, usually at nighttime. Unfortunately his A1c remains poorly controlled at 8.9, and he had a recent admission for diabetic ketoacidosis . . . Current Lantus dose is averaging 20 units with his Humalog averaging between 15 and 20 units daily. He typically is low in the morning and control is poor throughout the day.

(Id. at 116.) The notes from this visit further indicate that Kouzmanoff's metabolic panel labs show a fasting glucose of 158 MG/DL. (Id. at 120.) Dr. Cohen forwarded this record to Unum on April 18, 2016. (Id. at 122.)

         On March 17, 2016, Kouzmanoff initiated a STD Policy claim for “type 1 diabetes complications.” (Id. at 92.) He initially provided documentation from Dr. Cohen, which stated that, based on the February 23, 2016 office visit, Kouzmanoff had ketoacidosis (diabetes mellitus type 1) that was not work-related, would undergo a treatment plan of “intensive diabetes management, ” and “cannot drive or meet w/ clients.” (Id. at 100-03.) Kouzmanoff stopped working on March 31, 2016. (Id. at 345.) But on April 4, 2016, he told his cardiologist Dr. Tatiana Tsvetkova, M.D., that he “feels good and has no complaints.” (Id. at 146.) On April 14, 2016, Dr. Cohen provided a follow-up fax-also based on the February 23, 2016 visit-stating that Kouzmanoff “will not return” to work, either full or part time. (Id. at 108.)

         On April 5, 2016, Unum interviewed Kouzmanoff pursuant to its claim process. (Id. at 104-05.) In response to an inquiry as to what had changed such that he could no longer work, Kouzmanoff answered[10] generally that the symptoms had been going on for some time; his attending physician believed he was killing himself at work and should seek stress counseling (which was ineffective); his blood sugar would rise even without food; he couldn't work at the end of the day and had to cancel work appointments; he had been in the intensive care unit for five days the preceding December, [11] during which his blood sugar was at least 1154; he cannot do 12 to 15-hour days anymore; he missed his sales quota for the first time in 30 years the previous year; and that he “hates to admit” that returning to work would not be good because he would not be able to hit the necessary sales numbers. (Id. at 104.) Kouzmanoff's brief omits the balance of this interview, during which he indicated that he has “[v]ery few sympt[oms] now, feels [ ] as good as when he was in his prime.” (Id. at 105.)[12] He stated that he could return to work “tomorrow, ” “but couldn't continue thr[ough] it, would go back to the stress, looking at the numbers and results, too stressful.” (Id.)

         On April 14, 2016, Kouzmanoff visited an endocrinologist, Dr. Michelle Cassara, M.D., who assessed him as “Type 1 DM[] uncontrolled.” (Id. at 159.) Here too, Kouzmanoff selectively edits from the notes. While the brief fairly recounts Dr. Cassara's overview of medication, dosage, overnight lows, and post-breakfast blood sugar elevations (“especially on days off”), it drops a convenient ellipsis to cover this: “[Kouzmanoff] has [a] new job at the golf course (very active with push mower) that he only started three days ago. Has not adjusted insulin doses for this.” (Id. at 159.)[13]

         On April 18, 2016, Kouzmanoff called Unum, stating that he had received his February 23, 2016 chart. Based on the information contained therein from Dr. Cohen, he stated that he would not be returning to work. (Id. at 122.) He added that he had gone to the hospital the preceding January, but now that he wasn't working his blood sugar was stabilizing, and he has no symptoms. (Id.) Finally, he said he “cannot do the mental part of the occ[upation.] [C]annot do the concentration, attention to detail, new product knowledge due to the condition.” (Id.)

         On April 20, in response to an information request from Unum asking what Kouzmanoff should or cannot do, Dr. Cassara responded that he had no limitations at all, including “no limitations on exercise. Should be able to test blood sugars up to 6 times per day. Needs to carry food with him.” (Id. at 126, 134.) Also on April 20, 2016, Unum reviewed Kouzmanoff's STD Policy claim, including the notes and communications elucidated above. Among other findings, they concluded that Kouzmanoff has severe work-related stress that impacts his ability to control his blood sugar. (Id. at 129.) And they noted that the “medical [records] reflect[] that the claimant has poorly controlled dm; however does not have much in the way in the way of DM related complications beyond mild peripheral neuropathy and ED.”[14]

         That day, Kouzmanoff wrote to Unum, from which his brief again employs selective quoting. (Compare AR 134 with ECF No. 64, at 6.)[15] According to the brief, Kouzmanoff's letter recounted more “uncontrollable” blood sugars over the preceding years, his “several episodes in 2015” that included dry heaves and exhaustion, days spent in the hospital and 8.8 A1c reading, and that stress was causing the uncontrollable blood sugar levels. (AR 134.) Notably, those difficulties were all in the past at the time of the letter. The brief omits his representations concerning the then-present, including, “I work out and lift weights almost every day. I eat well and don't smoke . . . and am healthy.” (Id.) Also missing is his comment that he only planned to work until he turned 66-years-old, which was less than two years away. (Id.) He also asserted that it was only “this past year or 2 where I could no longer hold up the mental weight of my job.” (Id. (emphasis supplied).) He went on: “Summary - I did my job well for 29 ½ years. Physically, I feel fine but what the stress has done to me is more than unhealthy, it is life threatening. Very few folks have been able to last this long in this job as I have done.” (Id.)[16]Finally, the brief leaves out his affirmation that he had no additional medical records to support his claim outside those which had been provided by his doctors. (Id.)

         On May 9, 2016, Unum personnel convened again (with different reviewers). (Id. at 162.) On May 11, Unum told Kouzmanoff over the phone that the “medical documentation does not support inability to do his occupation.” (Id. at 164.) Additionally, Unum noted that while Dr. Cohen suggested that severe work-related stress was impacting the diabetes, the STD Policy does not cover any disability caused or contributed to by, or resulting from, an occupational illness or injury. (Id.) Finally, Unum noted that it had approved his claim through the April 14, 2016 endocrinologist visit, but was unable to do so going forward. (Id.) As Kouzmanoff points out, Unum did not receive a summary of his job functions from Thompson Reuters until May 13, 2016. (Id. at 165-66.) But even after that, and reviewing those job functions, Unum found that “[m]edical data does not appear to support functional loss as of 4/15/16 and ongoing and it also appears that that his reported disabling condition was contributed to by an occupational sickness.” (Id. at 190; see also Id. at 192-96 (claim appeal review document).) As alleged in the Amended Complaint, Unum denied Kouzmanoff's STD Policy claim “on the basis that he was not disabled.” (Statement ¶ 8.)

         On June 24, 2016, Dr. Cohen provided Thompson Reuters with a letter giving approval for Kouzmanoff to return to work with certain restrictions. (Unum Answer ¶ 44.) Per the letter, Kouzmanoff would require frequent breaks to check blood sugar and time to manage it if elevated. (Id.) He would also need to avoid stressful situations or work-meaning not working on a production quota basis and keeping meetings with prospective customers to a time limit. (Id.) Dr. Cohen reiterated that such situations and related stress caused Kouzmanoff to lose track of blood sugar levels. Moreover, the letter asked Thompson Reuters to consider a reduction in hours, noting that it would be healthier for Kouzmanoff to maintain a “9 to 5 window.” (Id.) In response, on July 1, 2016, Thompson Reuters offered Kouzmanoff modified employment that complied with the ...

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