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Written by AMLO.

MFTL wins significant ruling against UNUMProvident Corporation

Marcella Shepherd v. UNUMProvident Corporation

U.S. District Court (2005)

In the case of Marcella Shepherd v. UNUMProvident Corporation, Shepherd was a door-to-door or "debit" insurance sales person. Her job required her to visit over 400 families and customers each month across the hilly terrain of Eastern Kentucky.  She had an "own occupation" disability policy with Provident Life and Accident Insurance Company, a subsidiary of UNUMProvident Corporation.

UNUMProvident refused to pay her benefits, at the sum of $1000 a month on a policy that she had purchased many years before.  After extensive discovery, UNUMProvident moved to dismiss the allegations of bad faith, claiming that they had a reasonable basis to refuse payment of the claim (even if they were wrong) because they had sent Ms. Shepherd to an independent medical examination and, had the IME reviewed by an independent record reviewer.

MFTL fought this motion, employing expert Mary Fuller to give an opinion that UNUMProvident had indeed committed bad faith by refusing to consider the real day-to-day duties of her occupation, which included walking up hills, running from biting dogs, navigating across wooden bridges and streams, all of which would have been impossible given the arthritic condition of Ms. Shepherd's hip.  Furthermore, MFTL argued that the IME opinion was based on insufficient information from UNUMProvident and, moreover, the IME doctor recommended rehabilitative treatment which was not required by the insurance policy.

Finally, MFTL argued that the denial of Shepher`s claim was part of a larger management policy to deny claims as part of the financial goals of the company.  (See reference to multi-state market conduct examination report).

The District Judge David L. Bunning agreed with MFTL.  Judge Bunning overruled UNUMProvident`s motion for summary judgment on bad faith claim and held,

Fuller`s testimony as to the professed unreasonable manner in which Shepherd`s claim was adjusted, along with her testimony as to Defendant`s change in management focus and policies to that of denying claims as part of its financial plan, also provide the basis and support for Plaintiff`s presentation of the third requirement - - whether Defendant`s knew there was no reasonable basis to delay payment or acted recklessly about whether a reasonable basis existed.