What happens when an independent, unsolicited source provides evidence that a disability claimant may be committing fraud?  Can you consider emails hacked from a computer? What must the claim administrator do to evaluate the source of the evidence?

Here’s a fun new case to read (even if you don’t care about the issue presented). Truitt v. Unum Life Insurance Company of America, (pdf) __ F.3d__, 2013 WL 4777327 (5th Cir. Sept. 6, 2013).

FACTS: Truitt, a litigation attorney, claimed disability due to leg and foot pain. UNUM began paying benefits in 2003. But based upon surveillance video, two Independent Medical Exams, and a Functional Capacities Assessment, Unum discontinued benefits in 2006.  On appeal, however, Unum reinstated benefits.

But then… a former scorned boyfriend blew the whistle.  He provided Unum 600 pages of emails, photos and documents.  They showed that during her claimed disability Truitt was “swamped” with legal work, and had an impressive vacation travel schedule, including “dancing on decks.” Unum had additional experts review the information and terminated benefits concluding Truitt was not “disabled.” Truitt claimed her computer had been hacked and that Unum should not have considered the emails.  Truitt filed suit and Unum counterclaimed for $1m in overpayments.

5th CIRCUIT HELD:

1.  “There is no justifiable basis for placing the burden solely on the administrator to generate evidence relevant to deciding the claim, which may or may not be available to it, or which may be more readily available to the claimant.”  Op. at 15.
2. A conflicted administrator is “not under a duty to ‘reasonably investigate’ a claim.” When confronted with a denial of benefits by a conflicted administrator, the district court may not impose a duty to reasonably investigate on the administrator. Op. at 15.
3. Unum did not abuse its discretion by considering emails (from the scorned boyfriend) because Unum: (a) identified evidence it received (emails and travel documents etc.) that supported the decision to deny benefits; (b) considered Truitt’s rebuttal evidence that the emails had been hacked; (c) addressed Truitt’s objections to the emails, finding no evidence the emails had been manipulated or tampered with.  The emails appeared authentic and reliable.  Op. 16
4. Unum’s $1m reimbursement claim: When assessing fraud of a claimant, courts must apply federal common law, not Texas law. Op. at 19. The case was remanded for the trial court to reassess this claim.