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Romine v. Unum Life Insurance Company of America

United States District Court, N.D. Alabama, Northeastern Division

September 30, 2014

RICKIE ROMINE, Plaintiff,
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.

MEMORANDUM OPINION AND ORDER

MADELINE HUGHES HAIKALA, District Judge.

Plaintiff Rickie Romine is insured under a group disability insurance plan offered through the company where he worked until he became disabled. Defendant Unum Life Insurance Company issued the policy that funds the plan and makes benefits decisions under the policy. In this ERISA action, Mr. Romine contends that Unum wrongfully reduced his monthly long-term disability benefit.[1]

The parties have filed cross motions for summary judgment (Docs. 15, 21). Having considered the parties' pleadings, memoranda, and evidentiary submissions, the Court denies Unum's motion for summary judgment because the policy provisions that govern the calculation of Mr. Romine's disability benefit are ambiguous. The Court resolves the ambiguity in favor of Mr. Romine. The Court also denies Mr. Romine's motion for summary judgment because the benefit calculation that Mr. Romine proposes is incorrect under the terms of the policy.

I. FACTUAL BACKGROUND

Before he retired, Mr. Romine worked for Cavalier Homes, Inc. as the Vice President in charge of purchasing. (Doc. 14, ¶ 3). Cavalier had an employee benefit plan which provided long-term disability benefits to the officers of the company through a policy with Unum Life Insurance Company. ( Id. ¶ 4). Mr. Romine began receiving benefits under the policy after he was forced to stop working because of blindness. ( Id. ¶ 3). His claims against Unum in this lawsuit concern the method that Unum used to calculate his monthly disability benefit.

A. The Plan

The "MONTHLY BENEFIT" provision in Unum's policy describes the method for calculating an insured's monthly disability benefit. (Doc. 17-2, pp. 162-68). That provision states, in relevant part:

MONTHLY BENEFIT
To figure the amount of monthly benefit:
1. Take the lesser of:
a. 60% of the insured's basic monthly earnings; or
b. the amount of the maximum monthly benefit shown in the policy specifications; and
2. Deduct other income benefits, shown below, from this amount. ( Id. at 162). The maximum monthly benefit is $5, 000.00. ( Id. at 153). The plan defines "other income benefits" as follows:
OTHER INCOME BENEFITS
Other income benefits means those benefits as follows.
...
5. The amount of disability or retirement benefits under the United States Social Security Act, The Canada Pension Plan, or The Quebec Pension Plan, or any similar plan or act, as follows:
a. Disability benefits for which:
i. the insured is eligible; and
ii. his spouse, child or children are eligible because of his disability;
...

( Id. at 162-64).

The plan also provides for a cost of living adjustment (COLA) for the monthly benefit. ( Id. at 167). The plan's language concerning the COLA is as follows:

COST OF LIVING ADJUSTMENT
Eligibilty
An insured will be eligible for cost of living adjustments on the first anniversary of benefit payments and each following anniversary. Adjustments may be made as long as the insured is receiving benefits.
Adjustment Amount
The insured's net monthly benefit will increase by 4%. Each adjustment will be added to the insured's net monthly ...

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