Arnold
Arnold v. Unum Life Insurance Co. of America
Opinion
Opinion
Breyer, J.
ORDER GRANTING SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF IN PART AND IN FAVOR OF DEFENDANT IN PART
The question presented in this insurance dispute is whether the Defendant Unum Life Insurance Company of America (“UNUM”) abused its discretion when it concluded that a settlement payment Plaintiff, an UNUM policyholder, received from his former employer triggered a third-party settlement “offset” provision in the parties’ disability insurance contract, thereby reducing Plaintiffs disability benefits by almost $35,000.
For the reasons explained below, the Court finds that UNUM did not abuse its discretion when it determined that the settlement payment qualified as a “deductible source of income” under the parties’ agreement. However, the Court finds that UNUM did abuse its discretion in failing to subtract Plaintiffs settlement-related attorneys’ fees from the settlement payment before it calculated the amount by which it reduced Plaintiffs disability payments. The Court therefore GRANTS summary judgment in favor of Plaintiff and REMANDS this case to the claims administrator for a recalculation of the appropriate reduction in Plaintiffs benefits.