Court Rules for Claimant in Unum Dispute

Pittsburgh, PADr. Edward J. Zaloga, a doctor of osteopathy and a Unum long-term disability insurance policyholder, was injured in an automotive accident on June 17, 2002. He suffered lasting orthopedic and neurological damage to his neck, left arm and left hand, and by July 13 his attending physicians concluded that he could no longer perform capably as a board-certified nephrologist. They expressed particular concern over Dr. Zaloga's involvement with a medical practice where he served in a relief capacity.


It was time for Dr. Zaloga to collect his due and make a claim through his long-term disability policy, which he held with Provident Life and Unum.

According to the Disability Insurance Claims Law Blog (1/27/10), Dr. Zaloga initiated his claim for benefits in the fall of 2005, and his claim was initially approved on August 15 of the following year. The date of his disability was listed as July 13, 2004. For the next 18 months the claimant received benefits according to the provisions in his policy. He also provided supplemental claim forms monthly as requested by Provident Life and Unum.

All seemed well until the doctor's file was assigned to a new disability benefits specialist, who subsequently reviewed his file and disputed his claim that he had been working as a nephologist at the date of his disability, asserting he had been acting as chief medical officer of the medical services provider since June 1, 2004.
Claiming that Dr. Zaloga held a "dual occupation" prior to the date of his disability, Provident Life and Unum summarily terminated his benefits. The companies also disputed Zaloga's earnings prior to claiming disability.

Zaloga filed suit originally in the Court of Common Pleas for Lackawanna County, Pennsylvania, alleging that Provident Life and Unum violated the Unfair Trade Practices and Consumer Protection Law (UTPCPL) because the insurers did not obtain additional information, but instead reevaluated existing information already in their files. In the process, they applied a new definition of total disability that differed from that used originally in the policy language.

The insurance companies were reportedly not happy with some of the allegations Zaloga made and sought to have the offending statements struck from the claim, arguing that the allegations bore no connection to a bad faith or breach of contract claim under Pennsylvania law.

The United States District Court for the Middle District of Pennsylvania disagreed.