Hurley v. First Unum Life Insur.Co., 2005 NY Slip Op. 9498, 2005 NY App.Div.LEXIS 14219 (S.Ct.N.Y., App.Div. 12/12/2005)(Issue: Burden of Proof).  The plaintiff was a dental hygienist who became disabled due to carpal tunnel syndrome and pronator teres syndrome.  The insurer initially paid benefits, but later questioned the disability on the ground that Hurley appeared able to take care of her child, so she was alleged to be capable of working as a hygienist, but there was no medical evidence supporting that decision.  However, an in-house doctor suggested to the treating doctor that since an initial EMG was negative, a second nerve study might be helpful.  Although the doctor initially agreed, after discussing it with the claimant, the EMG was declined.  In response, the Unum claims examiner told the plaintiff that no further benefits would be paid unless she underwent an EMG test since the absence of that testing showed “a lack of significant clinical and objective findings to support the degree of impairment you claim existed.”

When the plaintiff maintained her refusal to attend an EMG, additional benefits were refused based on lack of evidence, and litigation ensued.  Following a bench trial, the court determined that the refusal to attend the EMG was a breach of the duty of cooperation; and the complaint was dismissed.  On appeal, the court found the policy required the insured to submit to a reasonable medical examination request while the claim was pending.  However, the court found that in this context, “the requirement that the request be reasonable can refer only to reasonableness in relation to the insurer's determination to honor or deny the claim. Viewed in that light, the defendant's request, under the particular facts of this case, was not reasonable.” *8. 

The court pointed out that the claim was paid for two years despite a prior negative EMG; and testimony was presented to the trial court from the initial diagnosing physician and from the treating physician, that this was not uncommon “in light of the relatively high number of false negative results from the test.”  In addition, the treating doctor testified that “a further EMG would not alter his diagnosis or his conclusion that the plaintiff suffered from a disabling condition.” *8-*9.

As additional grounds for overturning the lower court, the appellate division explained that even if the examination request had been reasonable at the time it was made, the reason communicated for the benefit termination was not the failure to attend the exam; it was due to lack of sufficient evidence.  The court explained:

Having elected to terminate the plaintiff's benefits because it found insufficient evidence that the plaintiff was disabled, the defendant had no basis to request a further examination and the plaintiff's subsequent failure to undergo the additional examination was immaterial to the validity of the termination (see Finkelstein v Equitable Life Assur. Soc. of U.S., 256 App Div 593, 596-597, affd 281 NY 690). The Supreme Court erred, therefore, in dismissing the complaint on the ground that the plaintiff failed to undergo the requested examination. *9-*10.

The court then went on to find that the evidence supported continuation of benefits since the defendant admitted the plaintiff was disabled for 2 ½ years and there was no evidence of any change in her condition since then.

A dissent was also filed which concluded the plaintiff breached the cooperation clause in the policy by refusing the test.  The dissenter also cited testimony from an independent examiner who found nothing wrong the plaintiff and testified that she failed a test to detect malingering.  Therefore, the dissent asserted the termination should have been upheld.

Discussion:      There are a number of interesting points made in this short opinion.  First of all, the preceding casenote discussing Gentle v. Barnhart explains that the ability to perform child care responsibilities is not the same as working; and that it is improper to draw conclusions from a claimant’s ability to take care of children.  Several months ago, we also covered Torres v. Unum Life Insur.Co. of America, 405 F.3d 670 (8^th Cir. 4/26/2005)(May 2005), which took Unum to task for basing its decision on suspicion rather than hard evidence.

The most important point presented here, though, is that it is not a breach of the cooperation clause for the insured to refuse an invasive test that has a significant false negative rate.  One would have to conclude from this finding that the insurer would also be precluded from compelling a functional capacity evaluation – which is why many states require a doctor’s prescription for such testing – it is both invasive and not conclusive.  The Social Security Administration also provides that it will not purchase an examination if it involves risk to the patient – 20 C.F.R. §404.1519m. 

After reading the dissent, though, it does seem surprising to us that the appellate division resolved the factual dispute created by the independent examination without remanding the case to the Supreme Court for resolution of the conflict in the testimony between the examining doctors.  The trial court observed the demeanor of the witnesses and was in a better position than the Appellate Division to resolve the credibility dispute.