8th Circuit Reverses District Court In Favor of Sun Life’s Interpretation of “Pre-Existing Condition”
On July 21, 2014, the Eighth Circuit Court of Appeals reversed the District Court for the Eastern District of Missouri’s decision in Kutten v. Sun Life Assurance Co. of Canada. Marc Kutten had sued Sun Life in U.S. District court alleging that Sun Life had improperly denied him Long Term Disability benefits under an ERISA governed group disability plan. The District Court granted summary judgment for Kutten and denied summary judgment for Sun Life.
The Eighth Circuit determined that the District Court had erred in granting Kutten’s motion for summary judgment in interpreting the meaning of medical treatment under the plans pre-existing condition exclusion provision. The pre-existing condition exclusion stated “No LTD benefit will be payable for any Total or Partial Disability that is due to: … a Pre-Existing Condition. Pre-Existing Condition means during the 3 months prior to the Employee’s Effective Date of Insurance the Employee received medical treatment, care or services, including diagnostic measures, or took prescribed drugs or medicines for the disabling condition.”
Since 1994, Kutten had suffered from retinitis pigmentosa, a progressive eye disease. Under his doctor’s direction and supervision, Kutten took non-prescribed, over-the-counter vitamin A palmitate supplements to slow the rate of progression of the disease. His employer entered into the group disability plan at issue here in June 2010. Kutten was forced to stop working, due to his eye disease, in September 2010 and filed for long-term disability benefits. Sun Life determined Kutten was disabled, but not entitled to benefits because his eye disease was a pre-existing condition. Sun Life determined that following his doctor’s direction and supervision in taking the vitamin A constituted “medical treatment.”
The District Court found that Sun Life abused its discretion in broadly interpreting the phrase medical treatment, “contrary to the Plan’s plain language and rendered portions of the clause meaningless and internally inconsistent.” After analyzing the meaning of medical treatment as used within the plan and the dictionary definitions of medical, medicine, and treatment, the Circuit Court stated “it is reasonable to conclude Sun Life designed the Pre-Existing Condition clause to exclude coverage in circumstances similar to this case [… and] Sun Life’s interpretation is consistent with the broader goals of the Plan.”
The Eighth Circuit, citing the “ordinary understanding of what constitutes a ‘medical treatment’ and the purpose of the Pre-Existing Condition clause,” found that Sun Life did not abuse its discretion in denying Kutten’s claim for long term disability benefits based on the pre-existing condition clause in the disability plan.