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RICO Gives Unum Group Plaintiffs Extra Leverage

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Philadelphia, PA: In April 2007, the federal Third Circuit Court of Appeals made reality of what may prove to be Unum Group's worst legal nightmare. Unum's nightmare is the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. For individuals, and especially individuals denied benefits by Unum under group disability plans, that decision may offer extra clout in reaching an early and successful settlement.

If you've been denied group disability benefits by Unum, your options as an individual used to be limited to either a civil suit under your state's insurance regulations or a federal action under the Employee Retirement Income Security Act of 1974 (ERISA). Companies like Unum have relatively little to fear from ERISA actions, because ERISA limits plaintiffs' rights to a jury trial and compensatory or punitive damages.

DisabilityAttorney Raymond Bourhis observes, "Someone can wind up on welfare, lose their home, and they can't be compensated beyond the benefits they were entitled to. If you do make a claim, and the insurance company says we won't pay you, your sole remedy is to file suit in federal court for past benefits." That doesn't make an attractive case for lawyers, either; the limited damages available under ERISA for individual cases simply don't make it worth their time and effort.

RICO, by contrast, allows a plaintiff to collect triple damages as well as punitive damages and prejudgement interest. Small wonder, then, that a number of attorneys handling cases again Unum had been trying to include RICO violation charges, and that Unum had just as vigorously sought to fend them off.

Things finally came to a head in the case of Weiss v. First Unum, a classic example of Unum denying disability benefits, in this instance to investment banker Richard Weiss. Weiss was covered by a group disability plan when he suffered a heart attack in 2001 from which he never fully recovered. After Weiss was forced to leave his job, Unum quickly terminated his disability benefits, claiming that he was no longer disabled, despite two angioplasties and implantation of a pacemaker that still left him with a weakened heart, low blood pressure, and chronic fatigue.

Weiss initially sued in state court, charging consumer fraud, bad-faith termination, and intentional infliction of emotional distress. After Unum had the case moved to federal court under ERISA, Weiss's attorney added state and federal RICO charges, alleging that Unum committed mail and wire fraud in letters and calls to Weiss.

Long story short, Unum fought to get the RICO charges dismissed, and Unum finally lost when the Third Circuit determined that the case could go forward, RICO included. Reviewing the decision, attorney J. Craig Williams remarked that "RICO cases may portend bigger problems for American corporations The standard of proof is lower, the range of admissible evidence is wider, but worst of all for corporations, they allow the plaintiffs to recover attorney's fees and apply to the courts to multiply the attorney's fees award if the case is complicated and the plaintiffs are successful and brought a large benefit to many people." Class action, anyone?

Attorney Michael Hiller of New York cautions that Weiss' success doesn't necessarily open the floodgates for RICO violation charges: "It's a very serious allegation. RICO is not just another fraud statute. You can't just jump right in. If you don't know what you're doing, you're going to see the case dismissed."

That said, Hiller's firm recently won an immediate and large settlement from Unum in a disability benefits case when they included RICO violations in their complaint. He says, "Based on my experience, there are definitely insurance companies out there whose conduct falls under the RICO statute."

Unum Legal Help

If you have had a disability claim denied, or if your claim was granted and then later terminated, please contact a lawyer involved in a possible [Unum Lawsuit] to review your case at no cost or obligation.
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READER COMMENTS

Posted by
Rose
on
One year anniversary from my denial. UNUM had approved my claim in 2005 to end of contract - I found out after getting my file. In 2012 they started a campaign of crazy requests , which included 10 years of tax records, Tons of calls to call them - I only do business with them in writing. I wrote them for clarification on the requests- my answer was a denial letter. I requested my file and that was quite telling. I had been targeted for denial and it didn't matter what I did. I discovered they actually altered my Doctor's report requested in 2012, It was submitted 2xs - 1st one directly faxed by my Dr. 2nd one - I put a copy in the inquiry letter. UNUM Rep and Quality Control Rep altered the copy to appear I faked it. Pretty obvious to me. They used this to deny based on 'my fraud' altering the document and not supplying a current APS. WOW. Yet- perfectly clear in their file was the original report. I'm a small fish so no lawyer will bother with this. My advice - If denied go over your files carefully. UNUM does selectively file so I was surprised how much they left in my file. Check all your files or have a trusted friend help you. Their fraud is what bothers me the most - RICO?

Posted by
David Swan
on
Good day,
I was awarded benefits from UNUM in 2007. Suddenly after receiving SSDI benefits, UNUM terminated my benefits saying I was able to return to work when in fact I'm far worse now than when I went out on disability. I want to file a lawsuit against them as soon as possible for whatever we can. They just can't pull my lively hood like that. Not only that, I now suffer from emotional issues that almost caused a suicide attempt due to their actions.

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