Barnhart v. UNUM Life Insurance Company of America, 179 F.3d 583 (8th Cir. 1999)-A bank employed plaintiff as a return item clerk. A long-term disability plan covered plaintiff. Plaintiff claimed her cervical spondylosis with no particular nerve encroachment. Plaintiff's cervical spine x-ray indicated spurring at C4-5 and C5-6, but showed no herniation. Plaintiff was 57 at the time she made her claim.
Defendant denied her claim. Plaintiff then sued. Defendant answered and filed a motion for summary judgment. Plaintiff opposed the motion with an affidavit and a Social Security Disability Administration determination of disability letter. District court, using differential standard of review, refused to consider these pieces of evidence since the evidence was not before the plan administrator at the time it made its decision. Plaintiff filed a motion for new trial asking the district court to consider the evidence and to consider whether it overlooked Defendant's fiduciary duty to act in plaintiff's best interest in examining plaintiff's claim.
Because of the Eight Circuit's decision in Woo v. Deluxe Corp., 144 F.3d 1157 (8th Cir. 1998) [see detailed analysis] (adopting a sliding scale standard of review for conflicted fiduciaries), the district court, in considering Barnhart's motion, asked the parties to brief the standard of review outlined in Woo. After considering the parties' arguments, the court found that the administrator had a conflict of interest. Using a "sliding scale" standard of review, the court denied plaintiffs motion, finding that the record satisfied this standard because it contained substantial evidence bordering on a preponderance to uphold the administrator's decision.
Eighth Circuit held that district court improperly ignored second prong of Woo test since plaintiff failed to show how conflict of interest resulted in a serious breach of fiduciary duty. Appropriate standard of review was arbitrary and capricious.
Eighth Circuit also held that the distort court properly excluded the evidence not before the plan administrator at the time the administrator made its decision.
