Disability Insurance Lawyer Blog

Court grants Discovery Predicated Upon Frankel & Newfield Precedents

A New York Federal Judge has granted a plaintiff significant discovery, relying largely upon a number of precedents secured by Frankel & Newfield, P.C., in ERISA long term disability insurance litigation.

The Court decided that the plaintiff would be permitted to take depositions of both party and non-party witnesses, relying upon prior cases where our firm convinced a sister court to grant such discovery. Defendants typically challenge a plaintiff's right to discovery in these ERISA insurance litigations, arguing that the Court is limited to considering only documentation that appears in the administrative record compiled by the insurer.

Here, the Court was willing to permit plaintiff significant discovery, addressing issues of the Defendant's conflict of interest and its relationship with third party vendors. We are pleased to see traction to numerous discovery decisions secured by our firm, and that other plaintiffs are able to leverage our success in an effort to level the litigation playing field.

Varney v. NYNEX

Long Term Disability Insurance Company Denies Benefits to Insurance Agency Owner; Frankel & Newfield Negotiates a Settlement

Our client was an insurance agency owner with a disability policy from a large national insurance company. He suffers from depression and was diagnosed as Bi-Polar with Sleep Apnea. After being paid long term disability insurance benefits for two years, the insurance company requested an Independent Medical Exam (IME).

Following the IME, the insurance company denied any further benefits, saying that he was no longer impaired from his occupation and able to return to work. Our client would have liked to be fine, and not to have suffered impairments in his functionality, but, unfortunately, his condition had not meaningfully improved.

He provided us with his medical records and all of the paperwork from the insurance company, and we developed strong arguments to counter both the IME findings and the conclusions of the insurer, and we thereafter represented him in negotiations which led to a settlement of his claim for a lump sum. The value of the settlement was greatly enhanced due to our work in collaborating with both the client and his medical providers to develop a powerful rebuttal to the biased conclusions of the insurer's hired gun.

The insurer knew that our firm was willing to aggressively litigate this claim in the absence of a resolution. This is an example of the value of engaging an aggressive, experienced law firm that practices exclusively on disability insurance matters.

If you have been denied long term disability insurance benefits and need help in negotiating a settlement, we encourage you to call our office today to learn how we can help you.

Court Determines Reliance Standard Abused its Discretion on Remanded Claim

Reliance Standard Insurance apparently failed to appreciate guidance from the Court, where it had previously remanded a claim back to perform an appropriate review of the claimant's eligibility for long term disability insurance benefits. Initially, the Court remanded the claim to Reliance Standard, permitting the claimant to supplement the record with evidence of his job responsibilities, and further medical support.

Upon review of the remanded claim, the Court determined that Reliance Standard abused its discretion, on the basis of a number of factors. This included the selective review of medical evidence by Reliance Standard's hired paper only reviewing doctors, the failure to perform an examination of the claimant, instead relying solely upon paper only medical reviews the rejection of all subjective and self reported information from the claimant, and the flawed vocational review performed by Reliance Standard.

This combination of factors led the Court to conclude that Reliance Standard's rejection of the claim for long term disability insurance benefits was an abuse of discretion, and awarded the claimant back benefits, and the ability to seek attorneys fees.

Kelly v. Reliance Standard

Court Finds Lincoln Life to Have Abused its Discretion

A Federal Court in Michigan has recently determined that Lincoln Life abused its discretion when it terminated a claim, finding that Lincoln's decision making process was lacking in terms of analysis of the evidence. The claimant had provided extensive evidence documenting a history of back pain, along with objective testing which supported the impairments in functionality.

The Court also took issue with Lincoln's reliance upon a file review which was conclusory and lacked meaningful consideration of the evidence, holding that "conclusory and unsupported statements that the documentation was insufficient to support a finding of disability" did not demonstrate a deliberate and principled decision-making process.

The Court thus awarded the claimant his back benefits.

All too often, insurers rely upon file only reviewing doctors, who are regularly used by them to support the denial or termination of claims. These opinions are often lacking meaningful analysis of the medical evidence, and are often simply an outright rejection of the medical evidence.

Peshke v. Lincoln Life

Met Life Denies Disability Insurance Benefits for Project Manager Based on Paper Medical Records Review, We Fight Back and Win

Our client, a 57 year old man, was a project manager in building maintenance. In October 2008, he could no longer perform the duties of his job. He was suffering from a long list of painful disabilities: herniated discs, degenerative disc disease, lumbar spondylosis, radiculopathy, chronic back pain, cervical and lumbar spine stenosis, lumbar facet arthropathy, radiculopathy, fatigue, carpal tunnel syndrome, and headaches.

Met Life had originally accepted his claim, and he received full disability benefits from October 2008 until late April 2011, when suddenly MetLife terminated his claim based solely on a paper review of his file.

A paper review means exactly what it says: a review of the paper file. There was no medical exam, no one met him or saw him at his home or in a doctor's office. They simply looked at some of his medical records and determined that he was no longer disabled. We are familiar with their process and the reviewer.

On December 14, 2010, our client's claim file was reviewed by Dr. Marc Sloan, a paid consultant for Met Life who conducts many Physician File Reviews (PFRs) for Met Life short and long term disability claimants. From our research and experience, we know that every claim reviewed by Dr. Sloan that involves a spine or back condition is found not disabled, reportedly based on a lack of objective findings supporting functional limitations. Met Life had the right to have our client examined in person, but never exercised that right.

To add insult to injury, Met Life failed to conduct a proper vocational assessment. They asserted that our client would be capable of functioning in any capacity, relying on generic physical categories of occupations, rather than considering the mental and intellectual demands of the various occupations it believes our client was capable of doing.

Our client can neither sit nor stand comfortably, nor can he walk, carry anything, or do much of anything physical without a tremendous amount of pain and discomfort. We'd love Met Life to find an occupation that would be suitable for him.

On April 25, 2011, Met Life terminated the client's long term disability claim. We prepared an appeal, with aggressive documentation of his condition and of Met Life's complete failure to conduct an appropriate vocational assessment.

Met Life overturned its decision on December 2, 2011.

Prudential found to Abuse Discretion on Long Term Disability Claim

A Federal Judge in Louisiana has determined that Prudential's claim determination, to terminate long term disability benefits that had been payable for several years, did not have a rational connection to the facts, and has reinstated the claim and awarded attorneys fees.
The claimant, who suffered from orthopedic injuries following a slip and fall down stairs, had several surgeries, and enjoyed the support for her claim from numerous treating doctors.

Despite the fact that the claimant secured Social Security Disability insurance benefits, Prudential terminated the claim alleging that she no longer had support for her ongoing impairment. Prudential chose an adversarial posture with the claimant throughout the appeal process, and ultimately, simply adopted the opinion of a paper reviewing, non-examining physician. Prudential relied upon well known insurance pandering entities, including Reliable Review Services (RRS) and Dr. Richard Kaplan, a doctor who markets himself to insurers, for the claim review.

The Court was troubled by Prudential's wholesale adoption of the non-examining physician's opinion, to the complete exclusion of the support from claimant's treating providers. Based upon this, the Court determined that Prudential abused its discretion.

Tesch v. Prudential Ins. Co.

Court Finds Lincoln Life Determination an Abuse of Discretion

A Federal Court in Michigan has reinstated a claimant's long term disability insurance benefits which were were wrongfully terminated by Lincoln Life Insurance. The claimant had been disabled since 2000, and his benefits were terminated by Lincoln Life in June 2008, based upon a determination that the claimant could perform work in a sedentary capacity.

Lincoln relied upon the Dictionary of Occupational Titles (DOT) as a reference, despite the fact that the DOT has not been revised since 1991. On appeal of the claim termination, Lincoln obtained an IME, which not surprisingly found that the claimant's pain was "out of proportion" to the physical examination and diagnostic studies. This is an all too typical comment provided by doctors hired by insurance companies on ERISA disability claims.

Lincoln also relied upon the medical opinion of a nurse, an action that drew skepticism from the Court, which noted that "When a plan administrator's explanation is based on the work of a doctor in its employ, we must view explanation with some skepticism." The Court found that Lincoln's review was limited and that it ignored the claimant's reports of constant pain. The fact that Lincoln ignored prior assessments of limited functionality guided the Court in its decision.

As a result, the Court ordered benefits to be reinstated, and permitted the claimant to seek attorney's fees. Grabowski v. Lincoln National Life Ins. Co.

Court Finds Sedgwick Claim Determination to be Arbitrary and Capricious

A Federal Judge in New Jersey has determined that a decision to terminate long term disability insurance benefits to a claimant suffering from lupus, rheumatoid arthritis and other conditions was arbitrary and capricious. The Court undertook an analysis that accounted for a number of case specific factors, taking guidance from the United States Supreme Court's holding in Met Life v. Glenn. Sedgwick is a third party administrator who does not insure the benefits, but rather handles claims for employers as the administrator.

The Court noted that Sedgwick's failure to comply with the ERISA regulations requiring appropriate notification of what is necessary to perfect a claim, along with the failure to consider all relevant medical conditions, and the failure to consider the SSDI award were factors weighing in favor of a finding of arbitrary and capricious conduct. The Court also found that Sedgwick's requirements of proof not contained in the policy, along with a changing of claim position without new information further supported a finding of arbitrary and capricious conduct.

On the other hand, the Court did not credit the use of repeat offender paper reviewing physicians as having any weight, noting that their was no evidence of bias presented to support the argument. However, by correctly weighing the totality of circumstances, the Court held that the decision to terminate the claim was improper, and ordered a portion of the back benefits to be paid, while remanding the claim back for further consideration.

Connor v. Sedgwick Claims Management Services

Court Finds CIGNA Arbitrary, Applied Wrong Standard of Disability

A recent decision from the Federal Court in Pennsylvania has chastised CIGNA's claim handling conduct and awarded back benefits to an insured whose claim was terminated by CIGNA based upon its effort to apply the wrong standard of disability. CIGNA terminated the claim on the purported basis that the claimant was able to work in some occupation, despite the fact that her claim was in the own occupation stage. In litigation, CIGNA sought to argue that this was a typographical error, and that it actually applied the own occupation standard.

The Court methodically picked apart the arguments, and demonstrated how CIGNA wrongfully applied the any occupation definition. The Court also rejected CIGNA's argument that evidence supported its claim decision under whatever standard was applied, factually demonstrating why CIGNA's argument lacked merit. The Court held that "any action taken by a plan administrator inconsistent with the terms of unambiguous policy language is arbitrary."

This strong decision serves to highlight how insurers often will apply erroneous standards, and will attempt in litigation to craft arguments to fix the holes in the logic of the underlying claim handling. Fortunately, this Judge appreciated the issues, and did not permit CIGNA to "mend the hole".

Loomis v. Life Ins Co. of N. Amer. (CIGNA)

CIGNA AGAIN TAKEN TO TASK FOR CLAIM HANDLING

Another Federal Judge has seen through the ERISA quagmire and has found that CIGNA's claim handling conduct was improper, and that the claimant provided sufficient evidence to demonstrate that he remained disabled. The Court awarded retroactive benefits with interest.

The Court was impressed with the evidence presented by the claimant demonstrating entitlement to any occupation benefits, based upon the support from his treating doctors, who had long standing treatment relationships with the claimant, and who articulated functional restrictions and limitations. The Court also determined that the record demonstrated that CIGNA cherry-picked selective items of evidence in order to support its claim decision. The Court also found the TSA (Transferable Skills Analysis) to be flawed, and upon considering the totality of the evidence, found the claimant to still be disabled.

Jones v. CIGNA Group, W.D.N.Y. 2011

AETNA CLAIM DECISION LACKS SUBSTANTIAL EVIDENCE

A Federal Judge has demonstrated that despite a favorable standard of review for an insurance company, a claim decision must be supported by substantial evidence, or it will be reversed. Aetna reached a claim determination on the purported basis of medical reviews performed by its in house physician and an outside physician consultant, neither of whom examined or evaluated the claimant.

The Court carefully considered the substance of the reports relied upon by Aetna, and determined that these reports lacked substantial evidence, due to the selective inclusion of information, and the failure to consider support for the impairment from the claimant's treating medical providers, coupled with the mischaracterization of the medical findings by another hired physician.

The Court noted the value of a physical examination to a reliable assessment of a claimant's disability. The Court chastised Aetna for searching for a reason to deny benefits, where Aetna blindly accepted the paper review conclusions over the opinions of treating physicians, without meaningful explanations as to why.

Unfortunately, this decision is more the exception than the rule, and all too often, insurers are permitted to engage in like conduct, without meaningful scrutiny by the Courts. Often, the courts determine that it was appropriate for an insurer to rely upon these "independent" physicians, or even to rely upon in house doctors who do not even practice medicine on patients, fail to conduct an examination of the claimant and demand objective evidence, even where the policy does not contain such a requirement.

Court Finds Met Life Abused its Discretion

Met Life, one of the largest insurers of ERISA long term disability insurance claims, has been found to have abused its discretion in terminating benefits to a Verizon employee, once her claim was reviewed under the any occupation definition of disability.

Plaintiff was employed as a Customer Account Manager for Verizon, from 2000 until August 2005, when she became unable to work due to an injury to her head, causing a concussion and traumatic brain injury. Her ERISA disability claim was paid for 24 months (first 12 months of short term disability benefits, then another 12 months of long term disability benefits). Thereafter, Met Life reviewed whether she remained disabled under a standard of disability which evaluates whether one can perform the duties of some other occupation taking account of one's education, training, experience and prior earnings.

In determining that plaintiff was not disabled, Met Life relied upon a review performed by doctors who never treated, evaluated or examined the plaintiff; instead, they simply reviewed medical records, and determined that there was "no objective evidence" to support continued impairment. This objective evidence term did not exist in the policy, and was effectively added to the plaintiff's claim requirements without notice. The Court held that in taking the position that plaintiff failed to submit objective medical evidence to support her claimed functional limitations, Met Life ignored the definition of disability in the plan, and violated ERISA.

Further compelling the Court's determination was Met Life's failure to consider the finding of disability made by the Social Security Administration, despite Met Life requiring the plaintiff to pursue Social Security disability benefits.

Unfortunately, rather than grant her benefits, the Court remanded the claim back to Met Life for further consideration of the claim.

UNUM Abused Discretion in Terminating Claim

A Federal District Court judge has found UNUM to have abused its discretion in terminating long term disability insurance benefits to a claimant, who was on a disability claim for orthopedic difficulties following a motor vehicle accident. The Court determined that UNUM failed to adequately consider the nature of the claimant's occupational duties, instead simply focusing upon the physical demand requirements of a generalized occupational class. This is a common technique employed by long term disability insurance companies, who focus only upon a physical functional capacity to perform work generally, rather than appreciating the actual work requirements, or considering the non-physical, cognitive requirements of a particular occupation.

The Court noted that UNUM rested its decision solely upon the results of a Functional Capacity Evaluation, a test that only is able to provide general overall functionality, and not any type of occupation specific abilities. Another troubling aspect of UNUM's claim handling was its selective embrace of portions of the report, while ignoring other aspects that were favorable to the claimant. UNUM also sought to impugn the claimant's credibility, another commonly seen approach by long term disability insurance companies. The Court rejected these efforts, noting that the subjective complaints of a claimant must be considered in connection with a long term disability claim.

Soucy v. First UNUM Life Ins. Co.

Another Horror Story of Abuse of Discretion Standard of Review

One of the most challenging aspects of disability insurance claim litigation is that the case can literally turn based upon what legal standard a court chooses to apply. These cases often would be claimant victories if a Judge was decided the case on a de novo standard of review (meaning a full review of the evidence), as opposed to the abuse of discretion or arbitrary and capricious standard (which adjudicates whether the decision is supported by substantial evidence or was erroneous as a matter of law).

Numerous judges have made this point clear in their decisions, and the most recent one highlights this issue. In Curtis v. Kan. City. Life Ins. Co., a decision from the Federal Court in Kentucky, the Court ruled for the insurer, holding that the decision to terminate the claim was not an abuse of discretion. The Court commented however, that If the standard of review was de novo, the Court would be inclined to find for Plaintiff. The Court even stated that it did not like the result, but it was mandated to rule as it did.

The application of this insurer favorable standard of review has lowered the bar of acceptable claim handling, or better stated, has further incentivized insurers to terminate legitimate claims with flimsy claim handling, as there will often be sufficient information for the insurers' lawyers to cite to in litigation to justify the claim handling under this standard of review.

Because of this, claimants must aggressively pursue their appeals with strong evidence of impairment and be able to counter each and every aspect of the claim termination. Our firm has developed a formula for success on appeals that helps us secure good results for clients without having to resort to litigation, where the landscape has become very insurer favorable.

Why Do Courts Reward Insurers who Fail to Comply with ERISA?

One of the more frustrating aspects of ERISA disability insurance practice is where insurers are not taken to task more forcefully where they fail to comply with ERISA and the regulations governing ERISA disability claim. As one example, an insurer is obligated to issue a benefit determination on an appeal of a claimant's adverse benefit determination (a claim denial or claim termination) within a proscribed period of time. This time frame is usually within 45 days, with the potential for a second 45 days if the insurer identifies special circumstances.

However, quite often, an insurer will fail to issue a decision timely. What can be done in such circumstances? Can a claimant file a lawsuit and claim to the Court that the appeal has been "deemed denied"? What will be the effect of this?

Courts throughout the country have wrestled with this concept. Many courts have adopted the "deemed denied" approach, which in essence strips the insurer of whatever level of discretionary authority it may have held, and proceeds to conduct a de novo claim determination. This alteration of the standard of review can result in a markedly different litigation posture, as many cases are lost where the standard of review is considered abuse of discretion or arbitrary and capricious.

However, numerous courts continue to reward insurers who have failed to comply with ERISA and the regulations. Some refuse to alter the standard of review, claiming that the insurer has "substantially" complied, while others have directed that the claim to be remanded to the insurer for further consideration. This has the effect of rewarding an insurer's recalcitrant behavior, and results in further delays to a claimant's ability to secure adjudication of his or her claim (perhaps something the insurer is hoping for, in an effort to forestall).

Thus, depending upon what jurisdiction your claim can be heard, it is important to consider strategy in commencing litigation where an insurer has failed to comply with its obligations under ERISA. If you are faced with such a situation, please do not hesitate to contact us, we can help.