Court Finds that LINA Abused its Discretion in Denying Long Term Disability Benefits But Will Hold an ERISA Trial

Yesterday, a Court out of Missouri found that Life Insurance Company of North America (LINA) was arbitrary and capricious in denying the Plaintiff’s long term disability claim due to an unreasonable misinterpretation and selective review of the medical evidence. Specifically, LINA ignored important aspect of the Plaintiff’s Functional Capacity Evaluation that that reflected she was unable to do a sedentary job, which the court found “suspect”, and grossly misinterpreted neuropsychological testing to reveal only a mild cognitive decline that would not prevent the claimant from working. The Court also found that LINA engaged in selective review of the medical records citing only those that were favorable to its denial of benefits. While the Court denied LINA’s request to remand the claim back to LINA for further administrative review, it also refrained from issuing summary judgment due to remaining genuine issues of material fact. Thus is seems the case will go forward to an ERISA bench trial, which is typically a trial on the “administrative record”. The claimant suffered from osteoarthritis and fibromyalgia. Dearman v. Dial Corporation

First Circuit Finds Sporadic Activities Observed Via Surveillance Supports Denial of Long Term Disability- Fibromyalgia Claim

On January 14, 2010, the First Circuit upheld Liberty Life Assurance Company of Boston’s termination of a fibromyalgia claimant’s long term disability benefits based on multiple rounds of surveillance that showed sporadic activities over the course of several days. Although, the Plaintiff argued that such activity was not inconsistent with her position that she was unable to function normally most of the time versus all of the time, the Court noted that it has permitted ERISA plan administrators to rely on this type of “snapshot” evidence in the past. The Court also found that specific activities seen on the surveillance such as bending and kneeling were inconsistent with Plaintiff’s abilities as reported by her physician in a Functional Capacity Form. Even more significant to the Court, however, was that the Plaintiff was observed going to large stores such as Home Depot and Walmart, when she had previously noted that she could not go to malls and limited her shopping to small stores. The court acknowledged that Walmart and Home Depot are not malls, but it held that it was not an abuse of discretion for Liberty to find that the Plaintiff’s ability to navigate large stores contradicted her claim that her fibromyalgia required her to frequent small stores. Cusson v. Liberty

Long Term Disability Denial Upheld Due to Failure to Provide Objective Evidence During the Elimination Period

A Regional Quality Insurance Nurse, responsible for ensuring that all nursing practice standards at multiple facilities met with state and federal guidelines, was denied disability benefits by Unum despite results of neuropsychological testing that showed gross slowing of cognitive skills and a mild reduction in auditory verbal memory, organization and word finding. A district court out of North Carolina upheld Unum’s determination in large part because the evaluation was performed 2 months after the initial denial of benefits and 7 months after the claimant stopped working, and not in the “relevant time period”/elimination period in which the Plaintiff had the burden of proving the “continuous” inability to perform her occupation. The Court noted that while an Attending Physician Statement provided during the elimination period noted cognitive problems, such Statement seemed to be based only on the claimant’s subjective complaints. Nicely v. Unum, December 23, 2009

The Ninth Holds Hartford’s Claim Tactics Show its Conflict of Interest Improperly Motivated Long Term Disability Determination

The Ninth Circuit reversed a long-term disability denial by Hartford Life Insurance Company based on its “over-reliance” on surveillance in which it “strung together a laundry list of discrete activities over the course of four days” thereby suggesting that the Plaintiff would be capable of performing such activities throughout the day. The Court noted that the ability to perform sedentary work “in bursts” did not amount to the ability to sustain a full time occupation. The Court also criticized Hartford for glossing over the difficulties that were observed in the surveillance, such as stiffness and slow movement, instead making the conclusion that the claimant had no limitations or physical distress. The Court opined that such overstatements about the observed activity then improperly influenced the claimant’s physician when he was asked to respond to such surveillance. Also at issue with the Court was Hartford’s “paper” review versus an in-person” exam, not because such exam was required by the Plan, but because the paper review, along with the over reliance on the surveillance, reflected signs of bias. The Court also disagreed with Hartford’s rationale for denial concerning the Plaintiff’s lack of further degeneration of his degenerative back condition, and noted that after paying the claimant for 2 years, one would expect benefits to be terminated if his condition improved, and not due to the lack of progression. The Court also believed that Hartford wrongfully disregarded the finding of disability by the Social Security Administration without comparing and contrasting it, after reaping the benefit of the dollar-for-dollar offset. Montour v. Hartford

Alabama Judge Stands Up to MetLife

In a very enlightened and forthright opinion, Judge Acker, from the northern district of Alabama, recognized several common insurance company disability claim tactics as unlawful, or in the context of ERISA, arbitrary and capricious. With a more critical eye of MetLife’s conflict of interest as payor and decision-maker of claims than most courts, the Court pointed to MetLife’s failure to have the claimant personally examined as well as the failure to make inquiries to its medical reviewers with regard to how stress effects the claimant’s coronary artery disease, despite stress being the main concern of the claimant’s treating physicians, as arbitrary and capricious behavior. Overall, the opinion is eloquent, brave, refreshing and is certainly worth a read for anyone who needs hope in tackling ERISA in our current claimant-unfriendly (but gradually improving) environment. Blankenship v. MetLife, decided December 30, 2009