Arizona Court Reverses Provident’s Denial of ERISA Disability Benefits in Chronic Fatigue Syndrome Case

A district court found in favor of a CFIDS ERISA claimant, and against Provident’s conclusion that the claimant could perform “any occupation” based on its Functional Capacity Evaluation (FCE), surveillance, and the fact that the claimant worked after she began suffering from Chronic Fatigue Immune Dysfunction Syndrome. As seems to be the trend, this Court recognized that Provident’s FCE conclusions were invalid based on the unknown amount of time in which the claimant was evaluated, the observations of the claimant laboring to complete tasks and often needing rest periods, and the Court’s general lack of understanding of how the results of such testing can be translated into the ability to perform sedentary work on a sustained basis. With regard to the surveillance, the Court found that observations of sporadic activities were consistent with Chronic Fatigue Syndrome and did not establish that the claimant could do sedentary work on a sustained basis. Quite refreshingly, the Court also failed to conclude that because the claimant worked with her CFS for a time, she was not prevented from working subsequently due to such illness. Rather, the Court found instructive the difficulties she was having due to working and the fact that she was forced to modify her work schedule as a result, as well as evidence from her co-workers and supervisor that reflected memory problems, the need to work from home and days she could not come to work at all. While this case was determined under a de novo standard, a more favorable ERISA claimant standard that the more common arbitrary and capricious standard, the Court’s analysis on these issues is helpful. Perryman v. Provident, February 18, 2010.

Florida Court Denies MetLife’s Counterclaim for SSDI Overpayment in ERISA Long Term Disability Claim

Existing ERISA law regarding equitable liens provides that only an “identifiable fund” of money can be recovered since ERISA is an equitable statute and does not allow recovery of pure money damages. Based on such ERISA tenet, a Middle District of Florida court denied MetLife’s claim for reimbursement of an overpayment to a long term disability claimant based on the claimant’s SSDI award which offset his long term disability benefits under the subject disability policy. The Plaintiff filed an affidavit stating all the money had been spent and thus no identifiable fund existed. Herman v. MetLife, December 29, 2009

Court Punts in the Face of CIGNA’s Disregard of LTD Claimant’s SSDI Award

An Illinois district court, after remand by the Seventh Circuit, recognized that CIGNA’s disregard of an ERISA claimant’s award of SSDI benefits, after providing an advocate to the long term disability claimant to secure the same, added weight to the notion that CIGNA was operating under a conflict of interest. The court however, distinguished the case from others because the claimant had been denied SSDI benefits twice before being approved months later, and because CIGNA performed an independent medical evaluation which the court believed reflected “safeguard procedures to minimize conflict.” Thus, instead of overturning CIGNA’s long term disability claim determination as being influenced by its conflict of interest, the court simply remanded the case back to CIGNA for explanation of its disagreement with the SSA’s decision, as failure to provide such explanation was inconsistent with ERISA’s requirement that specific and understandable reasons be communicated for denial. Raybourne v. CIGNA, February 8, 2010

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