If your claim for disability benefits has been denied, you have a lot of company. The insurance companies don’t like to pay these claims because of the amounts involved, and they have no trouble finding a doctor who is willing to say that even the most severely disabled person can work.
Often the insurance companies deny claims knowing full well that the insured is truly disabled. It is hard for the insured to find a lawyer who understands ERISA and is willing to challenge the insurer. And there aren’t any punitive damages in ERISA, so there is no way for the court to punish the insurer for its wrongful conduct.
The good news is that the insurance company employees who handle these denials appear to be badly overworked (it seems the insurers like to save money on labor costs as well as disability benefits). As such, there are usually mistakes made in every file that can be exploited when the case goes to trial, as you can see from the following:● Wible v. Aetna
Kerilei Oldoerp v. Metropolitan Life Insurance Company
This was the second time we had to try this case. At the first trial the District Court applied abuse of discretion review and found that Ms. Oldoerp was not disabled. Fortunately the law changed to clarify that de novo review applied as the Ninth Circuit subsequently held.
During a retrial with the correct standard of review, we made sure to include evidence that Ms. Oldoerp had been examined by a doctor from the Social Security Administration, who agreed that she was disabled. The District Court allowed the evidence, over MetLife’s objection, and found that Ms. Oldoerp was disabled.
Otilia Sullivan v. The Prudential Insurance Company of America et al.
Otilia Sullivan was a loan officer with a brain tumor that destroyed the vision in one eye and cut off the flow of blood to her brain. Prudential denied her claim for ERISA benefits, in spite of the fact that–as even one of Prudential’s doctors agreed–she was obviously disabled.
What makes this case interesting is that this was a clear case of Prudential denying a claim that it knew was payable. When she first looked at Ms. Sullivan’s claim Prudential’s adjuster agreed that she was disabled. However, because the amount of the claim exceeded a certain “authority limit” the adjuster needed to get the okay from her supervisor. The conversation between the adjuster and her supervisor wasn’t documented, but immediately thereafter Prudential’s adjuster started working up the claim for the denial.
Judge Nunely caught them red-handed. His Order granting judgment for Ms. Sullivan states, among other things, that Prudential’s medical reviews were just a sham to give it cover to deny Ms. Sullivan’s claim.
Prudential’s credibility in this case is further dubious given its utter failure to address the reasons prompting Dr. LoCascio’s further review in its briefing. Accordingly, the Court finds that Nurse Gillis and Dr. LoCascio’s exchange was more likely than not a result-oriented review to find inconsistencies in Plaintiff’s claim and to deny the claim for Prudential’s financial gain.
Daniel Valente v. Aetna Life Insurance Company
Mr. Valente had many, many physical illnesses. He was a cancer survivor and had a damaged heart, breathing problems, reoccurring internal bleeding that caused anemia, and a blown out knee. Yet, relying on a single file review by a cardiologist who wasn’t even competent to comment on most of Daniel’s problems, Aetna denied his claim.
Judge Selna heard the case and had no trouble finding that Aetna’s denial was wrong.
April Cabana v. Reliance Standard Life Insurance Company
Ms. Cabana was in a traffic accident that damaged her spine. She underwent two spinal fusions. After the second fusion x-rays showed it was solid but she continued to experience severe spinal pain.
She underwent a third spinal surgery, where the surgeon found that, in spite of the x-rays, the fusion wasn’t holding. He tried once again to stabilize Ms. Cabana’s spine, but after the surgeries she continued to have the same symptoms.
Reliance cut off Ms. Cabana’s disability benefits, arguing that x-rays after the third surgery showed that Ms. Cabana’s fusion was solid. It ignored that the x-rays also showed this after the second surgery, and also ignored the statements from Ms. Cabana’s physician that you can’t tell this from just an x-ray.
Fortunately Judge Fees was paying attention. He ruled for Ms. Cabana, overturning the denial and Ordering Reliance to pay her benefits.
Brian Hagerty v. American Airlines Long Term Disability Plan
Brian worked as a flight attendant for American Airlines. As is set forth in the Court’s decision, Brian developed HIV and hepatitis C. He was able to work with these conditions for a while, but eventually his physicians put him on disability.
In deciding he wasn’t disabled, the plan made numerous errors. As the Court later found, the Plan improperly demanded “objective proof” of Brian’s fatigue, and said there was no medical cause for the fatigue in spite of the fact that fatigue was a documented symptom of the drugs Mr. Hagerty was taking. And, remarkably, the Plan failed to get Mr. Hagerty’s complete medical records, and then based its denial on the opinions of three file review physicians who didn’t have anything to review.
Stacey Shane v. Albertson’s Inc. Employees’ Disability Plan
Anybody who has any doubts that insurance companies and employee benefit plans sometimes deny claims that are obviously payable should read the findings issued by the Court in this case. Ms. Shane, who had already been found disabled once by the Court, was hospitalized for two months due to acute respiratory failure, septic shock, and multi-organ failure. She went into a coma for a month and her physicians were surprised that she recovered. Less than a year later, in spite of the fact that she was still dangerously ill, the plan decided that Ms. Shane could go back to work. Fortunately, the Judge did not agree.
Patricia Snyder v. UNUM Life Insurance Company of America
I write a lot about the standard of review in ERISA cases. For those who don’t know, unfortunately the Supreme Court allows insurers to place clauses in their policies granting them discretion. This makes it more difficult to prevail at trial; even if the judge thinks the insurance company is wrong, it may still have to find for the insurance company.
The California legislature has helped out by passing California Insurance Code § 10110.6, a law that bans these discretionary clauses. Needless to say, the insurance industry hates this law, and has been trying out all sorts of arguments as to why the court’s shouldn’t apply it.
Fortunately, most of the lower court decisions have been to uphold § 10110.6. I participated in one of these decisions, in Snyder v. UNUM. A copy of the judge’s Order that § 10110.6 applied to void the discretionary clause in UNUM’s policy is here.
I have been asked to assist on the appeal from one of the few adverse lower court decisions about § 10110.6, in Orzechowski v. The Boeing Company Long Term Disability Plan, 8:12-cv-01905-CJC-RNB. That case is fully briefed at the Ninth Circuit Court of Appeals, as Case No.: 14-55919.