Insurer Abused Discretion by not Considering Medical Report Created After Date of Disability
Fontana v. The Guardian Life Insurance, 2009 WL 73743 (N.D. Cal. January 12, 2009)
Fontana, a software product manager, sued The Guardian Life Insurance Company for denying her claim for long-term disability benefits under an ERISA-governed plan. Guardian gave two explanations for its claim decision: (1) that a medical report based on examination conducted five months after the date the operative definition of disability changed cannot demonstrate Fontana’s disability; and (2) that Fontana’s activities as a graduate student dispute her claim. On cross motions for summary judgment on the Administrative Record, the Court ruled that both of these reasons constituted an abuse of discretion, and remanded the matter to Guardian for a new determination of Fontana’s administrative appeal.
As part of her administrative appeal, Fontana provided Guardian with a medical report prepared after a December 2006 examination, five months after the date that Fontana had to be disabled from “any occupation” to receive benefits. Guardian asserted that the date of the report rendered it irrelevant; however, the Court ruled that “[m]edical reports made after the period of disability may or may not be relevant to determine if a beneficiary was disabled at an earlier date, but they are not irrelevant solely because of their date.” In other words, while an insurer may have a good reason not to follow a medical opinion rendered after a particular date, the fact that the report was prepared after the relevant disability date cannot be the sole reason for disregarding the report. The Court further ruled that Guardian abused its discretion by basing the denial, in part, on Fontana’s status as a graduate student, because they failed to conduct an investigation into her schoolwork, and, in fact, overlooked evidence that Fontana was receiving accommodation from the school and retained a note taker for assistance.
In light of the decision that Guardian abused its discretion, and citing to Pannebecker v. Liberty Life Assurance Co., 542 F.3d 213 (9th Cir. 2008), the Court remanded the case back to Guardian for determination of plaintiff’s administrative appeal of the decision to terminate her claim for long-term disability benefits.
