A Medley of Interesting Disability Cases: Reviewing 2013 Cases

Another year has passed, and what better way to celebrate than by taking a look at the various interesting disability cases that have been issued during that time. This year they are collected in the Medley.

In this booklet I have summarized a couple of dozen individual and group disability opinions that were issued by both state and federal courts primarily over the 2013 calendar year. As is the case with each of my yearly collections, the cases included are meant to be illustrative of how judges resolve various issues, but those cases are not necessarily the only recent cases pertinent to each issue discussed. I have included both DI and LTD cases, with a focus on substantive over procedural issues (though both are included).

The format of this year’s Medley is the same as that of past collections: I have summarized the pertinent facts of each case and set forth how the court ruled on certain of the issues raised. At the conclusion of each case summary, I have provided my personal thoughts in a “Lessons Learned” section.

For those keeping track, this sixth booklet is the latest in a series that includes: (1) the Potpourri (2008 cases); (2) the Cornucopia (2009 cases); (3) the Smorgasbord (2010 cases); (4) the Cavalcade (2011 cases); and (5) the Ensemble (2012 cases). I am hopeful that collectively they provide a gestalt-ish “feel” for how courts seem to be resolving the issues that we all face. I am also hopeful that these summaries provide helpful guidance to those in the industry, whether they be making the initial decisions (the examiners and others working for disability carriers and third party administrators), giving legal advice about those decisions (in house counsel), defending those decisions (outside counsel), or performing other functions. We can all learn from the experience of the litigants whose disputes were resolved in these cases.

I would like to thank very much Natalie Ferrall, who gave significant time and great insight in assisting me with this publication.

If you would like a copy of this year's publication, or any prior year, please email me here.

 

Early Bird Registration for Definitive Disability Conference Expire on 1/31/2013

Early bird registration discounts for the inaugural Definitive Disability Conference are set to expire on January 31, 2013. Fax or e-mail your registration form in today to lock in your discounted rates. 

About the Definitive Disability Conference (DDC)

On May 16-17, 2013, Barger & Wolen will host the inaugural Definitive Disability Conference in Boston, an industry conference designed for in-house counsel and experienced claim personnel. The conference will be chaired by Martin Rosen, who heads Barger & Wolen’s Disability, Life and Health practice group.

The primary objectives for the Definitive Disability Conference are: (1) to create a conference focused solely on disability insurance issues; (2) to design the conference with the experienced disability insurance professional in mind; (3) to limit the conference to industry-related personnel and their counsel; and (4) to ensure that the conference provides great value for the price.

To accomplish these goals, Marty has secured speakers from the following companies, law firms and other entities:

  • Ameritas
  • Berkshire Life Insurance Company of America
  • Cigna
  • Colonial Life Insurance Company
  • CSC Financial Services Group
  • Disability Management Services, Inc.
  • First Mediation Corporation
  • Funk & Bolton, P.A.
  • Kunz, Plitt, Hyland & Demlong PC
  • Metropolitan Life Insurance Company
  • Mutual of Omaha Insurance Company
  • Nawrocki Smith LLP
  • Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
  • Shipman & Goodwin LLP
  • Shutts & Bowen LLP
  • Sun Life Financial
  • Unum Group

We are very excited about the inaugural conference and look forward to seeing you in Boston next spring.

For more information, please click on the following hyperlinks:

Ÿ         Definitive Disability Conference

Ÿ         Conference Program and Agenda

Ÿ         Speakers

Ÿ         Sponsorship Opportunities

Ÿ         Fees

Ÿ         Registration Form

Ÿ         Hotel

Ÿ         FAQs

Barger & Wolen Launches Disability Insurance Industry Conference

We at Barger & Wolen have exciting news to share with you.

On May 16-17, 2013, we will host the inaugural Definitive Disability Conference in Boston, an industry conference designed for in-house counsel and experienced claim personnel. The conference will be chaired by Martin Rosen, who heads Barger & Wolen’s Disability, Life and Health practice group.

The primary objectives for the Definitive Disability Conference are: (1) to create a conference focused solely on disability insurance issues; (2) to design the conference with the experienced disability insurance professional in mind; (3) to limit the conference to industry-related personnel and their counsel; and (4) to ensure that the conference provides great value for the price.

To accomplish these goals, Marty has secured speakers from the following companies, law firms and other entities:

  • Ameritas
  • Berkshire Life Insurance Company of America
  • Cigna
  • Colonial Life Insurance Company
  • CSC Financial Services Group
  • Disability Management Services, Inc.
  • First Mediation Corporation
  • Funk & Bolton, P.A.
  • Kunz, Plitt, Hyland & Demlong PC
  • Metropolitan Life Insurance Company
  • Mutual of Omaha Insurance Company
  • Nawrocki Smith LLP
  • Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
  • Shipman & Goodwin LLP
  • Shutts & Bowen LLP
  • Sun Life Financial
  • Unum Group

We are very excited about the inaugural conference and look forward to seeing you in Boston next spring.

For more information, please click on the following hyperlinks:

Ÿ         Definitive Disability Conference

Ÿ         Conference Program and Agenda

Ÿ         Speakers

Ÿ         Sponsorship Opportunities

Ÿ         Fees

Ÿ         Registration Form

Ÿ         Hotel

Ÿ         FAQs

 

Ninth Circuit Clarifies Application of Abuse of Discretion Review When Insurer Has a Conflict of Interest

The Ninth Circuit Court of Appeals in Montour v. Hartford Life & Accident, 582 F.3d 933 (9th Cir. 2009), adopted a new standard of reviewing ERISA abuse of discretion cases where the insurer has a conflict of interest. The court held that a “modicum of evidence in the record supporting the administrator’s decision will not alone suffice in the face of such a conflict, since this more traditional application of the abuse of discretion standard allowed no room for weighing the extent to which the administrator’s decision may have been motivated by improper considerations.”

Robert Montour was a telecommunications manager for Conexant Systems, Inc. His employer provided him with a group long-term disability plan governed by ERISA. Hartford was both the insurer and claims administrator of the plan. The plan granted Hartford discretionary authority to interpret plan terms and to determine eligibility for benefits.

Montour applied for and received disability benefits, initially for an acute stress disorder, in 2003. In 2004, Montour consulted an orthopedic surgeon, Dr. Kenneth Kengla, about knee and back pain and subsequently underwent surgery. Dr. Kengla diagnosed Montour with degenerative changes in both areas and notified Hartford that Montour was suffering from physical disability which prevented him from returning to the labor force. Dr. Kengla listed numerous restrictions on Montour’s physical activities.

In November and December 2005 Hartford conducted surveillance on Montour over the course of four days. Video footage from this surveillance depicted Montour driving his car along with other activities. Shortly thereafter, a Hartford investigator conducted a personal interview with Montour at his home, during which Montour listed a “bad back, [an] arthritic right knee, and sleep apnea” as the “disabling medical condition(s)” preventing him from returning to work. He also described an inability to concentrate, which he attributed to the medication he must take to treat his “constant pain.” Montour acknowledged that the surveillance video footage accurately depicted his level of functionality.

In May 2006 a Hartford nurse case manager submitted a letter to Dr. Kengla indicating that Montour was capable of performing “sedentary to light” work and soliciting their agreement. Dr. Kengla indicated that he disagreed with Hartford’s conclusions, citing Montour’s persistent orthopedic symptoms and physical restrictions.

In July 2006 Hartford hired a consulting physician, Dr. Gale Brown, to conduct a file review. Dr. Brown concluded that medical evidence supported the existence of a lower back condition but that Dr. Kengla’s offered restrictions were excessive. He acknowledged that the medical evidence supported Montour’s chronic pain but found that Montour was nevertheless capable of working full-time with modest restrictions, such as changing positions every thirty to forty-five minutes.

After Hartford enlisted a vocational rehabilitation expert to compile an Employability Analysis Report which concluded that Montour was capable of working in a high-level managerial capacity in five different fields, in August 2006 Hartford denied his claim. Montour appealed this decision and included a vocational appraisal report which concluded that Montour was “not employable in any setting” and that Hartford’s decision was based on numerous mistakes, including a disregard for the fact that the Social Security Administration (SSA) considered Montour to be “totally disabled.”

In response, Hartford hired a physician to conduct a second file review. The physician reviewed Montour’s records for evidence of a physical condition that would preclude sedentary work and, like Dr. Brown, found none. He noted in particular a lack of objective, clinical data demonstrating the extent to which Montour’s pain impacted his functionality. He also noted that Montour’s activities depicted on the surveillance videos exceeded the activity requirements of a “sedentary” job.

In light of concerns raised in the vocational appraisal report, Hartford requested a vocational specialist to conduct an Employability Analysis Report addendum, which reached the same conclusion as the initial Employability Analysis Report regarding the sedentary nature and thus the feasibility of the five proposed managerial positions. In February 2007, a Hartford appeal specialist affirmed the company’s previous decision to terminate Montour’s benefits. In a bench trial, the district court rendered its decision in favor of Hartford, upholding its denial.

In reversing the district court, the Ninth Circuit first explained that when an ERISA plan grants the administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan, the court reviews the decision for abuse of discretion. The court agreed with the district court that the abuse of discretion standard applied and that Hartford had a conflict of interest. However, the appeals court criticized the district court’s application of the “clear error” test, explaining that a reviewing court must also take into account the administrator’s conflict of interest as a factor in the abuse of discretion analysis. The appeals court concluded that the district court’s decision did not adequately balance the conflict factors. Accordingly, the appeals court proceeded to do so.

The appeals court gave a comprehensive description of the “signs of bias” it found were exhibited by Hartford throughout the decision-making process. These included overstatement of and excessive reliance upon Montour’s activities in the surveillance videos Hartford’s decision to conduct a paper review rather than an “in-person medical evaluation;” Hartford’s insistence that Montour produce objective proof of his pain level; and Hartford’s failure to deal with and distinguish the Social Security Administration’s contrary disability decision. The appeals court also noted Hartford’s “failure to present extrinsic evidence of any effort on its part to ‘assure accurate claims assessment.’”

The appeals court concluded that Hartford’s bias had infiltrated the entire administrative decision-making process, leading the court to accord significant weight to the conflict of interest. Weighing all of the factors together, the court concluded that Hartford’s conflict of interest improperly motivated its decision to terminate Montour’s benefits. The court reversed and remanded the matter for entry of judgment in favor of Montour and for reinstatement of long-term disability benefits.