Abell's Kentucky Law Blog

Rheumatoid Arthritis, Osteoarthritis and Fibromyalgia Support Disability Finding

Rheumatoid arthritis, osteoarthritis and fibromyalgia and the cumulative effects they inflict supported a finding of disability and entitlement to disability insurance benefits ruled the Fourth Circuit Court of Appeals recently in DuPerry v. Life Insurance Company of North America.

The court's decision comes nearly 4 1/2 years after the claim was submitted initially. The decision is a textbook illustration of a disability insurance companies efforts to "cherry pick" from the medical records and use those cherry-pick tidbits to try and justify denial of the claim.

The insured, Rebecca DuPerry, work as a payroll and benefits clerk for the Railroad Friction Products Corporation. Through her employment she had a long-term disability insurance policy both administered and underwritten by the Life Insurance Company of North America (LINA). On October 16, 2006, she filed a claim for disability insurance benefit, claiming that she was disabled because of her rheumatoid arthritis, osteoarthritis and fibromyalgia. She supported medical records as well as opinions and statements from her primary care physician in treating rheumatologist attesting to her limitations and to her occupational disability. Her claim was turned down. The insurance company claimed that it did not have enough diagnostic testing to show the severity of DuPerry's illness.

DuPerry appealed her claim's denial and submitted nearly 400 pages of documents in support of her claim. These included letters from both her treating rheumatologist and her primary care physician, a letter from her former supervisor describing her work ethic as "unsurpassed," a DVD filming her at home, supporting statements from several relatives, her prescription medication list and evidence showing her dependence on family for most common, every-day household chores and her need for assistance simply to walk or move around. Nevertheless, her claim was again denied.

DuPerry appealed again, this time submitting additional records from her primary care physician, her treating rheumatologist, another doctor and a second DVD documenting her condition. The insurance company referred her file for review to Dr. Marc Levesque of the Duke University Medical Center.  And again the claim was denied.

Having exhausted the claims appeal process, DuPerry filed suit.  The federal district court ruled that the disability insurance company had wrongly denied the claim. This time the insurance company appealed.

The Fourth Circuit viewed the insurance company's attempt to rely on isolated pieces of evidence as unreasonable:

   Initially, we note, as a global matter, that the pieces of evidence LINA identifies 10 to show, first, that DuPerry was able to perform, for relatively brief periods, certain task involved in sedentary work and, second, that certain individual diseases and physical problems that afflicted her were not sufficient, in isolation, to render her unable to do such work. However, to perform her job, DuPerry, obviously would be required to do much more than perform a small subset of her duties for a relatively short duration. Moreover, in so doing, she would have to overcome the combined effect of all of the problems caused by her diseases, not just a select few.

The court was also unsympathetic to Dr. Levesque's skepticism regarding the debilitating effects of DuPerry's pain, remarking that "DuPerry produce the only types of evidence a claimant in her situation could produce, her own description of the severity of her subjective symptoms, video showing how she moved in her condition, and her treating physician's opinions that the pain and fatigue rendered her unable to work." The court further noted that the policy contained no provision that precluded DuPerry from relying on her subjective complaints of pain as evidence supporting her disability claim.

The Fourth Circuit also approved the award of attorney's fees quoting approvingly from the District Court that LINA "patently abused the claim review procedure" by "overlooking substantial evidence from [DuPerry's] treating physicians that she was unable to work" and instead relied on "minor inconsistencies in and disingenuous interpretations of these physicians reports." Also, there was value in awarding attorneys fees as a deterrent effect to encourage plan administrators to inquire more meaningfully and fairly and disability claims that rely on subjective complaints of pain.

Robert L. Abell
www.RobertAbellLaw.com

Complex Regional Pain Syndrome and Disability Benefits

Complex Regional Pain Syndrome (CRPS) can have severe and debilitating effects. Its cause is unknown and its treatment problematic, usually a medication regiment.  CRPS also present special problems and issues for claimants for disability insurance benefits as shown in the recent case, Holmstrom v. MetLife, No 09-2173 (7th Circuit, August 4, 2010). The case also illustrates the maneuvers that disability insurance benefits companies will undertake to avoid paying benefits on disability insurance claims.

Robert L. Abell
www.RobertAbellLaw.com

Only "Some Degree of Success" Necessary for Award of Attorney's Fees Under ERISA, Supreme Court Rules

The Supreme Court has ruled in Hardt v. Reliance Standard Life Insurance Company, No 09-448 (May 24, 2010), that only "some degree of success" is necessary for an award of attorney's fees under ERISA on a disability insurance benefits claim.

ERISA, at 29 U.S.C. sec. 1132(g)(1), provides, in pertinent part, that "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party."  Given the absence of any statutory reference to a "prevailing party," the Court quickly and easily held that a "fee claimant need not be a 'prevailing party' to be eligible for an attorney's fees award" under sec. 1132(g)(1). 

A fee claimant, the Court held, "must show 'some degree of success on the merits' before a court may award attorney's fees under" sec. 1132(g)(1).  This threshold is satisfied "if the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether a particular party's success was substantial or occurred on a central issue." 

The petitioner, Hardt, met this threshold because she had successfully persuaded the district court that she had not been allowed a proper administrative review of her claim, which when remanded to the plan administrator resulted in the insurance company agreeing that she was entitled to benefits.

Robert L. Abell
www.RobertAbellLaw.com

Hartford's Conflict of Interest Causes Reversal Of Disability Benefits Termination

Most disability insurance companies have an inherent conflict of interest: they both administer the benefits plan through which the disability insurance policy is available to the employee and pay any benefits that they deem an employee eligible to receive. As such, they stand to gain from every denied claim. The importance of this conflict of interest is illustrated by the recent decision of the United States Court of Appeals for the Fifth Circuit in Schexnayder v. Hartford Life, No. 08-30538 (March 12, 2010)

The claimant-employee, Schexnayder, worked for over 20 years as a chemical operator therefore debilitating back problems made surgery necessary and the complications that followed left him disabled. Hartford, which was the benefit plan's administrator and insurer, paid him disability insurance benefits for 24 months, conceding that he was disabled from his "regular occupation."  During these 24 months, Schexnayder was found by the Social Security Administration to be totally disabled from any occupation and was awarded Social Security disability benefits. As a result, he had to repay Hartford some of the benefits that Hartford had paid to him. Nonetheless, Hartford ceased paying Schexnayder and asserted that its experts said he was not disabled from any occupation. He appealed unsuccessfully and then filed suit. Hartford never addressed the Social Security decision finding Schexnayder disabled from any occupation in its decisions terminating his benefits.

The court first noted, in accordance with the Supreme Court's decision in Met Life v. Glenn, 128 S.Ct. 2343 (2008), that Hartford's conflict of interest was but one factor taken into consideration on the issue of whether Hartford had abused its discretion in terminating Schexnayder's disability insurance benefits. Second, the court noted that Hartford's conflict of interest would be given more weight "because Hartford's decision here suggests procedural unreasonableness." The court then explained the import of the decision by the Social Security Administration finding Schexnayder totally disabled:

The SSA determined that Schexnayder is fully disabled and unable to perform any work, but Hartford did not address the SSA award in any of its denial letters. Because Hartford failed to acknowledge an agency determination that was in direct conflict with its own determination, it's decision was procedurally unreasonable. ... Having benefited financially from the governments determination that [Schexnayder] was totally disabled Hartford should at least acknowledged SSA award.

This procedural unreasonableness "justifies the court in giving more weight to [Hartford's] conflict"because it suggests financial bias may have affected Hartford's decision. We also consider the failure to address the SSA's decision in it own right. Although substantial evidence supported Hartford's decision, the method by which it made the decision was unreasonable, and the conflict, because it is more important under the circumstances, acts as a tiebreaker for us to conclude that Hartford abused its discretion.

Robert L. Abell
www.RobertAbellLaw.com