I previously blogged about the 10th Circuit’s decision in Murphy v. DeLoite & Touche and the permissible scope of discovery in claims governed by the Employee Retirement Income Security Act (“ERISA”). (Click here for prior post.) Although many of our local judges in the federal court in Colorado previously allowed at least some discovery sought on behalf of our clients, the gate has clearly been pushed further open. More recently, this office received favorable orders in Erickson v. Lincoln National and Bottoms v. Liberty Life. The decision issued by Magistrate Judge Shaffer in the Bottoms case has been published by Westlaw at 2011WL6181423.

In this case, Liberty Life argued that Plaintiff was not entitled to conduct discovery. Plaintiff’s discovery request sought information concerning the insurance company’s conflict of interest in rendering ERISA claim decisions, information concerning bias of the reviewing physicians retained by Liberty Life to perform a paper review of Plaintiff’s medical records, the incentive pay plans of Liberty Life employees who rendered the claim decision, and related information. Ultimately, the judge concluded Plaintiff was entitled to obtain much of this information from the insurance company.

Finally, after years of pushing this Issue, which required extensive briefing and attendance at numerous hearings, our clients’ rights to seek discovery under our federal rules of civil procedure on behalf of our clients is becoming more and more clear. Such discovery “battles” should be far less contentious in the future. Disability insurance carriers (such as Unum, Hartford, MetLife, Liberty Life, CIGNA, Sun Life, Prudential, Standard, and the others) will be required to produce information which should have always been readily available to Plaintiffs whose benefits have been denied under this biased and tainted method employed by disability carriers in rendering decisions. Judge Shaffer made it clear at the hearing and in his written decision that the days of insurance companies opposing all forms of discovery in these types of cases are over.

Other Limiting Conditions means chronic fatigue conditions (such as chronic fatigue syndrome, chronic fatigue immunodeficiency syndrome, post-viral syndrome, limbic encephalopathy, Epstein-bar virus infection, herpes virus type 6 infection, or other myalgic encephalomyelitis), any allergy or sensitivity to chemicals or the environment (such as environmental allergies, sick building syndrome, multiple chemical sensitivity syndrome, or chronic toxic encephalopathy), chronic pain conditions (such as fibromyalgia, reflex sympathetic dystrophy, or myofacial pain), carpal tunnel or repetitive motion syndrome, temporalmandibular joint disorder, crainomandibular joint disorder, arthritis, diseases or disorders of the cervical, thoracic, or lumbosacral back and its surrounding soft tissue, and sprains or strains of joints or muscles.

Are you kidding me!? Why doesn’t the insurance policy just say “we will pay you a monthly benefit for your disability, but you should be aware that we don’t actually cover most disabling disabilities or conditions.”

The employer who purchased this policy on behalf of its employees should have paid better attention to the product it was buying. This particular limiting provision would rule out the payment of benefits beyond 24 months for perhaps 30-40% of the individuals who contact our office suffering from a disabling illness, condition, or disease. This particular employer likely had no idea this type of provision had been included in its policy. Claimants seeking disability benefits under a group policy have a difficult enough time actually receiving those benefits given the protections afforded to employers (not employees as intended) and insurance companies by the Employee Retirement Income Security Act (“ERISA”). Such onerous provisions make it that much more difficult. Frankly, such a policy rises to the level of being illusory – meaning the policy promises a benefit that really isn’t there.

Please feel free to contact our office if you require assistance with your Colorado PERA disability retirement claim or have received a denial of benefits from either Standard Insurance Company or Unum for which you most likely need to file an internal appeal with either company. Click here if you would like to read more about the Colorado PERA Disability Retirement Program.

Signed, Shawn McDermott

As counsel for Plaintiff in the class action lawsuit filed by our client, Tracey Lawless, we have filed a motion to certify the case as a class action under Rule 23. The issue is now fully briefed and awaiting the court’s decision. Perhaps more importantly, we have also filed our dispositive motion and extensive legal brief asking Judge Hood to agree with our position that the “second prong” of the short term disability (STD) definition found in the policy must beremoved as it is not supported by and is entirely inconsistent with the PERA statute defining when a PERA member is entitled to STD payments. As of earlier this week, the dispositive motions filed by all parties are also now fully briefed. We simply await the Judge’s determination.

As a reminder to all who may be affected, if you believe your case fits within this proposed class or if you have any other questions regarding your Colorado PERA disability retirement claim or denial, you can always contact the disability insurance lawyers at our office for an initial, free consultation.

In presenting an internal appeal to Standard Insurance on behalf of the client, we asserted that Standard Insurance had breached its fiduciary duty to our client and that the legal theories of waiver and promissary estoppel prevented Standard from refusing to reinstate benefits, as our client had relied upon the previous misrepresentations. Ultimately, and perhaps because Standard Insurance did not want to litigate this matter in court, the insurance company took the correct action and decided to reinstate the disability benefits.

The appeal to Standard Insurance was prepared by attorney Heather Petitmermet and legal assistant MarySue Kern. Our office handles a wide variety of insurance denial claims. The majority of this work is in the arena of disability income replacement and life insurance benefits. If you are a resident of Colorado, or any state for that matter, and would like to have your denied claim reviewed by a disability insurance lawyer at the Law Office of Shawn E. McDermott, feel free to contact us by clicking here, and completing our contact form of by calling (303) 964-1800.

Most disability policies will pay benefits if the insured is unable to perform the material or substantial duties of their “own occupation.” However, after two years, the typical group policy definition changes such that an insured must then prove an inability to perform “any occupation.” Most waiver of premium provisions found in life insurance policies define disability as the inability to perform “any occupation.”

If you are pursuing a disability claim under a policy of insurance which you have purchased on your own or have by virtue of your employment, you will want to check your life insurance policy to determine if there is such a waiver of premium provision. If so, and you meet the conditions, you will need to submit a separate claim to the life insurance company (which is often the same company as the disability insurance carrier but not always) for the waiver of premium provision to apply. There are usually time limits on such applicaton.

Please feel free to contact our office if you have any questions regarding such claims or if your life or disability insurance claim has been denied.

The amended complaint in Lawless v. Standard and PERA, pending in the Denver District Court, seeks certification of a class whose members are defined as those PERA members whose claim for short term disability benefits have been denied even though Standard Insurance has determined that such individual is incapable of performing the essential functions of their “own job.” As such, these individuals meet the statutory definition of short term disability found in the PERA law. However, PERA has adopted a Rule and purchased a disability policy from The Standard which does not comply with this law. Instead, it adds a “second prong” or additional requirement that the PERA member also prove the inability to earn 75% of their pre-disability earnings in some other job based upon their education, training and experience. This second prong in the definition is not authorized by statute. We intend to immediately request the court to rule on this legal question so as to hopefully obtain benefits for our current clients and other members of the class. We also hope to obtain class certification in an expedited manner.

Please feel free to contact the Law Office of Shawn E. McDermott if you have a denied PERA disability retirement (short term disability or disability retirement) claim by either Standard Insurance Company or the new PERA disability program administrator, Unum Insurance Company, and if you believe you fit the description of the class of PERA members whose benefits have been wrongfully denied. Our phone number is (303) 964-1800.

The inclusion of discretionary clauses generally leads to a denied claim being reviewed by a judge in a deferential manner if the claim is governed by ERISA. When discretion to render a claim exists with the plan administrator or insurance company, the claimant whose claim has been denied must demonstrate that the insurer abused its discretion in rendering the claim determination, or that the insurer acted in an “arbitrary and capricious” manner. Many states have recognized the existence of a conflict of interest that exists when an administrator or insurer who is required to pay the benefit is also the party rendering the benefit determinations. Any logical observer would agree that a conflicted entity’s decision should not be granted deference by the court. At a minimum, the aggrieved claimant should have the opportunity to have his or her claim reviewed by the court without deference being granted by the judge to the party with the conflict of interest. There are now more than 20 states which have enacted laws or passed rules banning these discretionary clauses.

In analyzing an ERISA disability, life or health insurance claim denial, one of the first steps we undertake is to determine whether discretion has been granted to the plan’s administrator, and, if so, what steps can be taken to combat this very unfavorable standard of review which flows from the grant of such discretion. To learn more about the standard of review in ERISA-governed claims, visit our website here.

In the claim against LINA, Mr B was originally rendered disabled by bladder cancer which had gone into remission. However, at the time of the termination of long term disability benefits, he began suffering from severe pulmonary symptoms and was diagnosed with COPD and emphysema. He underwent a series of pulmonary tests, physical therapy and pain management to treat his disabling conditions.

Attorney Shawn E. McDermott and Heather Petitmermet filed an appeal of behalf of our client in October 2010. In our appeal, we were able to illustrate to the insurance company that our client was indeed disabled and unable to perform the material and essential duties of his occupation.

LINA disregarded the appeal and we were eventually required to file suit on behalf of our client. Because LINA’s decision was not timely and therefore its appeal procedures had not adhered to the required deadlines, any deference to which the insurer may have been entitled would likely have been lost and the court would have provided a more favorable standard for reviewing the claim termination. Whether this was the reason, or because LINA actually reached the correct decision upon receiving the appeal submitted by our office, shortly after our filing the lawsuit LINA reversed its position and determined that our client was indeed entitled to benefits. Our client is now receiving his monthly disability benefits from LINA.

In the claim against Hartford Life & Accident Insurance Company Ms. H suffered from the following conditions: diffuse myofascial pain/fibromyalgia, cervical and thoracic spine spondylosis, fatigue, restless leg syndrome, osteoarthritis and degenerative disease of the knee, adult-onset diabetes mellitus, obstructive sleep apnea, pulmonary hypertension, patent foramen ovale, cerebrovascular accident, vitamin D deficiency, chronic pain syndrome, spinal stenosis/arthritis, epiploic appedagitis, hypercholesterolemia, diverticulitis, depression, and anxiety, among others. She underwent physical therapy, operative arthroscopy of both knees, surgical intervention to repair her rotator cuff, transthoracic echocardiogram, colonoscopy, overnight pulse oximetery study, and an extensive medication regime.

Attorneys Shawn E. McDermott and Heather Petitmermet, with significant assistance from their legal staff, including MarySue Kern, filed an appeal of behalf of our client in November 2010. In the ERISA appeal, we were able to illustrate to the insurance company that our client was indeed disabled and unable to perform the material and essential duties of “any occupation.”

In January 2011, Hartford Life & Accident Insurance Company informed us that our client’s adverse benefit determination had been reversed and that disability benefits were indeed payable. Our client received a check for all past due benefits and is currently “on claim” and continuing to receive benefits into the future. As part of our ongoing relationship with the client, our firm continues to handle her disability claim on an ongoing monthly basis.

The disability attorneys at the Law Office of Shawn E. McDermott, LLC have represented hundreds of individuals whose short term and long term disability claims have been denied. Our office has handled claims against every major disability insurance company issuing individual and group disability policies. Please feel free to contact us for a free consultation.