This office handles a great many number of claims on behalf of PERA Members who are seeking disability benefits. The PERA Disability Program is administered by Standard Insurance Company. For a more detailed discussion of PERA issues, please refer to the PERA disability section of our website by clicking here.
This office recently concluded litigation in the case of Leticia Nunez v. Standard Insurance and PERA. Several important rulings on legal issues were obtained from Judge Frank Plaut who was sitting by designation as the district court judge in Kit Carson County. On behalf of Ms. Nunez, we took the position that the short term disability (STD) policy issued by Standard Insurance Company to PERA for (more…)
The 10th Circuit Court of Appeals recently issued a decision addressing two ERISA issues: (1) what constitutes a “governmental plan;” and (2) the right to trial by jury. These issues were addressed in the case of Shirley Graham v. Hartford Life and Accident Insurance Company, 589 F.3d 1345 (10th Cir. 2009), decided December 29, 2009. This was an appeal out of the Northern District of Oklahoma.
At issue was Ms. Graham’s claim for long-term disability (LTD) income protection benefits. She was a former employee of the United States Postal Service (USPS). Unlike most LTD plans, Ms. Graham was insured under a plan established by the National Rural Letter Carriers Association (NRLCA), recognized by the USPS as the exclusive bargaining representative for rural letter carriers. The NRLCA procured the group long term disability policy from Hartford. USPS was not involved in those negotiations, nor did it sponsor the plan. Given these facts, the Court concluded that although Ms. Graham was considered a governmental employee of the USPS, the actual plan and policy at issue was obtained by an employee organization, and not the governmental employer. As a result, the plan was not a “governmental plan” and therefore not exempted from ERISA. (more…)
Earlier this year, the Law Office of Shawn E. McDermott, LLC received a favorable decision from the United States District Court Judge Christine M. Arguello in an ERISA long term disability case involving two important issues. The case handled by this office is titled Mark Kohut v. Hartford Life and Accident Insurance Company and has now been published by WestLaw at __ F.Supp.2d __, 2008 WL 5246163 (D. Colo.). This disability case was subsequently resolved by agreement of the plaintiff and disability insurance company, Hartford Insurance.
As mentioned in an earlier blog, dated June 5, 2008, the Colorado legislature adopted C.R.S. §10-3-1116 which bans the use of “discretionary clauses” within any insurance policy, including group policies, issued in Colorado. We believe this is the first decision issued (more…)
The American Association for Justice (formerly the Association of Trial Lawyers of America) recently released a new report on the insurance industry titled “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse.” The report reviews some of the egregious ways the industry attempts to make large sums of money at the expense of their insureds, the consumer. The report details six methods that directly impact policy holders. It identifies the insurers who are engaging in these practices. Finally, it reviews what each consumer can do to resist these tactics. Review the AAJ report by clicking here.
The Law Office of Shawn E. McDermott LLC recently won a Colorado appellate case on behalf of its clients relating to uninsured/underinsured (UM/UIM) automobile insurance benefits. In this case, our clients, the Meza family members, had pursued a wrongful death claim under six different underinsured motorist policies issued to various family members of the Meza family. The claims were based on the tragic death of the family matriarch, Lucia Meza, who died in an automobile accident in 2000.
This insurance coverage denial case was initiated in 2002 by State Farm Insurance against the Mezas and three other insurance companies including Farmers, American Family and American Standard. Each of these carriers had denied the UIM claims of the Meza family members for a variety of reasons. The claims against State Farm and Farmers were resolved a few years ago. The final piece of the puzzle against American Family and American Standard was placed by the Colorado Court of Appeals with its decision on July 3, 2008 which affirmed the decision of the trial court from two years earlier. These two companies had improperly and in violation of public policy defined the term “relative” in its insurance policies in such a way to violate Colorado law. After six years of litigation, the Court of Appeals finally agreed with the legal arguments put forth by the Mezas and our office.
As the case was not published pursuant to Rule 35(f) of the Colorado appellate rules, it is reproduced below for interested readers: (more…)
…..
On June 27, 2008, the United States Supreme Court denied review in the case of Amschwand v. Spherion Corp., No. 07-841. In this author’s opinion, the Supreme Court should have accepted cert, and should thereafter have overturned the lower court’s decision in the case.
The question presented in Amschwand was whether an action by a plan beneficiary against a plan fiduciary for monetary relief equal to the insurance benefits that the beneficiary would have received absent the fiduciary’s breach of fiduciary duties seeks “equitable relief” within the meaning of ERISA §502(a)(3). To understand the question presented, a review of the facts is necessary. Mr. Amschwand was employed by Spherion Corp. and was a participant in Spherion’s group life plan, which was insured by Aetna Life Insurance Company. In 1999, Amschwand was diagnosed with cancer and took leave from his job. (more…)
On June 19, 2008, the Supreme Court issued its decision in Glenn v. Metropolitan Life Insurance Co., No. 06-923, 2008 WL 2444796. The Court was asked to address the issue of the conflict of interest which exists when the entity that administers an ERISA plan, such as an insurance company, is also the entity which pays the benefits out of its own pocket. The Supreme Court confirmed that a conflict of interest exists in such a situation and the court must consider the conflict or at least be “weighed as a factor” in determining whether the denial of an employee’s claim for benefits was proper. The court in Glenn found that MetLife, as plan administrator, engaged in a dual role of both evaluating and paying benefit claims which creates the kind of conflict of interest previously referred to in the Supreme Court’s decision of Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989). Unfortunately, the ERISA statutory scheme failed to contain an express standard of review for the courts to follow in reviewing a beneficiary’s denied claim. Pursuant to Firestone, the court found that a denial of benefits challenged under ERISA § 502(a)(1)(B) must be reviewed under a de novo standard unless the benefit plan expressly provides the plan administrator or fiduciary (often times the insurance company) with discretionary authority to determine eligibility for benefits or to construe the plan’s terms, in which case a deferential (or arbitrary and capricious) standard of review would be appropriate. Ever since the court’s ruling in Firestone in 1989, the district and circuit courts have struggled with the proper application of this arbitrary and capricious standard of review. The hope was that the Supreme Court would clarify the appropriate standard of review in those case where discretionary authority had been granted to a fiduciary and such fiduciary was acting under a conflict of interest. The new Glenn v. MetLife decision clarifies this approach somewhat and, in this author’s opinion, serves to overturn the 10th Circuit’s approach as set forth in Fought v. Unum, 379 F.3d 1997 (10th Cir. 2004). (more…)
…..
We just learned this morning that Governor Ritter signed into law House Bill 1407 yesterday afternoon which has the ability to dramatically assist beneficiaries/insureds of insurance contracts, including those governed by ERISA. Generally speaking, the bill provides specific rights and remedies to insureds under insurance contracts whose claims have been unreasonably delayed or denied. Specifically, such a finding can result in the recovery of reasonable attorney’s fees and up to two times the actual damages sustained. See C.R.S. §10-3-1116, as now amended.
Additionally, the law bans the use of “discretionary clause” provisions within any insurance policy, including group policies. (more…)
A nice win in a case against Standard Insurance and PERA.
On Friday, May 16, 2008, the Colorado Court of Appeals issued a decision of first impression which addresses Standard Insurance Company’s long pursued argument that it is entitled to governmental immunity in administering claims for disability retirement benefits for the Colorado Public Employees Retirement Association (PERA). Our office has handled many of these claims and faced this argument by Standard on more than one occasion. Until now, the Court of Appeals had not been presented with the legal question of immunity, but, now that it has, it has answered the question correctly. Standard Insurance does not have immunity and may be sued directly.
In the case of Moran v. Standard Insurance Co., No. 06CA2081, the Plaintiff appealed the trial court’s finding that Standard was an “instrumentality” of PERA and (more…)
Often times, both potential clients and inexperienced attorneys will contact our office and are surprised to learn that insurance bad faith claims cannot be pursued when a group insurance policy is governed by Employee Retirement Income Security Act of 1971 (visit our ERISA disability and health insurance claims page for a more detailed summary of “ERISA”). A group insurance policy obtained through an employer, such as a long term disability income replacement policy, looks like an ordinary policy but is not treated as such in the eyes of the law. That is because it is a group policy provided to an individual by his or her employer, and is thus governed by ERISA. (more…)