Our Client v. Reliance Standard Life Insurance Company of America
Our Client v. Reliance Standard Life Insurance Company of America
United States District Court for the Eastern District of Tennessee (2021)
Our client worked as a dock supervisor for a trucking company, until he fell while using a weed whacker, causing him severe back, leg, and foot pain. Following his accident, our client was no longer able to work in his dock supervisor role, so he filed for long term disability benefits from Reliance Standard Life Insurance Company, which provided benefits for 36 months.
After these 36 months, Reliance terminated his benefits, stating that he was not considered “totally disabled,” meaning he did not qualify for further benefits under Reliance’s long term disability plan. He continued to see physicians and medical experts, who examined him and provided reports of his severe pain levels.
Our client filed an appeal and provided further medical evidence from an independent medical examination, wherein an orthopedic surgeon opined that he could not do full-time sedentary work. Despite this, Reliance denied our client’s appeal, arguing that the physician’s claim was incorrect, and our client could work a sedentary occupation.
We sued for judicial review of Reliance’s denial, arguing that its decision was arbitrary and capricious. Under ERISA, when a policy contains a clear and express grant of discretion to the plan’s administrator, the court will overturn the administrator’s decision if it’s found to be arbitrary and capricious.
If a plan administrator “adopts an alternative opinion” from the insured’s physicians, they must provide sufficient reasoning for its decision–Reliance failed to do so. Rather, its hired physician wrote a single sentence in his report, challenging our client’s treating physicians but stating only that he disagreed with their recommendations and limitations. The court determined that the physician’s procedure and subsequent disagreement were arbitrary and capricious as he failed to provide a satisfactory explanation for his conclusion.
Reliance also encouraged our client to apply for SSA benefits, but then rejected his application for long term disability benefits without offering sufficient reasoning for disagreeing with the finding by the Social Security Administration that our client was disabled. Under the court’s standard of review, if the plan administrator encourages the insured to apply for SSA benefits, benefits from the insured receiving SSA payments, and fails to explain why its decision differs from the SSA, then the insurer’s decision is considered arbitrary and capricious. Reliance was found to have “undoubtedly” benefitted from our client’s qualifying for Social Security disability benefits as our client’s long term disability benefits were reduced any Social Security benefit he received.
Reliance’s failure to adequately explain its reasoning, both in its hired physician’s evaluations and its discrepancy from the SSA’s decision, led to the judge determining that the decision to deny our client’s benefits was arbitrary and capricious. The court ruled in our favor, remanding the decision back to Reliance, who later approved our client’s claim for long term disability benefits.
