Appeals Court Agrees that Reliance Standard’s Decision to Deny Long Term Disability Benefits was Incorrect; Benefits Reinstated

Disabled Bank Teller for National City Corporation wins lawsuit against Liberty Life after she was denied continued long term disability benefits.

While this recently decided case was not handled by Attorneys Dell & Schaefer, it can certainly be used for guidance for all LTD claimants, including our clients currently on claim or for our clients with pending lawsuits.

The Factual Background

Luann Gillespie worked as a bank teller for National City Corporation from 1998 until July 2007. In July 2007, Ms. Gillespie underwent a lumbar laminectomy and limited fusion to correct back and leg pain. It appears this surgery was unsuccessful and Ms. Gillespie was forced to make a claim for long term disability (LTD) benefits under The National City Corporation Long Term Disability Plan.

Her claim for LTD benefits was initially approved by Liberty Life Assurance Company of Boston (Liberty Life) and benefits were paid for the “own occupation” period. Unfortunately for Ms. Gillespie, her policy had a “change in definition of disability.” Most Group Long Term Disability Policies contain such language that causes what it means to be “disabled” under the policy to change after a fixed period of time. For Ms. Gillespie to continue to receive benefits after the initial two-and-a-half-year period, she would now have to prove that she could not “perform the duties of any other occupation for which (she may), or could become, qualified by education, training or experience.” This standard, of course, is much harder to satisfy.

Unfortunately for Ms. Gillespie, despite her doctors noting that she “continually asked to return to work in some capacity” and despite her treating physicians recommending that she not return to work as it was “detrimental to her and causing more and more pain,” Liberty Life decided to begin a heightened review of her claim due to the change in definition of disability and because Ms. Gillespie had reported that her condition had improved after she stopped working.

Liberty Life thereafter commissioned an independent medical examination (IME) by Dr. Amarish Pontis. Dr. Pontis concluded that he believed Ms. Gillespie could work in a sedentary position. Using this review and only this review, Liberty Life conducted a vocational assessment which found that Ms. Gillespie was capable of performing the job of a “cashier” or “information clerk.” Using this IME and Vocational Review, Liberty Life denied Ms. Gillespie’s continued receipt of LTD benefits.

With the assistance of an attorney, Ms. Gillespie timely and properly filed an administrative appeal challenging Liberty Life’s determination. This appeal included “Statements of Disability” from her treating physicians that stated that Ms. Gillespie “is totally and completely disabled… of any full-time employment.”

In response to Ms. Gillespie’s appeal, Liberty Life had a “paper review” performed by Dr. Philip J. Marion. Dr. Marion solely reviewed the medical records of Ms. Gillespie and never examined her. Dr. Marion concluded that her conditions did not prevent her from performing the duties of any occupation. Solely using Dr. Marion’s review, Liberty Life conducted a second vocational skills analysis which provided additional occupations that Liberty felt that Ms. Gillespie could perform. Armed with this paper review and vocational assessment, Liberty Life upheld its decision to deny the claim.

A Lawsuit is Filed

Shortly after the administrative appeal was denied, and after exhausting the required administrative remedies under ERISA, Ms. Gillespie’s attorney filed an ERISA lawsuit in Federal Court.

The trial court and the appealed court have both ruled in favor of Ms. Gillespie.
The appellate court has noted that Liberty’s “sole reliance on the cursory opinions of its independent medical examiners to determine Gillespie could perform sedentary work was, on balance, arbitrary and capricious.” The Court continued that “a plan administrator is of course permitted to rely on the opinions of its doctors or hired consultants and does not need to ‘accord special deference to the opinions of treating physicians.” The Court, however, concluded that “does not mean that the administrator can “arbitrarily refuse to credit a claimant’s reliable evidence.”

The Courts were concerned that there was no indication that Liberty ever gave any consideration to the medical opinions of her treating physicians. The Vocational Analyses Liberty relied upon did not refer to her treating physicians opinions as to her restrictions and limitations. These analyses only referred to the restrictions provided by Liberty’s hired guns. Furthermore, the reviews and examinations provided by Dr. Potnis and Dr. Marion failed to properly address the contrary medical evidence and opinions of Ms. Gillespie’s treating physicians. Those reviews just seemed to disregard it.

The Courts therefore concluded that “Liberty’s termination of Gillespie’s benefits was improper under either arbitrary and capricious or de novo review because Gillespie satisfied the definition of “totally disabled” under the Plan.

Again, this ruling is great lesson for any one who has been denied LTD benefits by Liberty Life or any disability insurance provider. If you are currently on claim or if you have been denied continued disability benefits, please contact Attorneys Dell & Schaefer Chartered for a free consultation so that we can assess your claim and see if we can be of assistance in strengthening your claim prior to a possible denial or to see if we can assist you in getting back on claim.