Liberty Life Loses in its Bid to Deny Long-Term Disability Benefits

In Melissa Vacarro v. Liberty Life Assurance Company of Boston, Melissa Vacarro was employed by NetApp Inc., when she began suffering from fatigue, pain and deteriorating cognitive abilities, particularly in the areas of memory and comprehension. She applied for disability benefits with Liberty, the disability insurer for her employer.

As an “HR Program Manger 5,” Plaintiff claimed to be a Class I employee. Liberty also covered Class II employees, which had a different and more stringent definition of long-term disability after the first 24 months of disability that the one for Class I employees.

Liberty denied both Plaintiff’s claim for long-term disability benefits and her claim to be a Class I employee. She appealed, but Liberty failed to meet its deadline for rending a decision on the appeal. Two days after the missed deadline, Plaintiff filed an ERISA lawsuit, alleging she had exhausted her administrative remedies.

Four days after the ERISA lawsuit was filed, Liberty granted her claim for long-term disability. Liberty did not even address her claim that she was a Class I employee, so Plaintiff proceeded with her court action.

Ultimately, Liberty refused to budge and maintained its view that Plaintiff was a Class II employee, putting forth several arguments in its attempt to support its claim. The Court disagreed with all of Liberty’s arguments and ruled that, “she is entitled to future LTD benefits as a Class I employee.”

ERISA Cause of Action Accrues When Insurer Fails to Respond to Appeal by the Deadline Date

Liberty argued that Plaintiff’s cause of action had not accrued on the date she filed her lawsuit since it issued its decision only six days after she filed her lawsuit. If the Court had bought that argument, it meant that an amended policy was in effect on the date of the accrual and would have applied to her case. That policy changed the definition of Class I employee more to Liberty’s liking.

The Court agreed that the policy in effect at the time the cause of action accrues is the one that applies. But here, the cause of action accrued on the date established for the decision on the administrative appeal when Liberty failed to issue its opinion. Since Liberty missed the deadline date, the policy in effect on that date and its definition of the different classes of employees was the applicable policy for the Court to use in deciding this case.

Vacarro was a Class I Employee

Liberty argued that even though Plaintiff was a manager, and the policy said “managers” were Class I employees, the term “manager” was ambiguous and the job description, describing that position as for an “Individual Contributor” should be used instead of the job title of “Manager.”

The Court found that “manager” is not an ambiguous term and that “A person of average intelligence and experience who reads the 2015 policy would have no way of knowing that the term “Manager” does not denote a job title but instead denotes the job level identified in the NetApp Job Description.” Ultimately, the Court granted the Plaintiff all the relief for which she sought.

This case was not handled by our office, but it can be instructive to those whose insurers are denying benefits based on a specific job title or description. If you have questions about any aspect of your claim for disability benefits, contact one of our disability attorneys at Dell & Schaefer for a free case evaluation.