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Insurance Company’s Denial of Disability Benefits was Arbitrary and Capricious

In Kimberly J. Guest-Marcotte v. Life Insurance Company of North America, Plaintiff, an insurance risk manager, was diagnosed with Ehlers-Danlos Syndrome (EDS) Type III, a hereditary disease characterized by loose connective tissue which results in frequent joint dislocations and subluxations. In June 2013, due to chronic pain and fatigue, Plaintiff quit work and applied for short term disability benefits (STDs) under her employment welfare plan administered by Life Insurance Company of North America (LINA).

LINA denied her claim. After two unsuccessful administrative appeals, Plaintiff filed an ERISA lawsuit in a federal district court in Michigan. That court ruled in favor of LINA, so Plaintiff appealed to the U.S. Court of Appeals for the Sixth Circuit.

The Appellate Court held that LINA acted arbitrarily and capriciously in denying Plaintiff’s claim without having one of its own physicians conduct a physical examination when the plan clearly granted LINA that option. The Court remanded with instructions for LINA to conduct “a full and fair review” of Plaintiff’s claim.

LINA Acted Arbitrarily and Capriciously in Denying the Claim Without Exercising its Option to Conduct a Physical Exam of Plaintiff

The Court agreed with LINA that the burden of proof is on plaintiffs to prove they are disabled, but pointed out that this Plaintiff had presented a “host of evidence” documenting her diagnosis. Her treating physicians not only presented objective medical evidence of test results, the medical records included evidence that Plaintiff suffered from symptoms consistent with the diagnosis.

The Court noted that, based on the evidence presented, LINA could only deny her claim if it doubted her credibility. LINA responded that it “did not make a credibility determination” and did not doubt that she suffered pain. But, LINA maintained, she “failed to prove through objective evidence how her pain renders her unable to do her job.”

The Court essentially scoffed at LINA’s response, noting that to deny Plaintiff disability benefits, it had not to believe her claim that her pain made it impossible for her to sit at her desk and concentrate long enough to do her job. The only way to determine whether Plaintiff was disabled as she claimed was for LINA to conduct its own physical examination.

Accordingly, the Court of Appeals held, “Under these circumstances, where there is no dispute that the claimant suffers from a genetic disease that produces severe and chronic pain, it was arbitrary and capricious for LINA to deny her disability claim without exercising its right to conduct a physical examination.”

The Remedy is Remand

The Court noted that when “the problem is with the integrity of the plan’s decision-making process, rather than that a claimant was denied benefits to which he was clearly entitled, remand to the plan administrator is the appropriate remedy.” The Court noted that it could not determine if Plaintiff was “clearly entitled” to benefits, so remand for a “full and fair review” was the remedy for this case.

This case was not handled by our office, but we think it may be instructive to those battling similar issues with their disability insurance company. For questions about this case, or any issue concerning your disability claim, contact one of our disability insurance attorneys at Dell & Schaefer for a free consultation.