Mississippi Court Ordered Reliance to Pay Long Term Disability Benefits

In the case of Juanita Nichols v. Reliance Standard Life Insurance Company, the plaintiff, aged 62, developed circulatory disorders including Raynaud’s disease. These conditions prevented her from working at her life-long job as a Hazard Analysis and Critical Control Points Coordinator at Peco Foods chicken processing plant. Raynaud’s is a condition where exposure to cold results in serious medical problems, possibly even gangrene.

Since Nichols’ could not work at the processing plant where temperatures were kept at about 40 degrees, she applied for disability benefits under the company’s insurance plan with Reliance, which provided benefits if she was unable to work in her regular occupation. A vocational “expert” employed by Reliance interpreted her job as a “sanitarian,” and concluded that she was not disabled since sanitarians did not have to work in such a cold environment. Nichols’ administrative appeals were denied so she filed this ERISA lawsuit.

The Court ruled in favor of Nichols, finding that Reliance’s denial was not based on substantial evidence. Plus, its conflict of interest weighed heavily against it. Finally, Reliance abused its discretion in denying Nichols benefits.

The Denial of Benefits was Not Based on Substantial Evidence

The Court noted that one step in determining whether or not Reliance abused its discretion was to determine if the denial was based on substantial evidence. In order to be substantial, the evidence must be based on a review of “the record as a whole”

The denial here was based on the occupational analysis by one of Reliance’s vocational specialists who changed Nichols regular occupation to a sanitarian, which did not require exposure to cold temperatures. The Court stated, “This conclusion is not based on a fair estimate of the record evidence.”

The Court concluded that it was clear that Plaintiff’s regular occupation exposed her to cold temperatures and stated that Reliance’s denial of benefits was “unsupported by any evidence, let alone substantial evidence.”

Reliance Had a Conflict of Interest

The Court noted that there was a clear conflict of interest since “Under its plan, Reliance both evaluates and pays claims…. It ‘potentially benefits from every denied claim.’” The Court found that Reliance had “a history of biased claims administration.”

The Court “conducted a cumbersome review of judicial opinions addressing Reliance’s behavior in disability cases. That review found over 100 opinions in the last 21 years criticizing Reliance’s disability decisions, including over 60 opinions reversing a decision as an abuse of discretion or as arbitrary and capricious. These opinions are often scathing.”

The Court listed all the cases it found and the reasons other courts had found Reliance had a conflict of interest. This evidence weighed heavily against it. In many of the cases, the same vocational specialist had been faulted for her work. The Court then concluded that it was clear Reliance had a conflict of interest in this case.

Reliance Abused its Discretion in Denying Nichols Benefits

The Court’s conclusion was easy. It stated, “that Reliance’s decision to deny Nichols benefits was devoid of evidentiary support is enough to prove that the decision was an abuse of discretion. Reliance’s long past of biased and wrongful claims denials in defiance of countless judicial warnings – a past marked by the same faulty occupation determination process that drove Nichols’ denial – simply underscores this conclusion.”

This case was not handled by our office, but we believe it can be of assistance to those who are dealing with similar issues. For questions concerning this, or any question about your disability claim, contact our disability attorneys at Dell & Schaefer for a free consultation.