California Insurance Lawyer Blog

Kantor & Kantor, LLP overcame a significant challenge in the 9th U.S. Circuit Court of Appeals on behalf of client Debbie U., who suffers from Multiple Sclerosis. The 9th Circuit ruled that Aetna Life Insurance Co. abused its discretion and wrongfully denied Debbie’s short-term and long-term disability benefits. A decision of this type, ruling on the record rather than remanding to the district court to correct its errors, is extremely rare in ERISA litigation.

This ruling ends Debbie’s six-year struggle with her employer’s disability plan which was administered and insured by Aetna. Debbie’s ultimate victory required two trials and two appeals to the 9th Circuit. After the first trial, the appellate court remanded the case to the district court to reconsider evidence of Aetna’s conflict of interest. After the second trial in which the district court ruled that Aetna had not abused its discretion, the 9th Circuit again accepted the appeal and reversed the trial court decision outright.

“The history of this case reads like a textbook example of insurer tactics to delay and discourage policyholders from pursuing the benefits they rightfully deserve,” said Corinne Chandler, the Kantor & Kantor lawyer who argued the case. “The 9th Circuit’s examination and specific findings demonstrate the importance of challenging denials that don’t make sense or rely on faulty medical evaluations.”

The appellate court found two major reasons to be skeptical of the trial court’s analysis that Aetna did not abuse its discretion, a legal term of art that applies to discretionary clauses in many disability insurance policies. Without finding that the insurer “abused its discretion,” courts cannot modify an insurer’s denial of benefits, even if the decision was wrong on the merits of the claim.

First, even though the policy required Debbie to apply for Social Security Disability Benefits, which she obtained, Aetna refused to consider the Award of those benefits (which was based on a more stringent disability standard), as evidence of Debbie’s disability. Second, although Aetna claimed Debbie did not supply the objective medical evidence it required, the 9th Circuit found Aetna’s request too vague and that the insurer did not engage in the “meaningful dialogue” the law requires in order for a policyholder to fully understand and supply the necessary information upon which the insurer would base its benefits award.

“This decision is an encouragement to policyholders who comply with insurers’ exhaustive demands and are left wondering why benefits are denied,” said Glenn Kantor, founding partner of Kantor & Kantor. “Courts have the ability to force insurers to follow up on the dictates of their own policies and make sure policyholders understand what documentation is necessary for a fair and honest benefits evaluation.”

The Court's Opinion can be read here: http://www.ca9.uscourts.gov/datastore/memoranda/2011/06/22/10-55018.pdf

About Kantor & Kantor, LLP
Kantor & Kantor is one of the largest law firms in the country exclusively representing plaintiffs who have been denied insurance benefits from life, health, disability and long-term care policies. The firm has extensive experience with the complex appeals process and federal court litigation of ERISA matters. For more information, log on to www.kantorlaw.net, call (800) 446-7529.

After years of uncertainty, an important legal question was finally resolved by the United States Court of Appeals for the Ninth Circuit in an opinion, Cyr v. Reliance Standard Life, issued today, June 22, 2011.

Sitting en banc, the Court considered whether or not an insurance company, acting as the administrator for an ERISA group disability plan, could be sued in its own name as a defendant in a lawsuit for benefits. For years, insurance companies have been arguing that they are not proper party defendants. The companies have successfully been forcing plan beneficiaries to try and track down plan administrators -- who are sometimes difficult to find, or expensive to serve -- in order to timely and properly file a lawsuit. Suing a plan administrator of an insured plan is nothing more than a charade, as it is the insurance companies who usually have final say about whether benefits will be paid. Because of a loophole in the law, insurers were able to frustrate plan participants who wanted to sue for benefits but who were not able to identify and/or properly serve the plan administrator. That game is now over.

Writing for the Court, Chief Judge Alex Kozinski said "[w]e conclude, therefore, that potential liability under 29 U.S.C. § 1132(a)(1)(B) is not limited to a benefits plan or the plan administrator." The Court went further and overruled previous authority which has been used for years by insurance companies to thwart plaintiffs: "Any statements or suggestions to the contrary in our prior decisions, including Ford v. MCI Communications Corp. Health & Welfare Plan, 399 F.3d 1076, 1081 (9th Cir. 2005); Everhart v. Allmerica Financial Life Insurance Co., 275 F.3d 751, 756 (9th Cir. 2001); Spain v. Aetna Life Insurance Co., 13 F.3d 310, 312 (9th Cir. 1993); and Gelardi v. Pertec Computer Corp., 761 F.2d 1323 (9th Cir. 1985), are overruled."

The Court's full decision can be read by clicking this link: http://www.ca9.uscourts.gov/datastore/opinions/2011/06/22/07-56869.pdf

Eating disorders are the deadliest of all mental illnesses, affecting 24 million Americans. They lead to numerous severe and chronic health problems, and without treatment, up to 20% of people with serious eating disorders will die. The challenge lies in family, friends, and physicians to recognize this secretive disorder, and catch it before the illness has set its roots.
If doctors were appropriately trained and more perceptive to the subtle symptoms of disordered eating, they would be better equipped to intervene early. Early intervention leads to a more successful treatment outcome, alleviates critical health issues, decreases the significant financial and emotional burdens of treatment on families, and has the potential to save lives.

The Times Union, in Albany, New York, reported on a vitally important bill sponsored by Sen. Shirley Huntley and Assemblyman Peter Rivera. This bill would mandate New York Physicians to receive training on the early recognition of eating disorders by requiring physicians and physician’s assistants, who have not received education on eating disorders, to take a one- hour free online course. This is quite a simple undertaking for physicians and such a small piece of their time, for something that may protect many lives.

Sadly, the New York bill, A4413/S3142 was overlooked, and was not given the opportunity to be voted on this year.

At Kantor & Kantor, our ED clients come to us at a time when their illness is established and fixed. They have unfortunately slipped through the currently imperfect network of physicians, friends, and family who are not sensitized enough to the symptoms, or the dangers of the disease. When we finally meet them, they have progressed to a point where their illness needs immediate medical or residential treatment. Insurance coverage for treatment is too often denied, or when approved, is too limited and thus insufficient. We end up fighting daily for the fight for the health, and even the lives of our clients in a system that is simply inadequate and unfair.

Doctors should be better trained, and the general public made far more aware or how pervasive, disruptive, and even how deadly eating disorders can be. We try to do our small part in this every day.

For more information on eating disorders you can check out the website for the National Eating Disorders Association (NEDA), by just clicking here: NEDA

NEDA has provided a helpful guide for physicians to follow when screening patients for eating disorders.
See http://www.nationaleatingdisorders.org/uploads/file/information-resources/WHAT%E2%80%99S%20%20%20UP%20%20%20DOC.pdf
http://www.nationaleatingdisorders.org/uploads/file/information-resources/The%20Physician%E2%80%99s%20Role%20in%20Eating%20Disorders%20Prevention%281%29.pdf

Our client is a 38 year old Project Manager diagnosed with Dercum’s Disease. On August 22, 2006 she underwent surgery, with complications, to remove a Lipoma (benign tumor) from her left lateral posterior hip. After surgery she suffered from severe left sided low back pain radiating down her leg. She was diagnosed with Lipomas Disease (aka Dercum’s Disease), Peripheral Nerve Entrapment and Cluneal Nerve Neuralgia due to Superior Cluneal Nerve injury. The National Organization for Rare Disorders has recognized Decum’s Disease as a chronic long lasting condition with limited treatment options.

At the time of her diagnosis our client had been working as Project Coordinator and Manager for the Cisco Network for 10 years. As a Project Coordinator and Manager, she had been responsible for managing moderately complex, larger-scale business projects, was responsible for establishing project plans and timelines and delegated work to other project team members.

On appeal, we submitted evidence that demonstrated that Unum had simply been searching for evidence to justify a termination of the claim. We pointed out that Unum had ignored our client’s own treating physicians’ opinions, the Functional Capacity Evaluations and the effects of the powerful drugs that our client had to take for her symptoms and conditions.

Our appeal was successful and our client was reinstated to her Plan, with payment of full back and future benefits