Throwback Thursday: Tricks Insurers Play with the Definition of”Disability”

Today we revisit the case of LaVertu v. Unum Life Ins.Co. of Amer., 2014 U.S.Dist.LEXIS 40442 (C.D.Cal. March 25, 2014), a case which highlights some of the tactics insurers use to stop paying long term disability claims. Kantor & Kantor represented the plaintiff and was successful in getting her disability payments reinstated.

The Plaintiff worked as an administrative assistant for an insurance agency. She became disabled in 2007 due to back pain. Unum approved the claim, began paying benefits in 2008 after the expiration of the six-month elimination period, and continued paying benefits for more than two years. However, benefits were terminated as of March 21, 2012 based on Unum’s conclusion that LaVertu no longer met the contractual definition of disability. The plaintiff’s pre-litigation appeal was unsuccessful and she filed suit.

LaVertu introduced evidence that she had undergone three spinal surgeries. None of the treatment improved the plaintiff’s condition, however. The Social Security Administration concurred, and awarded LaVertu disability benefits under the Social Security Act. Unum obtained a copy of the entire Social Security disability insurance claim file. After reviewing the contents of the file, Unum’s in-house vocational consultant determined that the file supported sitting for no more than four hours per day; thus, the plaintiff could not meet the exertional demands of a sedentary occupation. Following that review, which took place in 2009, Unum internally noted,”Clmt is [totally disabled] any occ and R&Ls are permanent.” That information was communicated to the plaintiff in a follow-up letter stating, “we do not anticipate a change in your medical status and therefore, have made the decision to extend our approval of your benefits through February 20, 2030.”

In late 2011, a paper review of the file by a physician resulted in an opinion that LaVertu was capable of full-time sedentary work activity, and corroboration through an independent medical examination was suggested. The exam, which was performed by Dr. Kamran Hakimian in February 2012, reported the plaintiff could perform a part-time sedentary job if allowed rest periods every hour. Dr. Hakimian also opined that the plaintiff could engage in a 40-hour work schedule within 6 months. Unum advised him that his prediction of a six-month return to work was “vocationally problematic,” and asked for clarification. He then agreed that the plaintiff could work full-time after a four-to-six week work hardening program without any explanation, although he retained the restrictions that a 10-minute break would be required every hour.

Unum then sought a legal opinion from in-house counsel as to whether benefits could be terminated based on part-time work capacity. Although Unum’s attorney advised that benefits could not be terminated under that scenario without the claimant’s consent, Unum terminated the benefits anyway.

The plaintiff appealed that decision. With her appeal, she provided assessments by her treating doctors, including her pain management specialist. She also provided a functional capacity evaluation finding her capable of less than sedentary work activity. Upon receipt of the appeal, Dr. William Sniger at Unum performed a review and concluded that she possessed sedentary work capacity, a conclusion confirmed by Richard Byard, a vocational consultant at Unum. The court overturned that decision.

In addressing the merits, the court determined that the evidence showed the plaintiff remained disabled since there was no evidence of improvement in her condition. Moreover, the court determined that limited sit, stand, and walk capabilities precluded sedentary work. Gordon v. Northwest Airlines, Inc. Long-Term Disability Income Plan, 606 F. Supp. 2d 1017, 1037 (D. Minn. 2009) (“Common sense dictates that someone who cannot walk, sit, or stand more than 2.5 hours per day cannot do sedentary work.”). The court further held that Unum lacked a basis for disregarding the FCE findings, but even if the FCE were excluded, the evidence still supported the claimant’s lack of ability to perform sedentary work.

The court also barred Unum from raising new reasons in court that were not listed earlier, citing Harlick v. Blue Shield of California, 686 F.3d 699, 719-20 (9th Cir. 2012) (stating that”a court will not allow an ERISA plan administrator to assert a reason for denial of benefits that it had not given during the administrative process.”). Cf. Abatie, 458 F.3d at 974 (“When an administrator tacks on a new reason for denying benefits in a final decision, thereby precluding the plan participant from responding to that rationale for denial at the administrative level, the administrator violates ERISA’s procedures.”).

The court also rejected Unum’s termination based on part-time work capacity or “hypothetical future work capacity.”

We at Kantor & Kantor strive to help individuals get the insurance coverage to which they are entitled. If you or someone you know is having trouble getting their long term disability payments paid, call us today for a free consultation on 888-569-6013. We care and we can help.

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