MetLife is on the Hook for Long Term Disability Benfits

At Kantor & Kantor, almost all of our cases involve helping a person sue an insurance company that has wrongfully denied his or her claim for benefits. Recently, however, we won an important victory in a case involving two insurance companies – both of whom claimed they had no obligation to pay benefits.

In our case, we represented a commercial real estate salesman, let’s call him Mr. David, who derived his entire income from commissions. In 2003, Mr. David became ill due to a variety of medical conditions, and although he continued to go to work, his income plummeted because he was unable to close deals. In early 2004, Mr. David submitted a claim for long term disability benefits to MetLife under his employer’s disability benefit plan, indicating on his claim form that his disability began in 2003. MetLife denied Mr. David’s claim on the ground that he did not meet the plan definition of disability. We filed suit on his behalf.

During litigation, however, MetLife came up with a new argument. It argued that on January 1, 2004, Mr. David’s company had changed insurers from Unum to MetLife, and because Mr. David’s disability began prior to January 1, 2004, MetLife claimed if anyone had to pay, it was Unum. Eventually we were forced to bring Unum into the lawsuit as well, which resulted in two giant insurance companies pointing fingers at each other.

Kantor & Kantor won at trial, with the federal trial judge finding both that Mr. David was disabled under the MetLife insurance policy, and that MetLife had waived its argument regarding Unum by not raising that argument at the outset when it denied Mr. David’s claim. MetLife appealed, but the Ninth Circuit Court of Appeals recently upheld the trial court’s ruling in a published decision.

The Ninth Circuit found that (1) the MetLife policy covered Mr. David; (2) Mr. David was disabled under the MetLife policy; (3) MetLife did not timely raise its defense regarding Unum’s coverage; and (4) MetLife did not raise a proper claim against Unum during the litigation. As a result, Mr. David is now entitled to the benefits he deserves from MetLife under his employer’s disability plan.

Although it was a long road, it sure is nice when the courts do the right thing and force insurer’s to pay the disability benefits they owe.

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