Disability Benefit Claims Law Blog : Disability Benefits Lawyer & Attorney : Dell & Schaefer : Disability Insurance Claims Law Blog

Our client, a dentist working in the capacity of a director of clinical technology for a well known company, began experiencing problems with his balance in March of 2009. In his role as director of clinical technology he was required to give lengthy presentations and speaking engagements, as well as be on the cutting edge in dental procedures. His initial balance problem quickly progressed leading to the cancelation of scheduled presentations, and our client seeing his doctors for testing. Test results indicated that he had a life-threatening brain tumor. Within a month and a half of first being seeing for the brain tumor he was undergoing brain surgery to remove the cancerous mass. The surgery was successful in removing the majority of the tumor, but resulted in loss of hearing in his left ear, cognitive dysfunction, and the exacerbation of a cervical neck condition brought on by years of dentistry. In the aftermath of the surgery his balance and equilibrium problems worsened, he began to experience severe headaches when working at the computer, and the surgery exacerbated his cervical neck condition. Hopes of returning to work after a short rest period from the surgery quickly vanished and he contacted Dell and Schaefer to assist in the filing of his disability claims.

Attorneys Gregory Dell and Stephen Jessup gathered all of the medical, financial and occupational information necessary to submit our client’s claim for disability benefits. Attorneys Dell & Jessup obtained supporting documentation from our client’s treating physicians and assisted our client with his application for disability benefits. Our client was further advised of the importance to have his doctors continue to document his restrictions and limitations. Within a week of filing for benefits, our client was approved for disability benefits. Attorneys Dell & Schaefer continue to handle our client’s disability claim on a monthly basis.
 

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Dr. C, a dentist, came to Attorneys Dell & Schaefer in 2006 seeking assistance in submitting applications for long-term disability benefits. In 1999, Dr. C began noticing a slight tremor in his right hand while writing and at times while holding a dental instrument. He immediately sought care from a neurologist, who after examining Dr. C, determined that the tremor was likely stress and anxiety related. Dr. C continued working and operating his dental practice with the hopes that his slight tremor would resolve.

Unfortunately, the tremor did not cease, in fact, it worsened. Dr. C began suspecting that perhaps the tremor was not simply stress, but something more serious and complicated. Beginning around 2002, Dr. C was forced to reduce his patient load due to his hand tremor and stop performing major dental procedures, which produced a majority of the income in his practice. Dr. C was having great difficulty maintaining his dental practice and he made the difficult decision to sell his practice before matters got financially worse. Dr. C found a buyer for the practice and negotiated an agreement where he would stay on as an independent contractor assisting in the transition of the practice to the new dentist. By mid 2003 the transition of the practice was complete and Dr. C accepted a new position with a dental practice performing minor dental procedures and cleanings. Dr. C’s symptoms continued to progress between 2003 and 2006, eventually causing him to go and see his neurologist again who advised him to stop all forms of general dentistry as of November 2006.

Prior to November 2006, Dr. C never understood what it meant to be “disabled”, as defined in his disability policy. He had always thought that “disability” was the loss of sight, the loss of a hand, or some injury or illness which would cause him to be completely incapable of performing activities of daily living. Dr. C had not realized, until Dell & Schaefer brought it to his attention, that pursuant to the unique terms and conditions of his disability policies, that “disability” also meant experiencing a 20% or greater loss of income in your occupation due to an illness or an injury. In early 2007, Dr. C submitted his applications for long-term disability benefits and claimed a disability date of May 2002, which was when he first began to loose income as a result of his hand tremor. The disability carrier approved the claim as of November 2006, but denied disability benefits for the period of May 2002 through October 2006, claiming that the insured’s late notice caused prejudice to the insurers, and even if the insurers had the ability to conduct a contemporaneous review, under their review of the claim Dr. C had not suffered the requisite loss of income to qualify for disability benefits. Under Florida law and the law of most states, failure to provide timely notice of claim to a disability carrier, in Dr. C’s case 90 days, can create a presumption of prejudice to the insurance carrier and an effective affirmative defense in the event of a suit.

Dr. C’s disability policy stated that if he was disabled prior to age 60 then he would receive disability benefits for his lifetime, otherwise the benefits would terminate at age 65. Dr. C turned age 60 in February 2006, and the disability carrier claimed he was not disabled until November 2006. The policy defined disabled as either residually or totally disabled. The carrier continued to deny benefits for anytime before November 2006 and advised Dr. C that benefits would terminate at Age 65. Attorney’s filed a lawsuit on behalf of Dr. C for breach of contract and seeking recovery of disability benefits due from May 2002 through October 2006. During litigation the insurance company raised the following defenses:

1) Dr. C failed to provide timely notice of claim;
2) Dr. C failed to reasonably treat with a physician from May 2002 through October 2006;
3) Dr. C failed to suffer a loss of income due to illness or injury;
4) Dr. C failed to comply with the “proof of loss” requirements of his policy.

Despite the difficult legal hurdles facing Dr. C’s case, Cesar Gavidia, Jr. and Gregory Michael Dell of Dell & Schaefer’s disability litigation team were able to successfully negotiate a confidential settlement that included past and future lifetime disability benefits.
 

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More than sixteen years ago, shortly after starting his dental practice, Dr. Johnson (name has been changed for privacy purposes) bought a disability insurance policy to protect his income in case of an illness or injury that prevented him from completely or partially working in his chosen profession. Over the years, Dr. Johnson’s practice grew substantially and so did his annual income. As such, Dr. Johnson’s insurance carrier made several offers to increase his monthly disability benefit in case of total disability. Each time, Dr. Johnson gladly accepted the increase in premium payments for the added protection.

Dr. Johnson’s dental practice consisted mainly of bridge and crown work, root canals, extractions, and general dentistry. Unfortunately, several years ago, Dr. Johnson began to experience stiffness and pain that radiated through his right arm and shoulder. At first, he dismissed the pain as overuse and applied home remedies. However, over time the pain became more severe, more frequent, and lingering longer. Dr. Johnson sought treatment from a rheumatologist and was subsequently diagnosed with osteoarthritis. Dr. Johnson continued to treat patients. 

However, his pain, now excruciating after only two hours of use, forced him to change his practice significantly. He had to forego crown and bridge work, root canals, and more difficult extractions.

After almost a year of cutting back, Dr. Johnson read the long-term disability income policy he bought so many years earlier. Dr. Johnson’s policy read,

“You are considered Totally Disabled, if due to injury or illness, you are unable to perform the Substantial and Material Duties of your Regular Occupation and are under the Regular care of a Physician. . . . You are considered Residually (Partially) Disabled if due to injury or illness, you are unable to perform one of the material and substantial duties of your regular occupation, have at least a 20% loss of earned income, and are under the regular care of a physician.” 

Dr. Johnson decided to apply for disability income benefits.  Shortly after he mailed his application for disability benefits to his disability insurance company, Dr. Johnson received a telephone call from the disability company. The claims analyst asked Dr. Johnson several questions regarding his condition and his continued treatment of patients. The insurance company requested additional documentation and indicated that their investigation might take several weeks. However, after only two and a half weeks, the insurance carrier sent Dr. Johnson a correspondence that read “We conducted a thorough investigation into your claim for disability income benefits and we are pleased to inform you that you are eligible to receive benefits under the terms of your disability income contract. As you are still working in your profession, you will receive partial disability benefits as long as you remain disabled and continue to suffer at least a 20% loss of earned monthly income.” Dr. Johnson was pleased by this news. Many of his colleagues had difficult experiences with their disability insurance companies when attempting to collect from their disability income policies. 

Dr. Johnson was required to provide the disability insurance company with monthly profit and loss statements. During several months he received no benefit, as in those months he did not sustain at least a 20% loss of earned income. Dr. Johnson subsequently hired another dentist to perform procedures that he could no longer safely perform. This resulted in fewer and fewer months in which Dr. Johnson was “eligible” to collect his disability income benefit. After two years of qualifying for disability benefits, Dr. Johnson’s disability insurance company approached him to request a buy-out of his disability income policy. The disability company offered him $100,000.00 for the surrender of his disability policy. Dr. Johnson found this offer fair as in most months he was collecting little or nothing in partial disability benefits. However, before signing the agreement, Dr. Johnson wanted an attorney to review the disability buyout agreement and advise him of his rights. That is when Dr. Johnson contacted Attorneys Dell & Schaefer.

After speaking with Dr. Johnson and reading his contract it became clear to Attorneys Dell & Schaefer that not only was the offer unconscionably low but that Dr. Johnson had fallen victim to what seems to be a common practice among many insurance carriers - advising an individual that he is partially disabled when under the terms of his contract he is totally disabled. When we explained our concerns to Dr. Johnson he was hesitant and stated, “I am still working. I’m not totally disabled.” Like so many others, Dr. Johnson was convinced that total disability meant the complete inability to engage in his occupation. This erroneous assumption was given credence by the insurance carrier’s simple statement, “As you are still working in your profession you will receive partial disbility benefits...”  Dr. Johnson’s incorrect interpretation of his disability policy was created by two years of similar statements from his disability insurance company and eventually a seemingly gracious offer to buyout an all but useless policy for the sum of $100,000.00. 

It was reasonable for Dr. Johnson to arrive at such a conclusion. Social Security provides disability benefits to individuals for the complete inability to engage in any gainful occupation, not to mention the fact that Dr. Johnson’s policy does provide for partial disability benefits. However, this was not a Social Security claim, but rather a long-term disability policy. As we explained to Dr. Johnson, under the terms of his disability policy, total disability means the inability to perform the “substantial and material” duties of his occupation as they were just prior to his illness. Dr. Johnson’s substantial and material duties as a dentist prior to his disability consisted of root canals, extractions, simple and complex, consultations, and many cosmetic procedures. However, Dr. Johnson’s post-disability duties consisted mainly of some simple extractions and consultations. He was simply unable to perform all of the substantial and material duties of his occupation and thus was totally disabled under the terms of his long-term disability policy. Most significantly, Dr. Johnson had been paying premiums for over a decade for this protection.

After our initial consultation, Dr. Johnson turned down the disability insurance company’s offer to buy out his policy and retained Attorney’s Dell & Schaefer to assert his rights to total disability income benefits under the terms of his contract. Attorney’s Dell & Schaefer were able to secure Dr. Johnson total disability benefits, un-paid back benefits totaling almost $200,000.00, interest on his back benefits, and attorney fees. Ultimately, we negotiated a lump-sum buyout of Dr. Johnson’s long-term disability policy, one well in excess of the meager $100,000.00 the disability insurance company once attempted to settle his claim for.

Unfortunately, Dr. Johnson’s story is not uncommon. Many disability policies provide that an individual with a partial disability will only be paid through the age of 65, while an individual on total disability benefits will be paid for the duration of the individual’s life. Moreover, partial disability benefits are based on the percentage of earned income lost. Thus, unlike total disability benefits, if the individual does not suffer a loss, benefits are not paid. Finally, in the event of a buyout of a long-term disability policy, an individual would be more apt to surrender his or her contract for less if the individual’s disability were deemed partial rather than total. Insurance companies save themselves millions of dollars each year by such practices. They lead claimants to believe that because they are working, they are only entitled to partial disability benefits and then entice them to surrender their contracts and all rights to their claim, for an unreasonably low price. Fortunately, for Dr. Johnson, he was able to realize the disability insurance company’s deception prior to surrendering his rights.

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